UNIVEST FINANCIAL Corp (UVSP)

CIK: 0000102212. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-02-23.

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

SEC company page: https://www.sec.gov/edgar/browse/?CIK=102212. Latest filing source: 0000102212-26-000012.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000102212.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

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

Ratios

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

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000102212.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: 0000102212-26-000028.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-04-28. Report date: 2026-03-31.

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

(All dollar amounts presented in tables are in thousands, except per share data. “BP” equates to “basis points”; "NM" equates to “not meaningful”; “—” equates to “zero” or “doesn’t round to a reportable number”; and “N/A” equates to “not applicable.” Certain prior period amounts have been reclassified to conform to the current-year presentation.)

Forward-Looking Statements

This report may contain forward-looking statements. When used or incorporated by reference in disclosure documents, the words "may," "will," "could," "should," "would," "believe," "anticipate," "plan," "estimate," "expect," "project," "target," and "goal," the negative of these terms and other similar expressions are intended to identify forward-looking statements, but are not the exclusive way to identify such statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may include but are not limited to: statements of goals, intentions and expectations; statements regarding business plans, prospects, growth and operating strategies; statements regarding the quality, growth and composition of loan, investment and deposit portfolios; statements regarding our financial performance, financial condition and liquidity; and estimates of our risks and future credit provision and noninterest expenses. These forward-looking statements are based on our current beliefs and expectations and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to certain risks, uncertainties and assumptions with respect to future business strategies and decisions that are subject to change, including but not limited to those set forth below:

•Operating, legal and regulatory risks;

•Economic, political and competitive forces;

•General economic conditions, either nationally or in our market areas, that are worse than expected, included as a result of employment levels and labor shortages, and the effect of a potential recession or slowed economic growth caused by supply chain disruptions or otherwise;

•Legislative, regulatory and accounting changes, including increased assessments by the Federal Deposit Insurance Corporation and changes in income tax laws and regulations;

•Monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;

•Demand for our financial products and services in our market area;

•Major catastrophes such as earthquakes, floods or other natural or human disasters and infectious disease outbreaks, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on us and our customers and other constituencies;

•Inflation or volatility in interest rates that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make or the sale of loans or other assets and/or lead to higher operating costs and higher costs to retain or attract deposits;

•The imposition of tariffs or other domestic or international governmental policies and any retaliatory responses;

•The impact of a potential federal government shutdown;

•Fluctuations in real estate values in our market area;

•A failure to maintain adequate levels of capital and liquidity to support our operations;

•The availability of capital;

•The composition and credit quality of our loan and investment portfolios;

•Changes in the level and direction of loan delinquencies, classified and criticized loans and charge-offs and changes in estimates of the adequacy of the allowance for credit losses;

•Changes in the economic assumptions or methodology utilized to calculate the allowance for credit losses;

•Our ability to access cost-effective funding;

•Changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;

•Our ability to implement our business strategies;

•Our ability to manage market risk, credit risk, interest rate risk and operational risk and the effectiveness of our risk management processes and procedures;

•Timing and amount of revenue and expenditures;

•Adverse changes in the securities markets;

•The impact of any military conflict, terrorist act or other geopolitical acts;

•Our ability to enter new markets successfully and capitalize on growth opportunities;

•Competition for loans, deposits and employees;

•System failures or cyber-security breaches of our information technology infrastructure and those of our third-party service providers;

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•The failure to maintain current technologies and/or to successfully implement future information technology enhancements;

•Changes in investor sentiment or consumer spending, borrowing or savings behavior;

•Our ability to attract and retain key employees;

•Other risks and uncertainties, including those occurring in the U.S. and international financial systems; and

•The risk that our analysis of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected or projected. These and other risk factors are more fully described in this report and in the Univest Financial Corporation Annual Report on Form 10-K for the year ended December 31, 2025 under the section entitled "Item 1A - Risk Factors," and from time to time in other filings made by the Corporation with the SEC.

These forward-looking statements speak only as of the date of the report. The Corporation expressly disclaims any obligation to publicly release any updates or revisions to reflect any change in the Corporation’s expectations with regard to any change in events, conditions or circumstances on which any such statement is based, unless otherwise required by law.

Critical Accounting Policies

In order to prepare the Corporation’s financial statements in conformity with U.S. generally accepted accounting principles, management is required to make estimates and assumptions that affect the amounts reported in the Corporation’s financial statements. There are uncertainties inherent in making these estimates and assumptions. Certain critical accounting policies could materially affect the results of operations and financial condition of the Corporation should changes in circumstances require a change in related estimates or assumptions. The Corporation has identified the fair value measurement of investment securities available-for-sale and the calculation of the allowance for credit losses on loans and leases as critical accounting policies. For more information on these critical accounting policies, please refer to the Corporation’s 2025 Annual Report on Form 10-K.

General

The Corporation is a Pennsylvania corporation, organized in 1973, and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956. The Corporation owns all of the capital stock of Univest Bank and Trust Co. and is the sole member of 1876 Double Eagle, LLC. The condensed consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries, the Bank and 1876 Double Eagle, LLC.

The Bank is engaged in domestic banking services for individuals, businesses, municipalities and non-profit organizations. Through its wholly-owned subsidiaries, the Bank provides a variety of financial services throughout its markets of operation. The Bank is the parent company of Girard Investment Services, LLC, a full-service registered introducing broker-dealer and a licensed insurance agency, Girard Advisory Services, LLC, a registered investment advisory firm, and Girard Pension Services, LLC, a registered investment advisor, which provides investment consulting and management services to municipal entities. The Bank is also the parent company of Univest Insurance, LLC, an independent insurance agency, and Univest Capital, Inc., an equipment financing business.

The Corporation earns revenues primarily from the margins and fees generated from lending and depository services as well as fee-based income from trust, insurance, mortgage banking, treasury management and investment services. The Corporation seeks to achieve adequate and reliable earnings through business growth while maintaining adequate levels of capital and liquidity and limiting exposure to credit and interest rate risk.

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Executive Overview

The Corporation’s consolidated net income, earnings per share and return on average assets and average equity were as follows:

Three Months Ended

March 31,

Change

(Dollars in thousands, except per share data)

2026

2025

Amount

Percent

Net income

$

27,092 

$

22,395 

$

4,697 

21.0 

%

Net income per share:

Basic

$

0.97 

$

0.77 

$

0.20 

26.0 

Diluted

0.96 

0.77 

0.19 

24.7 

Return on average assets

1.33 

%

1.14 

%

19 BP

16.7 

Return on average equity

11.57 

%

10.13 

%

144 BP

14.2 

The financial results for the three months ended March 31, 2026 included tax-free bank owned life insurance (BOLI) death benefit proceeds of $372 thousand, which represented $0.01 diluted earnings per share. In addition, the financial results for the quarter included a $427 thousand restructuring charge ($337 thousand after-tax), or $0.01 diluted earnings per share, related to the planned closure of two underutilized facilities: a financial center and a limited purpose banking office. The financial results for the three months ended March 31, 2025 included tax-free BOLI death benefit proceeds of $1.0 million, which represented $0.04 diluted earnings per share.

Results of Operations

Net Interest Income

Net interest income is the difference between interest earned primarily on loans, leases and investment securities and interest paid on deposits, borrowings, long-term debt and subordinated notes. Net interest income is the principal source of the Corporation’s revenue. Table 1 presents the Corporation’s average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the three months ended March 31, 2026 and 2025. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components.

Three months ended March 31, 2026 versus 2025

Net interest income on a tax-equivalent basis for the three months ended March 31, 2026 was $63.8 million, an increase of $6.7 million, or 11.7%, compared to $57.2 million for the three months ended March 31, 2025. The increase in tax-equivalent net interest income for the three months ended March 31, 2026 compared to the comparable period in the prior year was driven by higher average balances of loans and cash and cash equivalents, as well as a reduction in our cost of funds offset by higher average balances of inte

[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. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-02-23. Report date: 2025-12-31.

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

(All dollar amounts presented in tables are in thousands, except per share data. "BP" equates to "basis points"; "N/M" equates to "not meaningful"; "—" equates to "zero" or "doesn't round to a reportable number"; and "N/A" equates to "not applicable." Certain prior period amounts have been reclassified to conform to the current-year presentation.)

The information contained in this report may contain forward-looking statements, including statements relating to the Corporation and its financial condition and results of operations that involve certain risks, uncertainties and assumptions. The Corporation's actual results may differ materially from those anticipated, expected or projected as discussed in forward-looking statements. A discussion of forward-looking statements and factors that might cause such a difference includes those discussed in Part I, "Forward-Looking Statements," Item 1A. "Risk Factors," as well as those within this Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations and elsewhere in this report.

Critical Accounting Policies

The discussion below outlines the Corporation's critical accounting policies. For further information regarding accounting policies, refer to Note 1, "Summary of Significant Accounting Policies" included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K.

In order to prepare the Corporation's financial statements in conformity with U.S. generally accepted accounting principles, management is required to make estimates and assumptions that affect the amounts reported in the Corporation's financial statements. There are uncertainties inherent in making these estimates and assumptions. Certain critical accounting policies could materially affect the results of operations and financial condition of the Corporation should changes in circumstances require a change in related estimates or assumptions. The Corporation has identified the fair value measurement of investment securities available-for-sale and the calculation of the allowance for credit losses on loans and leases as critical accounting policies.

Fair Value Measurement of Investment Securities Available-for-Sale: The Corporation designates its investment securities as held-to-maturity, available-for-sale or trading. Each of these designations affords different treatment on the balance sheet and statement of income for market value changes affecting securities. Should evidence emerge that indicates that management's intent or ability to manage the securities as originally asserted is not supportable, securities with the held-to-maturity or available-for-sale designations may be re-categorized, which may result in adjustments to either the balance sheet or statement of income.

Fair values for securities are determined using independent pricing services and market-participating brokers. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flows and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the pricing service's evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. If at any time, the pricing service determines that it does not have sufficient verifiable information to value a particular security, the Corporation will utilize valuations from another pricing service. Management has a sufficient understanding of the third-party service's valuation models, assumptions and inputs used in determining the fair value of securities to enable management to maintain an appropriate system of internal control.

Allowance for Credit Losses on Loan and Leases: The Allowance for Credit Losses ("ACL") on loans and leases uses techniques that estimate losses on pools of loans and leases that share similar risk characteristics and specifically identify losses on individual loans and leases that do not share similar risk characteristics with others. The adequacy of these allowances is sensitive to changes in current and forecasted economic conditions that may affect the ability of borrowers to make contractual payments as well as the value of the collateral securing such payments. Management utilizes a discounted cash flow ("DCF") model to calculate the present value of the expected cash flows for pools of loans and leases that share similar risk characteristics and compares the results of this calculation to the amortized cost basis to determine its allowance for credit loss balance. The key assumptions used in the model are (1) probability of default, (2) loss given default, (3) prepayment and curtailment rates, (4) recovery delay (5) reasonable and supportable economic forecasts, (6) forecast reversion period, (7) expected recoveries on charged-off loans, and (8) discount rate. Although management believes it uses the best information available to establish the ACL, future adjustments to the ACL may be necessary and the Corporation’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. While management believes it has established the ACL in conformity with U.S. GAAP, our regulators, in reviewing the loan portfolio, may request us to increase our ACL based on judgments different from ours. In addition, because future events affecting

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borrowers and collateral cannot be predicted without uncertainty, the existing ACL may not be adequate or increases may be necessary should the quality of any loans or leases deteriorate or if there are changes to the assumptions noted above. Any material increase in the ACL would adversely affect the Corporation’s financial condition and results of operations.

The following table indicates the economic factors utilized in the Corporation's CECL model.

Economic Factors

At December 31, 2025

At December 31, 2024

Description of Economic Factors

Prepayment rates

11.27 

%

11.58 

%

Average total portfolio rate

Curtailment rates

27.93 

%

28.21 

%

Average total portfolio rate

Recovery delay

30 months

31 months

Average across all pools

Economic forecast

Moody's downside S2 weighted 42.5%, Baseline weighted 57.5%

Moody's downside S2 weighted 60%, Baseline weighted 40%

Moody's US Macro Forecast Narratives for December 2025 & 2024

Unemployment rates

5.48 

%

5.42 

%

Average of 4 quarter forecast period

GDP rates

1.21 

%

1.12 

%

Average of 4 quarter forecast period

House price index

(1.90)

%

(1.62)

%

Average of 4 quarter forecast period

Sensitivity Analysis

The below table indicates the impact to the allowance for credit losses on loans and leases if the factors described below were adjusted in the Corporation's CECL model.

Increase (Decrease) ($)

Adjustment Factor

Prepayment rates

+/- 2,000

If rates were adjusted across all pools by +/-100 basis points

Curtailment rates

+/- 460

If rates were adjusted across all pools by +/- 100 basis points

Recovery delay

 +/- 3,600

If recovery delays were adjusted by +/- 3 months across all pools

Economic forecast

(19,000)

If Baseline forecasts were used instead of the weighted Downside/Baseline scenarios

Economic forecast

28,100

If S2 Downside forecasts were used instead of the weighted Downside/Baseline scenarios

Economic forecast

52,000

If S3 Downside forecasts were used instead of the weighted Downside/Baseline scenarios

Unemployment rates

20,900

If rates were increased across all pools by 100 basis points

Unemployment rates

(18,600)

If rates were decreased across all pools by 100 basis points

GDP rates

 +/- 2,200

If the GDP forecast inputs were adjusted by +/- 100 basis points

House price index

 +/- 50

If the HPI forecast inputs were adjusted by +/- 100 basis points

Reversion period

650

If the reversion period was increased by 2 quarters across all pools

Reversion period

(775)

If the reversion period was decreased by 2 quarters across all pools

Readers of the Corporation’s financial statements should be aware that the estimates and assumptions used in the Corporation’s current financial statements may need to be updated in future financial presentations for changes in circumstances, business or economic conditions in order to fairly represent the condition of the Corporation at that time.

General

The Corporation earns revenues primarily from the margins and fees generated from lending and depository services as well as fee-based income from trust, insurance, mortgage banking, treasury management and investment services. The Corporation seeks to achieve adequate and reliable earnings through business growth while maintaining adequate levels of capital and liquidity and limiting exposure to credit and interest rate risk.

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Selected Financial Data

As of or For the Years Ended December 31,

(Dollars in thousands, except per share data)

2025

2024

2023

2022

2021

Results of Operations

Interest income

$

430,486 

$

412,355 

$

371,730 

$

252,193 

$

209,731 

Interest expense

190,291 

201,185 

151,733 

33,896 

21,348 

Net interest income

240,195 

211,170 

219,997 

218,297 

188,383 

Provision (reversal of provision) for credit losses

11,667 

5,933 

10,770 

12,198 

(10,132)

Net interest income after provision for credit losses

228,528 

205,237 

209,227 

206,099 

198,515 

Noninterest income

87,861 

88,055 

76,824 

77,885 

83,224 

Noninterest expense

203,039 

197,992 

197,362 

186,774 

167,409 

Net income before income taxes

113,350 

95,300 

88,689 

97,210 

114,330 

Income taxes

22,593 

19,369 

17,585 

19,090 

22,529 

Net income

$

90,757 

$

75,931 

$

71,104 

$

78,120 

$

91,801 

Financial Condition at Year End

Cash and cash equivalents

$

553,712 

$

328,844 

$

249,799 

$

152,799 

$

890,150 

Investment securities, net of allowance for credit losses

496,289 

493,978 

500,623 

507,562 

496,989 

Net loans and leases held for investment

6,826,639 

6,739,492 

6,481,827 

6,044,226 

5,238,093 

Assets

8,436,897 

8,128,417 

7,780,628 

7,222,016 

7,122,421 

Deposits

7,087,313 

6,759,259 

6,375,781 

5,913,526 

6,055,124 

Borrowings

323,278 

385,442 

465,067 

440,401 

213,980 

Shareholders' equity

943,318 

887,301 

839,208 

776,500 

773,794 

Per Common Share Data

Average shares outstanding (in thousands)

28,735 

29,215 

29,433 

29,393 

29,403 

Earnings per share – basic

$

3.16 

$

2.60 

$

2.42 

$

2.66 

$

3.12 

Earnings per share – diluted

3.13 

2.58 

2.41 

2.64 

3.11 

Dividends declared per share

0.87 

0.84 

0.84 

0.83 

0.80 

Book value (at year-end)

33.50 

30.55 

28.44 

26.53 

26.23 

Dividends declared to net income

27.6

%

32.3

%

34.8

%

31.2

%

25.6

%

Profitability Ratios

Return on average assets

1.11

%

0.96

%

0.94

%

1.12

%

1.38

%

Return on average equity

9.90 

8.85 

8.83 

10.13 

12.50 

Average equity to average assets

11.21 

10.86 

10.66 

11.09 

11.04 

Efficiency ratio

61.3 

65.7 

66.0 

62.4 

60.9 

Asset Quality Ratios

Nonaccrual loans and leases to loans and leases held for investment

0.20

%

0.19

%

0.31

%

0.22

%

0.63

%

Nonperforming loans and leases to loans and leases held for investment (1)

0.20 

0.19 

0.32 

0.23 

0.63 

Nonperforming assets to total assets (1)

0.45 

0.41 

0.52 

0.46 

0.48 

Net charge-offs to average loans and leases outstanding

0.16 

0.06 

0.08 

0.07 

— 

Allowance for credit losses, loans and leases to total loans and leases held for investment

1.28 

1.28 

1.30 

1.29 

1.35 

Allowance for credit losses, loans and leases to nonaccrual loans and leases

641.53 

687.54 

415.97 

591.66 

216.57 

Allowance for credit losses, loans and leases to nonperforming loans and leases (1)

637.40 

670.55 

405.43 

555.27 

213.37 

(1) The Corporation adopted ASU 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" effective January 1, 2023, which eliminated the category of troubled debt restructurings. Ratios at December 31, 2022 and 2021 were restated to exclude troubled debt restructured loans from nonperforming loans and nonperforming assets.

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Executive Overview

The Corporation's consolidated net income, earnings per share and return on average assets and average equity were as follows:

For the Years Ended December 31,

Amount of Change

Percent Change

(Dollars in thousands, except per share data)

2025

2024

2023

2025 to 2024

2024 to 2023

2025 to 2024

2024 to 2023

Net income

$

90,757 

$

75,931 

$

71,104 

$

14,826 

$

4,827 

19.5 

%

6.8 

%

Net income per share:

Basic

$

3.16 

$

2.60 

$

2.42 

$

0.56 

$

0.18 

21.5 

7.4 

Diluted

3.13 

2.58 

2.41 

0.55 

0.17 

21.3 

7.1 

Return on average assets

1.11

%

0.96

%

0.94

%

15 BP

2 BP

15.6 

2.1 

Return on average equity

9.90

%

8.85

%

8.83

%

105 BP

2 BP

11.9 

0.2 

2025 Overview

The Corporation reported net income of $90.8 million, or $3.13 diluted earnings per share, for 2025 compared to net income of $75.9 million, or $2.58 diluted earnings per share, for 2024.

The financial results for the year ended December 31, 2025 included bank owned life insurance ("BOLI") death benefit claims of $2.1 million, or $0.07 diluted earnings per share.

2024 Overview

The Corporation reported net income of $75.9 million, or $2.58 diluted earnings per share, for 2024 compared to net income of $71.1 million, or $2.41 diluted earnings per share, for 2023.

The financial results for the year ended December 31, 2024 included a $3.4 million net gain ($2.7 million after-tax), or $0.09 diluted earnings per share, generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans. Additionally, the financial results for the year ended December 31, 2024 included bank owned life insurance ("BOLI") death benefit claims of $241 thousand, or $0.01 diluted earnings per share.

Results of Operations

Net Interest Income

Net interest income is the difference between interest earned primarily on loans, leases and investment securities and interest paid on deposits, borrowings, long-term debt and subordinated notes. Net interest income is the principal source of the Corporation's revenue. Table 1 presents the Corporation's average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the years ended December 31, 2025, 2024 and 2023. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components.

2025 versus 2024

Reported net interest income for the year ended December 31, 2025 was $240.2 million, an increase of $29.0 million, or 13.7%, from the prior year. Net interest income, on a tax-equivalent basis, for the year ended December 31, 2025 was $241.9 million, an increase of $29.5 million, or 13.9%, from the prior year. An increase in tax-equivalent interest income of $18.6 million was driven by increased loan yields, and increases in the average balance of average interest-earning assets, as well as a decrease of $10.9 million in interest expense, which was largely driven by a decrease in the cost of interest-bearing deposits and a decrease in the average balance of borrowings. This was offset by an increase in the average balance of deposits. The net interest margin on a tax-equivalent basis for the year ended December 31, 2025 was 3.14% compared to 2.86% for 2024.

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Table of Contents

2024 versus 2023

Reported net interest income for the year ended December 31, 2024 was $211.2 million, a decrease of $8.8 million, or 4.0%, from the prior year. Net interest income, on a tax-equivalent basis, for the year ended December 31, 2024 was $212.3 million, a decrease of $8.9 million, or 4.0%, from the prior year. An increase in tax-equivalent interest income of $40.6 million, driven by increases in asset yields, including loan and investment yields, and increases in the average balance of average interest-earning assets was outpaced by an increase in interest expense of $49.5 million, which was largely driven by an increase in the cost of, and the average balances of, interest-bearing deposits. The net interest margin on a tax-equivalent basis for the year ended December 31, 2024 was 2.86% compared to 3.12% for 2023. The net interest margin decrease was attributable to the increase in interest rates and the liability sensitivity of the Corporation's balance sheet.

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Table of Contents

Table 1—Average Balances and Interest Rates—Tax-Equivalent Basis

For the Years Ended December 31,

2025

2024

2023

(Dollars in thousands)

Average

Balance

Income/

Expense

Average

Rate

Average

Balance

Income/

Expense

Average

Rate

Average

Balance

Income/

Expense

Average

Rate

Assets:

Interest-earning deposits with other banks

$

333,556 

$

13,902 

4.17

%

$

220,356 

$

11,193 

5.08

%

$

130,309 

$

6,660 

5.11

%

Obligations of states and political

subdivisions*

217 

4 

1.84 

1,447 

33 

2.28 

2,282 

62 

2.72 

Other debt and equity securities

496,435 

15,925 

3.21 

495,604 

14,909 

3.01 

505,343 

14,225 

2.81 

Federal Home Loan Bank, Federal Reserve Bank and other stock

37,584 

2,848 

7.58 

38,647 

2,912 

7.53 

40,092 

2,869 

7.16 

Total interest-earning deposits, investments and other interest-earning assets

867,792 

32,679 

3.77 

756,054 

29,047 

3.84 

678,026 

23,816 

3.51 

Commercial, financial and agricultural loans

971,245 

67,829 

6.98 

972,213 

69,921 

7.19 

991,505 

67,487 

6.81 

Real estate—commercial and construction loans

3,720,892 

218,473 

5.87 

3,587,147 

207,053 

5.77 

3,483,576 

188,644 

5.42 

Real estate—residential loans

1,723,191 

87,127 

5.06 

1,670,126 

82,344 

4.93 

1,505,799 

70,349 

4.67 

Loans to individuals

15,360 

1,335 

8.69 

26,646 

2,161 

8.11 

27,063 

2,011 

7.43 

Tax-exempt loans and leases

228,478 

11,951 

5.23 

232,020 

10,157 

4.38 

232,501 

9,597 

4.13 

Lease financings

176,420 

12,749 

7.23 

189,054 

12,845 

6.79 

178,220 

11,025 

6.19 

Gross loans and leases

6,835,586 

399,464 

5.84 

6,677,206 

384,481 

5.76 

6,418,664 

349,113 

5.44 

Total interest-earning assets

7,703,378 

432,143 

5.61 

7,433,260 

413,528 

5.56 

7,096,690 

372,929 

5.25 

Cash and due from banks

57,252 

57,799 

58,593 

Allowance for credit losses, loans and leases

(87,942)

(86,530)

(82,474)

Premises and equipment, net

46,797 

48,610 

51,921 

Operating lease right-of-use asset

26,936 

29,990 

31,351 

Other assets

425,134 

414,578 

400,977 

Total assets

$

8,171,555 

$

7,897,707 

$

7,557,058 

Liabilities:

Interest-bearing checking deposits

$

1,281,075 

$

32,735 

2.56

%

$

1,191,634 

$

32,857 

2.76

%

$

1,034,327 

$

23,668 

2.29

%

Money market savings

1,920,600 

73,424 

3.82 

1,801,035 

80,217 

4.45 

1,611,169 

64,153 

3.98 

Regular savings

720,718 

4,024 

0.56 

740,493 

3,529 

0.48 

871,332 

3,249 

0.37 

Time deposits

1,485,281 

61,838 

4.16 

1,413,589 

64,266 

4.55 

931,944 

34,979 

3.75 

Total time and interest-bearing deposits

5,407,674 

172,021 

3.18 

5,146,751 

180,869 

3.51 

4,448,772 

126,049 

2.83 

Short-term borrowings

11,112 

19 

0.17 

13,703 

249 

1.82 

148,776 

7,095 

4.77 

Long-term debt

204,452 

8,778 

4.29 

253,733 

10,942 

4.31 

263,877 

9,464 

3.59 

Subordinated notes

139,584 

9,473 

6.79 

149,007 

9,125 

6.12 

148,507 

9,125 

6.14 

Total borrowings

355,148 

18,270 

5.14 

416,443 

20,316 

4.88 

561,160 

25,684 

4.58 

Total interest-bearing liabilities

5,762,822 

190,291 

3.30 

5,563,194 

201,185 

3.62 

5,009,932 

151,733 

3.03 

Noninterest-bearing deposits

1,406,985 

1,380,178 

1,646,286 

Operating lease liabilities

29,765 

33,006 

34,474 

Accrued expenses and other liabilities

55,550 

63,310 

60,699 

Total liabilities

7,255,122 

7,039,688 

6,751,391 

Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")

7,169,807 

2.65 

6,943,372 

2.90 

6,656,218 

2.28 

Shareholders' Equity:

Common stock

157,784 

157,784 

157,784 

Additional paid-in capital

302,243 

300,644 

299,804 

Retained earnings and other equity

456,406 

399,591 

348,079 

Total shareholders' equity

916,433 

858,019 

805,667 

Total liabilities and shareholders' equity

$

8,171,555 

$

7,897,707 

$

7,557,058 

Net interest income

$

241,852 

$

212,343 

$

221,196 

Net interest spread

2.31 

1.94 

2.22 

Effect of net interest-free funding sources

0.83 

0.92 

0.90 

Net interest margin

3.14

%

2.86

%

3.12

%

Ratio of average interest-earning assets to average interest-bearing liabilities

133.67

%

133.61

%

141.65

%

*Obligations of states and political subdivisions are tax-exempt earning assets.

Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.

Net interest income includes net deferred costs amortization of $2.5 million, $2.7 million and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.

Tax-equivalent amounts for the years ended December 31, 2025, 2024 and 2023 have been calculated using the Corporation's federal applicable rate of 21%.

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Table 2—Analysis of Changes in Net Interest Income

The rate-volume variance analysis set forth in the table below compares changes in tax-equivalent net interest income for the year ended December 31, 2025 compared to 2024 and for the year ended December 31, 2024 compared to 2023, indicated by their rate and volume components. The change in interest income/expense due to both volume and rate has been allocated proportionately.

For the Years Ended December 31, 2025 Versus 2024

For the Years Ended December 31, 2024 Versus 2023

(Dollars in thousands)

Volume

Change

Rate

Change

Total

Volume

Change

Rate

Change

Total

Interest income:

Interest-earning deposits with other banks

$

4,982 

$

(2,273)

$

2,709 

$

4,572 

$

(39)

$

4,533 

Obligations of states and political subdivisions

(24)

(5)

(29)

(20)

(9)

(29)

Other debt and equity securities

25 

991 

1,016 

(285)

969 

684 

Federal Home Loan Bank, Federal Reserve Bank and other stock

(82)

18 

(64)

(104)

147 

43 

Interest on deposits, investments and other interest-earning assets

4,901 

(1,269)

3,632 

4,163 

1,068 

5,231 

Commercial, financial and agricultural loans

(69)

(2,023)

(2,092)

(1,319)

3,753 

2,434 

Real estate—commercial and construction loans

7,796 

3,624 

11,420 

5,804 

12,605 

18,409 

Real estate—residential loans

2,614 

2,169 

4,783 

7,943 

4,052 

11,995 

Loans to individuals

(971)

145 

(826)

(31)

181 

150 

Tax-exempt loans and leases

(157)

1,951 

1,794 

(20)

580 

560 

Lease financings

(894)

798 

(96)

702 

1,118 

1,820 

Interest and fees on loans and leases

8,319 

6,664 

14,983 

13,079 

22,289 

35,368 

Total interest income

13,220 

5,395 

18,615 

17,242 

23,357 

40,599 

Interest expense:

Interest-bearing checking deposits

2,363 

(2,485)

(122)

3,911 

5,278 

9,189 

Money market savings

5,076 

(11,869)

(6,793)

8,024 

8,040 

16,064 

Regular savings

(95)

590 

495 

(549)

829 

280 

Time deposits

3,196 

(5,624)

(2,428)

20,730 

8,557 

29,287 

Total time and interest-bearing deposits

10,540 

(19,388)

(8,848)

32,116 

22,704 

54,820 

Short-term borrowings

(40)

(190)

(230)

(4,072)

(2,774)

(6,846)

Long-term debt

(2,113)

(51)

(2,164)

(373)

1,851 

1,478 

Subordinated notes

(604)

952 

348 

— 

— 

— 

Interest on borrowings

(2,757)

711 

(2,046)

(4,445)

(923)

(5,368)

Total interest expense

7,783 

(18,677)

(10,894)

27,671 

21,781 

49,452 

Net interest income

$

5,437 

$

24,072 

$

29,509 

$

(10,429)

$

1,576 

$

(8,853)

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Table of Contents

Provision for Credit Losses

The provision for credit losses for the years ended December 31, 2025, 2024 and 2023 was $11.7 million, $5.9 million and $10.8 million, respectively. Net loan and lease charge-offs for the years ended December 31, 2025, 2024, and 2023 were $11.1 million, $3.8 million and $5.4 million, respectively. The year ended December 31, 2025 included a $6.8 million net charge-off recorded on a $23.7 million commercial loan relationship. The year ended December 31, 2023 included $2.4 million in charge-offs related to two nonaccrual commercial loans to one borrower. The following table details information pertaining to the Corporation's allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.

At December 31,

(Dollars in thousands)

2025

2024

2023

Allowance for credit losses, loans and leases

$

88,165 

$

87,091 

$

85,387 

Loans and leases held for investment

6,914,804 

6,826,583 

6,567,214 

Allowance for credit losses, loans and leases / loans and leases held for investment

1.28 

%

1.28 

%

1.30 

%

Noninterest Income

The following table presents noninterest income for the years ended December 31, 2025, 2024 and 2023:

For the Years Ended December 31,

$ Change

% Change

(Dollars in thousands)

2025

2024

2023

2025 to 2024

2024 to 2023

2025 to 2024

2024 to 2023

Trust fee income

$

8,853 

$

8,491 

$

7,732 

$

362 

$

759 

4.3 

%

9.8 

%

Service charges on deposit accounts

8,991 

8,082 

7,048 

909 

1,034 

11.2 

14.7 

Investment advisory commission and fee income

22,799 

21,208 

18,864 

1,591 

2,344 

7.5 

12.4 

Insurance commission and fee income

22,443 

22,349 

21,043 

94 

1,306 

0.4 

6.2 

Other service fee income

10,938 

14,747 

12,381 

(3,809)

2,366 

(25.8)

19.1 

Bank owned life insurance income

5,849 

3,861 

3,185 

1,988 

676 

51.5 

21.2 

Net gain on sales of investment securities

— 

18 

— 

(18)

18 

N/M

N/M

Net gain on mortgage banking activities

3,362 

5,265 

3,689 

(1,903)

1,576 

(36.1)

42.7 

Other income

4,626 

4,034 

2,882 

592 

1,152 

14.7 

40.0 

Total noninterest income

$

87,861 

$

88,055 

$

76,824 

$

(194)

$

11,231 

(0.2)

%

14.6 

%

2025 versus 2024

Noninterest income for the year ended December 31, 2025 was $87.9 million, a decrease of $194 thousand, or 0.2%, compared to 2024.

Other service fee income decreased $3.8 million, or 25.8%, for the year ended December 31, 2025, primarily due to the net gain of $3.4 million generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter of 2024. Net gain on mortgage banking activities decreased $1.9 million, or 36.1%, for the year ended December 31, 2025, primarily due to decreased salable volume and lower margins.

BOLI income increased $2.0 million, or 51.5%, for the year ended December 31, 2025, primarily due to death benefit claims of $2.1 million received during the year. Investment advisory commission and fee income increased $1.6 million, or 7.5%, for the year ended December 31, 2025, primarily due to increased assets under management and supervision driven by market appreciation. Service charges on deposit accounts increased $909 thousand, or 11.2%, for the year ended December 31, 2025, primarily due to an increase of $976 thousand in treasury management fees. Other income increased $592 thousand, or 14.7%, for the year ended December 31, 2025, primarily driven by a $620 thousand increase in fees on risk participation agreements for interest rate swaps due to increased demand.

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Table of Contents

2024 versus 2023

Noninterest income for the year ended December 31, 2024 was $88.1 million, an increase of $11.2 million, or 14.6%, compared to 2023.

Other service fee income increased $2.4 million, or 19.1%, for the year ended December 31, 2024, primarily due to the net gain of $3.4 million generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter of 2024, partially offset by a $966 thousand decrease in servicing fees associated with these loans. Investment advisory commission and fee income increased $2.3 million, or 12.4%, for the year ended December 31, 2024, primarily due to increased assets under management and supervision driven by new business and market appreciation. Net gain on mortgage banking activities increased $1.6 million, or 42.7%, for the year ended December 31, 2024, primarily due to increased salable volume and favorable margins. Insurance commission and fee income increased $1.3 million, or 6.2%, for the year ended December 31, 2024, primarily due to increases of $1.0 million in premiums for commercial lines and $435 thousand in contingent commission income. Service charges on deposit accounts increased $1.0 million, or 14.7%, for the year ended December 31, 2024, primarily due to an increase of $950 thousand in treasury management fees.

Other income increased $1.2 million, or 40.0%, for the year ended December 31, 2024. Gains on the sale of Small Business Administration loans increased $1.9 million due to increased sale volume, partially offset by a $605 thousand decrease in interest rate swap income due to decreased demand.

Noninterest Expense

The following table presents noninterest expense for the years ended December 31, 2025, 2024 and 2023:

For the Years Ended December 31,

$ Change

% Change

(Dollars in thousands)

2025

2024

2022

2025 to 2024

2024 to 2023

2025 to 2024

2024 to 2023

Salaries, benefits and commissions

$

127,023 

$

123,745 

$

120,188 

$

3,278 

$

3,557 

2.6 

%

3.0 

%

Net occupancy

11,149 

11,025 

10,686 

124 

339 

1.1 

3.2 

Equipment

4,293 

4,453 

4,132 

(160)

321 

(3.6)

7.8 

Data processing

17,425 

16,956 

16,799 

469 

157 

2.8 

0.9 

Professional fees

7,217 

6,402 

7,141 

815 

(739)

12.7 

(10.3)

Marketing and advertising

1,653 

2,173 

2,180 

(520)

(7)

(23.9)

(0.3)

Deposit insurance premiums

4,526 

4,432 

4,825 

94 

(393)

2.1 

(8.1)

Intangible expenses

469 

694 

938 

(225)

(244)

(32.4)

(26.0)

Restructuring charges

— 

— 

1,519 

— 

(1,519)

N/M

N/M

Other expense

29,284 

28,112 

28,954 

1,172 

(842)

4.2 

(2.9)

Total noninterest expense

$

203,039 

$

197,992 

$

197,362 

$

5,047 

$

630 

2.5 

%

0.3 

%

2025 versus 2024

Noninterest expense for the year ended December 31, 2025 was $203.0 million, an increase of $5.0 million, or 2.5%, compared to 2024.

Salaries, benefits and commissions increased $3.3 million, or 2.6%, for the year ended December 31, 2025, primarily due to annual merit increases and an increase in incentive compensation due to increased profitability, partially offset by an increase in capitalized compensation driven by higher loan production. Other expense increased $1.2 million, or 4.2%, for the year ended December 31, 2025, primarily driven by a $1.5 million increase in loan workout fees, partially offset by decrease in retirement plan costs of $463 thousand. Professional fees increased $815 thousand, or 12.7%, for the year ended December 31, 2025, due to increases of $563 thousand of consulting fees for data integration resources and $156 thousand for legal fees.

2024 versus 2023

Noninterest expense for the year ended December 31, 2024 was $198.0 million, an increase of $630 thousand, or 0.3%, compared to 2023.

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Table of Contents

Salaries, benefits and commissions increased $3.6 million, or 3.0%, for the year ended December 31, 2024, primarily due to an increase in incentive compensation due to increased profitability in the current year.

Professional fees decreased $739 thousand, or 10.3%, for the year ended December 31, 2024, primarily due to a decrease of $1.0 million of consulting fees due to the costs of implementing our digital initiative in the prior year. Other expense decreased $842 thousand, or 2.9%, primarily driven by decreases in retirement plan costs of $857 thousand. Additionally, the year ended December 31, 2023 included $1.5 million in restructuring charges associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds.

Tax Provision

The provision for income taxes was $22.6 million, $19.4 million and $17.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, at effective rates of 19.9%, 20.3% and 19.8%, respectively. The effective tax rates reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases. Excluding this impact, the effective tax rates were 21.7%, 22.1% and 21.7% for the years ended December 31, 2025, 2024 and 2023, respectively. The decrease in the effective tax rate for 2025 compared to 2024 was primarily due to the favorable impact from the proceeds of BOLI death benefits. The increase in the effective tax rate for 2024 compared to 2023 was primarily due to increases in state tax rates and the impact of stock-based compensation during the year.

Financial Condition

ASSETS

The following table presents assets at the dates indicated:

At December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Cash and cash equivalents

$

553,712 

$

328,844 

$

224,868 

68.4 

%

Investment securities, net of allowance for credit losses

496,289 

493,978 

2,311 

0.5 

Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost

37,808 

38,980 

(1,172)

(3.0)

Loans held for sale

15,288 

16,653 

(1,365)

(8.2)

Loans and leases held for investment

6,914,804 

6,826,583 

88,221 

1.3 

Allowance for credit losses, loans and leases

(88,165)

(87,091)

(1,074)

1.2 

Premises and equipment, net

45,554 

46,671 

(1,117)

(2.4)

Operating lease right-of-use asset

25,795 

28,531 

(2,736)

(9.6)

Goodwill and other intangibles, net

182,838 

183,819 

(981)

(0.5)

Bank owned life insurance

140,001 

139,351 

650 

0.5 

Accrued interest receivable and other assets

112,973 

112,098 

875 

0.8 

Total assets

$

8,436,897 

$

8,128,417 

$

308,480 

3.8 

%

Cash and Interest-Earning Deposits

Cash and interest-earning deposits increased $224.9 million, or 68.4%, from December 31, 2024, primarily due to increased interest-earning deposits at the Federal Reserve Bank of $231.7 million due to increases in deposits outpacing loan growth, partially offset by the repayment of subordinated notes and long-term debt.

Investment Securities

Total investment securities at December 31, 2025 increased $2.3 million, or 0.5%, from December 31, 2024. Purchases of $60.3 million, which were primarily residential mortgage-backed securities, increases in the fair value of available-for-sale investment securities of $17.2 million and a reversal of provision for credit losses of $828 thousand were partially offset by maturities and pay-downs of $68.1 million, sales of $6.9 million and net amortization of purchased premiums and discounts of $1.0 million.

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Table 3—Investment Securities

The following table shows the carrying amount of investment securities, net of allowance for credit losses, at the dates indicated. Held-to-maturity, available-for-sale and equity security portfolios are combined.

At December 31,

(Dollars in thousands)

2025

2024

2023

State and political subdivisions

$

— 

$

1,295 

$

2,301 

Residential mortgage-backed securities

412,604 

417,492 

410,329 

Collateralized mortgage obligations

1,368 

1,685 

2,001 

Corporate bonds

80,303 

71,000 

82,699 

Equity securities

2,014 

2,506 

3,293 

Total investment securities

$

496,289 

$

493,978 

$

500,623 

Table 4—Investment Securities (Yields)

The following table shows the maturity distribution and weighted average yields of investment securities at amortized cost at December 31, 2025. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties. Therefore, the stated yield may not be recognized in future periods. Additionally, residential mortgage-backed securities, which are collateralized by residential mortgage loans, typically prepay at a rate faster than the stated maturity. The weighted average yield is calculated by dividing income, which has not been tax effected on tax-exempt obligations, within each contractual maturity range by the outstanding amount of the related investment. Held-to-maturity and available-for-sale portfolios are combined, net of allowance for credit losses.

1 Year or less

After 1 Year to 5 Years

After 5 Years to 10 Years

After 10 Years

(Dollars in thousands)

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Residential mortgage-backed securities

$

— 

— 

%

$

644 

2.44 

%

$

24,543 

2.43 

%

$

412,023 

2.95 

%

Collateralized mortgage obligations

— 

— 

71 

2.44 

— 

— 

1,371 

1.57 

Corporate bonds

7,482 

2.09 

75,366 

4.09 

— 

— 

— 

— 

Total held-to- maturity and available-for-sale investment securities

$

7,482 

2.09 

%

$

76,081 

4.08 

%

$

24,543 

2.43 

%

$

413,394 

2.95 

%

At December 31, 2025, the Corporation had no reportable investments in any single issuer representing more than 10% of shareholders' equity.

Loans and Leases

Gross loans and leases held for investment at December 31, 2025 increased $88.2 million, or 1.3%, from December 31, 2024. The growth in gross loans and leases held for investment was primarily due to increases in construction, commercial real estate and home equity loans, partially offset by decreases in commercial and residential mortgage loans and lease financings.

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Table 5—Loan and Lease Maturities and Sensitivity to Changes in Interest Rates

The following table presents the maturity schedule of the loan and lease portfolio at December 31, 2025. Loans with variable rates or floating interest rates include adjustable rate instruments that may have longer than one month, and in some instances, multiple years of a fixed rate interest period.

(Dollars in thousands)

Total

Due in One Year or Less

Due after One Year to Five Years

Due After Five Years to Fifteen Years

Due After Fifteen Years

Loans and leases with fixed predetermined interest rates:

Commercial, financial and agricultural

$

195,444 

$

15,112 

$

151,804 

$

17,909 

$

10,619 

Real estate-commercial

1,371,487 

264,694 

1,048,537 

47,646 

10,610 

Real estate-construction

37,978 

15,666 

15,226 

4,267 

2,819 

Real estate-residential secured for business purpose

183,286 

37,268 

139,334 

6,684 

— 

Real estate-residential secured for personal purpose

56,413 

2,060 

9,908 

12,874 

31,571 

Real estate-home equity secured for personal purpose

5,877 

746 

765 

4,366 

— 

Loans to individuals

9,898 

5,932 

3,558 

217 

191 

Lease financings

232,066 

9,338 

209,181 

13,547 

— 

Loans and leases with fixed predetermined interest rates

$

2,092,449 

$

350,816 

$

1,578,313 

$

107,510 

$

55,810 

Loans and leases with variable or floating interest rates:

Commercial, financial and agricultural

$

831,990 

$

725,458 

$

79,373 

$

27,159 

$

— 

Real estate-commercial

2,250,049 

1,355,076 

891,932 

3,041 

— 

Real estate-construction

268,815 

174,455 

59,557 

34,803 

— 

Real estate-residential secured for business purpose

370,892 

108,820 

261,821 

251 

— 

Real estate-residential secured for personal purpose

903,197 

27,872 

200,239 

675,086 

— 

Real estate-home equity secured for personal purpose

194,517 

193,821 

696 

— 

— 

Loans to individuals

2,895 

2,789 

6 

84 

16 

Loans with variable or floating interest rates

$

4,822,355 

$

2,588,291 

$

1,493,624 

$

740,424 

$

16 

Total gross loans and leases held for investment

$

6,914,804 

$

2,939,107 

$

3,071,937 

$

847,934 

$

55,826 

Asset Quality

The Bank's strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans and leases. Performance of the loan and lease portfolio is monitored on a regular basis by Bank management and lending officers.

Nonaccrual loans and leases are loans or leases for which it is probable that not all principal and interest payments due will be collectible in accordance with the original contractual terms. Factors considered by management in determining accrual status include payment status, borrower cash flows, collateral value and the probability of collecting scheduled principal and interest payments when due.

At December 31, 2025, nonaccrual loans and leases were $13.7 million and had a related allowance for credit losses on loans and leases of $3.0 million. At December 31, 2024, nonaccrual loans and leases were $12.7 million and had a related allowance for credit losses on loans and leases of $1.9 million. During the second quarter of 2025, a $23.7 million commercial loan relationship was placed on nonaccrual status due to, among other things, suspected fraud. Subsequent to the relationship being placed on nonaccrual status, a $7.3 million charge-off was recognized during the second quarter. During the third quarter of 2025, a $1.4 million residential property associated with this relationship was transferred to other real estate owned. During the fourth quarter, loans totaling $13.9 million associated with this relationship were paid off and a $449 thousand recovery was recognized. As of December 31, 2025, the $1.4 million residential property remains in other real estate owned and the carrying value of the asset is supported by the appraised value of real estate collateral. Individual reserves have been established based on current facts and management's judgments about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits.

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Net loan and lease charge-offs for the year ended December 31, 2025 were $11.1 million compared to net loan and lease charge-offs of $3.8 million for the year ended December 31, 2024. Net charge-offs for the year ended December 31, 2025 included a $6.8 million net charge-off recorded on a $23.7 million commercial loan relationship.

Other real estate owned was $23.9 million at December 31, 2025, compared to $20.1 million at December 31, 2024. During the year ended December 31, 2025, two nonaccrual residential real estate loans with a total carrying value of $3.9 million were transferred to OREO. Additionally, during the year ended December 31, 2025, two residential real estate properties with a total carrying value of $226 thousand were sold. Additionally, write-downs on repossessed assets totaled $44 thousand during the year. Repossessed assets were $65 thousand at December 31, 2025, compared to $76 thousand at December 31, 2024. During the year ended December 31, 2025, repossessed assets totaling $143 thousand were acquired and repossessed assets totaling $105 thousand were sold.

Table 6—Nonaccrual and Past Due Loans and Leases; Other Real Estate Owned; Repossessed Assets; and Related Ratios

The following table details information pertaining to the Corporation's nonperforming assets at the dates indicated.

At December 31,

(Dollars in thousands)

2025

2024

2023

Nonaccrual loans held for sale

$

— 

$

— 

$

8 

Nonaccrual loans and leases held for investment

13,743 

12,667 

20,519 

Accruing loans and leases, 90 days or more past due

89 

321 

534 

Total nonperforming loans and leases

$

13,832 

$

12,988 

$

21,061 

Other real estate owned

23,926 

20,141 

19,032 

Repossessed assets

65 

76 

— 

Total nonperforming assets

$

37,823 

$

33,205 

$

40,093 

Loans and leases held for investment

$

6,914,804 

$

6,826,583 

$

6,567,214 

Allowance for credit losses, loans and leases

88,165 

87,091 

85,387 

Nonaccrual loans and leases with partial charge-offs

1,532 

273 

814 

Reserves on individually analyzed loans

3,022 

1,945 

1,787 

Allowance for credit losses, loans and leases / loans and leases held for investment

1.28

%

1.28

%

1.30

%

Nonaccrual loans and leases / loans and leases held for investment

0.20

%

0.19

%

0.31

%

Allowance for credit losses, loans and leases / nonaccrual loans and leases

641.53

%

687.54

%

415.97

%

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Table 7—Loan Portfolio Overview

The following table provides summarized detail related to outstanding commercial loan balances segmented by industry description as of December 31, 2025:

(Dollars in thousands)

December 31, 2025

Industry Description

Total Outstanding Balance

% of Commercial Loan Portfolio

CRE - Retail

$

437,864 

7.9 

%

Animal Production

428,809 

7.8 

CRE - Multi-family

383,688 

7.0 

CRE - 1-4 Family Residential Investment

277,643 

5.0 

Hotels & Motels (Accommodation)

259,170 

4.7 

CRE - Office

244,534 

4.4 

CRE - Industrial / Warehouse

222,619 

4.0 

Specialty Trade Contractors

209,450 

3.8 

Nursing and Residential Care Facilities

163,938 

3.0 

Homebuilding (tract developers, remodelers)

150,906 

2.7 

Merchant Wholesalers, Durable Goods

137,124 

2.5 

Crop Production

135,818 

2.5 

Repair and Maintenance

124,570 

2.3 

Motor Vehicle and Parts Dealers

116,657 

2.1 

CRE - Mixed-Use - Commercial

114,659 

2.1 

CRE - Mixed-Use - Residential

108,517 

2.0 

Administrative and Support Services

99,083 

1.8 

Wood Product Manufacturing

98,771 

1.8 

Real Estate Lenders, Secondary Market Financing

93,066 

1.7 

Professional, Scientific, and Technical Services

92,883 

1.7 

Food Services and Drinking Places

90,211 

1.6 

Fabricated Metal Product Manufacturing

79,947 

1.5 

Merchant Wholesalers, Nondurable Goods

79,922 

1.5 

Education

78,031 

1.4 

Amusement, Gambling, and Recreation Industries

76,874 

1.4 

Religious Organizations, Advocacy Groups

65,397 

1.2 

Miniwarehouse / Self-Storage

63,371 

1.2 

Personal and Laundry Services

62,052 

1.1 

Food Manufacturing

59,804 

1.1 

Machinery Manufacturing

52,598 

1.0 

Industries with $50 million in outstandings

$

4,607,976 

83.6 

%

Industries with $50 million in outstandings

$

901,965 

16.4 

%

Total Commercial Loans

$

5,509,941 

100.0 

%

Consumer Loans and Lease Financings

Total Outstanding Balance

Real Estate-Residential Secured for Personal Purpose

$

959,610 

Real Estate-Home Equity Secured for Personal Purpose

200,394 

Loans to Individuals

12,793 

Lease Financings

232,066 

Total Consumer Loans and Lease Financings

$

1,404,863 

Total

$

6,914,804 

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Table 8—Summary of Loan and Lease Loss Experience

The following table presents average loans and leases and loan and lease loss experience for the periods indicated.

 For the Years Ended December 31,

2025

2024

2023

(Dollars in thousands)

Average Loans

Net Charge-offs (Recoveries)

Net Charge-offs (Recoveries) to Average Loans

Average Loans

Net Charge-offs (Recoveries)

Net Charge-offs (Recoveries) to Average Loans

Average Loans

Net Charge-offs (Recoveries)

Net Charge-offs (Recoveries) to Average Loans

Commercial, financial and agricultural

$

1,041,998 

$

8,444 

0.81 

%

$

1,035,684 

$

2,329 

0.22 

%

$

1,056,025 

$

4,510 

0.43 

%

Real estate-commercial

3,520,879 

1,147 

0.03 

3,367,837 

21 

— 

3,182,965 

37 

— 

Real estate-construction

300,136 

— 

— 

329,218 

500 

0.15 

414,567 

206 

0.05 

Real estate-residential secured for business purpose

539,146 

— 

— 

528,631 

(235)

(0.04)

505,240 

(135)

(0.03)

Real estate-residential secured for personal purpose

990,788 

35 

— 

960,915 

(134)

(0.01)

826,943 

— 

— 

Real estate-home equity secured for personal purpose

193,257 

(2)

— 

180,579 

(46)

(0.03)

175,395 

2 

— 

Loans to individuals

15,360 

675 

4.39 

26,645 

828 

3.11 

27,063 

426 

1.57 

Lease financings

234,022 

819 

0.35 

247,697 

539 

0.22 

230,466 

351 

0.15 

Total

$

6,835,586 

$

11,118 

0.16 

%

$

6,677,206 

$

3,802 

0.06 

%

$

6,418,664 

$

5,397 

0.08 

%

During the year ended December 31, 2025, the Corporation recorded charge-offs of $7.3 million related to a $23.7 million commercial loan relationship. During the year ended December 31, 2024, the Corporation recorded charge-offs of $900 thousand related to five commercial loan relationships. During the year ended December 31, 2023, the Corporation recorded charge-offs of $2.4 million related to two nonaccrual commercial loans to one borrower totaling $5.9 million.

Table 9—Allowance for Credit Losses On Loans and Leases

The following table summarizes the allocation of the allowance for credit losses on loans and leases, and the percentage of loans and leases in each major loan category to total loans and leases held for investment at the dates indicated.

At December 31,

2025

2024

(Dollars in thousands)

ACL

% of ACL to Total ACL

% of Loans to Total Loans

ACL

% of ACL to Total ACL

% of Loans to Total Loans

Commercial, financial and agricultural

$

16,983 

19.3 

%

14.9 

%

$

16,079 

18.5 

%

15.2 

%

Real estate-commercial

47,166 

53.5 

52.4 

46,867 

53.8 

51.7 

Real estate-construction

5,475 

6.2 

4.4 

4,924 

5.7 

4.0 

Real estate-residential secured for business purpose

7,600 

8.6 

8.0 

7,491 

8.6 

7.9 

Real estate-residential secured for personal purpose

6,341 

7.2 

13.9 

7,222 

8.3 

14.6 

Real estate-home equity secured for personal purpose

1,638 

1.9 

2.9 

1,706 

2.0 

2.7 

Loans to individuals

348 

0.4 

0.2 

342 

0.4 

0.3 

Lease financings

2,614 

3.0 

3.4 

2,460 

2.8 

3.6 

Total

$

88,165 

100.0 

%

100.0 

%

$

87,091 

100.0 

%

100.0 

%

At December 31, 2025, the allowance for credit losses on individually analyzed loans was $3.0 million, or 22.9% of the balance of individually analyzed loans of $13.2 million. At December 31, 2024, the allowance for credit losses on individually analyzed loans was $1.9 million, or 16.1% of the balance of individually analyzed loans of $12.1 million.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions. There was no impairment of goodwill or identifiable intangibles recorded during 2023 through 2025. There can be no assurance that future impairment assessments or tests will not result in a charge to earnings.

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LIABILITIES

The following table presents liabilities at the dates indicated:

At December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Deposits

$

7,087,313 

$

6,759,259 

$

328,054 

4.9 

%

Short-term borrowings

24,411 

11,181 

13,230 

118.3 

Long-term debt

200,000 

225,000 

(25,000)

(11.1)

Subordinated notes

98,867 

149,261 

(50,394)

(33.8)

Operating lease liabilities

28,531 

31,485 

(2,954)

(9.4)

Accrued interest payable and other liabilities

54,457 

64,930 

(10,473)

(16.1)

  Total liabilities

$

7,493,579 

$

7,241,116 

$

252,463 

3.5 

%

Deposits

Total deposits increased $328.1 million, or 4.9%, from December 31, 2024, primarily due to increases in commercial, brokered and public funds deposits, partially offset by a decrease in consumer deposits. At December 31, 2025, noninterest-bearing deposits totaled $1.4 billion and represented 20.2% of total deposits, compared to $1.4 billion representing 20.9% at December 31, 2024. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.6 billion and $1.5 billion at December 31, 2025 and 2024, respectively. This represented 23.2% of total deposits at December 31, 2025 compared to 22.0% at December 31, 2024.

Table 10—Deposits

The following table summarizes the average amount of deposits for the periods indicated:

For the Years Ended December 31,

(Dollars in thousands)

2025

2024

2023

Noninterest-bearing deposits

$

1,406,985 

$

1,380,178 

$

1,646,286 

Interest-bearing checking deposits

1,281,075 

1,191,634 

1,034,327 

Money market savings

1,920,600 

1,801,035 

1,611,169 

Regular savings

720,718 

740,493 

871,332 

Time deposits

1,485,281 

1,413,589 

931,944 

Total average deposits

$

6,814,659 

$

6,526,929 

$

6,095,058 

At December 31, 2025 and 2024, the Corporation had $3.4 billion and $3.2 billion, respectively, in uninsured deposits in excess of the FDIC insurance limit of $250,000. At December 31, 2025 and 2024, the Corporation had $281.9 million and $276.0 million, respectively, in time deposits in excess of $250,000 maturing disclosed in the table below. Brokered deposits in the amount of $405.1 million and $360.0 million at December 31, 2025 and December 31, 2024, respectively, are not included in time deposits more than $250,000.

(Dollars in thousands)

For the Years Ended December 31,

Maturity Period

2025

2024

Due Three Months or Less

$

108,462 

$

76,621 

Due Over Three Months to Six Months

81,603 

94,290 

Due Over Six Months to Twelve Months

76,954 

81,338 

Due Over Twelve Months

14,864 

23,734 

Total

$

281,883 

$

275,983 

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Borrowings

Total borrowings decreased $62.2 million from December 31, 2024, primarily due to a $100.0 million redemption of previously issued subordinated notes partially offset by $50.0 million aggregate principal amount fixed-to-floating rate subordinated notes issued in the third quarter of 2025, and pay-downs of $25.0 million in long-term debt. These decreases were partially offset by an increase of $13.2 million in customer repurchase agreements.

Short-term borrowings at December 31, 2025 consisted of $24.4 million of customer repurchase agreements. Long-term debt at December 31, 2025 consisted of $200.0 million of FHLB advances and $98.9 million of subordinated notes. At December 31, 2025 and 2024, the Bank had outstanding short-term letters of credit with the FHLB totaling $1.4 billion and $1.3 billion, respectively, which were utilized to collateralize public fund deposits and other secured deposits.

Other Liabilities

Other liabilities decreased $10.5 million, or 16.1%, from December 31, 2024, primarily due to a decrease in accrued interest payable on time deposits.

SHAREHOLDERS' EQUITY

The following table presents total shareholders' equity at the dates indicated:

At December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Common stock

$

157,784 

$

157,784 

$

— 

— 

%

Additional paid-in capital

304,021 

302,829 

1,192 

0.4 

Retained earnings

591,202 

525,780 

65,422 

12.4 

Accumulated other comprehensive loss

(25,467)

(43,992)

18,525 

(42.1)

Treasury stock

(84,222)

(55,100)

(29,122)

52.9 

  Total shareholders' equity

$

943,318 

$

887,301 

$

56,017 

6.3 

%

The increase in shareholders' equity at December 31, 2025 of $56.0 million from December 31, 2024 was primarily related to an increase in retained earnings of $65.4 million. Retained earnings was impacted by net income of $90.8 million, partially offset by $25.0 million in cash dividends paid during the year. Accumulated other comprehensive loss decreased by $18.5 million, which was primarily attributable to increases in the fair value of available-for-sale investment securities of $13.6 million, net of tax, and an increase in unrecognized actuarial losses related to the Corporation's pension plan of $3.9 million, net of tax. Treasury stock increased $29.1 million from December 31, 2024, related to repurchases of 1,129,217 shares at a cost of $34.6 million, offset by $5.5 million of stock issued under the dividend reinvestment plan and employee stock purchase plan, and stock-based incentive plan activity.

Discussion of Segments

The Corporation has three operating segments: Banking, Wealth Management and Insurance. Detailed segment information appears in Note 23, "Segment Reporting" included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K.

The Banking segment reported pre-tax income of $115.6 million in 2025, $96.1 million in 2024 and $90.3 million in 2023. See the section of this Management's Discussion and Analysis under the heading "Results of Operations" and "Financial Condition" for a discussion of the key items impacting the Banking Segment.

The Wealth Management segment reported pre-tax income of $8.3 million in 2025, $6.1 million in 2024 and $5.0 million in 2023, which included noninterest income of $31.9 million in 2025, $29.9 million in 2024 and $26.8 million in 2023. Noninterest expense was $23.7 million in 2025, $23.9 million in 2024 and $21.8 million in 2023. The increases in noninterest income from 2024 and 2023 were primarily due to new customer relationships and appreciation of assets under management and supervision. Noninterest expense in 2025 compared to 2024 was relatively unchanged, while the increase in noninterest expense from 2023 to 2024 was primarily due to increases in salaries and commissions. Wealth Management assets under management and supervision were $5.9 billion as of December 31, 2025, $5.2 billion as of December 31, 2024 and $4.7 billion as of December 31, 2023.

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The Insurance segment reported pre-tax income of $5.5 million in 2025, $5.7 million in 2024 and $5.1 million in 2023, which included noninterest income of $22.5 million in 2025 and 2024 and $21.5 million in 2023. Noninterest expense was $16.9 million in 2025, $16.7 million in 2024 and $16.4 million in 2023. Noninterest income in 2025 compared to 2024 was relatively unchanged, reflecting an increase in revenue from commercial lines of $672 thousand being offset by a decrease in contingent commission income of $691 thousand. The increases in noninterest expense were primarily due to increases in salaries and commissions.

Capital Adequacy

Capital guidelines assign minimum capital requirements for categories of assets depending on their assigned risks. The components of risk-based capital for the Corporation are Tier 1 and Tier 2.

At December 31, 2025, the Corporation had a Tier 1 risk-based capital ratio of 11.22% and total risk-based capital ratio of 13.86%. At December 31, 2024, the Corporation had a Tier 1 capital ratio of 10.85% and total risk-based capital ratio of 14.19%. The Corporation continues to be in the "well-capitalized" category under regulatory standards. Details on the capital ratios can be found in Note 21, "Regulatory Matters," included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K along with a discussion on dividend and other restrictions.

Asset/Liability Management

The primary functions of Asset/Liability Management are to minimize interest rate risk and to ensure adequate earnings, capital and liquidity while maintaining an appropriate balance of interest-earning assets and interest-bearing liabilities. Management's objective with regard to interest rate risk is to understand the Corporation's sensitivity to changes in interest rates and develop and implement strategies to minimize volatility while maximizing net interest income.

The Corporation uses gap analysis and earnings at risk simulation modeling to quantify exposure to interest rate risk. The Corporation uses the gap analysis to identify and monitor long-term rate exposure and uses a risk simulation model to measure short-term rate exposure. The Corporation runs various earnings simulation scenarios to quantify the impact of declining or rising interest rates on net interest income over a one-year and two-year horizon. The simulations use expected cash flows and repricing characteristics for all financial instruments at a point in time and incorporate company-developed, market-based assumptions regarding growth, pricing, and optionality such as prepayment speeds. As interest rates increase, fixed-rate assets tend to decrease in value; conversely, as interest rates decline, fixed-rate assets tend to increase in value.

Interest Rate Sensitivity

Interest rate sensitivity is a function of the repricing characteristics of the Corporation's assets and liabilities. Minimizing the balance sheet's maturity and repricing risk is a continual focus. The Corporation uses a variety of techniques to assist in identifying and evaluating the potential range of risk, including a maturity/repricing gap analysis as well as an Earnings at Risk analysis under various interest rate scenarios.

The gap analysis identifies repricing gaps in the Corporation’s balance sheet. All assets and liabilities are modeled to reflect some level of behavioral optionality, such as prepayments on loans, early call features on investments or potential pricing change and/or product change to interest-bearing deposits. The Corporation projects all noninterest-bearing deposits to be considered non-rate sensitive, while utilizing an all-encompassing deposit beta assumption that captures changes in interest expense that may occur as interest rates change or balances shift into other products. These assumptions are based upon historic behavior; however, they are inherently uncertain and thus cannot precisely predict the impact of changes in interest rates. While actual results will differ from simulated results due to customer behavioral change and/or market and regulatory influences, the following models are important tools to guide management.

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Table 11—Interest Rate Sensitivity Gap Analysis

The following table presents the Corporation's gap analysis at December 31, 2025:

(Dollars in thousands)

Within Three Months

After Three Months to Twelve Months

After One Year to Five Years

Over Five Years

Non-Rate Sensitive

Total

Assets:

Cash and due from banks

$

— 

$

— 

$

— 

$

— 

$

63,579 

$

63,579 

Interest-earning deposits with other banks

490,133 

---

---

---

---

490,133 

Investment securities, net of allowance for credit losses

70,003 

43,901 

181,185 

223,208 

(22,008)

496,289 

Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost

---

---

---

---

37,808 

37,808 

Loans held for sale

11,058 

---

---

---

4,230 

15,288 

Loans and leases, net of allowance for credit losses

2,551,201 

704,999 

2,997,771 

647,660 

(74,992)

6,826,639 

Other assets

---

---

---

---

507,161 

507,161 

Total assets

$

3,122,395 

$

748,900 

$

3,178,956 

$

870,868 

$

515,778 

$

8,436,897 

Liabilities and shareholders' equity:

Noninterest-bearing deposits

 $ ---

 $ ---

 $ ---

 $ ---

$

1,431,974 

$

1,431,974 

Interest-bearing demand deposits

3,478,924 

---

---

---

---

3,478,924 

Savings deposits

762,130 

---

---

---

---

762,130 

Time deposits

375,740 

584,127 

454,038 

380 

---

1,414,285 

Borrowings

73,278 

50,000 

200,000 

---

---

323,278 

Other liabilities

---

---

---

---

82,988 

82,988 

Shareholders' equity

---

---

---

---

943,318 

943,318 

Total liabilities and shareholders' equity

$

4,690,072 

$

634,127 

$

654,038 

$

380 

$

2,458,280 

$

8,436,897 

Incremental gap

$

(1,567,677)

$

114,773 

$

2,524,918 

$

870,488 

$

(1,942,502)

Cumulative gap

$

(1,567,677)

$

(1,452,904)

$

1,072,014 

$

1,942,502 

Cumulative gap as a percentage of interest-earning assets

(19.7

%)

(18.3

%)

13.5

%

24.4

%

The table above indicates that the Corporation holds a greater amount of liabilities that have the opportunity to reprice over assets in the next twelve months. This table is limited as it does not take into consideration the magnitude of the repricing change in relation to interest rate changes. Further, the estimated sensitivities are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows. While the assumptions used are bank specific and based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.

Table 12—Net Interest Income - Summary of Earnings at Risk Simulation

Management also performs a simulation of net interest income to measure interest rate exposure. The following table demonstrates the anticipated impact of an instantaneous and parallel interest rate shift, or "shock," to the yield curve on the Corporation's net interest income over the next twelve months. This simulation incorporates the same assumptions noted above and assumes a static balance sheet with no incremental growth in interest-earning assets or interest-bearing liabilities over the next twelve months.

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The changes to net interest income are shown in the below table at December 31, 2025. The results suggest the Corporation's year-end balance sheet is asset sensitive as net interest income is projected to increase in a rising rate environment. Actual results will likely be different than modeled due to numerous factors, including interest rates earned on new loans and investments as well as rates paid on new and existing deposits and new borrowings. The changes to net interest income shown below are in compliance with the Corporation's policy guidelines.

Estimated Change in Net Interest Income Over Next 12 Months

(Dollars in thousands)

Amount

Percent

Rate shock - Change in interest rates

+300 basis points

$

14,807 

5.47

%

+200 basis points

10,382 

3.84 

+100 basis points

5,817 

2.15 

-100 basis points

(7,318)

(2.70)

-200 basis points

(19,851)

(7.34)

-300 basis points

(37,532)

(13.87)

The estimated sensitivities are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows. While the assumptions used are bank specific and based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.

Credit Risk

Originating loans exposes the Corporation to credit risk, which is the risk that the principal balance of a loan and any related interest will not be collected due to the inability of the borrower to repay the loan. The Corporation manages credit risk in the loan portfolio through adherence to consistent and conservative underwriting standards and policies established by the senior credit leadership and approved by the Board of Directors. Written loan policies establish underwriting standards, lending limits and other standards or limits as deemed necessary and prudent. While the Corporation has strict underwriting, review, and monitoring procedures in place, they cannot eliminate all of the risks related to these lending activities.

The Corporation's loan review department conducts ongoing, independent reviews of the lending process to ensure adherence to established policies and procedures, monitors compliance with applicable laws and regulations and provides objective measurement of the risk inherent in the loan portfolio.

The Corporation focuses on both assessing the borrower's capacity and willingness to repay and obtaining sufficient collateral. Commercial, financial and agricultural loans are generally secured by the borrower's assets and by personal guarantees. Commercial real estate, construction and residential real estate secured for business purposes loans are originated primarily within the Pennsylvania, Maryland, Delaware and New Jersey market areas at prudent loan-to-value ratios and are often additionally supported by guaranties. Management closely monitors the composition and quality of the total commercial loan portfolio to ensure that any credit concentrations by borrower or industry are identified and managed. See "Risk Factors" included herein under Item 1A for additional information on lending risk related to commercial loans.

The Corporation originates fixed-rate and adjustable-rate residential mortgage loans that are secured by the underlying 1- to 4-family residential properties for personal purposes. Credit risk exposure in this area of lending is minimized by the evaluation of the creditworthiness of the borrower, including debt-to-income ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio are generally insured by private mortgage insurance.

Credit risk in the consumer loan portfolio is controlled by strict adherence to underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values. In the home equity loan portfolio, combined loan-to-value ratios are generally limited to 80%, but may be increased to 85% for the Corporation's strongest profile borrowers. Other credit considerations and compensating factors may warrant higher combined loan-to-value ratios. These loans are included within the portfolio of loans to individuals.

The primary risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate these risks.

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Risk also lies in the residual value of the underlying equipment. Residual values are subject to judgments as to the value of the underlying equipment that can be affected by changes in economic and market conditions and the financial viability of the residual guarantors and insurers. To the extent not guaranteed or assumed by a third party, or otherwise insured against, the Corporation bears the risk of ownership of the leased assets. This includes the risk that the actual value of the leased assets at the end of the lease term will be less than the residual value. The Corporation greatly reduces this risk primarily by using $1.00 buyout leases and equipment finance agreements, in which the entire cost of the leased equipment is included in the contractual payments, leaving no residual payment at the end of the lease term for the majority of the lease portfolio.

The Corporation closely monitors delinquencies as another means of maintaining asset quality. Collection efforts begin after a loan payment is missed, by attempting to contact borrowers. If collection attempts fail, the Corporation will proceed to gain control of collateral in a timely manner to minimize losses. While liquidation and recovery efforts continue, officers continue to work with the borrowers, if appropriate, to recover monies owed to the Corporation.

Liquidity

The Corporation, in its role as a financial intermediary, is exposed to certain liquidity risks. Liquidity refers to the Corporation's ability to ensure that sufficient cash flows and liquid assets are available to satisfy demand for loans, deposit withdrawals, repayment of borrowings, certificates of deposit at maturity, operating expenses and capital expenditures. The Corporation manages liquidity risk by measuring and monitoring liquidity sources and estimated funding needs on a daily basis. The Corporation has a contingency funding plan in place to address liquidity needs in the event of an institution-specific or a systemic financial crisis.

The Corporation and its subsidiaries maintain ample ability to meet the liquidity needs of its customers. Our most liquid assets, unencumbered cash and cash equivalents, were $549.2 million and $327.8 million at December 31, 2025 and December 31, 2024, respectively. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $37.3 million and $55.4 million at December 31, 2025 and December 31, 2024, respectively. Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank, Federal Reserve Bank and a correspondent bank of $3.8 billion and $3.7 billion at December 31, 2025 and December 31, 2024, respectively, of which $2.3 billion and $2.1 billion was available as of December 31, 2025 and December 31, 2024, respectively. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $457.0 million at December 31, 2025 and $468.0 million at December 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Sources of Funds

Non-brokered deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, public funds and non-profit customers located in our primary service areas. The Corporation faces increased competition for these deposits from a large array of financial market participants, including banks, credit unions, savings institutions, mutual funds, security dealers and others.

As part of its diversified funding strategy, the Corporation also utilizes a mix of short-term and long-term wholesale funding providers. Wholesale funding includes federal funds purchases from correspondent banks, secured borrowing lines from the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia, and brokered deposits and other similar sources.

Cash Requirements

The Corporation has cash requirements for various financial obligations, including contractual obligations and commitments that require cash payments. The most significant contractual obligations, in both the under and over one-year time period, are for the Bank to repay certificates of deposit and short- and long-term borrowings. Certificates of deposit due within one year of December 31, 2025 totaled $960.1 million. If these deposits do not remain with the Bank, the Bank will be required to seek other sources of funds, which may be more expensive to obtain. The Bank anticipates meeting these obligations by utilizing on-balance sheet liquidity and continuing to provide convenient depository and cash management services through its financial center network, thereby replacing these contractual obligations with similar funding sources at rates that are competitive in our market. The Bank will also use borrowings and brokered deposits to meet its obligations.

Commitments to extend credit are the Bank's most significant commitment in both the under and over one-year time periods. These commitments do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon.

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Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, refer to Note 1, "Summary of Significant Accounting Policies" of this Form 10-K.