FIRST BANCORP /NC/ (FBNC)

CIK: 0000811589. 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=811589. Latest filing source: 0000811589-26-000051.

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/CIK0000811589.json. Derived margins 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. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000811589.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: 0000811589-26-000073.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2 - Management's Discussion and Analysis of Consolidated Results of Operations and Financial Condition

Highlights of the results for the first quarter of 2026 are presented below. Refer also to additional discussion in the "Results of Operations" and "Financial Condition" sections following.

Overview and Highlights for the Three Months Ended March 31, 2026

We earned net income of $46.7 million, or $1.13 diluted EPS, during the first quarter of 2026 compared to net income of $36.4 million, or $0.88 diluted EPS, for the first quarter of 2025. Our increased earnings was driven by a $14.3 million increase in net interest income in the first quarter of 2026 from the like quarter, resulting primarily by a combination of higher yield on interest earning assets and a lower cost of funds, both of which were driven by the overall interest rate environment throughout the past year.

•Net interest income for the first quarter of 2026 was $107.1 million, a 15.4% increase from the $92.8 million recorded in the first quarter of 2025. There was a shift in the mix of interest-earning assets between periods, with average loans growing $674.3 million, while average taxable securities contracted $186.9 million and short-term investments contracted $226.9 million.

•Net interest margin ("NIM") increased 42 basis points to 3.67% in the first quarter of 2026 from 3.25% in the first quarter of 2025 as a result of the higher average balance of loans, yields on securities and lower cost of funds, notably money market deposits.

•We remained well-capitalized by all regulatory standards. Risk-based capital ratios contracted slightly during the quarter with a total common equity Tier 1 ratio of 14.13%, Tier 1 risk-based capital ratio of 14.87% and total risk-based capital ratio of 16.12% at March 31, 2026, all down from March 31, 2025.

•The provision for credit losses for the first quarter of 2026 was $3.1 million, driven by loan growth and $1.4 million of net charge-offs.

•Noninterest income for the quarter ended March 31, 2026 totaled $15.2 million, reflecting an increase from the $13.0 million for the comparable prior year period, primarily from a $0.9 million increase in SBA loan sale gains and a $0.7 million increase in Other income.

•Noninterest expense of $60.2 million increased $2.3 million, or 4.0%, for the quarter ended March 31, 2026 from the prior year. The increase is attributable to a $1.7 million increase in Total personnel expenses and a $0.8 million increase in Other operating expenses.

Total assets were $12.9 billion at March 31, 2026, a 2.2% increase from December 31, 2025. The increase was driven primarily by deposit growth generating investable funds that were deployed in interest-bearing cash and loan balances. The primary balance sheet changes are presented below.

•Total cash and cash equivalents amounted to $598.0 million at March 31, 2026, representing a $288.4 million increase from December 31, 2025. Interest-bearing cash increased $300.0 million and was partially offset by an $11.6 million decrease in noninterest-bearing cash.

•AFS securities increased $69.0 million, or 3.4%, during the three months ended March 31, 2026.

•Total loans amounted to $8.8 billion at March 31, 2026, reflecting an increase of $71.4 million, or 0.8%, from December 31, 2025.

•Total deposits were $11.0 billion at March 31, 2026, an increase of $264.1 million, or 2.46%, from December 31, 2025. Deposit growth during the period was split between noninterest-bearing deposits, which increased $109.6 million, and interest-bearing deposits, which increased $154.4 million.

•Credit quality continued to be strong at March 31, 2026, with NPAs of 0.32% of total assets as of March 31, 2026, up 2 basis points from 0.30% at December 31, 2025.

•Our on-balance sheet liquidity ratio was 16.7% at March 31, 2026. Available off-balance sheet sources totaled $2.5 billion at quarter end, resulting in a total liquidity ratio of 34.0%.

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Index

Critical Accounting Estimates

The accounting principles we follow and our methods of applying these principles conform with GAAP and with general practices followed by the banking industry. Certain policies inherently have a greater reliance on the use of estimates, assumptions, or judgments and as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of our ACL and related Allowance for Unfunded Commitments, as well as business combinations, related fair value measurements and goodwill determination to be the accounting areas that require the most subjective or complex judgments, estimates, and assumptions, and where changes in those judgments, estimates, and assumptions (based on new or additional information, changes in the economic climate and/or market interest rates, etc.) could have a significant effect on our financial statements. See the "Allowance for Credit Losses, Allowance for Unfunded Commitments, and Loan Loss Experience" discussion in the Financial Condition section of Management's Discussion and Analysis.

There have been no material changes to the Company's significant accounting policies as discussed in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Current Accounting Matters

See Note 1 to the consolidated financial statements for information about recently announced or adopted accounting standards.

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Index

RESULTS OF OPERATIONS

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (primarily loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (deposits and borrowed funds). Changes in the net interest income are the result of changes in volume and the net interest spread which affects NIM. Volume refers to the average dollar levels of interest-earning assets and interest-bearing liabilities. Net interest spread refers to the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. NIM refers to net interest income divided by average interest-earning assets and is influenced by the level and relative mix of interest-earning assets and interest-bearing liabilities. Net interest income is also influenced by external factors such as local economic conditions, competition for loans and deposits, and market interest rates.

Net Interest Income for the Three Months Ended March 31, 2026

Net interest income for the first quarter of 2026 amounted to $107.1 million, an increase of $14.3 million, or 15.4%, from the $92.8 million recorded in the first quarter of 2025. The increase was primarily driven by higher yields on interest-earning assets and lower cost of funds.

For the first quarter of 2026, average interest-earning assets increased $256.3 million, or 2.2%, from the comparable period of the prior year, with average loans growing $674.3 million, while average securities and short term investments declined by $191.1 million and $226.9 million respectively.

The cost of interest bearing deposits decreased 25 basis points from the first quarter of 2025, with the biggest decrease coming from the cost of Money market deposits, which decreased 38 basis points and the cost of Time deposits $250,000, which decreased 29 basis points.

These changes resulted in the 42 basis point improvement in our NIM (see discussion below) from the like quarter to 3.67% for the first quarter of 2026.

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Index

The following table presents an analysis of net interest income for the first quarter of 2026 and 2025:

Average Balances and Net Interest Income Analysis

Three Months Ended March 31,

2026

2025

($ in thousands)

Average

Volume

Interest

Earned

or Paid

Average

Rate

Average

Volume

Interest

Earned

or Paid

Average

Rate

Assets

Loans (1) (2)

$

8,781,728 

$

120,747 

5.58 

%

$

8,107,394 

$

110,497 

5.52 

%

Taxable securities

2,442,140 

17,556 

2.88 

%

2,629,066 

15,524 

2.36 

%

Non-taxable securities

284,712 

1,115 

1.57 

%

288,905 

1,116 

1.55 

%

Short-term investments, primarily interest-bearing cash

276,471 

2,972 

4.36 

%

503,377 

5,487 

4.42 

%

Total interest-earning assets

11,785,051 

142,390 

4.89 

%

11,528,742 

132,624 

4.65 

%

Cash and due from banks

147,124 

133,756 

Premises and equipment

139,775 

143,064 

Other assets

690,864 

421,248 

Total assets

$

12,762,814 

$

12,226,810 

Liabilities

Interest-bearing checking

$

1,416,600 

$

2,230 

0.64 

%

$

1,431,556 

$

2,497 

0.71 

%

Money market deposits

4,566,409 

26,516 

2.35 

%

4,337,560 

29,180 

2.73 

%

Savings deposits

524,123 

241 

0.19 

%

539,104 

240 

0.18 

%

Other time deposits

495,115 

2,819 

2.31 

%

558,648 

3,353 

2.43 

%

Time deposits $250,000

304,089 

2,240 

2.99 

%

352,174 

2,849 

3.28 

%

Total interest-bearing deposits

7,306,336 

34,046 

1.89 

%

7,219,042 

38,119 

2.14 

%

Short-term borrowings

745 

1 

0.61 

%

794 

1 

0.60 

%

Long-term borrowings

73,858 

1,227 

6.74 

%

91,166 

1,657 

7.37 

%

Total interest-bearing liabilities

7,380,939 

35,274 

1.94 

%

7,311,002 

39,777 

2.21 

%

Noninterest-bearing checking

3,515,359 

3,375,098 

Other liabilities

179,753 

72,839 

Shareholders’ equity

1,686,763 

1,467,871 

Total liabilities and shareholders’ equity

$

12,762,814 

$

12,226,810 

Net yield on interest-earning assets and net interest income

$

107,116 

3.67 

%

$

92,847 

3.25 

%

Net yield on interest-earning assets and net interest income – tax-equivalent (3)

$

107,595 

3.69 

%

$

93,284 

3.27 

%

Interest rate spread

2.95 

%

2.44 

%

Average prime rate

6.75 

%

7.50 

%

(1)   Average loans include nonaccruing loans, the effect of which is to lower the average rate shown.

(2)   Includes accretion of discount on acquired loans of $1.1 million and $1.8 million for three months ended March 31, 2026 and 2025, respectively.

(3)   Includes tax-equivalent adjustments to reflect the tax benefit that we receive related to tax-exempt securities and loans as reduced by the related nondeductible portion of interest expense.

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Index

Overall, as demonstrated in the table above, the growth in earning assets, a shift in the mix of those earning assets from lower-yielding assets to higher-yielding assets, increased yield on assets and a decrease in the cost of liabilities drove the expansion in NIM and net interest income.

•Net interest income for the first quarter of 2026 was $107.1 million, an increase of $14.3 million from the like quarter. The increase in net interest income was primarily driven by our focused efforts to increase interest-earning assets, to improve the mix of earning assets and to manage deposit costs after the rate cuts by the Federal Reserve between September and December of 2024, which saw the federal funds rate fall 50 basis points and additional rate cuts totaling 75 basis points in the second half of 2025. We also focused on increasing loan yields as new originations were at higher rates than older loans. Further, securities yields increased as a result of the loss-earnback transactions in the third and fourth quarters of 2025 along with continued paydowns and payoffs on lower-yielding bonds.

•The Company’s NIM for the first quarter of 2026 was 3.67%, an increase of 42 basis points from the like quarter. Within interest-earning assets, the 2025 securities loss-earnback transactions referenced above resulted in an increase of 46 basis points on the yield on total securities as compared to the like quarter. In addition, loan yields increased 6 basis points to 5.58%. Following the rate cuts by the Federal Reserve in late 2024 and the second half of 2025, the rate on interest-bearing deposits fell 25 basis points from the like quarter.

•A

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

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

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

This MD&A is intended to assist readers in understanding our results of operations and changes in financial position for the past three years. It should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Report. This discussion may contain forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in forward-looking statements as a result of various factors.

Overview and 2025 Highlights

The Company is a bank holding company headquartered in Southern Pines, North Carolina. We provide diversified financial services primarily though the Bank, our principal subsidiary, including commercial and consumer banking services, mortgage lending, SBA lending, accounts receivable financing, and investment advisory services. As of December 31, 2025, the Bank had 113 branches in North Carolina and South Carolina and 1,353 full-time equivalent employees. We have grown organically as well as through strategic acquisitions as discussed previously in "Recent Developments and Acquisitions".

2025 Financial Highlights:

•Return on average assets was 0.89% for the year ended December 31, 2025, as compared to 0.63% for the prior year. Return on average common equity was 7.16% for the year ended December 31, 2025, as compared to 5.38% for the prior year. As discussed below, the returns for 2025 and 2024 were impacted by securities loss transactions as well as Hurricane Helene provisions.

•Total assets at December 31, 2025 were $12.7 billion, a 4.3% increase from a year earlier.

•Total loans outstanding expanded by $0.6 billion, or 7.8%, during the year. Loans totaled $8.7 billion at December 31, 2025.

•Credit quality continued to be strong with the NPA to total assets ratio at 0.30% as of December 31, 2025, consistent with December 31, 2024. Net charge offs as a percentage of average loans were 0.10% for 2025, as compared to 0.07% for the prior year.

•Capital remained strong with a total CET1 ratio of 14.10%, down from 14.35% for the prior year, and total risk-based capital ratio of 16.12% as of December 31, 2025, a decrease from 16.63% for the prior year. The decrease during 2025 in risk-based capital ratios was driven by loan growth, which carries a higher risk weight than short term investments, along with the repayment of $18.0 million of subordinated debt.

•Net income was $111.0 million, or $2.68 diluted EPS, for 2025 compared to net income of $76.2 million, or $1.84 diluted EPS, for 2024. As noted below, 2025 results were impacted by $71.6 million of securities loss from transactions that took place during the third and fourth quarter of 2025 and the $11.1 million reversal of provision related to Hurricane Helene throughout the year. See the following for discussion of changes to net income:

•Net interest income for 2025 increased $66.0 million, or 19.9%, driven by increased interest income and lower interest expense. The NIM was 3.40% for 2025, an increase of 51 basis points from the prior year.

•Total interest income increased $38.0 million in 2025 as compared to 2024, driven by higher interest income on loans of $21.1 million related to a combination of higher volumes of average balances and increased yields. Interest income on securities increased $20.5 million, primarily the result of increased yields driven by the securities loss-earnback transactions in late 2024 and the second half of 2025.

•Interest income on other interest-earning assets, primarily overnight funds, decreased $3.7 million, primarily the result of lower volumes along with the decrease in the federal funds rate.

•The 2025 decrease in interest expense of $28.0 million was driven by lower money market rates in late 2025, which resulted in repricing of our deposits and a corresponding $19.6 million decrease in

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deposit interest expense, especially in money market accounts which accounted for $7.4 million of the decrease. Additionally, interest expense on borrowings fell $8.4 million, primarily the result of average balances on outstanding borrowings.

•Provision for credit losses for 2025 of $11.5 million was down from $16.4 million in 2024 due primarily to the $13.0 million provision related to potential exposure from Hurricane Helene in 2024. Offsetting this was higher net charge offs in 2025, provisions for higher loan growth in 2025 and an increase in the level of unfunded commitments. See the "Provision for Loan Losses" section below.

•Noninterest income declined $25.8 million in 2025, which resulted primarily from the $71.6 million securities loss related to securities loss-earnback transactions that took place in the third and fourth quarter of 2025. Noninterest income in 2024 included a securities loss of $38.0 million related to a securities loss-earnback transactions that took place in the fourth quarter of 2024. Refer to "Noninterest Income" section below for further discussion.

•Noninterest expense increased $3.7 million in 2025, primarily related to the $4.2 million increase in Total personnel expense driven by increased incentives expense arising from the Company's performance. In 2024 and 2025, the Company actively managed headcount and continued to apply additional expense controls. Refer to "Noninterest Expense" section below for further discussion.

•Income tax expense increased $6.6 million from the prior year primarily resulting from higher pre-tax income. The 2025 effective tax rate of 20.4% was lower than the prior year as the result of net discrete tax benefits, primarily arising from state taxes, including the continued North Carolina graduated tax rate reductions.

Current Economic Conditions

Economic conditions during 2025 continued to show resilience, supported by generally positive domestic results, relatively low unemployment and sustained demand for goods and services. Inflationary pressures moderated further compared to prior periods, reflecting the impact of monetary policy actions taken by the Federal Reserve in recent years. However, a combination of positive and negative economic indicators persisted throughout 2025 and there continues to be some uncertainty in economic conditions and outlook. As such, we could be exposed to ongoing risks, which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations.

Our financial position and results of operations are susceptible, among other factors, to the ability of our loan customers to meet their loan obligations to us, the availability of our workforce, the availability of our vendors, and the volatility in the value of assets held by us or securing our loans. We have not realized significant negative impact on our loan portfolio or asset quality to date as a result of the current economic conditions. However, the economic pressures and uncertainties, increased consumer demand and recent volatility in both short-term and long-term interest rates have resulted in, and may continue to result in, specific changes in consumer and business spending and borrowing habits, given the current and expected interest rate environment, which could make it difficult to grow assets and income.

The extent to which the current economic conditions have a further impact on our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including actions taken by governmental authorities in response to inflationary trends and recessionary risks.

Critical Accounting Estimates

The accounting principles we follow and our methods of applying these principles conform with GAAP and with general practices followed by the banking industry. Certain policies inherently have a greater reliance on the use of estimates, assumptions, or judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of our ACL and related Allowance for Unfunded Commitments, as well as business combinations, related fair value measurements and goodwill determination to be the accounting areas that require the most subjective or complex judgments, estimates, and assumptions, and where changes in those judgments, estimates, and assumptions (based on new or additional information, changes in the economic climate and/or market interest rates, etc.) could have a significant effect on

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our financial statements. See the "Allowance for Credit Losses, Allowance for Unfunded Commitments, and Loan Loss Experience" discussion in the Financial Condition section of Management's Discussion and Analysis.

Our most significant accounting policies are presented in Note 1 to the accompanying consolidated financial statements. These policies, along with the disclosures presented in the other notes to the consolidated financial statements and in this MD&A, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.

Allowance for Credit Losses on Loans and Allowance for Unfunded Commitments

While management uses the best information available to establish the ACL, future adjustments to the ACL and methodology may be necessary if economic or other conditions differ substantially from the assumptions used in making the estimates. We perform periodic and systematic detailed reviews of the loan portfolio to identify trends and to assess the overall collectability of the portfolio. We believe the accounting estimate related to the ACL is a “critical accounting estimate” as: (1) changes in it can materially affect the provision for loan losses and net income; (2) it requires management to predict borrowers’ likelihood or capacity to repay, including evaluation of inherently uncertain future economic conditions; (3) the value of underlying collateral must be estimated on collateral-dependent loans; (4) prepayment activity must be projected to estimate the life of loans that often are shorter than contractual terms; and (5) it requires estimation of a reasonable and supportable forecast period for credit losses. Accordingly, this is a highly subjective process and requires significant judgment since it is difficult to evaluate current and future economic conditions in relation to an overall credit cycle and estimate the timing and extent of loss events that are expected to occur prior to end of a loan’s estimated life.

Our ACL is assessed at each quarterly balance sheet date and adjustments are recorded in the provision for loan losses on the consolidated statements of income. There are many factors affecting the ACL, some of which are quantitative, while others require qualitative judgment. There are both internal factors (i.e., loan balances, historical loss rates, credit quality, the contractual lives of loans), external factors (i.e., economic conditions such as trends in housing prices, interest rates, GDP, inflation, and unemployment), and assumptions of probability of default and loss given default by loan category, that can impact the ACL estimate. One of the most significant assumptions is the macroeconomic scenario forecasts that determine the economic variables utilized in the ACL model. Due to the inherent uncertainty in the macroeconomic forecasts, we evaluate a baseline scenario quarterly, as well as upside or downside macroeconomic scenarios to assess the most reasonable scenario based on review of the variable forecasts for each scenario, comparison to expectations, and sensitivity of variations in each scenario.

The most significant variable in the economic forecasts is the national unemployment rate (which has remained relatively stable), and changes in unemployment forecasts can have significant impact to the estimated ACL. Other economic variables include national GDP, the national commercial real estate pricing index and the national home price index. We use the national unemployment rate in all of our models regardless of the loan portfolio type, and we use a second economic variable in each cohort model depending on the loan portfolio type. The ACL quantitative estimate is sensitive to changes in the economic variable forecasts during the twelve-month reasonable and supportable forecast period with a straight-line reversion over the next three years to long-term average loss factors. There have been no changes to the reasonable and supportable period or reversion period in any year presented.

Although management believes its process for determining the ACL adequately considers all the factors that could potentially result in credit losses, the process includes subjective elements and is susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect our earnings or financial position in future periods.

Under the range of macroeconomic forecast scenarios considered as of December 31, 2025, use of a "downside"/ more pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $32 million. This estimate reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data but does not consider other qualitative adjustments that could increase or decrease modeled loss estimates calculated using this alternative economic scenario.

PCD loans represent assets that are acquired with evidence of more than insignificant credit quality deterioration since origination at the acquisition date. At acquisition, the allowance on PCD assets is booked directly to the ACL. Any subsequent changes in the ACL on PCD assets is recorded through the provision for loan losses on the consolidated statements of income.

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We believe that the ACL is adequate to absorb the expected life of loan credit losses on the portfolio of loans as of the balance sheet date. Actual losses incurred may differ materially from our estimates. For example, inflationary pressures and recessionary concerns leading to macroeconomic economic deterioration, higher unemployment and declines in real estate and other asset valuations could affect our loss experience and assumptions utilized in our model.

We estimate expected credit losses on unfunded commitments to extend credit over the contractual period in which we are exposed to credit risk on the underlying commitments, unless the obligation is unconditionally cancellable. The allowance for off-balance sheet credit exposures, which is included in "Other liabilities" on the consolidated balance sheets, is adjusted for as an increase or decrease to the provision for unfunded commitments. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The methodology is based on a loss rate approach that starts with the probability of funding based on historical experience. Similar to the methodology discussed above related to the loans receivable portfolio, adjustments are made to the historical losses for current conditions and reasonable and supportable forecasts.

Additional information on the loan portfolio and ACL can be found in the sections of this Item 7 titled “Nonperforming Assets” and “Allowance for Credit Losses and Loan Loss Experience” below.

Business Combinations and Goodwill

We believe that the accounting for business combinations, goodwill, and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. Pursuant to applicable accounting guidance, we recognize assets acquired, including identified intangible assets, and the liabilities assumed in acquisitions at their fair values as of the acquisition date, with the related transaction costs expensed in the period incurred. Specified items such as acquired operating lease assets and liabilities as lessee, employee benefit plans, and income-tax related balances are recognized in accordance with accounting guidance that results in measurements that may differ from fair value. Determining the fair value of assets acquired and liabilities assumed often involves estimates based on internal or third-party valuations which include appraisals, discounted cash flow analysis, or other valuation techniques that may include estimates of attrition, inflation, asset growth rates, discount rates, credit risk, multiples of earnings, or other relevant factors. The determination of fair value may require us to make point-in-time estimates about discount rates, future expected cash flows, market conditions, and other future events that can be volatile in nature and challenging to assess. While we use the best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement.

The primary identifiable intangible asset we typically record in connection with a whole bank or bank branch acquisition is the value of the core deposit intangibles which represents the estimated value of the long-term deposit relationships acquired in the transaction. Determining the amount of identifiable intangible assets and their average lives involves multiple assumptions and estimates and is typically determined by performing a discounted cash flow analysis, which involves a combination of any or all of the following assumptions: customer attrition/runoff, alternative funding costs, deposit servicing costs, and discount rates. The core deposit intangibles are amortized over the estimated useful lives of the deposit accounts based on a method that we believe reasonably approximates the anticipated benefit stream from this intangible. The estimated useful lives are periodically reviewed for reasonableness and have generally been estimated to have a life ranging from seven to ten years, with an accelerated rate of amortization. We review identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our policy is that an impairment loss is recognized, equal to the difference between the asset’s carrying amount and its fair value, if the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Estimating future cash flows involves the use of multiple estimates and assumptions, such as those listed above.

The ACL for PCD assets is recognized within business combination accounting with no initial impact to net income. Changes in estimates of expected credit losses on PCD loans after acquisition are recognized as provision expense (or reversal of provision expense) in subsequent periods as they arise. The ACL for non-PCD assets is recognized as provision expense in the same reporting period as the business combination. Estimated loan losses for acquired loans are determined using methodologies and applying estimates and assumptions that were described previously in the Allowance for Credit Losses on Loans and Allowance for Unfunded Commitments section above.

Non-PCD loans acquired are generally estimated at fair value using a discounted cash flow approach with assumptions of discount rate, remaining life, prepayments, probability of default, and loss given default. The actual

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cash flows on these loans could differ materially from the fair value estimates. The amount we record as the fair values for the loans is generally less than the contractual unpaid principal balance due from the borrowers, with the difference being referred to as the “discount” on the acquired loans. Discounts on acquired non-PCD loans are accreted to interest income over their estimated remaining lives, which may include prepayment estimates in certain circumstances.

Similarly, premiums or discounts on acquired debt are accreted or amortized to interest expense over their remaining lives. Actual accretion or amortization of premiums and discounts from a business acquisition may differ materially from our estimates impacting our operating results.

We believe that the accounting for goodwill also involves a higher degree of judgment than most other significant accounting policies. Goodwill arising from business combinations represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

ASC 350-10 establishes standards for an impairment assessment of goodwill. At each reporting date between annual goodwill impairment tests, we consider potential indicators of impairment. Generally, absent potential impairment indicators, we perform an annual assessment of whether the events and circumstances resulted in it being more likely than not that the fair value of any reporting unit was less than its carrying value. Impairment indicators considered include the condition of the economy and banking industry; government intervention and regulatory updates; the impact of recent events to financial performance and cost factors of the reporting unit; performance of the Company's stock, and other relevant events. During 2025 there were no triggers warranting interim impairment assessments and for the 2025 annual assessment, we concluded that it was more likely than not that the fair value exceeded its carrying value. At December 31, 2025, we had $478.8 million of goodwill.

Recent Accounting Standards and Pronouncements

For information relating to recent accounting standards and pronouncements, see Note 1 to our consolidated financial statements entitled “Summary of Significant Accounting Policies.”

RESULTS OF OPERATIONS

The following discussion reviews the results of operations and key drivers to change in the results of 2025 as compared to 2024. For a description of our results of operations for 2024 as compared to 2023, refer to the "Overview and 2024 Highlights," Results of Operations," and "Analysis of Financial Condition and Changes in Financial Condition" sections of Item 7 in our 2024 Form 10-K.

Net Interest Income

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). Changes in the net interest income are the result of changes in volume and the net interest spread which affects NIM. Volume refers to the average dollar levels of interest-earning assets and interest-bearing liabilities. Net interest spread refers to the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. NIM refers to net interest income divided by average interest-earning assets and is influenced by the level and relative mix of interest-earning assets and interest-bearing liabilities. Net interest income is also influenced by external factors such as local economic conditions, competition for loans and deposits, and market interest rates.

Net interest income amounted to $398.2 million in 2025, an increase of $66.0 million, or 19.9%, from $332.3 million in 2024. The increase was primarily due to the increase in yields on securities, partially a result of the securities loss-earnback transactions in 2025 and 2024, and the higher volume and yields of average loans outstanding. Additionally, interest expense decreased, primarily due the lower rates on interest-bearing deposits, specifically money market accounts, partially offset by the higher volume of average money market account balances. The average rate on borrowings decreased due to the payoff of borrowings with higher interest rates as well as borrowings with variable interest rates decreasing after the FOMC actions in 2024 and 2025.

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As a result of the higher net interest income related to the increase in the yield on interest-bearing assets and the decrease in the cost of interest-bearing liabilities, NIM expanded 51 basis points to 3.40% in 2025 from 2.89% in 2024. For internal purposes, we evaluate our NIM on a tax-equivalent basis, which is a non-GAAP financial measure, by adding the tax benefit realized from tax-exempt loans and securities to reported interest income, then dividing by total average earning assets. We believe that analysis of NIM on a tax-equivalent basis is useful and appropriate because it allows a comparison of net interest in different periods without taking into account the different mix of taxable versus non-taxable loans and investments that may have existed during those periods. The following is a reconciliation of reported net interest income to tax-equivalent net interest income and the resulting NIM as reported and on a tax-equivalent basis.

($ in thousands)

Year ended December 31,

2025

2024

2023

Net interest income, as reported

$

398,247 

$

332,273 

$

346,843 

Tax-equivalent adjustment

1,389 

2,983 

2,694 

Net interest income, tax-equivalent

$

399,636 

$

335,256 

$

349,537 

Net interest margin, as reported

3.40 

%

2.89 

%

3.03 

%

Net interest margin, tax-equivalent

3.42 

%

2.93 

%

3.06 

%

Our total cost of deposits has been more impacted by the FOMC's changes in short term rates than the yield on our interest-earning assets. The target federal funds rate began 2024 at 5.50% and remained there until September 2024, when it was reduced a total of 100 basis points by the end of 2024, helping to increase our NIM to 3.05% in the fourth quarter of 2024. In the second half of 2025, after a pause in rate changes, the FOMC made further rate changes, resulting in an additional 75 basis point decrease.

As shown in the chart below, our NIM has grown consistently since the first quarter of 2024. This NIM expansion is the result of our yield on interest-earning assets continuing to earn at higher rates, increasing 41 basis points during the same period, while our total cost of deposits peaked in the third quarter of 2024, then declined 44 basis points to 1.32% for the fourth quarter of 2025.

First Bancorp Comparison of Net Interest Margin,

Yield on Earning Assets and Total Cost of Deposits

Eight Quarters Ended December 31, 2025

Our NIM for all periods presented below benefited from the net accretion income arising from purchase accounting

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premiums/discounts associated with acquisitions. Presented in the table below is the amount of accretion which increased net interest income in each year presented.

Year ended December 31,

($ in thousands)

2025

2024

2023

Interest income – increased by accretion of loan discount on acquired loans

$

6,128 

$

8,938 

$

11,507 

Total interest income impact

6,128 

8,938 

11,507 

Interest expense – (increased) reduced by (discount accretion) premium amortization of deposits

(344)

(826)

(3,101)

Interest expense – increased by discount accretion of borrowings

(743)

(767)

(842)

Total net interest expense impact

(1,087)

(1,593)

(3,943)

Impact on net interest income

$

5,041 

$

7,345 

$

7,564 

The most significant component of the purchase accounting adjustments in each year was loan discount accretion on purchased loans. Generally, the level of loan discount accretion will decline each year after an acquisition due to the natural reduction in the outstanding balance of acquired loans. Alternately, levels of accretion will increase as a result of future acquisitions and related additions to loan discounts on acquired portfolios which are accreted to income as experienced since 2023 with the GrandSouth acquisition.

At December 31, 2025 and 2024, unaccreted loan discount on purchased loans amounted to $8.8 million and $15.1 million, respectively. The GrandSouth acquired portfolio comprised the majority of the remaining unaccreted loan discount at December 31, 2025.

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The following table presents the major components of net interest income and NIM.

Average Balances and Net Interest Income Analysis

Year Ended December 31,

2025

2024

2023

($ in thousands)

Average

Volume

Interest

Earned

or Paid

Avg.

Rate

Average

Volume

Interest

Earned

or Paid

Avg.

Rate

Average

Volume

Interest

Earned

or Paid

Avg.

Rate

Assets

Loans (1) (2)

$

8,283,246 

$

462,306 

5.58 

%

$

8,046,681 

$

441,181 

5.48 

%

$

7,902,628 

$

418,853 

5.30 

%

Taxable securities

2,632,412 

68,055 

2.59 

%

2,608,494 

47,510 

1.82 

%

2,920,040 

52,276 

1.79 

%

Non-taxable securities

287,298 

4,461 

1.55 

%

291,520 

4,466 

1.53 

%

296,287 

4,485 

1.51 

%

Short-term investments, primarily interest-bearing cash

496,404 

22,413 

4.52 

%

561,886 

26,083 

4.64 

%

314,537 

13,330 

4.24 

%

Total interest-earning assets

11,699,360 

557,235 

4.76 

%

11,508,581 

519,240 

4.51 

%

11,433,492 

488,944 

4.28 

%

Cash and due from banks

146,136 

84,997 

93,182 

Premises and equipment

141,884 

147,916 

151,980 

Other assets

524,650 

393,001 

354,379 

Total assets

$

12,512,030 

$

12,134,495 

$

12,033,033 

Liabilities and Equity

Interest-bearing checking

$

1,412,605 

$

9,443 

0.67 

%

$

1,395,856 

$

9,910 

0.71 

%

$

1,457,272 

$

6,192 

0.42 

%

Money market deposits

4,437,314 

119,158 

2.69 

%

4,039,999 

126,531 

3.13 

%

3,355,992 

78,643 

2.34 

%

Savings deposits

535,863 

1,009 

0.19 

%

564,473 

1,209 

0.21 

%

668,730 

1,024 

0.15 

%

Other time deposits

527,357 

12,406 

2.35 

%

666,868 

20,429 

3.06 

%

737,330 

19,023 

2.58 

%

Time deposits $250,000

332,895 

10,502 

3.15 

%

373,851 

14,006 

3.75 

%

343,669 

9,984 

2.90 

%

Total interest-bearing deposits

7,246,034 

152,518 

2.10 

%

7,041,047 

172,085 

2.44 

%

6,562,993 

114,866 

1.75 

%

Short-term borrowings

— 

— 

— 

%

137,692 

7,116 

5.17 

%

374,254 

19,289 

5.15 

%

Long-term borrowings

89,889 

6,470 

7.20 

%

95,275 

7,766 

8.15 

%

99,858 

7,946 

7.96 

%

Total interest-bearing liabilities

7,335,923 

158,988 

2.17 

%

7,274,014 

186,967 

2.57 

%

7,037,105 

142,101 

2.02 

%

Noninterest-bearing checking

3,506,429 

3,367,035 

3,613,973 

Total sources of funds

10,842,352 

1.47 

%

10,641,049 

1.76 

%

10,651,078 

1.33 

%

Other liabilities

119,805 

76,985 

88,870 

Shareholders’ equity

1,549,873 

1,416,461 

1,293,085 

Total liabilities and shareholders’ equity

$

12,512,030 

$

12,134,495 

$

12,033,033 

Net yield on interest-earning assets and net interest income

$

398,247 

3.40 

%

$

332,273 

2.89 

%

$

346,843 

3.03 

%

Net yield on interest-earning assets and net interest income – tax-equivalent (3)

$

399,636 

3.42 

%

$

335,256 

2.93 

%

$

349,537 

3.06 

%

Interest rate spread

2.59 

%

1.94 

%

2.26 

%

Average prime rate

7.37 

%

8.31 

%

8.20 

%

(1)Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and deferred loan (cost)/fee amortization in the amounts of $(0.8) million, $(1.1) million, and $0.5 million for 2025, 2024, and 2023, respectively.

(2)Includes accretion of discount on acquired loans of $6.1 million, $8.9 million, and $11.5 million in 2025, 2024, and 2023, respectively.

(3)Includes tax-equivalent adjustments to reflect the tax benefit that we receive related to tax-exempt securities and loans as reduced by the related nondeductible portion of interest expense.

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The following table presents additional detail regarding the estimated impact that changes in interest-earning asset and interest-bearing liability volumes and changes in the interest rates we earned/paid had on our net interest income in 2025 and 2024.

Volume and Rate Variance Analysis

Year Ended December 31, 2025

Year Ended December 31, 2024

Change Attributable to

Change Attributable to

($ in thousands)

Changes

in Volume

Changes

in Rates

Total

Increase

(Decrease)

Changes

in Volume

Changes

in Rates

Total

Increase

(Decrease)

Interest income:

Loans

$

13,217 

$

7,908 

$

21,125 

$

7,767 

$

14,561 

$

22,328 

Taxable securities

618 

19,927 

20,545 

(5,626)

860 

(4,766)

Non-taxable securities

(66)

61 

(5)

(73)

54 

(19)

Other interest-earning assets, primarily overnight funds

(2,957)

(713)

(3,670)

10,982 

1,771 

12,753 

Total interest income

10,812 

27,183 

37,995 

13,050 

17,246 

30,296 

Interest expense:

Interest bearing checking accounts

112 

(579)

(467)

(348)

4,066 

3,718 

Money market accounts

10,669 

(18,042)

(7,373)

18,726 

29,162 

47,888 

Savings accounts

(54)

(146)

(200)

(192)

377 

185 

Other time

(2,350)

(5,673)

(8,023)

(2,479)

3,885 

1,406 

Time deposits $250,000

(1,292)

(2,212)

(3,504)

1,004 

3,018 

4,022 

Total interest-bearing deposits

7,085 

(26,652)

(19,567)

16,711 

40,508 

57,219 

Short-term borrowings

(7,116)

— 

(7,116)

(12,208)

35 

(12,173)

Long-term borrowings

(3,183)

1,887 

(1,296)

(369)

189 

(180)

Total interest expense

(3,214)

(24,765)

(27,979)

4,134 

40,732 

44,866 

Net interest income

$

14,026 

$

51,948 

$

65,974 

$

8,916 

$

(23,486)

$

(14,570)

Note - Changes attributable to both volume and rate are allocated equally between rate and volume variances.

As demonstrated in the above table, net interest income expanded $66.0 million in 2025. Higher rates and volumes on interest-bearing assets and lower rates on interest-bearing liabilities were partially offset by higher money market volume.

•For 2025, higher loan volume resulted in a $13.2 million increase in interest income while increased market rates contributed to an additional $7.9 million of loan interest income. Variable rate loans comprised approximately 29% of the loan portfolio at December 31, 2025, and, accordingly, the magnitude of the immediate yield impact we experience from each federal funds rate change is limited.

•Increases in the overall yield on average investment securities, along with somewhat higher volumes, resulted in increased interest income of $20.5 million in 2025. During 2025, $585.1 million of AFS securities were purchased with a weighted average yield of 4.13%.

•Lower volumes of other interest-earning assets (primarily interest-bearing cash balances) along with lower yields resulted in a decrease in interest income of $3.7 million for the year.

•The decrease of $19.6 million in interest expense on deposits was driven by lower rates on accounts as we repriced deposits in response to the market decreases, partially offset with higher volumes, primarily in money market deposit accounts.

•Lower balances on short-term borrowings, historically comprised of short-term FHLB and Federal Reserve advances to fund loan demand in excess of deposit growth, contributed $7.1 million to the decrease in borrowings interest expense, which, in total, decreased $8.4 million in 2025.

Provision for Credit Losses and Provision for Unfunded Commitments

The provision for credit losses is comprised of the provision for loan losses and the provision for unfunded commitments. The provision recorded in each period represents the amount required such that the total ACL reflects

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the current estimate of life of loan credit losses in the loan portfolio and the allowance for unfunded commitments reflects the current expected losses on unfunded loan commitments that are expected to result in outstanding loan balances. Our estimate of credit losses is determined using a complex model that relies on reasonable and supportable forecasts and historical loss information to determine the balance of the ACL and allowance for unfunded commitments. The allowance for unfunded commitments is included in "Other liabilities" in the consolidated balance sheets.

The provision for loan losses was $9.6 million in 2025 and $18.8 million in 2024. The amount of provision recorded in each period was the amount required such that the total ACL reflected the appropriate balance as determined under the CECL model. The primary contributor to the reduction in provision expense was the $13.0 million related to potential credit exposure from Hurricane Helene recognized in 2024.

We subscribe to a third-party service which provides quarterly macroeconomic scenarios for the United States economy. For 2025, we continue to utilize the baseline forecast, which incorporates an equal probability of the United States economy performing better or worse than the projection. The economic forecasts throughout the year have exhibited general stability of the economy demonstrated in relatively low unemployment rates, healthy GDP levels, and mixed results for real estate price indices for commercial and residential properties.

During 2025 we recorded a provision for unfunded commitments of $1.9 million compared to a reduction of $2.3 million for 2024. Changes in the level of provision each year are generally related to fluctuations in the level of available credit lines and updated loss drivers.

In the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene in third quarter of 2024, the Company identified borrowers who were potentially impacted. During 2025, the Company evaluated the commercial loan portfolio and adjusted risk ratings and nonaccrual status as applicable. Therefore, for those relationships, the normal reserving process was applied for December 31, 2025. For the potentially impacted consumer loans, the Company applied increased reserve rates based upon severe economic factors to the approximately $268 million of loans (primarily Residential 1-4 family real estate) in the most impacted path of Hurricane Helene. Due to the potential exposure from Hurricane Helene, the ACL on these impacted consumer loans was $1.9 million as of December 31, 2025, adding 2 basis points to the overall ACL as a percent of total loans, which was 1.42% as of December 31, 2025.

Additional discussion of the CECL method and our asset quality and credit metrics, which impact our provision for credit losses, is provided in the "Nonperforming Assets" and "Allowance for Credit Losses and Loan Loss Experience" sections following.

Noninterest Income

Our noninterest income amounted to $7.9 million in 2025, $17.9 million in 2024, and $57.3 million in 2023.

The decreased noninterest income for the year ended December 31, 2025 as compared to the same period in 2024 is a result of increased "Securities losses, net," partially offset by increased "Other gains, net." Details of the more significant components of noninterest income are presented in the table below.

Noninterest Income

Year Ended December 31,

($ in thousands)

2025

2024

2023

Service charges on deposit accounts

$

16,237 

$

16,620 

$

16,800 

Other service charges and fees - bankcard and interchange income, net

9,464 

9,306 

9,319 

Other service charges - other

15,022 

12,961 

12,766 

Presold mortgage loan fees and gains on sale

1,819 

2,292 

1,613 

Commissions from sales of financial products

6,274 

5,270 

5,503 

SBA loan sale gains

1,072 

3,630 

2,489 

Bank-owned life insurance ("BOLI") income

5,113 

4,773 

4,350 

Securities losses, net

(71,627)

(37,981)

— 

Other gains, net

8,691 

1,028 

4,465 

Total noninterest income

$

(7,935)

$

17,899 

$

57,305 

Service charges on deposit accounts decreased $0.4 million, or 2.3%, in 2025 as compared to 2024.

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Other service charges and fees - bankcard interchange income, net represents interchange income from debit and credit card transactions, net of associated interchange expense and amounted to $9.5 million in 2025, a 1.7% increase from the $9.3 million in 2024.

Other service charges - other includes items such as ATM charges, wire transfer fees, safety deposit box rentals, fees from sales of personalized checks, and check cashing fees. Also included in this category are SBA guarantee servicing fees and related servicing rights amortization which fluctuate based on the volume of and prepayment speeds on SBA loans serviced for others. The increase in this category in 2025 was $2.1 million, or 15.9%.

Securities losses, net was $71.6 million in 2025. $27.9 million of this loss relates to a securities loss-earnback transaction from the third quarter in which the Company sold $194.3 million of AFS securities bearing 1.63% at a loss. Additionally, $43.7 million of this loss relates to a securities loss-earnback transaction from the fourth quarter in which the Company sold $342.0 million of AFS securities bearing 1.67% at a loss.

Other gains, net amounted to a net gain of $8.7 million for 2025. The majority of the increase from the prior year related to a pretax gain of $4.6 million realized upon the sale of an office building during the fourth quarter.

Noninterest Expenses

Total noninterest expenses totaled $239.3 million, $235.6 million, and $254.4 million, for 2025, 2024, and 2023, respectively.

The primary contributors to the $3.7 million, or 1.6%, increase for the year ended December 31, 2025 as compared to 2024 was the $4.2 million increase in Total personnel expense arising from increased incentives due to the Company's financial performance, partially offset by the $0.9 million decrease in Amortization of intangible assets. For the year ended December 31, 2025, there was a continued overall effort by management to actively control headcount and expenses.

The following table presents the primary components of noninterest expense.

Noninterest Expenses

Year Ended December 31,

($ in thousands)

2025

2024

2023

Salaries incentives and commissions expense

$

119,478 

$

113,853 

$

114,415 

Employee benefit expense

24,706 

26,169 

25,436 

Total personnel expense

144,184 

140,022 

139,851 

Occupancy and equipment expense

20,435 

20,535 

21,554 

Credit card rewards and other bankcard expenses

6,011 

6,572 

5,288 

Telephone and data lines

3,497 

3,390 

3,960 

Software licenses and other software costs

8,096 

7,691 

8,717 

Data processing expense

9,767 

8,916 

8,733 

Professional fees

5,576 

6,207 

5,409 

Advertising and marketing

3,375 

3,704 

4,401 

Non-credit losses

3,590 

2,859 

4,784 

FDIC insurance costs

6,449 

6,559 

6,982 

Corporate insurance costs

2,189 

2,302 

2,275 

Merger and acquisition expenses

— 

— 

13,695 

Intangibles amortization expense

5,672 

6,604 

8,003 

Foreclosed real estate (gains) losses, net

261 

(245)

(150)

Other operating expenses

20,208 

20,491 

20,877 

Total noninterest expense

$

239,310 

$

235,607 

$

254,379 

Income Taxes

We recorded income tax expense of $28.5 million in 2025, $21.9 million in 2024, and $27.8 million in 2023. Our effective tax rates were 20.4% for 2025, 22.3% for 2024, and 21.1% for 2023. The effective tax rate for 2025 included approximately $2.1 million of net discrete tax benefits, primarily arising from state taxes, including the continued North Carolina graduated tax rate reductions. The effective tax rate for 2024 included incremental state tax-related expense related to prior years, changes in state tax income apportionment, and the negative impact of

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decreasing deferred tax assets related to the North Carolina corporate income tax reduction effective January 1, 2025 and for future years.

ANALYSIS OF FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION

Loans

The loan portfolio is the largest category of our earning assets and is comprised of commercial loans, real estate mortgage loans, real estate construction loans, and consumer loans. The majority of our loan portfolio is within our North Carolina and South Carolina market areas. We also have a portfolio of SBA loans that have been made on a more dispersed geographic basis. The diversity of the economic bases of our market areas has historically provided a stable lending environment.

Total loans amounted to $8.7 billion at December 31, 2025, an increase of $627.7 million, or 7.8%, from December 31, 2024. The following table provides a summary of the loan portfolio composition at each of the past five year ends.

Loan Portfolio Composition

As of December 31,

2025

2024

2023

2022

2021

($ in thousands)

Amount

% of

Total

Loans

Amount

% of

Total

Loans

Amount

% of

Total

Loans

Amount

% of

Total

Loans

Amount

% of

Total

Loans

Commercial and industrial

$

1,046,438 

12 

%

$

919,690 

11 

%

$

905,862 

11 

%

$

641,941 

9 

%

$

648,997 

11 

%

Construction, development & other land loans

753,199 

9 

%

647,167 

8 

%

992,980 

12 

%

934,176 

14 

%

828,549 

13 

%

Commercial real estate - owner occupied

1,353,912 

15 

%

1,248,812 

16 

%

1,259,022 

16 

%

1,036,270 

16 

%

991,775 

16 

%

Commercial real estate - non owner occupied

2,843,555 

33 

%

2,625,554 

33 

%

2,528,060 

31 

%

2,123,811 

32 

%

1,813,849 

31 

%

Multi-family real estate

537,015 

6 

%

506,407 

6 

%

421,376 

5 

%

350,180 

5 

%

389,113 

6 

%

Residential 1-4 family real estate

1,736,453 

20 

%

1,729,322 

21 

%

1,639,469 

20 

%

1,195,785 

18 

%

1,021,966 

17 

%

Home equity loans/lines of credit

383,652 

4 

%

345,883 

4 

%

335,068 

4 

%

323,726 

5 

%

331,932 

5 

%

Consumer loans

67,458 

1 

%

70,653 

1 

%

68,443 

1 

%

60,659 

1 

%

57,238 

1 

%

Loans, gross

8,721,682 

100 

%

8,093,488 

100 

%

8,150,280 

100 

%

6,666,548 

100 

%

6,083,419 

100 

%

Unamortized net deferred loan (fees) costs

737 

1,188 

(178)

(1,403)

(1,704)

Total loans

$

8,722,419 

$

8,094,676 

$

8,150,102 

$

6,665,145 

$

6,081,715 

The majority of our loan portfolio over the years has been real estate mortgage loans, including commercial and residential mortgages. Except for construction, land development, and other land loans, the majority of our real estate loans are primarily supported by cash flows from the borrower’s occupation or business, with the real estate pledged providing a secondary repayment source.

The largest component of our portfolio is non-owner occupied commercial real estate loans, followed by residential 1-4 family real estate and owner occupied commercial real estate loans. As demonstrated in the table above, while there have been some variations in the relative percentage of each loan category to the total portfolio over the years, the nature of our portfolio has not changed drastically from the prior year or the historical averages.

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A summary of scheduled loan maturities, based on contractual maturity dates, over certain time periods is presented below, with fixed rate loans and adjustable rate loans shown separately.

Loan Maturities

As of December 31, 2025

Due within

one year

Due after one year but

within five years

Due after five years but

within fifteen years

Due after fifteen

years

Total

($ in thousands)

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Variable Rate Loans:

Commercial and industrial

$

144,114 

6.52 

%

$

195,020 

5.24 

%

$

67,412 

9.24 

%

$

343 

8.85 

%

$

406,889 

6.36 

%

Construction, development & other land loans

155,897 

7.27 

%

216,042 

6.49 

%

67,291 

6.20 

%

3,319 

8.42 

%

442,549 

6.74 

%

Commercial real estate - owner occupied

17,223 

6.49 

%

120,232 

6.23 

%

41,691 

6.42 

%

66,816 

8.71 

%

245,962 

6.95 

%

Commercial real estate - non owner occupied

32,155 

6.22 

%

298,870 

6.01 

%

144,910 

5.99 

%

9,464 

8.18 

%

485,399 

6.06 

%

Multi-family real estate

2,258 

6.77 

%

21,292 

6.11 

%

45,713 

5.82 

%

— 

— 

%

69,263 

5.94 

%

Residential 1-4 family real estate

7,803 

7.45 

%

58,779 

6.28 

%

27,748 

6.57 

%

374,333 

4.98 

%

468,663 

5.28 

%

Home equity loans/lines of credit

11,787 

7.20 

%

47,441 

6.62 

%

311,598 

6.83 

%

— 

— 

%

370,826 

6.81 

%

Consumer loans

2,297 

8.27 

%

9,518 

9.21 

%

52 

9.16 

%

879 

8.79 

%

12,746 

9.01 

%

Total at variable rates

373,534 

6.86 

%

967,194 

6.05 

%

706,415 

6.72 

%

455,154 

5.63 

%

2,502,297 

6.29 

%

Fixed Rate Loans:

Commercial and industrial

144,974 

17.18 

%

245,318 

5.65 

%

182,111 

3.55 

%

58,722 

3.47 

%

631,125 

7.49 

%

Construction, development & other land loans

78,735 

6.53 

%

165,214 

6.04 

%

66,372 

5.19 

%

127 

6.00 

%

310,448 

5.98 

%

Commercial real estate - owner occupied

92,498 

4.21 

%

644,895 

5.28 

%

356,384 

4.53 

%

709 

8.06 

%

1,094,486 

4.95 

%

Commercial real estate - non owner occupied

295,711 

4.08 

%

1,558,858 

4.85 

%

498,781 

4.24 

%

167 

6.50 

%

2,353,517 

4.62 

%

Multi-family real estate

37,900 

3.72 

%

263,219 

4.48 

%

166,633 

4.47 

%

— 

— 

%

467,752 

4.42 

%

Residential 1-4 family real estate

53,338 

4.03 

%

288,236 

5.62 

%

124,022 

4.75 

%

795,978 

4.02 

%

1,261,574 

4.45 

%

Home equity loans/lines of credit

1,661 

6.93 

%

6,619 

6.68 

%

1,701 

4.96 

%

438 

5.50 

%

10,419 

6.39 

%

Consumer loans

1,069 

8.27 

%

45,454 

9.22 

%

5,966 

8.86 

%

1,997 

17.05 

%

54,486 

9.45 

%

Total at fixed rates

705,886 

7.04 

%

3,217,813 

5.13 

%

1,401,970 

4.36 

%

858,138 

4.01 

%

6,183,807 

5.04 

%

Subtotal

1,079,420 

6.98 

%

4,185,007 

5.34 

%

2,108,385 

5.15 

%

1,313,292 

4.57 

%

8,686,104 

5.40 

%

Nonaccrual loans

36,315 

— 

— 

— 

36,315 

Total loans

$

1,115,735 

$

4,185,007 

$

2,108,385 

$

1,313,292 

$

8,722,419 

Note: The above table is based on contractual scheduled maturities. Early repayment of loans or renewals at maturity are not considered in this table.

Approximately 12% of our accruing loans outstanding at December 31, 2025 mature within one year and 61% of total loans mature within five years. During 2025, the Company continued to focus on shifting more loans to variable rates. As of December 31, 2025, the percentages of variable rate loans and fixed rate loans as compared to total performing loans were 29% and 71%, respectively, compared to 23% variable and 77% fixed at December 31, 2024. While fixed rate loans present market interest rate risk, we monitor our interest rate risk closely. Refer to additional discussion in the section “Interest Rate Risk” below.

The Company’s loan portfolio is not concentrated in loans to any single borrower or to a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions.

In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries, and geographic regions, the Company monitors exposure to credit risk that could arise from potential concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Bank makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). These loans are underwritten and monitored to manage the associated risks. The Company has determined that there is no concentration of credit risk associated with its lending policies or practices.

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Most of our business activity is with customers located within the markets where we have banking operations. Therefore, our exposure to credit risk is significantly affected by changes in the economy within our markets. Approximately 87% of our loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.

The following tables provides a summary of the outstanding balances of the commercial real estate-owner occupied, commercial real estate-non owner occupied and multi-family real estate loan portfolio compositions at December 31, 2025 by geographic region.

Region

($ in thousands)

Commercial real estate - owner occupied

Commercial real estate - non owner occupied

Multi-family real estate

Total

Charlotte, NC

$

60,478 

$

422,971 

$

41,065 

$

524,514 

Piedmont Triad, NC

120,592 

270,119 

23,227 

413,938 

Research Triangle, NC

113,933 

413,768 

47,627 

575,328 

Wilmington, NC

171,967 

251,777 

109,192 

532,936 

Asheville, NC

75,897 

217,527 

20,271 

313,695 

Other areas in NC

517,571 

632,919 

162,881 

1,313,371 

Greenville-Spartanburg, SC

84,841 

123,444 

32,457 

240,742 

Columbia, SC

11,355 

32,233 

7,676 

51,264 

Charleston, SC

61,015 

174,502 

57,618 

293,135 

Other areas in SC

72,588 

223,970 

34,345 

330,903 

Other states

63,675 

80,325 

656 

144,656 

Total

$

1,353,912 

$

2,843,555 

$

537,015 

$

4,734,482 

As noted above and described in the Item 1. Business section, we do not have concentrations geographically or by CRE category.

Nonperforming Assets

NPAs include nonaccrual loans, loans past due 90 days or more and still accruing interest, foreclosed real estate and, prior to the adoption of ASU 2022-02, accruing TDRs.

Nonaccrual loans are loans on which interest income is no longer being recognized or accrued because management has determined that the collection of interest is doubtful. Placing loans on nonaccrual status negatively impacts earnings because (1) interest accrued but unpaid as of the date a loan is placed on nonaccrual status is reversed and deducted from interest income; (2) future accruals of interest income are not recognized until it becomes probable that both principal and interest will be paid; and (3) principal charged-off, if appropriate, may necessitate additional provisions for loan losses that are charged against earnings. As a matter of policy, we generally place all loans that are past due 90 or more days on nonaccrual basis. There were no accruing loans that were past due 90 days or more at December 31, 2025 and December 31, 2024.

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The following table summarizes our NPAs at the dates indicated.

Nonperforming Assets

As of December 31,

($ in thousands)

2025

2024

2023

2022

2021

Nonperforming assets

Nonaccrual loans

$

36,315 

$

31,779 

$

32,208 

$

28,514 

$

34,696 

TDRs - accruing

— 

— 

— 

9,121 

13,866 

Accruing loans 90 days past due

— 

— 

— 

— 

1,004 

Total nonperforming loans

36,315 

31,779 

32,208 

37,635 

49,566 

Foreclosed real estate

1,425 

4,965 

862 

658 

3,071 

Total nonperforming assets

$

37,740 

$

36,744 

$

33,070 

$

38,293 

$

52,637 

Allowance for credit losses

$

123,581 

$

122,572 

$

109,853 

$

90,967 

$

78,789 

Total Loans

8,722,419 

8,094,676 

8,150,102 

6,665,145 

6,081,715 

Asset Quality Ratios

Nonaccrual loans to total loans

0.42 

%

0.39 

%

0.40 

%

0.43 

%

0.57 

%

Nonperforming loans to total loans

0.42 

%

0.39 

%

0.40 

%

0.56 

%

0.82 

%

Nonperforming assets to total loans and foreclosed real estate

0.43 

%

0.45 

%

0.41 

%

0.57 

%

0.87 

%

Nonperforming assets to total assets

0.30 

%

0.30 

%

0.27 

%

0.36 

%

0.50 

%

Allowance for credit losses to total loans

1.42 

%

1.51 

%

1.35 

%

1.36 

%

1.30 

%

Allowance for credit losses to nonaccrual loans

340.30 

%

385.70 

%

341.07 

%

319.03 

%

227.08 

%

Allowance for credit losses to nonperforming loans

340.30 

%

385.70 

%

341.07 

%

241.71 

%

158.96 

%

Our asset quality continues to be strong as demonstrated by stable or improving trends in all ratios as presented in the table above. Our total nonperforming loans to total loans was 0.42% at December 31, 2025, while our total NPA ratio was 0.30% at that date. Additional discussion of the credit quality classification status of our loans is contained in Note 4 to our consolidated financial statements.

"Commercial real estate - owner occupied" is the largest category of nonaccrual loans, at $13.5 million, or 37.1% of total nonaccrual loans, followed by "Commercial and industrial" at $9.1 million, or 25.1% of total nonaccrual loans, and "Residential 1-4 family real estate" at $5.9 million, or 16.3% of total nonaccrual loans.

As of December 31, 2025, SBA loans accounted for approximately $14.8 million of our nonaccrual loans, or 9.1%, of the total SBA portfolio, and carried guarantees from the SBA totaling $7.3 million. This is compared to $15.5 million, or 11.4%, of the SBA portfolio at December 31, 2024. We continue to closely monitor the SBA loan portfolio and give it appropriate consideration when evaluating the adequacy of the ACL as those loans are generally considered inherently more risky than other loans in our portfolio. Refer to additional discussion of the ACL below.

As shown in Note 4 to the consolidated financial statements, our accruing past due loans (30 or more days) totaled $18.5 million at December 31, 2025, with the majority (55.4%) being in the Residential 1-4 family real estate category.

We classify loans as “special mention” when there is a defined weakness or weaknesses that jeopardize the repayment by the borrower and there is a distinct possibility that we could sustain some loss if the deficiency is not corrected. Performing special mention loans, which are still accruing interest, totaled $29.3 million and $37.1 million as of December 31, 2025 and 2024, respectively. In addition, loans that are in the risk category of "classified" which are still accruing interest totaled $22.2 million at December 31, 2025 and $34.0 million at December 31, 2024. These loans have a risk of further deterioration and potential loss to the Bank.

Total foreclosed real estate amounted to $1.4 million at December 31, 2025, compared to $5.0 million in 2024. Six properties were added to foreclosed real estate during 2025 and we completed the sale of nine properties during the year.

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Table of Contents

Allowance for Credit Losses, Allowance for Unfunded Commitments, and Loan Loss Experience

The total ACL amounted to $123.6 million at December 31, 2025 compared to $122.6 million at December 31, 2024. Fluctuations in the ACL are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as occurred in 2023, adjustments for acquired loan portfolios.

In the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene in third quarter of 2024, the Company identified borrowers who were potentially impacted. During 2025, the Company evaluated the commercial loan portfolio and adjusted risk ratings and nonaccrual status as applicable. Therefore, for those relationships, for December 31, 2025, the normal reserving process was applied. For the potentially impacted consumer loans, the Company applied increased reserve rates based upon severe economic factors to the approximately $268 million of loans (primarily Residential 1-4 family real estate) in the most impacted path of Hurricane Helene. This compares to consumer and commercial loans totaling $744 million at December 31, 2024. Due to the potential exposure from Hurricane Helene, the ACL on these impacted consumer loans was $1.9 million as of December 31, 2025, adding 2 basis points to the overall ACL as a percent of total loans, which was 1.42% as of December 31, 2025. As of December 31, 2024, the ACL on these loans was $13.0 million, adding 16 basis points to the overall ACL as a percent of total loans, which was 1.51%.

The ACL reflects the best estimate of life of loan expected credit losses that will result from the inability of borrowers to make required loan payments. Systematic methodologies are used to determine the ACL for loans and the allowance for certain off-balance-sheet credit exposures. The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loan portfolio.

We consider the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the loan portfolio. Our estimate of the ACL involves a high degree of judgment. Therefore, the process for determining expected credit losses may result in a range of expected credit losses. The ACL is calculated using collectively evaluated pools for loans with similar risk characteristics applying the DCF method. When a loan no longer shares similar risk characteristics with its segment, the loan is evaluated on an individual basis applying a DCF or asset approach for collateral-dependent loans. Refer also to the discussion of the critical estimates utilized in the ACL in the prior section, Critical Accounting Estimates, and refer to Note 1 of the consolidated financial statements for a discussion of our CECL methodology used to determine the ACL.

Our assessment of the ACL involves uncertainty and judgment and is subject to change in future periods. The amount of any changes could be significant if the assessment of loan quality or collateral values changes substantially with respect to one or more loan relationships or portfolios or if there is a significant change in the reasonable and supportable forecast used to model our expected credit losses. The allocation of the ACL as presented in the following table is based on reasonable and supportable forecasts, historical data, subjective judgment, and estimates and therefore, may not be predictive of the specific amounts or loan categories in which charge-offs may ultimately occur. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require adjustments to the provision for loan losses in future periods if, in their opinion, the results of their review warrant such additions.

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The following table sets forth the allocation of the ACL by loan category at the dates indicated. However, the ACL is available to absorb losses in any and all categories.

Allocation of the Allowance for Credit Losses

As of December 31,

($ in thousands)

2025

% of

Loan Category

2024

% of

Loan Category

2023

% of

Loan Category

2022

% of

Loan Category

2021

% of

Loan Category

Commercial and industrial

$

20,044 

1.92

%

$

19,474 

2.12

%

$

21,227 

2.34

%

$

17,718 

2.76

%

$

16,249 

2.50

%

Construction, development & other land loans

11,465 

1.52

%

9,314 

1.44

%

13,940 

1.40

%

15,128 

1.62

%

16,519 

1.99

%

Commercial real estate - owner occupied

20,298 

1.50

%

19,380 

1.55

%

18,218 

1.45

%

14,972 

1.44

%

12,317 

1.24

%

Commercial real estate - non owner occupied

25,017 

0.88

%

27,768 

1.06

%

24,916 

0.99

%

22,780 

1.07

%

16,789 

0.93

%

Multi-family real estate

5,205 

0.97

%

5,476 

1.08

%

3,825 

0.91

%

2,957 

0.84

%

1,236 

0.32

%

Residential 1-4 family real estate

34,068 

1.96

%

33,552 

1.94

%

21,396 

1.31

%

11,354 

0.95

%

8,686 

0.85

%

Home equity loans/lines of credit

3,519 

0.92

%

4,111 

1.19

%

3,339 

1.00

%

3,158 

0.98

%

4,337 

1.31

%

Consumer loans

3,965 

5.88

%

3,497 

4.95

%

2,992 

4.37

%

2,900 

4.78

%

2,656 

4.64

%

Total

$

123,581 

1.42

%

$

122,572 

1.51

%

$

109,853 

1.35

%

$

90,967 

1.36

%

$

78,789 

1.30

%

Note: "% of Loan Category" represents the ACL as a percent of the respective total loan categories presented previously in the Loan Portfolio Composition table.

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For the years indicated, the following table summarized the net loss experience by loan category and key ratios demonstrating the asset quality trends over the most recent five years.

Loan Ratios, Loss and Recovery Experience

As of December 31,

($ in thousands)

2025

2024

2023

2022

2021

Loans outstanding at end of year

$

8,722,419 

$

8,094,676 

$

8,150,102 

$

6,665,145 

$

6,081,715 

Average amount of loans outstanding

8,283,246 

8,046,681 

7,902,628 

6,293,280 

5,018,391 

Allowance for credit losses, at end of year

123,581 

122,572 

109,853 

90,967 

78,789 

Net loan (charge-offs) recoveries

Commercial and industrial

$

(5,724)

$

(4,915)

$

(6,965)

$

(1,763)

$

(1,978)

Construction, development & other land loans

168 

150 

250 

480 

703 

Commercial real estate - owner occupied

(1,182)

(187)

321 

477 

(212)

Commercial real estate - non owner occupied

(900)

(355)

502 

432 

(1,562)

Multi-family real estate

— 

— 

13 

11 

12 

Residential 1-4 family real estate

320 

292 

373 

17 

488 

Home equity loans/lines of credit

14 

270 

(211)

557 

178 

Consumer loans

(1,251)

(1,287)

(757)

(633)

(309)

Total net charge-offs

$

(8,555)

$

(6,032)

$

(6,474)

$

(422)

$

(2,680)

Average loans

Commercial and industrial

$

928,407 

$

877,989 

$

865,043 

$

619,480 

$

700,557 

Construction, development & other land loans

671,208 

810,564 

1,053,422 

857,880 

619,928 

Commercial real estate - owner occupied

1,281,633 

1,239,411 

1,224,284 

1,012,275 

812,764 

Commercial real estate - non owner occupied

2,732,414 

2,552,146 

2,464,389 

1,968,944 

1,322,685 

Multi-family real estate

518,659 

466,588 

402,814 

357,491 

256,396 

Residential 1-4 family real estate

1,724,566 

1,696,449 

1,482,941 

1,091,788 

951,573 

Home equity loans/lines of credit

357,299 

331,995 

341,778 

326,592 

300,291 

Consumer loans

69,060 

71,539 

67,957 

58,830 

54,197 

Total average loans

$

8,283,246 

$

8,046,681 

$

7,902,628 

$

6,293,280 

$

5,018,391 

Ratios

Allowance for credit losses as a percent of loans at end of year

1.42

%

1.51

%

1.35

%

1.36

%

1.30

%

Allowance for credit losses as a multiple of net charge-offs

14.45 

20.32 

16.97 

215.56 

29.40 

Provision for loan losses as a percent of net charge-offs

111.79

%

310.86

%

305.07

%

2,985.78

%

358.62

%

Recoveries of loans previously charged-off as a percent of loans charged-off

26.43

%

37.08

%

36.37

%

90.55

%

64.75

%

Total net charge-offs as a percent of average loans

(0.10

%)

(0.07

%)

(0.08

%)

(0.01

%)

(0.05

%)

Net (charge-offs) recoveries by loan category as a percent of average loans:

Commercial and industrial

(0.62

%)

(0.56

%)

(0.81

%)

(0.28

%)

(0.28

%)

Construction, development & other land loans

0.03

%

0.02

%

0.02

%

0.06

%

0.11

%

Commercial real estate - owner occupied

(0.09

%)

(0.02

%)

0.03

%

0.05

%

(0.03

%)

Commercial real estate - non owner occupied

(0.03

%)

(0.01

%)

0.02

%

0.02

%

(0.12

%)

Multi-family real estate

—

%

—

%

—

%

—

%

—

%

Residential 1-4 family real estate

0.02

%

0.02

%

0.03

%

—

%

0.05

%

Home equity loans/lines of credit

—

%

0.08

%

(0.06

%)

0.17

%

0.06

%

Consumer loans

(1.81

%)

(1.80

%)

(1.11

%)

(1.08

%)

(0.57

%)

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Securities

Our securities portfolio and the breakout of AFS and HTM securities is presented in the following table.

Securities Portfolio Composition

As of December 31,

($ in thousands)

2025

2024

2023

Securities available for sale:

US Treasury securities

$

168,095 

$

120,581 

$

172,570 

Government-sponsored enterprise securities

1,758 

9,614 

60,266 

Mortgage-backed securities

1,860,357 

1,897,175 

1,937,784 

Corporate bonds

18,346 

15,692 

18,759 

Total securities available for sale

2,048,556 

2,043,062 

2,189,379 

Securities held to maturity:

Mortgage-backed securities

6,735 

9,198 

12,085 

State and local governments

506,364 

510,800 

521,593 

Total securities held to maturity

513,099 

519,998 

533,678 

Total securities

$

2,561,655 

$

2,563,060 

$

2,723,057 

Average total securities during year, at amortized cost

$

2,919,710 

$

2,900,014 

$

3,216,327 

During 2025, we sold $536.3 million of securities, with a weighted average yield of 1.66%, at a loss of $71.6 million and we purchased $585.1 million of securities, with a weighted average yield of 4.35%. Also impacting the change in balances of AFS securities was the improvement in unrealized loss on AFS securities which was $194.1 million at December 31, 2025 as compared to $368.1 million at December 31, 2024. Generally, we invested cash flows from amortizing investments in interest bearing cash deposits. As a result of the securities loss-earnback transactions during 2025, the composition of the securities portfolio has shifted to having a higher percentage of variable rate securities as of December 31, 2025 compared to the prior year.

The composition of the investment securities portfolio reflects our investment strategy of maintaining an appropriate level of liquidity while providing a relatively stable source of income. The investment portfolio also provides a balance to interest rate risk and credit risk in other categories of the balance sheet while providing a vehicle for the investment of available funds, furnishing liquidity, and supplying securities to pledge as required collateral for certain deposits. Essentially all of our mortgage-backed securities, which include both AFS and HTM securities, are issued by GSEs or GNMA, and are traded in liquid secondary markets. These securities are recorded on the balance sheet at fair value for the AFS portfolio and at amortized cost for the HTM portfolio.

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Table of Contents

The table below presents the composition, tax equivalent yields, and remaining maturities of our securities as of December 31, 2025. For more information about these securities, including gross unrealized gains and losses by type of security and securities pledged, see Note 3 to the consolidated financial statements.

Securities Portfolio Maturity Schedule

($ in thousands)

US Treasury securities

Government & govt.-sponsored enterprise securities

Mortgage-backed securities (1)

Corporate debt securities

Total

Weighted Average Yield (2)

Securities available for sale

Remaining maturity:

One year or less

$

— 

$

— 

$

594 

$

— 

$

594 

3.01 

%

After one through five years

148,136 

— 

686,607 

4,711 

839,454 

4.04 

%

After five through ten years

19,959 

1,758 

1,060,979 

13,635 

1,096,331 

2.46 

%

After ten years

— 

— 

112,177 

— 

112,177 

2.63 

%

Fair Value

$

168,095 

$

1,758 

$

1,860,357 

$

18,346 

$

2,048,556 

Amortized cost

$

165,137 

$

1,968 

$

2,057,381 

$

18,192 

$

2,242,678 

3.01 

%

Weighted-average yield (2)

4.15 

%

1.75 

%

2.90 

%

6.06 

%

3.01 

%

Weighted average maturity years

4.17 

5.08 

5.97 

4.15 

5.82 

Mortgage-backed securities (1)

State and local governments

Total

Weighted Average Yield (2)

Securities held to maturity

Remaining maturity:

One year or less

$

— 

$

— 

$

— 

— 

%

After one through five years

6,735 

8,872 

15,607 

2.67 

%

After five through ten years

— 

243,080 

243,080 

1.98 

%

After ten years

— 

254,412 

254,412 

2.12 

%

Amortized cost

$

6,735 

$

506,364 

$

513,099 

Fair value

$

6,536 

$

441,916 

$

448,452 

2.10 

%

Weighted-average yield (2)

2.57 

%

2.09 

%

2.10 

%

Weighted average maturity years

2.26 

8.50 

8.44 

(1)Mortgage-backed securities are shown maturing in the periods consistent with their estimated lives based on expected prepayment speeds.

(2)Yields have been computed using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. Weighted average yield for each maturity range has been computed on a fully taxable-equivalent basis using the amortized cost of each security in that range. Yields on tax-exempt investments have been adjusted to a taxable equivalent basis using a 23.05% tax rate.

Nearly all of our $1.9 billion in AFS mortgage-backed securities at December 31, 2025 were issued by the FHLMC, FNMA, GNMA, or the SBA, each of which is a GSE and guarantees the repayment of the securities. Included in this total are private-label commercial mortgage-backed securities of $0.7 million. Mortgage-backed securities vary in their repayment in correlation with the underlying pools of mortgage loans.

At December 31, 2025, we held $513.1 million in securities classified as HTM, which are carried at amortized cost. These securities had fair values that were lower than their carrying values by $64.6 million at December 31, 2025. Approximately $6.7 million of the HTM securities were mortgage-backed securities that have been issued by either the FHLMC or FNMA. The remaining $506.4 million in HTM securities were comprised almost entirely of highly-rated municipal bonds issued by state and local governments throughout the nation. We have no significant concentration of bond holdings from one state or local government entity, with the single largest exposure to any one entity being $9.3 million. We have evaluated any unrealized losses on individual securities at each year end and determined them to be of a temporary nature and caused by fluctuations in market interest rates, not by concerns about the ability of the issuers to meet their obligations.

Deposits

Deposits represent the primary funding source for our loans and investments. Total deposits amounted to $10.7 billion at December 31, 2025, an increase of $217.9 million, or 2.1%, from December 31, 2024. Deposit growth for the year was entirely organic as there were no acquisitions during 2025. During 2025, retail deposits grew $222.6 million, or 2.1%, from the prior year end. Brokered deposits ended 2025 at $4.9 million. We continue

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Table of Contents

to have a diversified and granular deposit base which has remained a stable source of funding. At December 31, 2025, noninterest-bearing deposits accounted for 32% of total deposits. This contributes to our low cost of funds.

The table below presents our historical deposit mix which continues to be predominately transaction and non-time deposit accounts. As demonstrated in the below table, total time deposits have declined to 8% of total deposits at December 31, 2025 from 10% at December 31, 2021. Such a shift in mix is beneficial for us, as non-time deposit accounts generally carry lower interest rates compared to time deposits and we are able to reprice these deposit categories as market rates move over time. Approximately 98% of our time deposits mature within one year.

Deposit Composition

As of December 31,

2025

2024

2023

2022

2021

($ in thousands)

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Noninterest-bearing checking accounts

$

3,486,985 

32 

%

$

3,367,624 

32 

%

$

3,379,876 

34 

%

$

3,566,003 

39 

%

$

3,348,622 

37 

%

Interest-bearing checking accounts

1,420,795 

13 

%

1,398,395 

13 

%

1,411,142 

14 

%

1,514,166 

16 

%

1,593,231 

17 

%

Money market accounts

4,510,356 

42 

%

4,285,405 

41 

%

3,653,506 

36 

%

2,416,146 

26 

%

2,562,283 

28 

%

Savings accounts

526,643 

5 

%

542,133 

5 

%

608,380 

6 

%

728,641 

8 

%

708,054 

8 

%

Other time deposits

493,282 

5 

%

566,514 

5 

%

610,887 

6 

%

464,343 

5 

%

547,669 

6 

%

Time deposits $250,000

305,473 

3 

%

360,854 

4 

%

355,209 

4 

%

276,319 

3 

%

357,355 

4 

%

Total customer deposits

10,743,534 

100 

%

10,520,925 

100 

%

10,019,000 

100 

%

8,965,618 

97 

%

9,117,214 

100 

%

Brokered Deposits

4,887 

— 

%

9,600 

— 

%

12,599 

— 

%

261,911 

3 

%

7,415 

— 

%

Total deposits

$

10,748,421 

100 

%

$

10,530,525 

100 

%

$

10,031,599 

100 

%

$

9,227,529 

100 

%

$

9,124,629 

100 

%

While our customer deposits have remained fairly stable, there continues to be competition for deposits by both in-market and out-of-market competitors. We routinely engage in activities designed to grow and retain deposits, including emphasizing relationship banking to new and existing customers where borrowers are encouraged to maintain deposit accounts with us; pricing deposits at rate levels that will attract and/or retain deposits; and continually working to identify and introduce new products that will attract customers or enhance our appeal as a primary provider of financial services.

The table below presents maturities of time deposits which are individually greater than the FDIC insurance limit of $250,000 as of December 31, 2025.

As of December 31, 2025

($ in thousands)

3 Months

or Less

Over 3 to 6

Months

Over 6 to 12

Months

Over 12

Months

Total

Time deposits greater than the FDIC insurance limit of $250,000

$

148,111 

$

108,618 

$

41,879 

$

6,865 

$

305,473 

As shown above, time deposits in excess of $250,000 totaled $305.5 million at December 31, 2025. On an individual account basis, there was a total of $159.9 million which was in excess of $250,000. This presentation of time deposit accounts does not evaluate total deposit relationships, account ownership types or other factors for determining the actual uninsured balances by customer.

As of December 31, 2025 and December 31, 2024, the estimated uninsured deposits we held totaled approximately $4.3 billion and $4.1 billion, respectively. As of December 31, 2025 and December 31, 2024, respectively, our insured deposits were estimated to be $6.5 billion, or 60.2% of total deposits, and $6.4 billion or 61.0% of total deposits. When coupled with deposits collateralized by investment securities with balances totaling $730.4 million and $690.5 million as of December 31, 2025 and December 31, 2024, respectively, approximately 67.0% and 67.6% of our total deposits were insured or collateralized at December 31, 2025 and December 31, 2024, respectively.

We do not take deposits through foreign offices. Deposits at December 31, 2025 from foreign depositors were nominal.

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Table of Contents

Borrowings

Although none were outstanding as of December 31, 2025, short-term borrowings can be utilized to provide balance sheet liquidity and to fund imbalances in our loan growth compared to our deposit growth. In addition, we have long-term debt in the form of trust preferred securities and have the availability to borrow from the FHLB or FRB.

Total borrowings at December 31, 2025 decreased $17.3 million from the prior year end. During the year, the Company redeemed $18.0 million of subordinated debentures.

Our borrowings outstanding as of the dates presented were as follows:

($ in thousands)

December 31, 2025

December 31, 2024

FHLB advances

$

753 

$

802 

Trust preferred capital issuances

77,324 

77,324 

Subordinated debentures

— 

18,000 

78,077 

96,126 

Unamortized discounts on acquired borrowings

(3,508)

(4,250)

$

74,569 

$

91,876 

As noted in the table above, at December 31, 2025, we had $77.3 million of borrowings structured as trust preferred capital securities which qualify as Tier I capital for regulatory capital adequacy requirements. The Company issued $46.4 million of these securities with the balance assumed from acquisitions.

At December 31, 2025, the Company had several sources of readily available borrowing capacity:

•Borrowing capacity with the FHLB of approximately $1.4 billion which can be structured as either short-term or long-term borrowings, depending on the particular funding or liquidity need, and is secured by a blanket lien on most of our real estate loan portfolio, select investment securities, and our FHLB stock (of which $0.8 million were outstanding at December 31, 2025 and December 31, 2024).

•Federal funds lines with several correspondent banks totaling $265.0 million which provide for overnight unsecured federal funds purchased (of which none were outstanding at December 31, 2025 and December 31, 2024); and,

•A line of credit with the Federal Reserve through its discount window borrowing program of approximately $763.8 million which is secured by a blanket lien on a portion of our commercial and consumer loan portfolio (excluding real estate loans) and specific investment securities. All of this line was available at both December 31, 2025 and December 31, 2024.

Refer to Note 9 to the consolidated financial statements for additional discussion of our borrowings.

Liquidity, Commitments, and Contingencies

Our liquidity is determined by our ability to convert assets to cash or to acquire alternative sources of funds to meet the needs of our customers who are withdrawing or borrowing funds, and our ability to maintain required reserve levels, pay expenses, and operate the Company on an ongoing basis. Our primary liquidity sources are net income from operations, cash and due from banks, federal funds sold, and other short-term investments. Our securities portfolio has a high percentage of amortizing mortgage-backed securities generating monthly cash flows. In addition, the portfolio is comprised almost entirely of readily marketable securities, which could also be sold to provide cash. We also maintain available lines of credit from the FHLB and the Federal Reserve, as well as federal funds lines from several correspondent banks which are summarized below.

At December 31, 2025, the Company had several sources of readily available borrowing capacity as described above in the Borrowings section.

Liquidity is evaluated as both on-balance sheet (primarily cash and cash-equivalents, unpledged securities, and other marketable assets) and off-balance sheet (readily available lines of credit or other funding sources). Our overall on-balance sheet liquidity ratio was 14.9% at December 31, 2025. Our total liquidity ratio, including the $2.5 billion in available lines of credit, was 32.8% as of that date. The increase in available lines of credit during 2025

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Table of Contents

was a result of additional loan and security collateral being transferred to the FHLB to enhance the levels of off-balance sheet liquidity.

We continue to manage liquidity sources and believe our liquidity sources, including unused lines of credit, are at an acceptable level and remain adequate to meet our operating needs in the foreseeable future. We will continue to monitor our liquidity position carefully and will explore and implement strategies to increase liquidity if deemed appropriate.

In the normal course of business we have various outstanding contractual obligations that will require future cash outflows. In addition, there are commitments and contingent liabilities, such as commitments to extend credit, that may or may not require future cash outflows. Certain of the outstanding commitments and contingent liabilities, such as commitments to extend credit, are not reflected in the financial statements.

Presented below is a summary of our contractual obligations and other commercial commitments outstanding as of December 31, 2025.

Contractual Obligations and Other Commercial Commitments

Payments Due Per Period ($ in thousands)

Contractual Obligation as of December 31, 2025

Less

than 1 Year

1-3 Years

4-5 Years

After 5 Years

Total

Borrowings

$

51 

$

702 

$

— 

$

77,324 

$

78,077 

Operating leases

1,616 

2,589 

2,119 

14,802 

21,126 

Time deposits, including brokered deposits

772,752 

25,095 

6,584 

144 

804,575 

Non-qualified postretirement plan liabilities

575 

1,179 

1,148 

3,883 

6,785 

Committed LIHTC investment obligations

36,363 

70,473 

1,775 

2,245 

110,856 

Estimated interest expense on borrowings and time deposits (1)

24,702 

10,672 

10,445 

22,114 

67,933 

Total contractual cash obligations

$

836,059 

$

110,710 

$

22,071 

$

120,512 

$

1,089,352 

(1) Represents forecasted interest expense on borrowings and time deposits based on interest rates and balances at December 31, 2025. Forecasts are based on the contractual maturity of each liability.

Amount of Commitment Expiration Per Period ($ in thousands)

Other Commercial Commitments as of December 31, 2025

Less

than 1 Year

1-3 Years

4-5 Years

After 5 Years

Total

Amounts

Committed

Lines of credit and loan commitments

481,630 

646,349 

241,310 

971,034 

2,340,323 

Standby letters of credit

25,288 

5,444 

91 

— 

30,823 

Total commercial commitments

$

506,918 

$

651,793 

$

241,401 

$

971,034 

$

2,371,146 

As presented in the table above, at December 31, 2025, we had $30.8 million in standby letters of credit outstanding. We had no carrying amount for these standby letters of credit. The nature of standby letters of credit is that of a stand-alone obligation made on behalf of our customers to suppliers of the customers to guarantee payments owed to the suppliers by the customers. The standby letters of credit are generally for terms of one year, at which time they may be renewed for another year if both parties agree. The payment of the guarantees would generally be triggered by a continued nonpayment of an obligation owed by the customer to the supplier. In the event that we are required to honor a standby letter of credit, a note, already executed by the customer, becomes effective providing repayment terms and any collateral.

It has been our experience that deposit withdrawals are generally able to be replaced with new deposits when needed or through short-term advances from the FHLB. We believe that the Bank can meet its contractual cash obligations and existing commitments from normal operations.

Capital Resources and Shareholders’ Equity

Shareholders’ equity at December 31, 2025 amounted to $1.7 billion, a $208.6 million, or 14.4%, increase from December 31, 2024. The two basic components that typically have the largest impact on our shareholders’ equity are net income, which increases shareholders’ equity, and dividends declared, which decreases shareholders’ equity. Additionally, any stock issuances can significantly increase shareholders’ equity, including those associated with acquisitions such as in 2023, and any stock repurchases reduce shareholders’ equity. Finally, fluctuations in the

53

Table of Contents

amount of AOCI, generally driven by market interest rate changes resulting in increases or decreases in unrealized gains/losses on AFS securities, can have a significant impact on total equity. In 2025, the most significant factors that impacted our shareholders' equity were (1) $111.0 million net income reported for 2025, which increased equity, (2) common stock dividends declared of $37.7 million, which reduced equity; and (3) $132.7 million increase in equity related to changes in AOCI driven by lower unrealized losses on AFS securities.

As discussed in “Borrowings” above, we also currently have $77.3 million in trust preferred securities outstanding, all of which qualify as Tier I capital under regulatory standards. We are not aware of any recommendations of regulatory authorities or otherwise which, if they were to be implemented, would have a material effect on our liquidity, capital resources, or operations.

The Company and the Bank must comply with regulatory capital requirements established by the Federal Reserve and the Commissioner. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on our financial statements. The primary source of funds for the payment of dividends by the Company is dividends received from its subsidiary, the Bank. The Bank, as a North Carolina banking corporation, may declare dividends so long as such dividends do not reduce its capital below its applicable required capital (typically, the level of capital required to be deemed “adequately capitalized”). As of December 31, 2025, approximately $1.1 billion of the Company’s investment in the Bank is restricted as to transfer to the Company without obtaining prior regulatory approval.

Our regulatory capital ratios as of December 31, 2025, 2024 and 2023 are presented in the table below. All of our capital ratios significantly exceeded the minimum regulatory thresholds for all periods presented.

Risk-Based and Leverage Capital Ratios

As of December 31,

($ in thousands)

2025

2024

2023

Risk-Based and Leverage Capital

Common Equity Tier I capital:

Shareholders’ equity

$

1,654,168 

$

1,445,611 

$

1,372,380 

Intangible assets, net of deferred tax liability

(483,644)

(487,660)

(493,383)

Accumulated other comprehensive income adjustments

149,375 

282,029 

308,030 

Total Common Equity Tier I capital

1,319,899 

1,239,980 

1,187,027 

Add: Trust preferred securities eligible for Tier I capital treatment

71,493 

71,148 

70,807 

Total Tier I leverage capital

1,391,392 

1,311,128 

1,257,834 

Tier II capital:

Add: Allowable allowance for credit losses and unfunded commitments

117,202 

108,320 

112,491 

Add: Subordinated debentures eligible for Tier II capital treatment

— 

17,602 

27,177 

Tier II capital additions

117,202 

125,922 

139,668 

Total capital

$

1,508,594 

$

1,437,050 

$

1,397,502 

Total risk weighted assets

$

9,358,794 

$

8,642,315 

$

8,991,087 

Adjusted fourth quarter average tangible assets

$

12,407,330 

$

11,756,111 

$

11,532,812 

Risk-based and Leverage capital ratios:

Common equity Tier I capital to Tier I risk adjusted assets

14.10 

%

14.35 

%

13.20 

%

Tier I capital to Tier I risk adjusted assets

14.87 

%

15.17 

%

13.99 

%

Total risk-based capital to Tier II risk-adjusted assets

16.12 

%

16.63 

%

15.54 

%

Tier I leverage capital to adjusted fourth quarter average assets

11.21 

%

11.15 

%

10.91 

%

Our goal is to maintain our capital ratios at levels at least 200 basis points higher than the regulatory “well capitalized” thresholds set for banks. At December 31, 2025, our leverage ratio was 11.21% compared to the regulatory well capitalized bank-level threshold of 4.00% and our total risk-based capital ratio was 16.12% compared to the 10.50% regulatory well capitalized threshold.

The decrease in regulatory capital ratios in 2025 was related to the increase in risk weighted assets and the redemption of $18 million of subordinated debentures, partially offset by retained net income.

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In addition to regulatory capital ratios, we also closely monitor our ratio of TCE to tangible assets, which is a non-GAAP financial measure. The TCE ratio was 9.61% at December 31, 2025 compared to 8.22% at December 31, 2024, with the increase of 139 basis points related primarily to the improvement in our AOCI unrealized loss on AFS securities included in equity, partially a result of the securities loss-earnback transaction along with market improvements.

The following table reconciles common equity to tangible common equity and provides the calculation of the TCE ratio:

($ in thousands)

December 31, 2025

December 31, 2024

Reconciliation of Common Equity to TCE

Total shareholders' common equity

$

1,654,168 

$

1,445,611 

Less: Goodwill and other intangibles

(483,644)

(487,660)

Tangible common equity

$

1,170,524 

$

957,951 

Reconciliation of Total Assets to Tangible Assets

Total assets

$

12,668,339 

$

12,147,694 

Less: Goodwill and other intangibles

(483,644)

(487,660)

Tangible assets

$

12,184,695 

$

11,660,034 

TCE divided by Tangible Assets

9.61 

%

8.22 

%

See “Supervision and Regulation” under “Business” in Item 1. and Note 19 to the consolidated financial statements for discussion of other matters that may affect our capital resources.

Off-Balance Sheet Arrangements and Derivative Financial Instruments

Off-balance sheet arrangements include transactions, agreements, or other contractual arrangements pursuant to which we have obligations or provide guarantees on behalf of an unconsolidated entity. We have no off-balance sheet arrangements of this kind other than letters of credit and repayment guarantees associated with our trust preferred securities and subordinated debentures.

In the normal course of business, we are exposed to certain risks arising from both our business operations and economic conditions. As an element of our risk management strategies, we may enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Derivative financial instruments include futures, forwards, interest rate swaps, options contracts, and other financial instruments with similar characteristics.

We do not engage in significant derivatives activities, however, in 2023 to accommodate customers, we implemented a program whereby we enter into interest rate swaps with certain commercial loan customers, with offsetting positions to dealers under a back-to-back swap program. At December 31, 2025, the Company's derivative financial instruments consist entirely of customer back-to-back interest rate swaps which are not designated as hedges. Under this program, the Company executes interest rate swaps with commercial banking customers to facilitate their risk management strategies. Those interest rate swaps are simultaneously economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program are not designated as hedging instruments, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. Refer to Note 13 of the consolidated financial statements for additional discussion of our derivative positions.

Current Accounting Matters

We prepare our consolidated financial statements and related disclosures in conformity with standards established by, among others, the FASB. Because the information needed by users of financial reports is dynamic, the FASB frequently issues new rules and proposes new rules for companies to apply in reporting their activities. See Note 1 to our consolidated financial statements for a discussion of recent rule proposals and changes.

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Selected Financial Information

Year Ended December 31,

($ in thousands, except per share data)

2025

2024

2023

2022

2021

Income Statement Data

Interest income

$

557,235 

$

519,240 

$

488,944 

$

341,118 

$

255,918 

Interest expense

158,988 

186,967 

142,101 

16,103 

9,523 

Net interest income

398,247 

332,273 

346,843 

325,015 

246,395 

Provision for credit losses

11,502 

16,448 

17,813 

12,400 

15,031 

Net interest income after provision

386,745 

315,825 

329,030 

312,615 

231,364 

Noninterest income

(7,935)

17,899 

57,305 

67,824 

73,611 

Noninterest expense

239,310 

235,607 

254,379 

195,220 

184,656 

Income before income taxes

139,500 

98,117 

131,956 

185,219 

120,319 

Income tax expense

28,452 

21,902 

27,825 

38,283 

24,675 

Net income

111,048 

76,215 

104,131 

146,936 

95,644 

Per Common Share Data

Earnings per common share – basic

$

2.68 

$

1.85 

$

2.54 

$

4.12 

$

3.19 

Earnings per common share – diluted

2.68 

1.84 

2.53 

4.12 

3.19 

Cash dividends declared

0.91 

0.88 

0.88 

0.88 

0.80 

Market Price

High

55.55 

49.20 

43.24 

49.00 

50.92 

Low

36.02 

29.79 

26.48 

32.90 

32.47 

Close

50.79 

43.97 

37.01 

42.84 

45.72 

Stated book value – common

39.89 

34.96 

33.38 

28.89 

34.54 

Common shares outstanding at year end

41,466,227 

41,347,418 

41,109,987 

35,704,154 

35,629,177 

Selected Balance Sheet Data (at year end)

Total assets

$

12,668,339 

$

12,147,694 

$

12,114,942 

$

10,625,049 

$

10,508,901 

Loans

8,722,419 

8,094,676 

8,150,102 

6,665,145 

6,081,715 

Allowance for credit losses

(123,581)

(122,572)

(109,853)

90,967 

78,789 

Intangible assets

495,982 

501,654 

508,257 

372,933 

376,618 

Deposits

10,748,421 

10,530,525 

10,031,599 

9,227,529 

9,124,629 

Borrowings

74,569 

91,876 

630,158 

287,507 

67,386 

Total shareholders’ equity

1,654,168 

1,445,611 

1,372,380 

1,031,596 

1,230,575 

Selected Average Balances

Total assets

12,512,030 

12,134,495 

12,033,033 

10,556,772 

8,495,645 

Loans

8,283,246 

8,046,681 

7,902,628 

6,293,319 

5,018,391 

Earning assets

11,699,360 

11,508,581 

11,433,492 

9,989,242 

7,871,319 

Deposits

10,752,463 

10,408,082 

10,176,966 

9,283,527 

7,401,910 

Interest-bearing liabilities

7,335,923 

7,274,014 

7,037,105 

5,758,001 

4,736,343 

Total shareholders’ equity

1,549,873 

1,416,461 

1,293,085 

1,097,385 

969,775 

Ratios

Return on average assets

0.89

%

0.63

%

0.87

%

1.39

%

1.13

%

Return on average common equity

7.16

%

5.38

%

8.05

%

13.40

%

9.86

%

Total risk-based capital ratio

16.12

%

16.63

%

15.54

%

15.09

%

14.67

%

Net interest margin

3.40

%

2.89

%

3.03

%

3.25

%

3.13

%

Net interest margin (taxable-equivalent basis)

3.42

%

2.93

%

3.06

%

3.28

%

3.16

%

Loans to deposits at year end

81.15

%

76.87

%

81.24

%

72.23

%

66.65

%

Allowance for loan losses to total loans

1.42

%

1.51

%

1.35

%

1.36

%

1.30

%

Nonperforming assets to total assets at year end

0.30

%

0.30

%

0.27

%

0.36

%

0.50

%

Net (charge-offs) recoveries to average total loans

(0.10

%)

(0.07

%)

(0.08

%)

(0.01

%)

(0.05

%)

Note - During both 2023 and 2021, the Company completed significant acquisitions impacting the comparisons for each of those years. See additional discussion under "Recent Developments and Acquisitions" in Item 1.

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