TRICO BANCSHARES /

Previous wording

The statements contained herein that are not historical facts are forward-looking statements based on current expectations and beliefs of the Company ("TriCo") and First Hawaiian, Inc. and its subsidiaries (including First Hawaiian Bank) ("FHI") concerning future developments and their potential effects on TriCo and FHI. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of TriCo and FHI. TriCo and FHI caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically; uncertainty in U.S. fiscal, monetary and trade policy, including the interest rate policies of the Federal Reserve Board or the effects of any declines in housing and commercial real estate prices, high or increasing unemployment rates, continued or renewed inflation, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the markets in which TriCo and FHI conduct business, including California, Hawaii, Guam and Saipan; volatility and disruptions in global capital and credit markets; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds; competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services; concentrations within TriCo's or FHI’s loan portfolio (including commercial real estate loans) or other asset classes, and the parties’ ability to attract and retain customer deposits, large loans to certain borrowers, access liquidity and capital, and manage deposit costs and funding sources; the success, impact, and timing of TriCo's and FHI’s respective business strategies, including market acceptance of any new products or services and TriCo's and FHI’s ability to successfully implement strategic, operational, technology and integration initiatives; the failure to properly use and protect customer and employee information and data; cybersecurity risks (such as TriCo's 2023 cyber security ransomware incident), including the occurrence of fraudulent activity or a material breach of, or disruption to, the security of FHI’s, TriCo’s or their vendors’ systems; risks related to the development, implementation, use and management of artificial intellig…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The statements contained herein that are not historical facts are forward-looking statements based on current expectations and beliefs of the Company ("TriCo") concerning future developments and their potential effects on TriCo including, among others, statements regarding the expected timing, completion and effects of the proposed business combination transaction between First Hawaiian, Inc and its subsidiaries (including First Hawaiian Bank) ("FHI") and TriCo (the "Transaction"). Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of TriCo. TriCo cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically; uncertainty in U.S. fiscal, monetary and trade policy, including the interest rate policies of the Federal Reserve Board or the effects of any declines in housing and commercial real estate prices, high or increasing unemployment rates, continued or renewed inflation, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the markets in which TriCo and FHI conduct business, including California, Hawaii, Guam and Saipan; volatility and disruptions in global capital and credit markets; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds; competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services; concentrations within TriCo's or FHI’s loan portfolio (including commercial real estate loans) or other asset classes, and the parties’ ability to attract and retain customer deposits, large loans to certain borrowers, access liquidity and capital, and manage deposit costs and funding sources; the success, impact, and timing of TriCo's and FHI’s respective business strategies, including market acceptance of any new products or services and TriCo's and FHI’s ability to successfully implement strategic, operational, technology and integration initiatives; the failure to properly use and protect customer and employee information and data; cybersecurity risks (such as TriCo's 2023 cyber security ransomware incident), including the occurrence of fraudulent activity or a material breach of, or disruption to, …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The transaction is expected to close by the end of 2026, subject to the receipt of required regulatory approvals, approval by First Hawaiian and TriCo shareholders and the satisfaction of customary closing conditions. A summary of the terms of the merger agreement and other related agreements are summarized in, and the merger agreement has been filed as an exhibit to, the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 15, 2026.

Current wording

The transaction is expected to close by the end of 2026, subject to the receipt of required regulatory approvals and the satisfaction of customary closing conditions. A summary of the terms of the merger agreement and other related agreements are summarized in, and the merger agreement has been filed as an exhibit to, the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 15, 2026.

Previous wording

Performance highlights and other developments for the Company as of or for the three and six months ended June 30, 2026, included the following:

Current wording

Performance highlights and other developments for the Company as of or for the three and nine months ended September 30, 2026, included the following:

Previous wording

•Net income was $34.2 million or $1.06 per diluted share as compared to $33.7 million or $1.04 per diluted share in the trailing quarter, and an increase of $6.6 million or 24.1% from the second quarter of 2025

Current wording

•Net income was $38.0 million or $1.18 per diluted share as compared to $34.2 million or $1.06 per diluted share in the trailing quarter, and an increase of $3.8 million or 11.1% from the trailing quarter

Previous wording

•Net interest income (FTE) was $93.9 million, an increase of $2.4 million or 2.6% over the trailing quarter; net interest margin (FTE) was 4.11%, an increase of 4 basis points over 4.07% in the trailing quarter

Current wording

•Net interest income (FTE) was $96.8 million, an increase of $2.9 million or 3.1% over the trailing quarter; net interest margin (FTE) was 4.16%, an increase of 5 basis points over 4.11% in the trailing quarter

Previous wording

•Loan balances increased $242.9 million or 13.7% (annualized) from the trailing quarter and increased $352.1 million or 5.1% from the same quarter of the prior year

Current wording

•Loan balances increased $99.1 million or 5.4% (annualized) from the trailing quarter and increased $403.4 million or 5.8% from the same quarter of the prior year

Previous wording

•Average non-interest bearing deposits grew by 2.5% year over year and were 30.7% of total deposits at quarter end

Current wording

•Quarterly average non-interest bearing deposits grew by 3.2% year over year and represented 31.0% of total average deposits while non-interest bearing deposits as of quarter end represented 31.4% of total deposits

Previous wording

•Yield on average earning assets was 5.31%, an increase of 5 basis points over the 5.26% in the trailing quarter; yield on average loans was 5.85%, an increase of 7 basis points over the 5.78% in the trailing quarter

Current wording

•Yield on average earning assets was 5.35%, an increase of 4 basis points over the 5.31% in the trailing quarter; yield on average loans was 5.87%, an increase of 2 basis points over the 5.85% in the trailing quarter

Previous wording

•The average cost of total deposits was 1.27%, an increase of 1 basis point as compared to 1.26% in the trailing quarter, and a decrease of 10 basis points from 1.37% in the same quarter of the prior year

Current wording

•The average cost of total deposits was 1.26%, a decrease of 1 basis point as compared to 1.27% in the trailing quarter, and a decrease of 13 basis points from 1.39% in the same quarter of the prior year

Previous wording

•For the quarter ended June 30, 2026, the Company’s return on average assets was 1.37%, while the return on average equity was 10.15%; for the trailing quarter ended March 31, 2026, the Company’s return on average assets was 1.38%, while the return on average equity was 10.08%

Current wording

•For the quarter ended September 30, 2026, the Company’s return on average assets was 1.50%, while the return on average equity was 11.08%; for the trailing quarter ended June 30, 2026, the Company’s return on average assets was 1.37%, while the return on average equity was 10.15%

Previous wording

•The loan to deposit ratio was 87.36% as of June 30, 2026, as compared to 84.11% for the trailing quarter end

Current wording

•The loan to deposit ratio was 87.76% as of September 30, 2026, as compared to 87.36% for the trailing quarter end

Previous wording

•The efficiency ratio was 56.25% for the quarter ended June 30, 2026, as compared to 54.55% for the trailing quarter, inclusive of $0.9 million in merger related expenses during the current quarter, versus none in the trailing quarter

Current wording

•The efficiency ratio was 56.96% for the quarter ended September 30, 2026, as compared to 56.25% for the trailing quarter, inclusive of $3.8 million in merger related expenses during the current quarter, versus $0.9 million in the trailing quarter

Previous wording

•The allowance for credit losses (ACL) to total loans was 1.78% as of June 30, 2026, compared to 1.81% as of the trailing quarter end, and 1.79% as of June 30, 2025. Non-performing assets to total assets were 0.76% on June 30, 2026, as compared to 0.77% as of March 31, 2026, and 0.68% on June 30, 2025

Current wording

•The allowance for credit losses (ACL) to total loans was 1.73% as of September 30, 2026, compared to 1.78% as of the trailing quarter end, and 1.78% as of September 30, 2025. Non-performing assets to total assets were 0.79% on September 30, 2026, as compared to 0.76% as of June 30, 2026, and 0.72% on September 30, 2025

Previous wording

The Company’s primary source of revenue is net interest income, or the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. Following is a summary of the components of FTE net income for the periods indicated.

Current wording

The Company’s primary source of revenue is net interest income, or the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. Following is a summary of the components of FTE net interest income for the periods indicated.

Previous wording

Loans may be acquired at a premium or discount to par value, in which case, the premium is amortized (subtracted from) or the discount is accreted (added to) interest income over the remaining life of the loan. The dollar impact of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off early. Upon the early pay off of a loan, any remaining unaccreted discount or unamortized premium is immediately taken into interest income; and as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income. Despite the elevated rate environment, the prepayment rate of portfolio loans, inclusive of those acquired at a premium or discount, remains generally consistent. During the quarters ended June 30, 2026, March 31, 2026 and June 30, 2025, the purchased loan discount accretion was $1.0 million, $1.4 million and $1.2 million, respectively.

Current wording

Loans may be acquired at a premium or discount to par value, in which case, the premium is amortized (subtracted from) or the discount is accreted (added to) interest income over the remaining life of the loan. The dollar impact of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off early. Upon the early pay off of a loan, any remaining unaccreted discount or unamortized premium is immediately taken into interest income; and as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income. Despite the elevated rate environment, the prepayment rate of portfolio loans, inclusive of those acquired at a premium or discount, remains generally consistent. During the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, the purchased loan discount accretion was $1.2 million, $1.0 million and $1.0 million, respectively.

Previous wording

Net interest income (FTE) during the three months ended June 30, 2026, increased $7.1 million or 8.2% to $93.9 million compared to $86.8 million during the three months ended June 30, 2025. Net interest margin totaled 4.11% for the three months ended June 30, 2026, an increase of 23 basis points from the same quarter in 2025. The primary drivers behind the change in net interest margin is related to an increase in average loan balances, improving interest income by $4.3 million, coupled with a decline in yields paid on interest-bearing deposits improving net interest income by $1.3 million, with yields paid declining by 14 basis points between the quarter ended June 30, 2026, and the same quarter of the prior year. The accretion of discounts from acquired loans added 6 basis points and 8 basis points to loan yields during the quarters ended June 30, 2026 and June 30, 2025, respectively. Finally, the average balance of noninterest-bearing deposits increased by $63.0 million from the three-month average as of June 30, 2026.

Current wording

Net interest income (FTE) during the three months ended September 30, 2026, increased $7.0 million or 7.8% to $96.8 million compared to $89.8 million during the three months ended September 30, 2025. Net interest margin totaled 4.16% for the three months ended September 30, 2026, an increase of 24 basis points from the same quarter in 2025. The primary drivers behind the change in net interest margin is related to an increase in average loan balances, improving interest income by $5.1 million, coupled with a decline in yields paid on interest-bearing deposits improving net interest income by $2.3 million, with yields paid declining by 17 basis points between the quarter ended September 30, 2026, and the same quarter of the prior year. The accretion of discounts from acquired loans added 6 basis points to loan yields during the quarters ended September 30, 2026 and September 30, 2025, respectively. Finally, the average balance of noninterest-bearing deposits increased by $82.7 million from the three-month average as of September 30, 2026.

Previous wording

Net interest income (FTE) during the three months ended June 30, 2026 increased $7.1 million to $93.9 million compared to $86.8 million during the three months ended June 30, 2025. As noted above, the increase in net interest income (FTE) was due largely to: higher average loan balances, lower rates paid for interest-bearing deposits, and lower average balances for borrowings, all of which have a beneficial impact on net interest income.

Current wording

Net interest income (FTE) during the three months ended September 30, 2026 increased $7.0 million to $96.8 million compared to $89.8 million during the three months ended September 30, 2025. As noted above, the increase in net interest income (FTE) was due largely to: higher average loan balances, lower rates paid for interest-bearing deposits, and lower average balances for borrowings, all of which have a beneficial impact on net interest income.

Previous wording

During the three months ended June 30, 2026, the Company recorded a provision for credit losses of $2.7 million, as compared to $3.3 million during the trailing quarter, and $4.7 million during the second quarter of 2025.

Current wording

During the three months ended September 30, 2026, the Company recorded a reversal of credit losses of $1.9 million, as compared to a provision of $2.7 million during the trailing quarter, and $0.7 million during the third quarter of 2025.

Previous wording

The $2.2 million increase in allowance for credit losses was primarily attributed to net loan growth during the quarter, which totaled $242.9 million. Additionally, Management notes that economic indicators through the end of the current quarter, as well as actual and forecasted trends including, but not limited to, unemployment, gross domestic product, and corporate borrowing rates continued to evidence stability and were supportive of general economic expansion, and were consistent with, if not slightly improved from the period ended March 31, 2026, which is aligned with the Company's direct experiences with borrowers. Management's proactive portfolio management policies and ongoing dialogue with borrowers suggest caution continues to be warranted, with emphasis on the consumer portfolio. Actions by the Federal Reserve during 2026 or stimulative policies by the Federal government may impact this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to monetary policy assumptions. Furthermore, political policy risks both domestic and international remain unresolved, which could quickly lead to further negative effects on domestic economic outcomes. The lingering uncertainties related to the extent and duration of escalation within the Middle East, and potential domestic economic impact from volatility in oil prices and the impact on inflation risks, continue to present challenges in correlating potential improvement of credit risks within the Company's loan portfolio. Therefore, management continues to believe that certain credit weaknesses are present in the overall economy and that it is appropriate to maintain a reserve level that incorporates such risk factors.

Current wording

The decrease in allowance for credit losses required on individually analyzed loans is largely attributed to the improvement in collateral values, including borrowers who have provided additional collateral, across several credits. Meanwhile, the reversal in collective reserves, despite an overall increase in net loan balances of approximately $99.1 million during the quarter, was primarily attributed to improved delinquency rates and risk grades across the commercial real estate portfolio. Additionally, Management notes that economic indicators through the end of the current quarter, as well as actual and forecasted trends including, but not limited to, unemployment, gross domestic product, and corporate borrowing rates remained supportive of general economic expansion, and a slight improvement from the period ended June 30, 2026, which is aligned with the Company's direct experiences with borrowers.

Previous wording

The ratio of classified loans to total loans of 1.93% as of June 30, 2026, was a decrease of 7 basis points from March 31, 2026, and 1 basis point from the comparative quarter ended 2025. The change in classified loans outstanding as compared to the trailing quarter represented a decrease of approximately $0.5 million.

Current wording

The ratio of classified loans to total loans of 1.76% as of September 30, 2026, was a decrease of 17 basis points from June 30, 2026, and 12 basis points from the comparative quarter ended 2025. The change in classified loans outstanding as compared to the trailing quarter represented a decrease of approximately $10.2 million.

Previous wording

Loans past due 30 days or more increased by $0.7 million during the quarter ended June 30, 2026, to $49.6 million, as compared to $48.9 million at March 31, 2026. The majority of loans identified as past due are well-secured by collateral, and approximately $27.5 million are less than 90 days delinquent.

Current wording

Loans past due 30 days or more decreased by $3.4 million during the quarter ended September 30, 2026, to $46.2 million, as compared to $49.6 million at June 30, 2026. The majority of loans identified as past due are well-secured by collateral, and approximately $27.5 million are less than 90 days delinquent.

Previous wording

Non-performing loans decreased by $0.6 million during the quarter ended June 30, 2026, to $68.8 million as compared to $69.5 million at March 31, 2026. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Management anticipates that these proactive strategies, specifically within agricultural real estate secured and agricultural commercial loans, will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $68.8 million loans designated as non-performing as of June 30, 2026, approximately $43.9 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.

Current wording

Non-performing assets to total assets were 0.79% on September 30, 2026, as compared to 0.76% as of June 30, 2026, and 0.72% on September 30, 2025. Non-performing loans increased nominally during the quarter ended September 30, 2026, to $69.6 million as compared to $68.8 million at June 30, 2026. The credit and collateral profiles of non-performing loans remain generally consistent with the trailing quarter. As noted previously, management continues to proactively work with these borrowers to identify actionable and appropriate resolution strategies which are customary for the industries. Management anticipates that these proactive strategies, specifically within agricultural real estate secured and agricultural commercial loans, will further benefit from the continued improvement in agricultural commodity prices, stable water supply, and growing crop demand. Of the $69.6 million loans designated as non-performing as of September 30, 2026, approximately $45.0 million are current or less than 30 days past due with respect to payments required under their existing loan agreements.

Previous wording

As of June 30, 2026, other real estate owned consisted of 14 properties with a carrying value of approximately $6.8 million, as compared to 14 properties with a carrying value of $7.0 million at March 31, 2026. Non-performing assets of $75.6 million at June 30, 2026, represented 0.76% of total assets, a change from $76.4 million or 0.77% and $67.5 million or 0.68% as of March 31, 2026 and June 30, 2025, respectively.

Current wording

As of September 30, 2026, other real estate owned consisted of 14 properties with a carrying value of approximately $9.4 million, as compared to 14 properties with a carrying value of $6.8 million at June 30, 2026. Non-performing assets of $79.0 million at September 30, 2026, represented 0.79% of total assets, a change from $75.6 million or 0.76% and $71.1 million or 0.72% as of June 30, 2026 and September 30, 2025, respectively.

Previous wording

Non-interest income increased $2.1 million or 6.4% to $35.3 million during the six months ended June 30, 2026, compared to $33.2 million during the comparative period ended June 30, 2025. As noted above, service charges and customer fees in the 2026 period drove an increase of $0.8 million. Further, elevated activity and volume of assets under management resulted in an increase of $0.7 million or 22.0% in related income. Other income for the six months ended June 30, 2026 and 2025 included excess insurance related proceeds of $560,000 and $1,207,000, respectively.

Current wording

Non-interest income increased $4.3 million or 8.4% to $55.4 million during the nine months ended September 30, 2026, compared to $51.2 million during the comparative period ended September 30, 2025. Service charges and customer fees in the 2026 period drove an increase of $1.4 million. Further, elevated activity and volume of assets under management resulted in an increase of $0.8 million or 16.0% in related income. The remaining notable fluctuations are attributable to the previously noted non-recurring items associated with the retirement of subordinated debt and the sale of investment securities.

Previous wording

Non-interest expense increased $1.3 million or 1.0% to $122.0 million during the six months ended June 30, 2026, as compared to $120.7 million for the trailing six months ended. Excluding the aforementioned merger expenses, changes in other non-interest expense line items were mixed during the six months period ended June 30, 2026, but essentially flat and due to timing differences rather than unique changes in operations. As noted above, increases in incentive compensation were attributed to the loan and deposit production activity as well as the Company's overall financial performance.

Current wording

Non-interest expense increased $7.3 million or 4.0% to $188.5 million during the nine months ended September 30, 2026, as compared to $181.1 million for the trailing nine months ended September 30, 2025. As noted above, increases in incentive compensation were attributed to both individual production and overall Company performance. Increases in data processing and software expense along with increases in equipment expense were largely attributable to expanded digital and scaling capabilities. Excluding those items and the $4.7 million in merger expenses, changes in other non-interest expense line items were mixed during the nine months period ended September 30, 2026, but essentially flat and due to timing differences.

Previous wording

The Company’s effective tax rate was 26.2% for the quarter ended June 30, 2026, as compared to 26.6% for the quarter ended March 31, 2026, and 27.2% for the quarter ended June 30, 2025. Differences between the Company's effective tax rate and applicable federal and state blended statutory rate of approximately 29.6% are due to the proportion of non-taxable revenues, non-deductible expenses, and benefits from tax credits as compared to the levels of pre-tax earnings.

Current wording

The Company’s effective tax rate was 27.1% for the quarter ended September 30, 2026, as compared to 26.2% for the quarter ended June 30, 2026, and 26.8% for the quarter ended September 30, 2025. Differences between the Company's effective tax rate and applicable federal and state blended statutory rate of approximately 29.6% are due to the proportion of non-taxable revenues, non-deductible expenses, and benefits from tax credits as compared to the levels of pre-tax earnings.

Previous wording

Loans outstanding increased by $242.9 million or 13.7% on an annualized basis during the quarter ended June 30, 2026. During the quarter, gross loan originations/draws totaled approximately $632.9 million while gross payoffs/repayments of loans totaled $412.8 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $388.7 million and $442.2 million, respectively. Origination volume was elevated relative to historical norms, while repayments were in line with recent periods. Domestically, the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion through the remainder of 2026.

Current wording

Loans outstanding increased by $99.1 million or 5.4% on an annualized basis during the quarter ended September 30, 2026. During the quarter, gross loan originations/draws totaled approximately $496.0 million while gross payoffs/repayments of loans totaled $410.8 million, which compares to gross originations/draws and gross payoffs/repayments during the trailing quarter ended of $632.9 million and $412.8 million, respectively. Origination and repayment volumes returned to levels consistent with recent periods, following an outlier quarter of elevated originations.

Previous wording

Investment security balances decreased $74.8 million or 16.0% on an annualized basis during the quarter as a result of prepayments/maturities of $113.1 million and net decreases in the market value of securities of $3.6 million, partially offset by purchases totaling $42.1 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities and collateralized loan obligations. While management intends to primarily utilize cash flows from the investment security portfolio and organic deposit growth to support loan growth, excess liquidity will be utilized for purchases of investment securities to support net interest income growth and net interest margin expansion.

Current wording

Investment security balances decreased $163.1 million or 36.3% on an annualized basis during the quarter as a result of prepayments / maturities of $131.8 million and net decreases in the market value of securities of $60.5 million, partially offset by purchases totaling $29.2 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities. While management intends to primarily utilize cash flows from the investment security portfolio and organic deposit growth to support loan growth, excess liquidity will be utilized for purchases of investment securities to support net interest income growth and net interest margin expansion.

Previous wording

Deposit balances decreased by $34.8 million or 1.7% annualized during the period, inclusive of $68.8 million in one-way sell activity at June 30, 2026, as a short-term method to reduce the Company's overall balance sheet size. There were no deposits sold in the trailing quarter or the same quarter of the prior year.

Current wording

Deposit balances increased by $74.6 million or 3.6% annualized during the period, inclusive of $68.8 million in one-way sell activity outstanding at June 30, 2026, which was returned to the Company's balance sheet during the current quarter. There were no deposits sold as of September 30, 2026 or the same quarter of the prior year.

Previous wording

Investment securities held to maturity decreased $9.8 million to $80.8 million as of June 30, 2026, as compared to December 31, 2025. This decrease is attributable to calls and principal repayments of $9.7 million, and amortization of net purchase premiums of $0.1 million.

Current wording

Investment securities held to maturity decreased $14.3 million to $76.2 million as of September 30, 2026, as compared to December 31, 2025. This decrease is attributable to calls and principal repayments of $14.1 million, and amortization of net purchase premiums of $0.2 million.

Previous wording

Nonperforming assets decreased during the three months ended June 30, 2026 by $0.8 million or 1.1% to $75.6 million compared to $76.4 million at March 31, 2026. The decrease in nonperforming assets during the second quarter of 2026 was primarily the result of nonperforming loan additions totaling $3.3 million, offset by pay-downs and upgrades, which totaled $3.6 million during the quarter, as well as $0.3 million in charge-offs. Management is actively engaged in the collection and recovery efforts for all nonperforming assets and believes that the loan loss reserves associated with these loans is sufficient as of June 30, 2026.

Current wording

Nonperforming assets increased during the three months ended September 30, 2026 by $3.3 million or 4.4% to $79.0 million compared to $75.6 million at June 30, 2026. The increase in nonperforming assets during the third quarter of 2026 was primarily the result of nonperforming loan additions totaling $6.3 million, offset by pay-downs and upgrades, which totaled $1.9 million during the quarter, as well as $0.7 million in charge-offs. Management is actively engaged in the collection and recovery efforts for all nonperforming assets and believes that the loan loss reserves associated with these loans is sufficient as of September 30, 2026.

Previous wording

For additional information regarding the allowance for credit losses, including changes in specific, formula, and environmental factors allowance categories, see“Asset Quality and Loan Loss Provisioning”at“Results of Operations”, above. For additional information on the current ACL methodology, see"Allowance for Credit Losses - Loans"within footnote 1 of the Company's 10-Q/10-K. Based on the current conditions of the loan portfolio, management believes that the $130.2 million allowance for credit losses at June 30, 2026 is adequate to absorb expected losses inherent in the Bank’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.

Current wording

For additional information regarding the allowance for credit losses, including changes in specific, formula, and environmental factors allowance categories, see“Asset Quality and Loan Loss Provisioning”at“Results of Operations”, above. For additional information on the current ACL methodology, see"Allowance for Credit Losses - Loans"within footnote 1 of the Company's 10-Q/10-K. Based on the current conditions of the loan portfolio, management believes that the $128.2 million allowance for credit losses at September 30, 2026 is adequate to absorb expected losses inherent in the Bank’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.

Previous wording

The following table details the components and summarize the activity in foreclosed assets, net of allowances for losses, for the six months ended June 30, 2026:

Current wording

The following table details the components and summarize the activity in foreclosed assets, net of allowances for losses, for the nine months ended September 30, 2026:

Previous wording

During the six months ended June 30, 2026, the Company’s deposits increased by $104.9 million to $8.4 billion at quarter end. There were no brokered deposits included in the deposit balances as of June 30, 2026 and December 31, 2025. Estimated uninsured deposits totaled $2.9 billion and $2.9 billion as of June 30, 2026 and December 31, 2025, respectively.

Current wording

During the nine months ended September 30, 2026, the Company’s deposits increased by $179.5 million to $8.4 billion at quarter end. There were no brokered deposits included in the deposit balances as of September 30, 2026 and December 31, 2025. Estimated uninsured deposits totaled $2.9 billion and $2.9 billion as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

During the three months ended June 30, 2026, the Company repurchased zero shares. During the six months ended June 30, 2026, the Company repurchased 447,211 shares with a market value totaling $21.6 million under the 2025 Program. There were no shares repurchased in 2025 under the 2025 Program, however, during the three and six months ended June 30, 2025 the Company purchased 379,978 and 469,632 shares with market values of $15.2 million and $18.9 million under the 2021 Share Repurchase Program. As of June 30, 2026, approximately 1,553,000 shares remain authorized for repurchase

Current wording

During the three months ended September 30, 2026, the Company repurchased zero shares. During the nine months ended September 30, 2026, the Company repurchased 447,211 shares with a market value totaling $21.6 million under the 2025 Program. There were no shares repurchased in 2025 under the 2025 Program, however, during the three and nine months ended September 30, 2025 the Company purchased 52,106 and 521,738 shares with market values of $2.3 million and $21.3 million under the 2021 Share Repurchase Program. As of September 30, 2026, approximately 1,553,000 shares remain authorized for repurchase

Previous wording

Total shareholders' equity increased by $19.6 million during the quarter ended June 30, 2026, as net income of $34.2 million was partially offset by a $2.5 million increase in accumulated other comprehensive losses and $11.5 million in cash dividends on common stock. As a result, the Company’s book value increased to $42.03 per share at June 30, 2026, compared to $41.49 at March 31, 2026. The Company’s tangible book value per share, a non-GAAP measure, calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and dividing that sum by total shares outstanding, was $32.40 per share at June 30, 2026, as compared to $31.82 at March 31, 2026.

Current wording

Total shareholders' equity decreased by $15.1 million during the quarter ended September 30, 2026, as net income of $38.0 million was offset by a $42.6 million increase in accumulated other comprehensive losses and $11.5 million in cash dividends paid on common stock. As a result, the Company’s book value decreased to $41.56 per share at September 30, 2026, compared to $42.03 at June 30, 2026. The Company’s tangible book value per share, a non-GAAP measure, calculated by subtracting goodwill and other intangible assets from total shareholders’ equity and dividing that sum by total shares outstanding, was $31.93 per share at September 30, 2026, as compared to $32.40 at June 30, 2026.

Previous wording

At June 30, 2026, the Company's primary sources of liquidity represented 47% of total deposits and 139% of estimated total uninsured (excluding collateralized municipal deposits and intercompany balances) deposits, respectively. As secondary sources of liquidity, the Company's held-to-maturity investment securities had a fair value of $76.7 million, including approximately $4.1 million in net unrealized losses.

Current wording

At September 30, 2026, the Company's primary sources of liquidity represented 47% of total deposits and 139% of estimated total uninsured (excluding collateralized municipal deposits and intercompany balances) deposits, respectively. As secondary sources of liquidity, the Company's held-to-maturity investment securities had a fair value of $70.8 million, including approximately $5.5 million in net unrealized losses.

Previous wording

The Company’s profitability during the first six months of 2026 generated cash flows from operations of $58.8 million compared to $53.8 million during the first six months of 2025. Net cash from investing activities was $167.1 million for the six months ended June 30, 2026, compared to net cash from investing activities of $59.4 million during the six months ending 2025. Financing activities provided $56.5 million during the six months ended June 30, 2026, compared to using $174.9 million during the six months ended June 30, 2025.

Current wording

The Company’s profitability during the first nine months of 2026 generated cash flows from operations of $100.0 million compared to $98.8 million during the first nine months of 2025. Net cash from investing activities was $170.4 million for the nine months ended September 30, 2026, compared to net cash from investing activities of $3.6 million during the nine months ending 2025. Financing activities provided $109.1 million during the nine months ended September 30, 2026, compared to using $58.7 million during the nine months ended September 30, 2025.

Previous wording

The types of contractual obligations of the Company and Bank, include but are not limited to term subordinated debt, operating leases, deferred compensation and supplemental retirement plans as well as off-balance sheet commitments such as unfunded loans and letters of credit, are consistent with those as of December 31, 2025. However, as borrowings have been repaid, the borrowing capacity at correspondent banks has increased. In addition, as the balance of investment securities has declined, so has the balance of unpledged securities. In total, and as illustrated above, the balance of total primary liquidity has increased during the first six months of 2026.

Current wording

The types of contractual obligations of the Company and Bank, include but are not limited to term subordinated debt, operating leases, deferred compensation and supplemental retirement plans as well as off-balance sheet commitments such as unfunded loans and letters of credit, are consistent with those as of December 31, 2025. However, as borrowings have been repaid, the borrowing capacity at correspondent banks has increased. In addition, as the balance of investment securities has declined, so has the balance of unpledged securities. In total, and as illustrated above, the balance of total primary liquidity has increased during the first nine months of 2026.

Previous wording

The Company is dependent upon the payment of cash dividends by the Bank to service its commitments, which have historically included dividends to shareholders, scheduled debt service payments, and general operations. Shareholder dividends are expected to continue subject to the Board’s discretion and management's continuing evaluation of capital levels, earnings, asset quality and other factors. The Company expects that the cash dividends paid by the Bank to the Company will be sufficient to cover the Company's cash flow needs. However, the Company and its ability to generate liquidity through either the issuance of stock or debt, also serves as a potential source of strength for the Bank. Dividends paid by the Company to holders of its common stock used $23.0 million of cash during the six months ended June 30, 2026. The Company’s liquidity is dependent on dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.

Current wording

The Company is dependent upon the payment of cash dividends by the Bank to service its commitments, which have historically included dividends to shareholders, scheduled debt service payments, and general operations. Shareholder dividends are expected to continue subject to the Board’s discretion and management's continuing evaluation of capital levels, earnings, asset quality and other factors. The Company expects that the cash dividends paid by the Bank to the Company will be sufficient to cover the Company's cash flow needs. However, the Company and its ability to generate liquidity through either the issuance of stock or debt, also serves as a potential source of strength for the Bank. Dividends paid by the Company to holders of its common stock used $34.6 million of cash during the nine months ended September 30, 2026. The Company’s liquidity is dependent on dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.