SOUTH PLAINS FINANCIAL, INC. (SPFI)

CIK: 0001163668. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-05.

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

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1163668. Latest filing source: 0001140361-26-008087.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001163668.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

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

Ratios

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

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001163668.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: 0001140361-26-019131.

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

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations for the periods covered by this Quarterly Report on Form 10-Q (this “Form 10-Q”) and
should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report on Form
10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”), on March 5, 2026. Unless we state otherwise or the context otherwise requires,
references in this Form 10-Q to “we,” “our,” “us” and “the Company” refer to South Plains Financial, Inc., a Texas corporation, our wholly-owned banking subsidiary, City Bank, a Texas banking association and our other consolidated subsidiaries.
References in this Form 10-Q to the “Bank” refer to City Bank.

Cautionary Notice Regarding Forward-Looking Statements

This Form 10-Q contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or
phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,”
“annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations,
estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such
forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking
statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

●

risks relating to the acquisition of BOH Holdings, Inc. (“BOH”) including, without limitation: the expected impact of the transaction and on the combined entities’ operations, financial condition, and
financial results; the businesses of South Plains and BOH may not be combined successfully, or such combination may take longer to accomplish than expected; the cost savings from the transaction may not be fully realized or may take longer
to realize than expected; operating costs, customer loss and business disruption following the transaction, including adverse effects on relationships with employees, may be greater than expected; the risk of deposit and customer attrition;
and increased competitive pressures on solicitations of customers by competitors;

●

risks related to the integration of any other acquired businesses, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, risks related to entering a new
geographic market, the time and costs associated with integrating systems, technology platforms, procedures and personnel, the ability to retain key employees and maintain relationships with significant customers, the need for additional
capital to finance such transactions, and possible failures in realizing the anticipated benefits from acquisitions;

●

potential recession in the United States and our market areas;

●

uncertainty or perceived instability in the banking industry as a whole;

●

increased competition for deposits and related changes in deposit customer behavior;

●

the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas, and its impact on market interest rates, the economy and credit
quality;

●

business and economic conditions, particularly those affecting our market areas, as well as the concentration of our business in such market areas;

●

the impact of pandemics, epidemics, or any other health-related crisis;

●

high concentrations of loans secured by real estate located in our market areas;

●

increases in unemployment rates in the United States and our market areas;

●

risks associated with our commercial loan portfolio, including the risk for deterioration in value of the general business assets that secure such loans;

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●

potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;

●

risks associated with our agricultural loan portfolio, including the heightened sensitivity to weather conditions, commodity prices, and other factors generally outside the borrowers and our control;

●

risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;

●

public funds deposits comprising a relatively high percentage of our deposits;

●

potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;

●

our ability to maintain our reputation;

●

our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses;

●

our ability to attract, hire and retain qualified management personnel;

●

our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;

●

interest rate fluctuations, which could have an adverse effect on our profitability;

●

competition from banks, credit unions and other financial services providers;

●

our ability to keep pace with technological change or difficulties we may experience when implementing new technologies;

●

cybersecurity risk, including cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service
providers, including as a result of a cyber attack, could impact the Company’s reputation, increase regulatory oversight, and impact the financial results of the Company;

●

our ability to maintain effective internal control over financial reporting;

●

employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;

●

increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;

●

our ability to maintain adequate liquidity and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;

●

costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;

●

severe weather, natural disasters, military conflicts (including the conflicts in the Middle East, the possible expansion of such conflicts and potential geopolitical and economic consequences), acts of
terrorism, geopolitical instability, domestic civil unrest or other external events, including as a result of the impact of the policies of the current U.S. presidential administration or Congress;

●

uncertainty regarding United States fiscal debt, deficit and budget matters;

●

the impacts of tariffs, sanctions, and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers;

●

the risks related to the development, implementation use and management of emerging technologies, including artificial intelligence and machine learning;

●

compliance with governmental and regulatory requirements, including the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Economic Growth, Regulatory Relief, and Consumer
Protection Act of 2018 (“EGRRCPA”), and others relating to banking, consumer protection, securities and tax matters;

●

changes in accounting principles and standards, including those related to loan loss recognition under the current expected credit loss, or CECL, methodology;

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●

changes in the laws, rules, regulations, interpretations or policies that apply to the Company’s business and operations, and any additional regulations, or repeals that may be forthcoming as a result
thereof, which could cause the Company to incur additional costs and adversely affect the Company’s business environment, operations and financial results; and

●

our ability to navigate the uncertain impacts of current and future governmental monetary and fiscal policies, including the current and future policies of the Board of Governors of the Federal Reserve System
(“Federal Reserve”) and as a result of initiatives of the Trump administration.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Form 10-Q and the risk factors set forth in our 2025
Annual Report on Form 10-K. Because of these risks and other uncertainties, our actual future results, performance or achievements, or industry results, may be materially different from the results indicated by the forward-looking statements in
this Form 10-Q. In addition, our past results of operations are not necessarily indicative of our future results. Accordingly, you should not rely on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of
the dates on which such forward-looking statements were made. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a
result of new information, future developments or otherwise, except as required by applicable law.

Available Information

The Company maintains an Internet web site at www.spfi.bank. The Company makes available, free of charge, on its web site (under www.spfi.bank/financials-filings/sec-filings
) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably
practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (under www.spfi.bank/corporate-governance/documents-charters
) links to the Company’s Code of Conduct and the charters for its board committees. In addition, the SEC maintains an Internet site (at www.sec.gov ) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC.

The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases ). The Company intends to use its web site as a means of disclosing material non-public information and for c

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

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-05. Report date: 2025-12-31.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the
accompanying notes included in Item 8. Financial Statements and Supplementary Data. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we
believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this Report, may cause
actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Except as required by law, we assume no obligation to update any of these forward-looking
statements.

Discussion in this Form 10-K includes results of operations and financial condition for 2025 and 2024 and year-over-year comparisons between 2025 and 2024. For discussion on
results of operations and financial condition pertaining to 2024 and 2023 and year-over-year comparisons between 2024 and 2023, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II,
Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025.

Overview

We are a bank holding company headquartered in Lubbock, Texas, and our wholly-owned subsidiary, City Bank is one of the largest independent banks in West Texas and has additional banking
operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. Through City Bank, we provide a wide range of commercial and consumer financial services to small and
medium-sized businesses and individuals in our market areas. Our principal business activities include commercial and retail banking, along with investment, trust and mortgage services.

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On December 1, 2025, SPFI, and BOH Holdings, Inc., a Texas corporation (“BOH”), entered into an Agreement and Plan of Reorganization (the “Reorganization Agreement”), providing for the
acquisition by SPFI of BOH through the merger of BOH with and into SPFI, with SPFI surviving the merger (the “Merger”). At December 31, 2025, BOH had $745.1 million in assets, $624.5 million in total gross loans, and $603.0 million in deposits.
Pursuant to the terms and subject to the conditions of the Reorganization Agreement, which has been unanimously approved by the boards of directors of each of SPFI and BOH, each share of BOH common stock issued and outstanding immediately prior
to the effective time of the Merger (the “effective time”) will be converted into the right to receive, without interest, 0.1925 shares of SPFI common stock, subject to adjustment pursuant to the terms of the Reorganization Agreement (the
“Exchange Ratio”), plus cash in lieu of any fractional shares.

Based on the closing price of $37.79 for SPFI common stock on November 28, 2025, the Merger would have an aggregate value of approximately $105.9 million, though the transaction value is likely
to change until closing due to fluctuations in the price of SPFI common stock. Immediately following the consummation of the Merger, Bank of Houston, a Texas state banking association and wholly-owned subsidiary of BOH, will merge with and into
City Bank, with City Bank surviving the merger. The Merger is expected to close during the second quarter of 2026, subject to the satisfaction of customary closing conditions, including the receipt of all required regulatory approvals and the
approval of BOH’s shareholders.

Selected Financial Data

The following table sets forth certain of our selected financial data for, and as of the end of, each of the periods indicated (dollars in thousands, except per share data).

As of and for the Year Ended December 31,

2025

2024

2023

Selected Income Statement Data:

Net interest income

$

166,999

$

147,098

$

139,747

Provision for credit losses

5,195

4,300

4,610

Noninterest income

44,889

48,072

79,226

Noninterest expense

132,620

127,578

134,946

Income tax expense

15,602

13,575

16,672

Net income

58,471

49,717

62,745

Share and Per Share Data:

Earnings per share (basic)

$

3.59

$

3.03

$

3.73

Earnings per share (diluted)

3.44

2.92

3.62

Dividends per share

0.62

0.56

0.52

Tangible book value per share(1)

29.05

25.40

23.47

Selected Period End Balance Sheet Data:

Cash and cash equivalents

$

552,439

$

359,082

$

330,158

Investment securities

567,540

577,240

622,762

Gross loans held for investment

3,144,502

3,055,054

3,014,153

Allowance for credit losses on loans

45,131

43,237

42,356

Total assets

4,480,500

4,232,239

4,204,793

Total deposits

3,874,077

3,620,876

3,626,153

Borrowings

60,493

110,354

110,168

Total stockholders’ equity

493,837

438,949

407,114

Performance Ratios:

Return on average assets

1.33

%

1.17

%

1.54

%

Return on average stockholders’ equity

12.70

%

11.75

%

16.58

%

Net interest margin(2)

3.98

%

3.65

%

3.61

%

Efficiency ratio(3)

62.32

%

65.07

%

61.33

%

Credit Quality Ratios:

Nonperforming assets to total assets(4)

0.26

%

0.58

%

0.14

%

Nonperforming loans to total loans held for investment(5)

0.31

%

0.79

%

0.17

%

Allowance for credit losses on loans to nonperforming loans(5)

460.29

%

179.98

%

818.00

%

Allowance for credit losses on loans to total loans held for investment

1.44

%

1.42

%

1.41

%

Net loan charge-offs to average loans

0.10

%

0.11

%

0.07

%

Capital Ratios:

Total stockholders’ equity to total assets

11.02

%

10.37

%

9.68

%

Tangible common equity to tangible assets(1)

10.61

%

9.92

%

9.21

%

Common equity tier 1 capital ratio

14.45

%

13.53

%

12.41

%

Tier 1 leverage ratio

12.53

%

12.04

%

11.33

%

Tier 1 risk-based capital ratio

15.70

%

14.80

%

13.69

%

Total risk-based capital ratio

17.26

%

17.86

%

16.74

%

(1)

Represents a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures.”

(2)

Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

(3)

The efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income on a tax-equivalent basis and noninterest income.

(4)

Nonperforming assets consist of nonperforming loans plus foreclosed assets.

(5)

Nonperforming loans include nonaccrual loans and loans past due 90 days or more.

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Results of Operations

Net income for the year ended December 31, 2025 was $58.5 million, or $3.44 per diluted share, compared to $49.7 million, or $2.92 per diluted share, for the year ended December 31, 2024. The
increase in net income was primarily the result of an increase of $19.9 million in net interest income, partially offset by a decrease of $3.2 million in noninterest income and an increase of $5.0 million in noninterest expenses. Details of the
changes in the various components are further discussed below.

Return on average assets was 1.33% and return on average equity was 12.70% for the year ended December 31, 2025, compared to 1.17% and 11.75%, respectively, for the year ended December 31,
2024. The increase in return on average assets was primarily due to the increase in net income of 17.6%, relative to an increase of 3.6% in total average assets.

Net Interest Income

Net interest income is the principal source of the Company’s net income and represents the difference between interest income (interest and fees earned on assets, primarily loans and investment
securities) and interest expense (interest paid on deposits and borrowed funds). We generate interest income from interest-earning assets that we own, including loans and investment securities. We incur interest expense from interest-bearing
liabilities, including interest-bearing deposits and other borrowings, notably FHLB advances and subordinated notes. To evaluate net interest income, we measure and monitor (i) yields on our loans and other interest-earning assets, (ii) the costs
of our deposits and other funding sources, (iii) our net interest spread and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net
interest margin is calculated as the annualized net interest income on a fully tax-equivalent basis divided by average interest-earning assets.

Changes in the market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets,
interest-bearing and noninterest-bearing liabilities, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.

The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the
resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest
margin. For purposes of this table, interest income, net interest margin and net interest spread are shown on a fully tax-equivalent basis.

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Year Ended December 31,

2025

2024

2023

Average Balance

Interest

Yield/Rate

Average Balance

Interest

Yield/Rate

Average Balance

Interest

Yield/Rate

(Dollars in thousands)

Assets:

Interest-earning assets:

Loans(1)

$

3,087,635

$

211,231

6.84

%

$

3,054,189

$

202,301

6.62

%

$

2,924,473

$

176,627

6.04

%

Investment securities – taxable

504,853

18,634

3.69

%

532,730

21,090

3.96

%

570,655

21,590

3.78

%

Investment securities – non-taxable

153,691

4,196

2.73

%

155,168

4,076

2.63

%

185,205

4,901

2.65

%

Other interest-earning assets (2)

468,655

18,847

4.02

%

312,917

14,319

4.58

%

223,152

9,973

4.47

%

Total interest-earning assets

4,214,834

252,908

6.00

%

4,055,004

241,786

5.96

%

3,903,485

213,091

5.46

%

Noninterest-earning assets

171,720

179,527

176,495

Total assets

$

4,386,554

$

4,234,531

$

4,079,980

Liabilities and Stockholders’ Equity:

Interest-bearing liabilities:

NOW, savings and money market deposits

$

2,337,103

$

63,062

2.70

%

$

2,250,942

$

70,362

3.13

%

$

2,117,985

$

55,423

2.62

%

Time deposits

433,760

16,293

3.76

%

411,028

16,719

4.07

%

321,205

9,564

2.98

%

Short-term borrowings

8

—

0.00

%

3

—

0.00

%

84

5

5.95

%

Subordinated debt

51,412

2,730

5.31

%

63,868

3,339

5.23

%

75,458

4,018

5.32

%

Junior subordinated deferrable interest debentures

46,393

2,914

6.28

%

46,393

3,381

7.29

%

46,393

3,276

7.06

%

Total interest-bearing liabilities

2,868,676

84,999

2.96

%

2,772,234

93,801

3.38

%

2,561,125

72,286

2.82

%

Noninterest-bearing liabilities:

Noninterest-bearing deposits

991,899

968,307

1,069,280

Other liabilities

65,476

70,777

71,102

Total noninterest-bearing liabilities

1,057,375

1,039,084

1,140,382

Stockholders’ equity

460,503

423,213

378,473

Total liabilities and stockholders’ equity

$

4,386,554

$

4,234,531

$

4,079,980

Net interest income

$

167,909

$

147,985

$

140,805

Net interest spread

3.04

%

2.58

%

2.64

%

Net interest margin(3)

3.98

%

3.65

%

3.61

%

(1)

Average loan balances include nonaccrual loans and loans held for sale.

(2)

Includes income and average balances for interest-earning deposits at other banks, nonmarketable securities, federal funds sold and other miscellaneous interest-earning assets.

(3)

Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes
in average interest rates. The following tables set forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes
in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volume and rate have been allocated to volume.

Year Ended December 31, 2025 over 2024

Year Ended December 31, 2024 over 2023

Change due to:

Change due to:

Volume

Rate

Total

Variance

Volume

Rate

Total

Variance

(Dollars in thousands)

Interest-earning assets:

Loans

$

2,215

$

6,715

$

8,930

$

7,834

$

17,840

$

25,674

Investment securities – taxable

(1,104

)

(1,352

)

(2,456

)

(1,435

)

935

(500

)

Investment securities – non-taxable

(39

)

159

120

(795

)

(30

)

(825

)

Other interest-earning assets

7,127

(2,599

)

4,528

4,012

334

4,346

Total interest-earning assets

8,199

2,923

11,122

9,616

19,079

28,695

Interest-bearing liabilities:

NOW, Savings, MMDAs

2,693

(9,993

)

(7,300

)

3,479

11,460

14,939

Time deposits

925

(1,351

)

(426

)

2,675

4,480

7,155

Short-term borrowings

—

—

—

(5

)

—

(5

)

Subordinated debt

(651

)

42

(609

)

(617

)

(62

)

(679

)

Junior subordinated deferrable interest debentures

—

(467

)

(467

)

—

105

105

Total interest-bearing liabilities

2,967

(11,769

)

(8,802

)

5,532

15,983

21,515

Net change

$

5,232

$

14,692

$

19,924

$

4,084

$

3,096

$

7,180

43

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Net interest income for the year ended December 31, 2025 was $167.0 million compared to $147.1 million for the year ended December 31, 2024, an increase of $19.9 million, or 13.5%. The increase
in net interest income in 2025 was comprised of a $11.1 million, or 4.6%, increase in interest income and a $8.8 million, or 9.4%, decrease in interest expense. The growth in interest income was primarily attributable to increases of $8.9 million
in loan interest income. The increase in loan interest income was primarily due to growth of $33.4 million in average loans outstanding and an increase of 22 basis points in the yield on loans. Additionally, there was a recovery of $1.7 million
in interest during the second quarter of 2025, related to a full repayment of a loan that had previously been on nonaccrual. This recovery positively impacted the loan yield by approximately 6 basis points during 2025.

The $8.8 million decrease in interest expense for the year ended December 31, 2025 was primarily related to a 42 basis points decrease in the rate paid on interest-bearing liabilities over the
same period in 2024, partially offset by an increase of $96.4 million in average interest-bearing liabilities. The decline in rates was largely attributed to the Federal Open Market Committee (“FOMC”) of the Board of Governors of the Federal
Reserve dropping their target benchmark interest rate, resulting in federal funds rate decreases of 75 basis points in the last four months of 2025.

For the year ended December 31, 2025, net interest margin and net interest spread were 3.98% and 3.04%, respectively, compared to 3.65% and 2.58% for the same period in 2024, respectively,
which reflects the changes in interest income and interest expense discussed above.

Provision for Credit losses

Credit risk is inherent in the business of making loans. We establish an allowance for credit losses (“ACL”) through charges to earnings, which are shown in the consolidated
statements of comprehensive income as the provision for credit losses. Credit losses on loans are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. The provision for credit losses is
determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to our
earnings. The provision for credit losses and the amount of allowance for each period are dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, management’s
assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas. See “Financial Statements and Supplementary Data – Note 1.
Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included elsewhere in this Report for more detailed discussion.

The provision for credit losses for the year ended December 31, 2025 was $5.2 million compared to $4.3 million for the year ended December 31, 2024. The provision during the year ended December
31, 2025 was largely attributable to net charge-offs of $3.0 million and loan growth during 2025. Net charge-offs decreased $428 thousand during 2025 as compared to 2024. The allowance for credit losses as a percentage of loans held for
investment was 1.44% at December 31, 2025 and 1.42% at December 31, 2024. Further discussion of the allowance for credit losses is noted below.

Noninterest Income

While interest income remains the largest single component of total revenues, noninterest income is an important contributing component. The largest portion of our noninterest income is
associated with our mortgage banking activities. Other sources of noninterest income include service charges on deposit accounts, and bank card services and interchange fees.

The following table sets forth the major components of our noninterest income for the periods indicated:

Year Ended

December 31, 2025 over 2024

Year Ended

December 31, 2024 over 2023

2025

2024

Increase

(decrease)

2024

2023

Increase

(decrease)

(Dollars in thousands)

Noninterest income:

Service charges on deposit accounts

$

8,823

$

8,026

$

797

$

8,026

$

7,130

$

896

Bank card services and interchange fees

13,912

13,640

272

13,640

13,323

317

Mortgage banking activities

10,684

14,186

(3,502

)

14,186

13,817

369

Investment commissions

1,700

1,704

(4

)

1,704

1,698

6

Fiduciary income

2,932

2,719

213

2,719

2,433

286

Gain on sale of subsidiary

—

—

—

—

33,778

(33,778

)

Other income and fees(1)

6,838

7,797

(959

)

7,797

7,047

750

Total noninterest income

$

44,889

$

48,072

$

(3,183

)

$

48,072

$

79,226

$

(31,154

)

(1)

Other income and fees includes income and fees associated with the increase in the cash surrender value of life insurance, safe deposit box rental, check printing, collections, legal settlements, wire
transfer, Small Business Investment Company (“SBIC”) investments, income from sweep accounts, and other miscellaneous services.

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Table of Contents

Noninterest income for the year ended December 31, 2025 was $44.9 million compared to $48.1 million for the year ended December 31, 2024, a decrease of $3.2 million, or 6.6%. Significant
changes in the components of noninterest income are detailed below.

Service charges on deposit accounts - Income from service charges on deposit accounts increased $797 thousand, or 9.9% for the year ended December 31,
2025 compared to the same period in 2024. This was largely a result of increased commercial deposits, a continued focus on growing treasury management services, which began building during 2024, and an increase in customer overdraft fees.

Mortgage banking activities - Income from mortgage banking activities decreased $3.5 million, or 24.7%, to $10.7 million for the year ended December 31,
2025 from $14.2 million for the year ended December 31, 2024. The decrease was primarily the result of a $3.3 million negative fair value adjustment of the Company’s mortgage servicing rights portfolio for the year ended December 31, 2025 as
compared to a negative $1.2 million adjustment for the same period in 2024. The $2.1 million larger negative adjustment in 2025 was mainly due to overall lower rates during the year as compared to 2024. In addition, there was also a decrease of
$23.3 million, or 8.0%, in mortgage loan originations in the current year as compared to the prior year.

Other income and fees - Other noninterest income and fees decreased $959 thousand for the year ended December 31, 2025 compared to the same period in
2024. The decrease was primarily the result of decreases of $576 thousand in income from SBIC investments and $611 thousand recognized for property insurance proceeds during the current year as compared to the prior year.

Noninterest Expense

The following table sets forth the major components of our noninterest expense for the periods indicated:

Year Ended

December 31, 2025 over 2024

Year Ended

December 31, 2024 over 2023

2025

2024

Increase

(decrease)

2024

2023

Increase

(decrease)

(Dollars in thousands)

Noninterest expense:

Salaries and employee benefits

$

76,947

$

74,338

$

2,609

$

74,338

$

79,377

$

(5,039

)

Occupancy and equipment, net

16,051

16,105

(54

)

16,105

16,102

3

Professional services

7,310

6,583

727

6,583

6,433

150

Marketing and development

4,023

3,782

241

3,782

3,453

329

IT and data services

4,701

4,286

415

4,286

3,410

876

Bankcard expenses

6,099

5,873

226

5,873

5,557

316

Realized loss on sale of securities

—

—

—

—

3,409

(3,409

)

Other expenses(1)

17,489

16,611

878

16,611

17,205

(594

)

Total noninterest expense

$

132,620

$

127,578

$

5,042

$

127,578

$

134,946

$

(7,368

)

(1)

Other expenses include items such as banking regulatory assessments, telephone expenses, postage, courier fees, directors’ fees, appraisal expenses, and insurance.

Noninterest expense for the year ended December 31, 2025 was $132.6 million compared to $127.6 million for the year ended December 31, 2024, an increase of $5.0 million, or 4.0%. Significant
changes in the components of noninterest expense are detailed below.

Salaries and employee benefits - Salaries and employee benefits increased $2.6 million, or 3.5%, from $74.3 million for the year ended December 31, 2024
to $76.9 million for the year ended December 31, 2025. This was primarily driven by annual salary adjustments, which became effective in January of 2025.

Professional services - Professional services increased $727 thousand, or 11.0%, from $6.6 million for the year ended December 31, 2024 to $7.3 million
for the year ended December 31, 2025. This was primarily driven by approximately $500 thousand in merger related expenses and by increased consulting fees for technology projects and other initiatives during 2025 as compared to 2024.

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Table of Contents

IT and data services – IT and data services expenses increased $415 thousand or 9.7% in the current year from $4.3 million for the year ended December
31, 2024 to $4.7 million for the year ended December 31, 2025. The increase relates primarily to the continued rising cost of technology services and customers using more digital services.

Other expenses - Other expenses increased $878 thousand, or 5.3%, from $16.6 million for the year ended December 31, 2024 to $17.5 million
for the year ended December 31, 2025. This increase was primarily driven by an increase of $845 thousand in the ineffectiveness related to fair value hedges on municipal securities in 2025 as compared to 2024.

Financial Condition

Our total assets increased $248.3 million, or 5.9%, to $4.48 billion at December 31, 2025 as compared to $4.23 billion at December 31, 2024. Our loans held for investment increased $89.4
million, or 2.9%, to $3.14 billion at December 31, 2025, compared to $3.06 billion at December 31, 2024. Total deposits increased $253.2 million, or 7.0% to $3.87 billion at December 31, 2025, compared to $3.62 billion at December 31, 2024.

Loan Portfolio

Our loans represent the largest portion of earning assets, greater than our securities portfolio or any other asset category, and the quality and diversification of the loan portfolio is an
important consideration when reviewing the Company’s financial condition. We originate substantially all of the loans in our portfolio, except certain loan participations that are independently underwritten by the Company prior to purchase.

Loans held for investments increased $89.4 million, or 2.9%, to $3.14 billion at December 31, 2025 as compared to $3.06 billion at December 31, 2024. The organic loan growth remained
relationship-focused and occurred broadly across the loan portfolio, partially offset by a decrease of $86.2 million in multi-family property loans.

The following table shows the contractual maturities of our loans held for investment portfolio at December 31, 2025:

Due in

One Year or

Less

Due after One

Year

Through Five

Years

Due after Five

Years

Through

Fifteen Years

Due after

Fifteen Years

Total

(Dollars in thousands)

Commercial real estate

$

181,701

$

593,794

$

233,142

$

55,988

$

1,064,625

Commercial - specialized

167,817

131,105

69,569

40,860

409,351

Commercial - general

153,713

228,991

193,761

82,858

659,323

Consumer:

1-4 family residential

39,192

122,709

107,105

320,845

589,851

Auto loans

3,346

159,180

96,631

—

259,157

Other consumer

8,909

38,343

14,840

—

62,092

Construction

84,279

11,128

638

4,058

100,103

Total loans

$

638,957

$

1,285,250

$

715,686

$

504,609

$

3,144,502

The following table shows the distribution between fixed and adjustable interest rate loans for maturities greater than one year as of December 31, 2025:

Fixed

Rate

Adjustable

Rate

(Dollars in thousands)

Commercial real estate

$

368,362

$

514,562

Commercial - specialized

98,431

143,103

Commercial - general

201,699

303,911

Consumer:

1-4 family residential

345,865

204,794

Auto loans

255,811

—

Other consumer

53,183

—

Construction

271

15,553

Total loans

$

1,323,622

$

1,181,923

At December 31, 2025, there was $1.59 billion in adjustable rate loans, with $877.7 million of these loans that mature or reprice in the next twelve months. Of these loans that mature or
reprice in the next twelve months, $597.0 million will reprice immediately upon changes in the underlying index rate, with the remaining $280.7 million being subject to rate ceilings, floors above the current index, or a future repricing date.
The Wall Street Journal prime rate is the predominate index used by the Bank.

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Table of Contents

The Bank is primarily involved in real estate, commercial, agricultural and consumer lending activities with customers throughout Texas and Eastern New Mexico. We have a collateral
concentration as 71.6% of our loans were secured by real property as of December 31, 2025, compared to 73.7% as of December 31, 2024. We believe that these loans are not concentrated in any one single property type and that they are
geographically dispersed throughout the areas we serve. Although the Bank has diversified portfolios, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the markets in which it
operates, which consist primarily of agribusiness, wholesale/retail, oil and gas and related businesses, healthcare industries and institutions of higher education. Commercial real estate loans and residential construction loans represent 37.0%
of loans held for investment as of December 31, 2025 and represented 40.1% of loans held for investment as of December 31, 2024. Further, 96% of the total dollar amount of these loans are secured by collateral located in the state of Texas.

We have established concentration limits in the loan portfolio for commercial real estate loans and unsecured lending, among other loan types. All loan types are within established limits. We
use underwriting guidelines to assess the borrowers’ historical cash flow to determine debt service, and we further stress test the debt service under higher interest rate scenarios. Financial and performance covenants are used in commercial
lending to allow us to react to a borrower’s deteriorating financial condition, should that occur.

Commercial Real Estate. Our commercial real estate portfolio includes loans for commercial property that is owned by real estate investors, construction
loans to build owner-occupied properties, and loans to developers of commercial real estate investment properties and residential developments. Residential construction loans are broken out separately below. Commercial real estate loans are
subject to underwriting standards and processes similar to our commercial loans. These loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The
repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in
the general economy. The properties securing our real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.

Commercial real estate loans decreased $54.4 million, or 4.9%, to $1.06 billion as of December 31, 2025 from $1.12 billion as of December 31, 2024. The decrease was primarily driven by a
decrease of $86.2 million in multi-family loans and $18.9 million in hospitality loans, partially offset by increases in residential and commercial land development loans and other commercial real estate loans.

Commercial – General and Specialized. Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably.
Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, to evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed,
and to ensure appropriate collateral is obtained to secure the loan. Commercial loans are primarily made based on the identified cash flows of the borrower and, secondarily, on the underlying collateral provided by the borrower. Most commercial
loans are secured by the assets being financed or other business assets, such as real estate, accounts receivable, or inventory, and typically include personal guarantees. Owner-occupied real estate is included in commercial loans, as the
repayment of these loans is generally dependent on the operations of the commercial borrower’s business rather than on income-producing properties or the sale of the properties. Commercial loans are grouped into two distinct sub-categories:
specialized and general. Commercial related loans that are considered “specialized” include agricultural production and real estate loans, energy loans, and finance, investment, and insurance loans. Commercial related loans that contain a broader
diversity of borrowers, sub-industries, or serviced industries are grouped into the “general category.” These include goods, services, restaurant & retail, construction, and other industries. Performance of these loans is subject to operating
and cash flow results of the borrower, with risk in the volatility of operating results for particular industries.

Commercial general loans increased $102.0 million, or 18.3%, to $659.3 million as of December 31, 2025 from $557.4 million as of December 31, 2024. The increase in commercial general loans was
primarily due to increases broadly across this segment with the largest increases coming from restaurant and retail loans and goods and services loans.

Commercial specialized loans increased $20.4 million, or 5.2%, to $409.4 million as of December 31, 2025 from $389.0 million as of December 31, 2024. This increase was primarily due to growth
of $28.1 million in energy sector loans, partially offset by a decrease of $7.1 million in agricultural real estate loans.

Consumer. We utilize a computer-based credit scoring analysis to supplement our policies and procedures in underwriting consumer loans. Our loan policy
addresses types of consumer loans that may be originated and the collateral, if secured, which must be perfected. The relatively smaller individual dollar amounts of consumer loans that are spread over numerous individual borrowers also minimize
our risk. Residential real estate loans are included in consumer loans. We generally require mortgage title insurance and hazard insurance on these residential real estate loans. All consumer loans are generally dependent on the risk
characteristics of the borrower’s ability to repay the loan, a consideration of the debt to income ratio, employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral.

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Table of Contents

Consumer loans increased $25.3 million, or 2.9%, to $911.1 million as of December 31, 2025, from $885.8 million as of December 31, 2024. The increase in these loans was primarily a result of a
$23.5 million increase in residential mortgage loans. As of December 31, 2025, our consumer loan portfolio was comprised of $589.9 million in 1-4 family residential loans, $259.2 million in auto loans, and $62.1 million in other consumer loans.

Construction. Loans for residential construction are for single-family properties to developers, builders, or end-users. These loans are underwritten
based on estimates of costs and completed value of the project. Funds are advanced based on estimated percentage of completion for the project. Performance of these loans is affected by economic conditions as well as the ability to control costs
of the projects.

Construction loans decreased $3.8 million, or 3.6%, to $100.1 million as of December 31, 2025 from $103.9 million as of December 31, 2024.

The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.16 billion at December 31,
2025 and $1.22 billion at December 31, 2024. Nonowner-occupied commercial real estate loans are made up of income-producing commercial real estate property loans and construction, acquisition, and development property loans. As of December 31,
2025, total income-producing commercial real estate property loans totaled $796.3 million and was comprised of $229.7 million of multi-family property loans, $183.3 million of retail property loans, $141.3 million of office property loans, $42.2
million in hospitality loans, and $199.8 million in industrial and other property loans. Industrial and other property loans include types such as warehouse, mini-storage, and convenience stores. As of December 31, 2025, total construction,
acquisition, and development property loans totaled $368.4 million and was comprised of $100.1 million in residential construction property loans and $268.3 million of commercial construction and other land development loans. The weighted average
loan-to-value of income-producing nonowner-occupied commercial real estate loans was approximately 55% at December 31, 2025. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 58% at
December 31, 2025.

Owner-occupied commercial real estate loans totaled $419.0 million at December 31, 2025 and $366.8 million at December 31, 2024.

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include
commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The Company’s exposure to
credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit to our customers is represented by the contractual or notional amount of those instruments.
Commitments to extend credit and standby letters of credit are not recorded as an asset or liability by the Company until the instrument is exercised. The contractual or notional amounts of those instruments reflect the extent of involvement we
have in particular classes of financial instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration
dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company
uses the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments. The amount and nature of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on
management’s credit evaluation of the potential borrower.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public
and private short-term borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds collateral supporting those commitments for
which collateral is deemed necessary.

The following table summarizes commitments we have made as of the dates presented.

December 31,

2025

2024

(Dollars in thousands)

Commitments to grant loans and unfunded commitments under lines of credit

$

554,286

$

537,688

Standby letters of credit

30,681

18,696

Total

$

584,967

$

556,384

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Table of Contents

Allowance for Credit Losses

The ACL for loans is established for future expected credit losses through a provision for credit losses charged to earnings. Management evaluates the appropriate level of the ACL on a
quarterly basis. The analysis takes into consideration the results of an ongoing loan review process, the purpose of which is to determine the level of credit risk within the portfolio and to ensure proper adherence to underwriting and
documentation standards. Additional allowances are provided to those loans which appear to represent a greater than normal exposure to risk. The quality of the loan portfolio and the adequacy of the ACL is assessed by regulatory examinations and
the Company’s internal and external loan reviews. The ACL consists of two elements: (1) specific valuation allowances established for expected losses on specifically analyzed loans and (2) collective valuation allowances calculated using
comparable and quantifiable information from both internal and external sources about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported
amount. Expected credit losses are estimated over the contractual term of the loans and adjusted for expected prepayments.

To determine the adequacy of the ACL on loans, the Company applied a dual credit risk rating (“DCRR”) methodology that estimates each
loan’s probability of default and loss given default to calculate the expected credit loss to non-analyzed loans. The DCRR process quantifies the expected credit loss at the loan level for the entire loan portfolio. Loan grades are assigned by
a customized scorecard that risk rates each loan based on multiple probability of default and loss given default elements to measure the risk of the loan portfolio. The ACL estimate incorporates the Company’s DCRR loan level risk rating
methodology and the expected default rate frequency term structure to derive loan level life of loan estimates of credit losses for every loan in the portfolio. The estimated credit loss for each loan is adjusted based on one-year through the
cycle estimate of expected credit loss to a life of loan measurement that reflects current conditions and forecasts. The life of loan expected loss is determined using the contractual weighted average life of the loan adjusted for prepayments.
Prepayment speeds are determined by grouping the loans into pools based on segments and risk rating. After the life of loan expected losses are determined, they are adjusted to reflect the Company’s reasonable and supportable economic forecast
over a selected range of a one to two years. The Company has developed regression models to project net charge-off rates based on macroeconomic variables (“MEVs”), typically a one-year period is used. MEV’s considered in the analysis
consist of data gathered from the St. Louis Federal Reserve Research Database (“FRED”), such as, federal funds rate, 10-year treasury rates, 30-year mortgage rates, crude oil prices, consumer price index, housing price index, unemployment rates,
housing starts, gross domestic product, and disposable personal income. These regression models are applied to the Company’s economic forecast to determine the corresponding net charge-off rates. The projected
net charge-off rates for the given economic scenario are used to adjust the through the cycle expected losses. Qualitative adjustments are also made to ACL results for additional risk factors that are relevant in assessing the expected credit
losses within our loan segments. These qualitative factor (“Q-Factor”) adjustments may increase or decrease management’s estimate of the ACL by a calculated percentage based upon the estimated level of perceived risk within a particular
segment. Q-Factor risk decisions consider concentrations of the loan portfolio, expected changes to the economic forecasts, large relationships, and other factors related to credit administration, such as borrower’s risk rating and the
potential effect of delayed credit score migrations. Management quantifiably identifies segment percentage Q-Factor adjustments using a scorecard risk rating system scaled to historical loss experience within a segment and management’s
perceived risk for that particular segment. In addition to the loan level evaluations, nonaccrual loans with a balance of $250 thousand or more are individually analyzed based on facts and circumstances of the loan to determine if a specific
allowance amount may be necessary. Specific allowances may also be established for loans whose outstanding balances are below the above threshold when it is determined that the risk associated with the loan differs significantly from the risk
factor amounts established for its loan category.

The ACL for loans was $45.1 million at December 31, 2025 compared to $43.2 million at December 31, 2024, an increase of $1.9 million, or 4.4%. The ACL for loans as a
percentage of loans held for investment was 1.44% at December 31, 2025 and 1.42% at December 31, 2024.

The following table provides an analysis of the ACL for loans and other data during the periods indicated.

As of or for the Year Ended December 31,

2025

2024

2023

(Dollars in thousands)

Average loans outstanding during period(1)

Commercial real estate

$

1,080,575

$

1,108,216

$

988,121

Commercial – specialized

385,521

395,450

350,940

Commercial – general

603,940

524,370

517,242

Consumer:

1-4 family residential

583,058

561,629

512,149

Auto loans

258,813

273,898

317,465

Other consumer

63,583

69,110

78,842

Construction

99,057

107,668

140,460

Loans held for sale

13,088

13,850

19,254

Total average loans outstanding during period

$

3,087,635

$

3,054,191

$

2,924,473

Net charge-offs (recoveries) during the period

Commercial real estate

$

541

$

42

$

—

Commercial – specialized

(127

)

(80

)

(164

)

Commercial – general

476

910

292

Consumer:

1-4 family residential

166

169

(5

)

Auto loans

1,147

1,051

691

Other consumer

833

1,057

861

Construction

(5

)

310

319

Total net charge-offs (recoveries) during the period

$

3,031

$

3,459

$

1,994

Total loans held for investment outstanding

$

3,144,502

$

3,055,054

$

3,014,153

Nonaccrual loans

$

7,070

$

22,102

$

3,242

Allowance for credit losses on loans

$

45,131

$

43,237

$

42,356

Ratio of allowance to total loans held for investment

1.44

%

1.42

%

1.41

%

Ratio of allowance to nonaccrual loans

638.35

%

195.62

%

1,306.48

%

Ratio of nonaccrual loans to total loans held for investment

0.22

%

0.72

%

0.11

%

Ratio of net charge-offs (recoveries) to average loans during the period

Commercial real estate

0.05

%

—

—

Commercial – specialized

(0.03

)%

(0.02

)%

(0.05

)%

Commercial – general

0.08

%

0.17

%

0.06

%

Consumer:

1-4 family residential

0.03

%

0.03

%

—

Auto loans

0.44

%

0.38

%

0.22

%

Other consumer

1.31

%

1.53

%

1.09

%

Construction

(0.01

)%

0.29

%

0.23

%

Total ratio of net charge-offs (recoveries) to average loans during the period

0.10

%

0.11

%

0.07

%

(1)

Average outstanding balances include loans held for sale.

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Table of Contents

Net charge-offs totaled $3.0 million and were 0.10% of average loans outstanding for the year ended December 31, 2025, compared to $3.5 million and 0.11% for the year ended December 31, 2024. Gross charge-offs
increased $44 thousand and recoveries increased $472 thousand for the year ended December 31, 2025 compared to the same period in 2024.

While the entire ACL for loans is available to absorb losses from any part of our loan portfolio, the following table sets forth the allocation of the ACL for loans for the periods presented
and the percentage of allowance in each classification to total allowance:

As of December 31,

2025

2024

2023

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

(Dollars in thousands)

Commercial real estate

$

15,214

33.8

%

$

15,973

36.9

%

$

15,808

37.3

%

Commercial – specialized

5,231

11.6

%

4,640

10.7

%

4,020

9.5

%

Commercial – general

7,448

16.5

%

6,874

15.9

%

6,391

15.1

%

Consumer:

1-4 family residential

11,103

24.6

%

9,677

22.4

%

9,177

21.7

%

Auto loans

3,033

6.7

%

3,015

7.0

%

3,601

8.5

%

Other consumer

1,150

2.5

%

1,115

2.6

%

968

2.3

%

Construction

1,952

4.3

%

1,943

4.5

%

2,391

5.6

%

Total allowance for credit losses

$

45,131

100.0

%

$

43,237

100.0

%

$

42,356

100.0

%

Asset Quality

Loans are considered delinquent when principal or interest payments are past due 30 days or more. Delinquent loans may remain on accrual status between 30 days and 90 days past due. Loans on
which the accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management,
there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on
nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well-secured and management believes full
collectability of principal and interest is probable.

50

Table of Contents

Loans that exhibit characteristics different from their pool characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective ACL
evaluation. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we analyze loans for specific allowance
based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral
dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between
appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us
to believe the last appraised value no longer reflects the actual market for the collateral. The specific allowance amount on a collateral-dependent loan is charged-off to the allowance if deemed not collectible and the impairment amount on a
loan that is not collateral-dependent is set up as a specific reserve.

Real estate we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned (“OREO”) until sold and is initially recorded at fair value less
costs to sell when acquired, establishing a new cost basis. OREO and repossessed assets are reported as foreclosed assets.

Nonperforming loans include nonaccrual loans and loans past due 90 days or more. Nonperforming assets consist of nonperforming loans plus foreclosed assets.

At December 31, 2025, our total nonaccrual loans were $7.1 million, or 0.22% of total loans held for investment, as compared to $22.1 million, or 0.72% of total loans held for investment, at
December 31, 2024. These loans within this amount that exceeded $250 thousand were specifically analyzed and specific valuation allowances were established as necessary and included in the ACL for loans as of December 31, 2025 to cover any
probable loss. The decrease in the year ended December 31, 2025 was primarily due to the full repayment of a $19.5 million loan in the second quarter of 2025 that had been on nonaccrual at December 31, 2024. This decrease was partially offset by
other loans being placed on nonaccrual status during 2025.

Nonperforming loans were $9.8 million at December 31, 2025 and $24.0 million at December 31, 2024. This decrease is mainly due to the nonaccrual changes noted above.

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other than insignificant payment delay, or interest rate
reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL for loans. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience
financial difficulty, another concession, such as principal forgiveness, may be granted. In some cases, the Company provides multiple types of concessions on one loan. The Company closely monitors the performance of loans that are modified to
borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Upon the Company’s determination that a modified loan has subsequently been deemed to not be fully collectible, the uncollectible amount is
written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL for loans is adjusted by the same amount.

If a borrower on a modified accruing loan has demonstrated performance under the previous terms, is not experiencing financial difficulty and shows the capacity to continue to perform under the
restructured terms, the loan will remain on accrual status. Otherwise, the loan will be placed on nonaccrual status until the borrower demonstrates a sustained period of performance, which generally requires six consecutive months of payments.

Securities Portfolio

The securities portfolio is the second largest component of the Company’s interest-earning assets, and the structure and composition of this portfolio is important to an analysis of the
financial condition of the Company. The securities portfolio serves the following purposes: (i) it provides a source of pledged assets for securing certain deposits and borrowed funds, as may be required by law or by specific agreement with a
depositor or lender; (ii) it provides liquidity to even out cash flows from the loan and deposit activities of customers; (iii) it can be used as an interest rate risk management tool, since it provides a large base of assets, the maturity and
interest rate characteristics of which can be changed more readily than the loan portfolio to better match changes in the deposit base and other funding sources of the Company; and (iv) it is an alternative interest-earning asset when loan demand
is weak or when deposits grow more rapidly than loans.

The securities portfolio consists of securities classified as either held-to-maturity or available-for-sale. Securities consist primarily of state and municipal securities, mortgage-backed
securities and U.S. government sponsored agency securities. We determine the appropriate classification at the time of purchase. All held-to-maturity securities are reported at amortized cost, adjusted for premiums and discounts that are
recognized in interest income using the interest method over the period to maturity. All available-for-sale securities are reported at fair value.

51

Table of Contents

Total securities at December 31, 2025 were $567.5 million, representing a decrease of $9.7 million, or 1.7%, compared to $577.2 million at December 31, 2024. The decrease
was primarily due to $28.9 million in maturities, prepayments and calls, net of purchases and a $21.7 million decrease in the fair value of securities available for sale at December 31, 2025 as compared to December 31, 2024.

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. During the year ended December 31, 2025, the fair value adjustment to the Company’s
securities available for sale increased $21.7 million after decreasing by $9.7 million during 2024. The change resulted from decreased longer-term interest rates during 2025. At December 31, 2025, the Company evaluated whether the decline in fair
value has resulted from credit losses or other factors. Within this evaluation, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agency, and adverse conditions
specifically related to the security, among other factors. Based on management’s evaluation no unrealized losses on securities were determined to be due to credit loss. Additionally, we anticipate full recovery of amortized cost with respect to
these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not probable that we will be required to sell them before recovery of the amortized
cost basis, which may be at maturity, thus no ACL or losses have been recognized or realized in the consolidated financial statements for securities in the portfolio.

The following table sets forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of the date presented. Expected maturities
may differ from contractual maturities if borrowers have the right to call or prepay obligation with or without call or prepayment penalties.

As of December 31, 2025

Due in

One Year or Less

Due after One Year

Through Five Years

Due after Five Years

Through Ten Years

Due after

Ten Years

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

(Dollars in thousands)

Available-for-sale

State and municipal

$

545

3.46

%

$

5,079

2.72

%

$

12,841

2.40

%

$

180,951

2.38

%

Residential mortgage-backed securities

41

1.33

%

1,040

2.06

%

518

2.97

%

301,112

2.29

%

Commercial mortgage-backed securities

—

—

1,525

4.03

%

47,244

2.31

%

—

—

Collateralized mortgage obligations

—

—

—

—

63,398

4.56

%

4,310

5.30

%

Asset-backed and other amortizing securities

—

—

254

2.99

%

2,069

3.19

%

11,649

2.75

%

Other securities

—

—

5,000

7.53

%

—

—

—

—

Total available-for-sale

$

586

3.31

%

$

12,898

4.69

%

$

126,070

3.47

%

$

498,022

2.36

%

Deposits

Deposits represent the Company’s primary and most vital source of funds. We offer a variety of deposit products including demand deposits accounts, interest-bearing products, savings accounts
and certificate of deposits. We put continued effort into gathering noninterest-bearing demand deposit accounts through loan production, customer referrals, marketing staffs, mobile and online banking and various involvements with community
networks.

Total deposits at December 31, 2025 were $3.87 billion, representing an increase of $253.2 million, or 7.0%, compared to $3.62 billion at December 31, 2024. The increase was due to organic
growth and occurred broadly across commercial and retail deposits, with growth in both noninterest-bearing and interest-bearing deposits. As of December 31, 2025, 26.4% of total deposits were comprised of noninterest-bearing demand accounts,
62.5% of interest-bearing non-maturity accounts and 11.1% of time deposits. Interest-bearing non-maturity accounts included $210.8 million in brokered deposits, which represented 5.4% of total deposits at December 31, 2025.

52

Table of Contents

The following table shows the deposit mix as of the dates presented:

December 31, 2025

December 31, 2024

Amount

% of Total

Amount

% of Total

(Dollars in thousands)

Noninterest-bearing deposits

$

1,023,517

26.4

%

$

935,510

25.8

%

NOW and other transaction accounts

1,307,596

33.8

%

498,718

13.8

%

Money market and other savings

1,111,529

28.7

%

1,741,988

48.1

%

Time deposits

431,435

11.1

%

444,660

12.3

%

Total deposits

$

3,874,077

100.0

%

$

3,620,876

100.0

%

The following table summarizes our average deposit balances and weighted average rates for the periods indicated:

2025

2024

2023

Average

Balance

Weighted

Average Rate

Average

Balance

Weighted

Average

Rate

Average

Balance

Weighted

Average

Rate

(Dollars in thousands)

Noninterest-bearing deposits

$

991,899

—

%

$

968,307

—

%

$

1,069,280

—

%

Interest-bearing deposits:

NOW and interest-bearing demand accounts

1,172,864

2.69

%

482,160

3.74

%

401,075

2.93

%

Savings accounts

133,404

0.79

%

135,484

0.90

%

145,758

0.87

%

Money market accounts

1,030,835

2.96

%

1,633,298

3.13

%

1,571,152

2.70

%

Time deposits

433,760

3.76

%

411,028

4.07

%

321,205

2.98

%

Total interest-bearing deposits

2,770,863

2.86

%

2,661,970

3.27

%

2,439,190

2.66

%

Total deposits

$

3,762,762

2.11

%

$

3,630,277

2.40

%

$

3,508,470

1.85

%

Time deposits issued in amounts of more than $250 thousand represent the type of deposit most likely to affect the Company’s future earnings because of interest rate sensitivity. The effective
cost of these funds is generally higher than other time deposits because the funds are usually obtained at premium rates of interest.

The scheduled maturities of time deposits of more than $250 thousand as of December 31, 2025 follows:

(Dollars in thousands)

Three

Months

Three to

Six Months

Six to

12 Months

After

12 Months

Total

$

90,616

$

45,554

$

50,597

$

5,568

$

192,335

The estimated amount of uninsured deposits as of December 31, 2025 was $1.40 billion. This represented approximately 36% of total deposits and excludes $336 million of collateralized public
fund deposits.

Borrowed Funds

In addition to deposits, we may utilize advances from the FHLB and other borrowings as a supplementary funding source to finance our operations.

FHLB Advances. The FHLB allows us to borrow, both short and long-term, on a blanket floating lien status collateralized by first mortgage loans and
commercial real estate loans as well as FHLB stock. At December 31, 2025 and 2024, we had total remaining borrowing capacity from the FHLB of $1.27 billion and $1.11 billion, respectively. We had no FHLB borrowings during the years ended December
31, 2025 or 2024.

The Company may use FHLB letters of credit to pledge to certain public deposits. The outstanding balance of FHLB letters of credit was $0 and $75.0 million at December 31, 2025 and December 31,
2024, respectively.

Federal Reserve Bank of Dallas. The Bank has a line of credit with the FRB. The amount of the line is determined on a monthly basis by the Federal
Reserve Bank. The line is collateralized by a blanket floating lien on all agriculture, commercial and consumer loans. The amount of the line was $659.7 million and $654.0 million at December 31, 2025 and 2024, respectively. There were no amounts
outstanding on the FRB line of credit at December 31, 2025 and 2024. We had no long-term FRB borrowings during the years ended December 31, 2025 or 2024.

Lines of Credit. The Bank has uncollateralized lines of credit with multiple banks as a source of funding for liquidity management. The total amount of
the lines was $140.0 million and $140.0 million as of December 31, 2025 and 2024. The lines were not used, other than testing during the years ended December 31, 2025 and 2024.

53

Table of Contents

Subordinated Debt

In December 2018, the Company issued $14.1 million of subordinated notes that have a maturity date of December 2030 and a weighted average fixed rate of 6.41% for the first seven years. After
the fixed rate period, all notes will float at the Wall Street Journal prime rate, with a floor of 4.0% and a ceiling of 7.5%. These notes pay interest quarterly, are unsecured, and may be called by the
Company at any time after the remaining maturity is five years or less. Additionally, these notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations.

On September 29, 2020, the Company issued $50.0 million in subordinated notes. Proceeds were reduced by approximately $926 thousand in debt issuance costs. The notes had a maturity date of
September 2030 with a fixed rate of 4.50% for the first five years. On August 25, 2025, the Company notified holders (the “Redemption Notice”) of these notes that it had elected to redeem all of these outstanding notes effective on September 30,
2025 (the “Redemption Date”). Each of these notes were redeemed pursuant to the terms of the Indenture, dated as of September 29, 2020, between the Company and UMB Bank, National Association, as trustee for these notes (the “Trustee”), at the
Redemption Price totaling $50.0 million in aggregate principal amount, plus accrued and unpaid interest (the “Redemption Price”). As provided in the Redemption Notice, on the Redemption Date, the Trustee paid the relevant Redemption Price to the
holders of these notes appearing on the books and records of the Trustee on the Redemption Date. The notes ceased to represent the right to payment of principal and interest upon the payment to the holders of the notes by the Trustee representing
the Redemption Price. The Company received all necessary regulatory approvals for the redemption of these notes.

As of December 31, 2025, the total amount of subordinated debt outstanding was $14.1 million.

Junior Subordinated Deferrable Interest Debentures and Trust Preferred Securities. Between March 2004 and June 2007, the Company formed three
wholly-owned statutory business trusts solely for the purpose of issuing trust preferred securities, the proceeds of which were invested in junior subordinated deferrable interest debentures. The trusts are not consolidated and the debentures
issued by the Company to the trusts are reflected in the Company’s consolidated balance sheets. The Company records interest expense on the debentures in its consolidated financial statements. The amount of debentures outstanding was $46.4
million at December 31, 2025 and 2024. The Company has the right, as has been exercised in the past, to defer payments of interest on the securities for up to twenty consecutive quarters. During such time, corporate dividends may not be paid. The
Company is current in its interest payments on the debentures.

The chart below indicates certain information, as of December 31, 2025, about each of the statutory trusts and the junior subordinated deferrable interest debentures, including the date the
junior subordinated deferrable interest debentures were issued, outstanding amounts of trust preferred securities and junior subordinated deferrable interest debentures, the maturity date of the junior subordinated deferrable interest debentures,
and the interest rates on the junior subordinated deferrable interest debentures.

Name of Trust

Issue

Date

Amount

of Trust

Preferred

Securities

Amount of

Debentures

Stated

Maturity Date

of Trust Preferred

Securities and

Debentures(1)

Interest Rate of

Trust Preferred

Securities and

Debentures(2)(3)

(Dollars in thousands)

South Plains Financial Capital Trust III

2004

$

10,000

$

10,310

2034

3-mo. CME Term SOFR + 291 bps; 6.77%

South Plains Financial Capital Trust IV

2005

20,000

20,619

2035

3-mo. CME Term SOFR + 165 bps; 5.37%

South Plains Financial Capital Trust V

2007

15,000

15,464

2037

3-mo. CME Term SOFR + 176 bps; 5.48%

Total

$

45,000

$

46,393

(1)

May be redeemed at the Company’s option.

(2)

Interest payable quarterly with principal due at maturity.

(3)

Rate as of last reset date, prior to December 31, 2025.

54

Table of Contents

Liquidity and Capital Resources

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow
needs, all at a reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet
the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.

Our liquidity position is supported by management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks,
federal funds sold, and fair value of unpledged investment securities. Other available sources of liquidity include wholesale deposits, and additional borrowings from correspondent banks, FHLB advances, and the FRB discount window. At December
31, 2025, the Bank had the capacity to borrow funds from the FHLB and the Federal Reserve discount window of up to approximately $1.27 billion and $659.7 million, respectively. Additionally, we have uncollateralized lines with multiple banks
totaling $140.0 million at December 31, 2025. These lines are not guaranteed and we are not placing reliance on them.

Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios,
and increases in customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term basis.

Capital

Total stockholders’ equity increased to $493.8 million as of December 31, 2025, compared to $438.9 million as of December 31, 2024. The increase from December 31, 2024 was primarily the result
of $58.5 million in net income and an increase of $12.9 million in accumulated other comprehensive income (“AOCI”) related to fair value changes in securities available for sale and related fair value hedges, partially offset by $10.1 million in
dividends paid, and repurchases of common stock of $8.5 million for the year ended December 31, 2025.

We are subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory capital requirements may result in certain
mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “prompt corrective
action” (described below), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. The capital amounts and
classifications are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Qualitative measures established by regulation to ensure capital adequacy required us to maintain minimum
amounts and ratio of common equity tier 1 (“CET1”) capital, tier 1 capital and total capital to risk-weighted assets and of tier 1 capital to average consolidated assets, referred to as the “leverage ratio.”

The risk-based capital ratios measure the adequacy of a bank’s capital against the riskiness of its assets and off-balance sheet activities. Failure to maintain adequate capital is a basis for
“prompt corrective action” or other regulatory enforcement action. In assessing a bank’s capital adequacy, regulators also consider other factors such as interest rate risk exposure; liquidity, funding and market risks; quality and level of
earnings; concentrations of credit, quality of loans and investments; risks of any nontraditional activities; effectiveness of bank policies; and management’s overall ability to monitor and control risks.

At December 31, 2025, both we and the Bank met all the capital adequacy requirements to which we and the Bank were subject. At December 31, 2025, we and the Bank were “well capitalized” under
the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since December 31, 2025 that would materially adversely change such capital classifications. From time to time, we may need to
raise additional capital to support our and the Bank’s further growth and to maintain our “well capitalized” status.

The table below also summarizes the capital requirements applicable to us and the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as our and the Bank’s
capital ratios as of the dates indicated.

Actual

Minimum Capital

Requirement with

Capital Buffer

Minimum

To be Considered

Well Capitalized

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

As of December 31, 2025:

Total capital (to risk-weighted assets)

Consolidated

$

622,485

17.26

%

$

378,645

10.50

%

N/A

N/A

Bank

537,444

14.91

%

378,576

10.50

%

$

360,549

10.00

%

Tier 1 capital (to risk-weighted assets)

Consolidated

566,107

15.70

%

306,522

8.50

%

N/A

N/A

Bank

492,355

13.66

%

306,466

8.50

%

288,439

8.00

%

CET 1 capital (to risk-weighted assets)

Consolidated

521,107

14.45

%

252,430

7.00

%

N/A

N/A

Bank

492,355

13.66

%

252,384

7.00

%

234,357

6.50

%

Tier 1 capital (to average assets)

Consolidated

566,107

12.53

%

181,591

4.00

%

N/A

N/A

Bank

492,355

10.90

%

181,512

4.00

%

225,868

5.00

%

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Table of Contents

Actual

Minimum Capital

Requirement with

Capital Buffer

Minimum

To be Considered

Well Capitalized

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

As of December 31, 2024:

Total capital (to risk-weighted assets)

Consolidated

$

631,713

17.86

%

$

371,426

10.50

%

N/A

N/A

Bank

520,788

14.73

%

371,351

10.50

%

$

353,667

10.00

%

Tier 1 capital (to risk-weighted assets)

Consolidated

523,535

14.80

%

300,678

8.50

%

N/A

N/A

Bank

476,574

13.48

%

300,617

8.50

%

282,934

8.00

%

CET 1 capital (to risk-weighted assets)

Consolidated

478,535

13.53

%

247,617

7.00

%

N/A

N/A

Bank

476,574

13.48

%

247,567

7.00

%

229,884

6.50

%

Tier 1 capital (to average assets)

Consolidated

523,535

12.04

%

174,777

4.00

%

N/A

N/A

Bank

476,574

10.96

%

174,710

4.00

%

217,336

5.00

%

Community Bank Leverage Ratio

On September 17, 2019, the federal banking agencies jointly finalized a rule to be effective January 1, 2020 and intended to simplify the regulatory capital requirements described above for qualifying community
banking organizations that opt into the Community Bank Leverage Ratio (“CBLR”) framework, as required by Section 201 of the EGRRCPA. The final rule became effective on January 1, 2020, and the CBLR framework became available for banks to use
beginning with their March 31, 2020 Call Reports. Under the final rule, if a qualifying community banking organization opts into the CBLR framework and meets all requirements under the framework, it will be considered to have met the
well-capitalized ratio requirements under the “prompt corrective action” regulations described above and will not be required to report or calculate risk-based capital. In order to qualify for the CBLR framework, a community banking
organization must have a tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. In November 2025, the federal bank
regulatory agencies proposed changes to the CBLR framework intended to encourage broader adoption, including reducing the required leverage ratio from 9% to 8%; however, the proposed rule has not yet been finalized. Although the Company and the
Bank are qualifying community banking organizations, the Company and the Bank have elected not to opt in to the CBLR framework at this time and will continue to follow the Basel III capital requirements as described above.

Treasury Stock

We repurchased stock in accordance with its stock repurchase programs during 2025 and 2024. In 2025, we repurchased 259,046 shares of common stock for a total of $8.5 million. In 2024, we
repurchased 53,799 shares of common stock for a total of $1.3 million See Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities,” of this Report for further information.

Interest Rate Sensitivity and Market Risk

As a financial institution, our primary component of market risk is interest rate volatility. Our interest rate risk policy provides management with the guidelines for effective funds
management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We have historically managed our sensitivity position within our established guidelines.

Interest rate sensitivity involves the relationships between rate-sensitive assets and liabilities and is an indication of the probable effects of interest rate fluctuations on the Company’s
net interest income. Interest rate-sensitive assets and liabilities are those with yields or rates that are subject to change within a future time period due to maturity or changes in market rates. The model is used to project future net interest
income under a set of possible interest rate movements. The Company’s Investment/Asset Liability Committee (“ALCO Committee”) reviews this information to determine compliance with the limits set by the Bank’s board of directors.

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Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets
and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net
interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business. Based upon the nature of our operations, we are not subject to foreign exchange or
commodity price risk. We do not own any trading assets.

Our exposure to interest rate risk is managed by the ALCO Committee, in accordance with policies approved by the Bank’s board of directors. The ALCO Committee formulates strategies based on
appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, the ALCO Committee considers the impact on earnings and capital on the current outlook on interest rates, potential changes in interest rates,
regional economies, liquidity, business strategies and other factors. The ALCO Committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and
liabilities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the ALCO Committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity.
Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities and an interest rate shock simulation model.

We use interest rate risk simulation models and shock analyses to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates
on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated in the model. The average lives of non-maturity deposit accounts are based on decay assumptions and are incorporated into the model. All of
the assumptions used in our analyses are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual
results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.

On a quarterly basis, we run a simulation model for a static balance sheet and other scenarios. These models test the impact on net interest income from changes in market interest rates under
various scenarios. Under the static model, rates are shocked instantaneously and ramped rates change over a 12-month and 24-month horizon based upon parallel and non-parallel yield curve shifts. Parallel shock scenarios assume instantaneous
parallel movements in the yield curve compared to a flat yield curve scenario. Non-parallel simulation involves analysis of interest income and expense under various changes in the shape of the yield curve. Our internal policy regarding internal
rate risk simulations currently specifies that for gradual parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 7.5% for a 100 basis point shift, 15% for a
200 basis point shift, and 22.5% for a 300 basis point shift.

The following tables summarize the simulated change in net interest income over a 12-month horizon as of the dates indicated:

As of December 31,

2025

2024

Change in Interest Rates (Basis Points)

Percent Change in

Net Interest Income

Percent Change in

Net Interest Income

+300

(3.03

)

(4.63

)

+200

(1.91

)

(3.02

)

+100

(0.89

)

(1.54

)

-100

(0.26

)

0.01

-200

0.27

1.69

Impact of Inflation

Our consolidated financial statements and related notes included elsewhere in this Report have been prepared in accordance with GAAP. GAAP requires the measurement of financial
position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.

The Company’s asset and liability structure is substantially different from that of an industrial company in that virtually all assets and liabilities of the Company are monetary in nature. Management believes the
impact of inflation on financial results depends upon the Company’s ability to react to changes in interest rates and by such reaction, reduce the inflationary impact on performance. Interest rates do not necessarily move in the same direction,
or at the same magnitude, as the prices of other goods and services. However, other operating expenses do reflect general levels of inflation. Management seeks to manage the relationship between interest rate-sensitive assets and liabilities in
order to protect against wide net interest income fluctuations, including those resulting from inflation.

Various information shown elsewhere in this Report will assist in the understanding of how well the Company is positioned to react to changing interest rates and inflationary trends. In particular, additional
information related to the Company’s interest rate-sensitive assets and liabilities is contained in this Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Report under the heading “Interest
Rate Sensitivity and Market Risk.”

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Non-GAAP Financial Measures

Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial
measures discussed in this Report as being non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the
effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the U.S. in our consolidated
statements of comprehensive income(loss), balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either
financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated
in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this Report may differ from that of other companies reporting measures with similar names. It is important to understand how
other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this Report when comparing such non-GAAP financial measures.

Tangible Book Value Per Common Share. Tangible book value per share is a non-GAAP measure generally used by investors, financial analysts and investment
bankers to evaluate financial institutions. The most directly comparable GAAP financial measure for tangible book value per common share is book value per common share. We believe that the tangible book value per common share measure is important
to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value
while not increasing our tangible book value.

Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by investors, financial
analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit intangibles and other intangible assets, net of
accumulated amortization. The most directly comparable GAAP financial measure for tangible common equity to tangible assets is total common stockholders’ equity to total assets. We believe that this measure is important to many investors in the
marketplace who are interested in the relative changes from period to period of tangible common equity to tangible assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both
total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and then presents book value per common
share, tangible book value per common share, total stockholders’ equity to total assets, and tangible common equity to tangible assets:

As of December 31,

2025

2024

2023

(Dollars in thousands)

Total stockholders’ equity

$

493,837

$

438,949

$

407,114

Less:  Goodwill and other intangibles

(20,448

)

(21,035

)

(21,744

)

Tangible common equity

$

$ 473,389

$

417,914

$

385,370

Total assets

$

4,480,500

$

4,232,239

$

4,204,793

Less:  Goodwill and other intangibles

(20,448

)

(21,035

)

(21,744

)

Tangible assets

$

4,460,052

$

4,211,204

$

4,183,049

Shares outstanding

16,293,577

16,455,826

16,417,099

Total stockholders’ equity to total assets

11.02

%

10.37

%

9.68

%

Tangible common equity to tangible assets

10.61

%

9.92

%

9.21

%

Book value per share

$

30.31

$

26.67

$

24.80

Tangible book value per share

$

29.05

$

25.40

$

23.47

Critical Accounting Policies and Estimates

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

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The following is a discussion of the critical accounting policies and significant estimates that we believe require us to make the most complex or subjective decisions or assessments.
Additional information about these policies can be found in Note 1 of the Company’s consolidated financial statements as of December 31, 2025.

Allowance for Credit Losses on Loans. The ACL for loans is established for future expected credit losses through a provision for credit losses charged
to earnings. Expected losses are calculated using comparable and quantifiable information both internal and external about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the
collectability of the reported amount. Expected credit losses are estimated over the contractual term of the loans and adjusted for expected prepayments when appropriate. The ACL for loans is affected by charge-offs, recoveries and the provision
for credit losses on loans.

The ACL for loans is evaluated on a quarterly basis by management and is based upon management’s review of the collectability of the loans in light of historical experience, the nature and
volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates
that are susceptible to significant revision as more information becomes available. The determination of the adequacy of the ACL for loans is based on estimates that are particularly susceptible to significant changes in the economic environment
and market conditions. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Recently Issued Accounting Pronouncements

See Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements included elsewhere in this Report regarding the impact of new accounting
pronouncements which we have adopted.