National Bank Holdings Corp (NBHC)

Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the three months ended March 31, 2026, and with our annual report on Form 10-K (file number 001-35654), which includes our audited consolidated financial statements and related notes as of and for the years ended December 31, 2025, 2024 and 2023. Our acquisition of Vista occurred on January 7, 2026, subsequent to the dates of information in our most recent report on Form 10-K, and comparisons herein to prior quarters or years should be reviewed with that context. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” located elsewhere in this quarterly report and in Item 1A“Risk Factors” in the annual report on Form 10-K, referenced above, and should be read herewith.

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All amounts are in thousands, except share and per share data, or as otherwise noted.

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Overview

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Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services for our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, the Company continues to shift from constructing systems for 2UniFi to activating services. 2UniFi is an innovative financial ecosystem with treasury management depository capabilities and a streamlined SBA loan offering. Moving forward, 2UniFi will continue to focus on providing a unified client experience that helps small- and medium-sized business owners manage financial products and services across multiple banks and fintechs. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Texas, Utah, Wyoming, New Mexico, Idaho and Palm Beach, Florida, as well as our ongoing investment in digital solutions and strategic acquisitions, position us well for growth opportunities. As of March 31, 2026, we had $12.6 billion in assets, $9.6 billion in loans, $10.5 billion in deposits, $1.7 billion in equity and $1.4 billion in assets under management in our trust and wealth management business.

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Operating Highlights

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Strategic execution

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Profitability and returns

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Loan portfolio

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Credit quality

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Deposits

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Liquidity

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Revenues

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[["\u200b","\u200b","\u200b"],["\u25cf","\u200b \u200b \u200b","Net interest income FTE increased 25.3% to $111.0 million during the three months ended March 31, 2026, compared to $88.6 million during the same period in the prior year."],["\u25cf","\u200b \u200b \u200b","The net interest margin FTE expanded 13 basis points to 4.06% fo

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Item 7.       MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the years ended December 31, 2025, 2024, and 2023, and with the other financial and statistical data presented in this annual report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” and should be read herewith.

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Management’s discussion focuses on 2025 results compared to 2024. For a discussion of 2024 results compared to 2023, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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All amounts are in thousands, except share and per share data, or as otherwise noted.

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Overview

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Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services to our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, we are innovating through 2UniFi with the goal of delivering a comprehensive digital financial ecosystem for our clients. We are focused on providing small- and medium-sized businesses with alternative digital access to address borrowing, depository and cash management needs, while also providing information management and access to digital payment tools, under the safety of a regulated bank. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Texas, Utah, Wyoming, New Mexico and Idaho, as well as our ongoing investment in digital solutions and strategic acquisitions, position us well for growth opportunities. As of December 31, 2025, we had $9.9 billion in assets, $7.4 billion in loans, $8.3 billion in deposits, $1.4 billion in equity and $1.3 billion in assets under management in our trust and wealth management business.

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Operating Highlights

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Strategic execution

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Profitability and returns

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Loan portfolio

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Credit quality

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Deposits

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Liquidity

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Revenues

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Expenses

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Capital

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Key Challenges

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Macroeconomic pressures have resulted in volatility and uncertainty in the banking industry and many other industries. The prolonged elevated interest rate environment is drawing increased scrutiny on financial institutions. Liquidity within the financial services sector remains tight, and we expect the intense competition for deposits throughout our markets to continue. While these are widespread challenges for the banking industry, the Company has not experienced a material impact to our financial condition, operations, client base, liquidity, capital position or risk profile.

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Additionally, we face continual challenges implementing our business strategy. These include growing our assets, particularly loans, and deposits amidst intense competition, changing interest rates, adhering to changes in the regulatory environment and identifying and consummating disciplined acquisition and other expansionary opportunities in a very competitive and inflationary environment. We will continue to make investments in our digital growth strategy and our digital financial ecosystem 2UniFi, and may also seek to partner with third parties to accelerate growth. 2UniFi may prove difficult to successfully scale and may require additional operational and control systems to manage fraud, cybersecurity, operational, legal and compliance risks.

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Future growth in our interest income will ultimately be dependent on our ability to originate high-quality loans and source other high-quality earning assets such as investment securities as well as our ability to access liquidity and manage our cost of funds. During the year ended December 31, 2024, the Federal Reserve decreased the prevailing interest rates by a total of 100 basis points, and, during 2025, the Federal Reserve decreased the prevailing interest rates by 75 basis points. While further cuts remain unclear, our future earnings will be impacted by the Federal Reserve’s future interest rate policy decisions. Management employs risk management policies to monitor and limit exposure to changes in market rates, which is discussed in more detail in the Asset/Liability Management and Interest Rate Risk section of Management’s Discussion and Analysis.

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Summary of Selected Historical Consolidated Financial Data

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The following table sets forth a summary of selected historical financial information derived from our audited consolidated financial statements as of and for the five years ended December 31, 2025. This information should be read together with the related notes thereto included elsewhere in this annual report. Such information is not necessarily indicative of anticipated future results. All amounts are presented in thousands, except share and per share data, or as otherwise noted.

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Consolidated Statements of Financial Condition Data:

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Consolidated Statements of Operations Data:

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Key Metrics

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About Non-GAAP Financial Measures

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Certain financial measures and ratios presented are supplemental measures that are not required by, or are not presented in accordance with, U.S. GAAP. We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

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These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these differences by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

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A reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures is as follows:

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Tangible Common Book Value Ratios

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Return on Average Tangible Assets and Return on Average Tangible Equity

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Efficiency Ratio and Pre-Provision Net Revenue

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Adjusted Net Income and Earnings Per Share

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Application of Critical Accounting Policies and Significant Estimates

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We use accounting principles and methods that conform to GAAP and general banking practices. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. The most significant of these estimates relate to the determination of the ACL and accounting for acquired loans. See additional discussion of our ACL policy in note 2 – Summary of Significant Accounting Policies in the notes to our consolidated financial statements for the year ended December 31, 2025.

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Allowance for credit losses

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The determination of the ACL, which represents management’s estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date, involves a high degree of judgment and complexity. The Company estimates the ACL by first disaggregating the loan portfolio into segments based upon broad characteristics such as primary use and underlying collateral. Within these segments, the portfolio is further disaggregated into classes of loans with similar attributes and risk characteristics. The ACL is determined at the class level, analyzing loss history based upon specific loss drivers and risk factors affecting each loan class. The Company utilizes a DCF model developed within a third-party software tool that incorporates forecasts of certain national macroeconomic factors (reasonable and supportable forecasts) which drive the losses predicted in establishing the Company’s ACL. Management accounts for the inherent uncertainty of the underlying economic forecast by reviewing and weighting alternate forecast scenarios. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis. Additionally, the ACL calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition. For further discussion of the ACL, see notes 2 and 7 to our consolidated financial statements.

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Future Accounting Pronouncements

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In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-scope Improvements. The update amends the guidance in ASC 270 to improve the required interim disclosures and clarify when that guidance is applicable as well as clarify disclosures that should be provided in interim reporting periods. The guidance also requires entities to disclose events taking place after the end of the last annual reporting period that have a material impact. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact from ASU 2025-11 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.

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In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The update includes targeted changes to the guidance in ASC 815 to better reflect risk management, reduce complexity and align with economic reality. The update will allow grouping of hedged items for forecasts with similar risk, more flexibility for variable-rate debt and simplified accounting for certain complex hedges, including swaps and options. It primarily affects cash flow hedges. The standard is effective for interim and annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The guidance must be adopted on a prospective basis, and there are transition provisions designed to assist in migrating existing hedging relationships to the new guidance. The Company is currently evaluating the impact from ASU 2025-09 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.

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In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans. The update amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans that meet certain criteria at acquisition by recognizing them at their purchase price plus an allowance for expected credit losses. The ASU’s amendments align the accounting for those purchased loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination. The amendments in this update are effective for fiscal years and interim reporting periods beginning after December 15, 2026 and are required to be applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact from ASU 2025-08.

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In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Topic 350): Targeted Improvements to the Accounting for Internal-Use Software. The update will eliminate the accounting consideration of software project development stages and enhance the guidance around the threshold for cost capitalization. The amendments in this update are effective for fiscal years and interim reporting periods beginning after December 15, 2027 and can be applied using a prospective transition approach, a modified transition approach or a retrospective transition approach. The Company has evaluated the impact from ASU 2025-06 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.

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In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The update is related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC Topic 606. It allows all entities to elect a practical expedient that assumes current conditions as of the balance sheet date do not change for the remaining life of the asset. The update also allows for an accounting policy election, which is not applicable to public business entities. Entities are required to disclose whether they have elected to use the practical expedient and, if applicable, the accounting policy election. The amendments in this update are effective for fiscal years and interim reporting periods beginning after December 15, 2025 and are to be applied on a prospective basis. The Company has evaluated the impact from ASU 2025-05 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.

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In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. The update requires public business entities to disclose specific components of certain expense categories. This includes expense categories such as employee compensation, depreciation, and intangible asset amortization. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and are to be applied on a prospective basis with an option for retrospective application. Early adoption is permitted. The Company has evaluated the impact from ASU 2024-03 and does not expect the adoption of this pronouncement to have a material impact on its financial statements apart from the inclusion of additional disclosures.

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Financial Condition

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Total assets were $9.9 billion at December 31, 2025, increasing $75.8 million from December 31, 2024. Cash and cash equivalents increased $289.2 million to $417.1 million at December 31, 2025, compared to December 31, 2024, and investment securities increased $119.7 million to $1.2 billion. Loans totaled $7.4 billion and $7.8 billion at December 31, 2025 and December 31, 2024, respectively, and the allowance for credit losses totaled $87.4 million and $94.5 million at December 31, 2025 and December 31, 2024, respectively. Lower-cost transaction deposits totaled $7.1 billion and $7.2 billion at December 31, 2025 and December 31, 2024, respectively. Total deposits increased $54.7 million to $8.3 billion at December 31, 2025, compared to December 31, 2024.

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Investment securities

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Available-for-sale

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Total investment securities available-for-sale were $528.6 million at December 31, 2025, compared to $527.5 million at December 31, 2024. During the years ended December 31, 2025 and 2024, purchases of available-for-sale securities totaled $160.5 million and $185.7 million, respectively. During 2025 and 2024, the Company sold $57.8 million and $132.1 million, respectively, of available-for-sale investment securities on the open market as part of the Company’s strategic balance sheet management resulting in pre-tax losses of $3.3 million and $6.6 million, respectively. Proceeds from the sale were redeployed into higher yielding assets. Maturities and paydowns of available-for-sale securities during 2025 and 2024 totaled $132.6 million and $157.5 million, respectively.

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Available-for-sale investment securities are summarized in the following table as of the dates indicated. The weighted average yield was calculated based on amortized cost. Yields on tax exempt securities have not been adjusted for tax exempt status.

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As of December 31, 2025 and 2024, nearly all the available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed rate and adjustable rate FHLMC, FNMA and GNMA securities. The other MBS are comprised of securities backed by FHLMC, FNMA and GNMA securities.

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Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 4.6 years and 5.3 years at December 31, 2025 and December 31, 2024, respectively. This estimate is based on assumptions and actual results may differ. At December 31, 2025 and December 31, 2024, the duration of the total available-for-sale investment portfolio was 3.9 years and 4.3 years, respectively.

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At December 31, 2025 and 2024, adjustable rate securities comprised 0.6% and 5.9%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed rate amortizing securities with 10- to 30-year contractual maturities, with a weighted average coupon of 2.30% per annum and 2.31% per annum at December 31, 2025 and 2024, respectively.

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The available-for-sale investment portfolio included $60.2 million of unrealized losses and $2.9 million of unrealized gains at December 31, 2025. At December 31, 2024, the available-for-sale investment portfolio included $90.9 million of unrealized losses and $0.5 million of unrealized gains. We believe any unrealized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were impaired. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.

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Our investment security portfolio consists of high-quality securities, which are largely backed by either U.S. government agencies or GSEs. We regularly model liquidity stress scenarios to assess potential liquidity issues.

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Held-to-maturity

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At December 31, 2025, we held $651.7 million of held-to-maturity investment securities, compared to $533.1 million at December 31, 2024. Purchases of held-to-maturity securities totaled $260.3 million and $10.5 million during 2025 and 2024, respectively. Paydowns and maturities of held-to-maturity securities totaled $143.2 million and $63.1 million during 2025 and 2024, respectively.

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Held-to-maturity investment securities are summarized as follows as of the dates indicated:

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The residential mortgage pass-through and other residential MBS held-to-maturity investment portfolios are comprised of fixed rate FHLMC, FNMA and GNMA securities.

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The fair value of the held-to-maturity investment portfolio included $57.3 million of unrealized losses and $3.0 million of unrealized gains at December 31, 2025. At December 31, 2024, the held-to-maturity investment portfolio included $81.8 million of unrealized losses and $0.1 million of unrealized gains.

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The Company does not measure expected credit losses on a financial asset, or groups of financial assets, in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Management evaluated held-to-maturity securities noting they are backed by loans guaranteed by either U.S. government agencies or GSEs, and management believes that default is highly unlikely given this governmental backing and long history without credit losses. Additionally, management notes that yields on which the portfolio generally trades are based upon market views of prepayment and liquidity risk and not credit risk. The Company has no intention to sell the securities and believes it will not be required to sell the securities before the recovery of their amortized cost.

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Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of December 31, 2025 and December 31, 2024 was 4.3 years and 5.6 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 3.6 years and 4.4 years as of December 31, 2025 and December 31, 2024, respectively.

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Other securities

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The carrying balances of other securities are summarized as follows as of the dates indicated:

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Other securities included FRB stock, FHLB stock, convertible preferred stock, equity method investments and equity securities with readily determinable fair values. During the year ended December 31, 2025, purchases of other securities totaled $51.2 million, and proceeds from redemptions and sales of other securities totaled $51.0 million. During the year ended December 31, 2024, purchases of other securities totaled $44.9 million, and proceeds from redemptions and sales of other securities totaled $57.5 million. Purchases consisted primarily of FHLB stock, and proceeds consisted primarily of

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redemptions of FHLB stock. Changes in the Company’s FHLB stock holdings were directly correlated to FHLB line of credit advances and paydowns.

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FRB and FHLB stock

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At December 31, 2025 and December 31, 2024, the Company held FRB stock and FHLB stock for regulatory or debt facility purposes. These are restricted securities which, lacking a market, are carried at cost. There have been no identified events or changes in circumstances that may have an adverse effect on the FRB and FHLB stock carried at cost.

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Convertible preferred stock

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Other securities include convertible preferred stock without a readily determinable fair value. During the year ended December 31, 2025, there were no purchases of convertible preferred stock. One convertible preferred stock investment in our portfolio underwent an initial public offering and was reclassified as an equity security with a readily determinable fair value during the third quarter of 2025. During the year ended December 31, 2024, the Company purchased $0.4 million of convertible preferred stock. The Company recorded $3.9 million of impairment on convertible preferred stock related to venture capital investments, included in other non-interest income in the Company’s consolidated statements of operations, during the year ended December 31, 2024. The Company also sold convertible preferred stock totaling $1.0 million, during the year ended December 31, 2024, which generated realized gains of $0.1 million recorded in other non-interest income in the Company’s consolidated statements of operations.

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Equity method investments

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Other securities also include equity method investments totaling $32.4 million and $28.0 million at December 31, 2025 and December 31, 2024, respectively. The increase was primarily due to a $5.0 million investment. The Company sold equity method investments totaling $1.9 million, during the year ended December 31, 2025, which generated realized gains of $0.6 million recorded in other non-interest income in the Company’s consolidated statements of operations. The Company recorded net unrealized gains on equity method investments totaling $0.8 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively, which are recorded in other non-interest income in the Company’s consolidated statements of operations. The Company recorded no impairment related to equity method investments for the years ended December 31, 2025 or 2024. Purchases of equity method investments during the years ended December 31, 2025 and 2024 totaled $0.6 million and $1.5 million, respectively.

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Equity securities with readily determinable fair values

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As noted above, one convertible preferred stock investment underwent an initial public offering and was reclassified as an equity security with a readily determinable fair value totaling $5.1 million at December 31, 2025. Equity securities with readily determinable fair values are generally traded on an exchange and market prices are readily available. Unrealized gains or losses on equity securities with readily determinable fair values are recognized in other non-interest income in the Company’s consolidated statements of operations. During the year ended December 31, 2025, the Company recorded $3.1 million of unrealized gains from equity securities with readily determinable fair values.

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Loans overview

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At December 31, 2025, our loan portfolio was comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.

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The table below shows the loan portfolio composition at the respective dates:

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The Company maintains a granular and well-diversified loan portfolio with self-imposed concentration limits. At December 31, 2025, loans totaled $7.4 billion, compared to $7.8 billion at December 31, 2024.

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Our commercial and industrial loan portfolio is highly diversified across industry sectors and geography. At December 31, 2025, there were no industry sectors representing more than 15.0% of our total loan portfolio. Key sectors included government/non-profit loans of $994.7 million, or 13.4% of total loans, and health care/hospital loans of $498.9 million, or 6.7% of total loans. The commercial and industrial portfolio also includes loans to companies that operate in the transportation industry. The transportation industry, trucking in particular, has experienced recent economic challenges. As a result of these industry challenges, some of the transportation loans may be subject to higher credit risk. The Company’s exposure to this industry is small, consisting of $134.8 million, or 1.8% of total loans, at December 31, 2025.

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Non-owner occupied CRE loans were 127.1% of the Company’s risk based capital, or 21.3% of total loans, and no specific property type comprised more than 7.0% of total loans. The Company maintains little exposure to non-owner occupied CRE retail properties and office properties, comprising 1.9% and 1.2% of total loans, respectively, including available credit. Multifamily loans totaled $300.7 million, including available credit, or 3.5% of total loans, including available credit, as of December 31, 2025.

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The agriculture industry continues to be impacted by volatile commodity prices and generally by higher input costs, combining to stress margins. Our food and agribusiness portfolio is 3.1% of total loans and is well-diversified across food production, crop and livestock types. Crop and livestock loans represent 1.2% of total loans. We have maintained relationships with food and agribusiness clients that generally possess low leverage and, correspondingly, low bank debt to assets, minimizing potential credit losses in the future.

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New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan fundings totaled $1.6 billion over the trailing 12 months, led by commercial loan fundings of $1.1 billion. Fundings are defined as closed end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of fundings to better approximate the impact of fundings on loans outstanding and ultimately net interest income.

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The following tables represent new loan fundings during 2025 and 2024:

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Included in fundings are net fundings (paydowns) under revolving lines of credit totaling $95,774, ($1,591), $15,490 and $21,752 for the dates noted in the table above, respectively.

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Included in the table above are quarterly net fundings (paydowns) under revolving lines of credit totaling $64,375, $16,302, $19,281 and ($59,523) for the dates noted in the table above, respectively.

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The tables below show the contractual maturities of our total loans for the dates indicated:

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The stated interest rate (which excludes the effects of non-refundable loan origination and commitment fees, net of costs and the accretion of fair value marks) of total loans with maturities over one year is as follows at the dates indicated:

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Asset quality

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Asset quality is fundamental to our success and remains a strong point, driven by our disciplined adherence to our self-imposed concentration limits across industry sector and real estate property type. Accordingly, for the origination of loans, we

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have established a credit policy that allows for responsive, yet controlled lending with credit approval requirements that are scaled to loan size. Within the scope of the credit policy, each prospective loan is reviewed in order to determine the appropriateness and the adequacy of the loan characteristics and the security or collateral prior to making a loan. We have established underwriting standards and loan origination procedures that require appropriate documentation, including financial data and credit reports. For loans secured by real property, we require property appraisals, title insurance or a title opinion, hazard insurance and flood insurance, in each case where appropriate.

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Additionally, we have implemented procedures to timely identify loans that may become problematic in order to ensure the most beneficial resolution for the Company. Asset quality is monitored by our credit risk management department and evaluated based on quantitative and subjective factors such as the timeliness of contractual payments received. Additional factors that are considered, particularly with commercial loans over $500,000, include the financial condition and liquidity of individual borrowers and guarantors, if any, and the value of our collateral. To facilitate the oversight of asset quality, loans are categorized based on the number of days past due and on an internal risk rating system, as discussed in more detail below.

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Our internal risk rating system uses a series of grades which reflect our assessment of the credit quality of loans based on an analysis of the borrower’s financial condition, liquidity and ability to meet contractual debt service requirements. Loans that are perceived to have acceptable risk are categorized as “Pass” loans. “Special mention” loans represent loans that have potential credit weaknesses that deserve close attention. Special mention loans include borrowers that have potential weaknesses or unwarranted risks that, unless corrected, may threaten the borrower’s ability to meet debt service requirements. However, these borrowers are still believed to have the ability to respond to and resolve the financial issues that threaten their financial situation. Loans classified as “Substandard” have a well-defined credit weakness and are inadequately protected by the current paying capacity of the obligor or of the collateral pledged, if any. Although these loans are identified as potential problem loans, they may never become non-performing. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. “Doubtful” loans are loans that management believes that collection of payments in accordance with the terms of the loan agreement are highly questionable and improbable. Doubtful loans are deemed impaired and put on non-accrual status.

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The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Loan modifications may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof. Modified loans are discussed further in note 6 of our consolidated financial statements. Assets that have been foreclosed on or acquired through deed-in-lieu of foreclosure are classified as OREO until sold, and are carried at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ACL and any subsequent declines in carrying value charged to impairments on OREO.

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Non-performing assets and past due loans

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Non-performing assets consist of non-accrual loans and OREO. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during 2025 and 2024 was $2.4 million and $2.0 million, respectively.

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Past due status is monitored as an indicator of credit deterioration. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans that are 90 days or more past due are put on non-accrual status unless the loan is well secured and in the process of collection.

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The following table sets forth the non-performing assets and past due loans as of the dates presented:

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During 2025, non-performing loans decreased $11.1 million, or 30.8%, to $24.9 million, compared to 2024. During 2025 and 2024, accruing modified loans totaled $43.8 million and $15.3 million, respectively. Total non-performing assets to total loans and OREO totaled 0.36% and 0.47% at December 31, 2025 and 2024, respectively.

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Loans 30-89 days past due and still accruing interest were 0.16% and 0.30% of total loans at December 31, 2025 and December 31, 2024, respectively. Loans 90 days or more past due and still accruing interest were 0.21% and 0.19% of total loans for December 31, 2025 and 2024, respectively.

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Allowance for credit losses

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The ACL represents the amount that we believe is necessary to absorb estimated lifetime credit losses inherent in the loan portfolio at the balance sheet date and involves a high degree of judgment and complexity. The Company utilizes a DCF model developed within a third-party software tool to establish expected lifetime credit losses for the loan portfolio. The ACL is calculated as the difference between the amortized cost basis and the projections from the DCF analysis. The DCF model allows for individual lifetime loan cash flow modeling, excluding extensions and renewals, using loan-specific interest rates and repayment schedules including estimated prepayment rates and loss recovery timing delays. The model incorporates forecasts of certain national macro-economic factors, including unemployment rates, HPI, retail sales and GDP, which drive correlated loss rates. The determination and application of the ACL accounting policy involves judgments, estimates and uncertainties that are subject to change. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis.

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We measure expected credit losses for groups of loans included in segments with similar risk characteristics. We have identified four primary loan segments within the ACL model that are further stratified into 11 loan classes to provide more granularity in analyzing loss history and to allow for more definitive qualitative adjustments based upon specific risk factors affecting each loan class. Generally, the underlying risk of loss for each of these loan segments will follow certain norms/trends in various economic environments. Loans that do not share risk characteristics are evaluated on an individual

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basis and are not included in the collective evaluation. Following are the loan classes within each of the four primary loan segments:

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Loans on non-accrual, in bankruptcy and modified loans with a balance greater than $250 thousand are excluded from the pooled analysis and are evaluated individually. If management determines that foreclosure is probable, expected credit losses are evaluated based on the criteria listed below, adjusted for selling costs as appropriate. Typically, these loans consist of commercial, commercial real estate and agriculture loans and exclude homogeneous loans such as residential real estate and consumer loans. Specific allowances are determined by collectively analyzing:

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The resulting ACL for loans is calculated as the sum of the general reserves, specific reserves on individually evaluated loans, and qualitative factor adjustments. While these amounts are calculated by individual loan or by segment and class, the entire ACL is available for any loan that, in our judgment, should be charged off. The determination and application of the ACL accounting policy involves judgments, estimates, and uncertainties that are subject to change. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition, liquidity or results of operations.

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At December 31, 2025 and 2024, the allowance for credit losses totaled $87.4 million and $94.5 million, respectively. The decrease during 2025 was primarily driven by the resolution of non-performing loans. Specific reserves on loans totaled $8.1 million at December 31, 2025, compared to $6.4 million at December 31, 2024.

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During the years ended December 31, 2025 and 2024, net charge-offs totaled $25.2 million and $9.8 million, respectively. Charge-offs during 2025 were recorded primarily due to proactive credit actions taken on three credits during the fourth quarter and an $8.9 million charge-off from one credit during the first quarter due to suspected fraud by the borrower, which the Company believes is an isolated circumstance within the loan portfolio. The ratio of net charge-offs to average total loans totaled 0.34% and 0.13% for the years ended December 31, 2025 and 2024, respectively.

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The Company has elected to exclude AIR from the ACL calculation. As of December 31, 2025 and 2024, AIR from loans totaled $38.3 million and $41.5 million, respectively. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income.

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Total ACL

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After considering the above-mentioned factors, we believe that the ACL of $87.4 million is adequate to cover estimated lifetime losses inherent in the loan portfolio at December 31, 2025. However, it is likely that future adjustments to the ACL will be necessary. Any changes to the underlying assumptions, circumstances or estimates, including but not limited to changes in the underlying macro-economic forecast, used in determining the ACL, could negatively or positively affect the Company’s results of operations, liquidity or financial condition.

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The following schedule presents, by class stratification, the changes in the ACL during the years listed:

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