RENASANT CORP

Previous wording

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) our ability to efficiently integrate acquisitions into our operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired or may acquire; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) our ability to remediate the material weakness in the Company’s internal control over financial reporting identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025; (vi) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vii) the financial resources of, and products available from, competitors; (viii) changes in laws and regulations as well as changes in accounting standards; (ix) changes in governmental and regulatory policy, whether applicable specifically to financial institutions or impacting the United States generally (such as, for example, changes in trade policy); (x) changes in the securities and foreign exchange markets; (xi) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xii) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment portfolio; (xiii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiv) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xv) general economic, market or business conditions, including the impact of inflation; (xvi) changes in demand for loan and deposit products and other financial services; (xvii) concentrations of deposit or credit exposure; (xviii) changes or the lack of changes in interest rates, yield curves an…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) our ability to efficiently integrate acquisitions into our operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired or may acquire; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) our ability to remediate the material weakness in the Company’s internal control over financial reporting identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2026; (vi) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vii) the financial resources of, and products available from, competitors; (viii) changes in laws and regulations as well as changes in accounting standards; (ix) changes in governmental and regulatory policy, whether applicable specifically to financial institutions or impacting the United States generally (such as, for example, changes in trade policy); (x) changes in the securities and foreign exchange markets; (xi) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xii) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xiii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiv) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xv) general economic, market or business conditions, including the impact of inflation; (xvi) changes in demand for loan and deposit products and other financial services; (xvii) concentrations of credit or d…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The securities portfolio is used to provide a source for meeting liquidity needs and to supply securities to be used in collateralizing certain deposits and certain types of borrowings. The securities portfolio also serves as an outlet to deploy excess liquidity and generate interest income rather than hold excess funds as cash. The following table shows the carrying value of our securities portfolio by investment type and the percentage of such investment type relative to the entire securities portfolio as of the dates presented:

Current wording

The securities portfolio is used to meet liquidity needs and to supply securities to be used in collateralizing certain deposits and certain types of borrowings. The securities portfolio also serves as an outlet to deploy excess liquidity and generate interest income rather than hold excess funds as cash. The following table shows the carrying value of our securities portfolio by investment type and the percentage of such investment type relative to the entire securities portfolio as of the dates presented:

Previous wording

The Company purchased $378,991 and $175,815 in investment securities during the three months ended March 31, 2026 and 2025, respectively. The merger with The First contributed approximately $1,457,377 to the securities portfolio at April 1, 2025.

Current wording

The Company purchased $541,398 and $946,095 in investment securities during the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Proceeds from maturities, calls and principal payments on securities during the first three months of 2026 totaled $141,463. Proceeds from the maturities, calls and principal payments on securities during the first three months of 2025 totaled $56,789. No gain or loss on sales of securities was recorded in the first quarter of 2026 or 2025.

Current wording

Proceeds from maturities, calls and principal payments on securities during the first six months of 2026 totaled $287,997. Proceeds from the maturities, calls and principal payments on securities during the first six months of 2025 totaled $165,377. No gain or loss on sales of securities was recorded in the first half of 2026 or 2025.

Previous wording

During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has the intent and ability to hold these securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At March 31, 2026, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $38,482. No gains or losses were recognized at the time of transfer.

Current wording

During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has the intent and ability to hold these securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At June 30, 2026, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $36,544. No gains or losses were recognized at the time of transfer.

Previous wording

Loan concentrations are considered to exist when there are loans to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At March 31, 2026, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. As the above table demonstrates, non-owner occupied commercial mortgage term loans was our largest concentration of loans at March 31, 2026 and the following table provides additional detail, broken down by collateral type, about the segments within this loan category as of such date .

Current wording

Loan concentrations are considered to exist when there are loans to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At June 30, 2026, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. As the above table demonstrates, non-owner occupied commercial mortgage term loans was our largest concentration of loans at June 30, 2026. The following table provides additional detail, broken down by collateral type, about the segments within this loan category as of such date.

Previous wording

The Company relies on deposits as its primary source of funds. Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits). Noninterest-bearing deposits represented 23.45% of total deposits at March 31, 2026, as compared to 23.49% of total deposits at December 31, 2025. The slight decrease in noninterest-bearing deposits as a percentage of total deposits was primarily driven by the seasonal increase in interest-bearing public fund deposits, offset by growth in noninterest-bearing deposits. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin; business factors, described in the following paragraph, may lead us to obtain public deposits. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters.

Current wording

The Company relies on deposits as its primary source of funds. Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits). Noninterest-bearing deposits represented 23.22% of total deposits at June 30, 2026, as compared to 23.49% of total deposits at December 31, 2025. The slight decrease in noninterest-bearing deposits as a percentage of total deposits primarily reflects the growth in interest-bearing deposits. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin; business factors, described in the following paragraph, may lead us to obtain public deposits. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters.

Previous wording

Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were $4,160,265 and $3,779,910 at March 31, 2026 and December 31, 2025, respectively.

Current wording

Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors’. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were$3,797,144 and $3,784,489 at June 30, 2026 and December 31, 2025, respectively.

Previous wording

Total borrowings may include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Dallas (the “FHLB”), borrowings from the Federal Reserve Discount Window, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically consist of federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. Due to strong deposit growth during the quarter, the Company was able to pay down a portion of the FHLB advances. The following table presents our short-term borrowings by type as of the dates presented:

Current wording

Total borrowings may include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Dallas (the “FHLB”), borrowings from the Federal Reserve Discount Window, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically consist of federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances, while long-term debt typically consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. Due to deposit growth during the first half of 2026, the Company was able to pay down a portion of its FHLB advances. The following table presents our short-term borrowings by type as of the dates presented:

Previous wording

Long-term debt typically consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The following table presents our long-term debt by type as of the dates presented:

Current wording

The following table presents our long-term debt by type as of the dates presented:

Previous wording

Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits (which has not been the case in recent periods). Advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had $5,480,190 of availability on unused lines of credit with the FHLB at March 31, 2026, as compared to $5,574,759 at December 31, 2025. The Company also had credit available at the Federal Reserve Discount Window in the amount of $706,245.

Current wording

Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits (which has not been the case in recent periods). Advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had $5,519,985 available on unused lines of credit with the FHLB at June 30, 2026, as compared to $5,574,759 at December 31, 2025. The Company also had credit available at the Federal Reserve Discount Window in the amount of$1,067,639.

Previous wording

The Company has issued subordinated notes, and the Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors, the proceeds of which were used to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The proceeds generated by the Company’s subordinated notes and trust preferred securities transactions have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank as regulatory capital. The subordinated notes and trust preferred securities qualify as Tier 2 capital under current regulatory guidelines. On May 7, 2026, the Company completed an additional subordinated debt offering, issuing $300,000,000 aggregate principal amount of 6.25% Fixed-to-Floating Rate Subordinated Notes due 2036.

Current wording

The Company has issued subordinated notes, and the Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors, the proceeds of which were used to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). During the second quarter of 2026, the Company completed a subordinated debt offering, issuing $300,000,000 aggregate principal amount of 6.25% Fixed-to-Floating Rate Subordinated Notes due 2036 (the “2036 Notes”). The proceeds generated by the Company’s subordinated notes and trust preferred securities transactions, including the proceeds of the 2036 Notes, have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank (sometimes referred to herein as the “Bank”) as regulatory capital. The subordinated notes and trust preferred securities qualify as Tier 2 capital under current regulatory guidelines.

Previous wording

On April 1, 2025 the Company completed its merger with The First Bancshares, Inc. (“The First”). At closing, The First merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, The First Bank merged with and into Renasant Bank (sometimes referred to as the “Bank”), with Renasant Bank the surviving banking corporation in the merger. For more information, including the fair value of assets acquired and liabilities assumed, see Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report.

Current wording

On April 1, 2025 the Company completed its merger with The First Bancshares, Inc. (“The First”). At closing, The First merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, The First Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. For more information, including the fair value of assets acquired and liabilities assumed, see Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report.

Previous wording

The Company’s acquisition of The First on April 1, 2025, had a significant impact on our results of operations during the first quarter of 2026 as compared to the same period in 2025, and unless otherwise noted, is the primary driver of the period-over-period change indicated throughout this section.

Current wording

The Company’s acquisition of The First on April 1, 2025 had a significant impact on our results of operations for the six months ended June 30, 2026 as compared to the same period in 2025, and is the primary driver of the six-month period-over-period change as indicated throughout this section.

Previous wording

From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these items will be incurred or, when incurred, the amount of such items. The following table presents the impact of these items on reported EPS for the dates presented.

Current wording

From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these items will be incurred or, when incurred, the amount of such items. There were no such items incurred in the three and six months ended June 30, 2026. The following table presents the impact of these items on reported earnings per share (“EPS”) for the three and six months ended June 30, 2025.

Previous wording

Net interest income, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest component of our net income, comprising 81.96% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the first quarter of 2026. Changes in net interest income are driven by fluctuations in the volume, mix and repricing of assets and liabilities.

Current wording

Net interest income, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest component of our net income, comprising 81.64% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the second quarter of 2026 and 81.80% of total revenue for the first half of 2026. Changes in net interest income are driven by fluctuations in the volume, mix and repricing of assets and liabilities.

Previous wording

The daily average balances of nonaccruing assets are included in the foregoing table. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21%, and for loans, a state tax rate of 4.45%, which is net of federal tax benefit.

Current wording

The daily average balances of nonaccruing assets are included in the foregoing tables. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21%, and for loans, a state tax rate of 4.45%, which is net of federal tax benefit.

Previous wording

Net interest income and net interest margin are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix as well as loan and deposit pricing decisions. External factors include changes in market interest rates, competition and the shape of the interest rate yield curve. The addition of The First’s loan portfolio and strong organic loan growth in 2025 were the largest contributing factors to the increase in net interest income for the three months ended March 31, 2026, as compared to the same period in 2025. Lower interest rates and the addition of The First’s deposits generated a positive impact to both the cost and mix of our funding sources. The Company has continued its efforts to mitigate increases in the cost of funding due to competition or otherwise through maintaining noninterest-bearing deposits and staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment.

Current wording

Net interest income and net interest margin are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix as well as loan and deposit pricing decisions. External factors include changes in market interest rates, competition and the shape of the interest rate yield curve. The addition of The First’s loan portfolio and strong organic loan growth in 2025 were the largest contributing factors to the increase in net interest income for the three and six months ended June 30, 2026, as compared to the same periods in 2025. Lower interest rates, driven by the Federal Reserve’s rate cuts in late 2025, and the addition of The First’s deposits generated a positive impact to both the cost and mix of our funding sources. The Company has continued its efforts to mitigate increases in the cost of funding, whether due to competition or otherwise, through maintaining noninterest-bearing deposits and staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment.

Previous wording

The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three months ended March 31, 2026, as compared to the same period in 2025 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):

Current wording

The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three and six months ended June 30, 2026, as compared to the same periods in 2025 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):

Previous wording

The increase in interest income, on a tax equivalent basis, for the three months ended March 31, 2026, as compared to the same time period in 2025 is due primarily to the addition of The First’s earning assets.

Current wording

The aforementioned rate cuts by the Federal Reserve in the second half of 2025 resulted in a decline in interest income on loans and interest-bearing balances with banks, which was the primary driver of the decrease in interest income, on a tax equivalent basis, for the three months ended June 30, 2026, as compared to the same time period in 2025. The addition of The First’s earning assets was the primary driver of the increase in interest income, on a tax equivalent basis, for the six months ended June 30, 2026, as compared to the same time period in 2025.

Previous wording

The following table presents the percentage of total average earning assets, by type and yield, for the periods presented:

Current wording

The following tables present the percentage of total average earning assets, by type and yield, for the periods presented:

Previous wording

For the first quarter of 2026, interest income on loans held for investment, on a tax equivalent basis, increased $99,621 to $299,125 from $199,504 for the same period in 2025. Driven largely by the addition of $5,173,334 in loans held for investment through our merger with The First on April l, 2025, the year-to-date average balance of loans held for investment increased $6,068,246 from March 2025, thereby resulting in the increase in interest income on loans held for investment for the three months ended March 31, 2026, as compared to the same period in 2025.

Current wording

For the second quarter of 2026, interest income on loans held for investment, on a tax equivalent basis, decreased $4,722 to $300,112 from $304,834 for the same period in 2025. For the six months ended June 30, 2026, interest income on loans held for investment, on a tax equivalent basis, increased $94,899 to $599,237 from $504,338 for the same period in 2025. The decrease in interest income on loans held for investment for the second quarter of 2026 as compared to the same period in 2025 is due to the aforementioned rate cuts by the Federal Reserve. The increase in interest income on loans held for investment for the six months ended June 30, 2026, as compared to the same period in 2025, was driven largely by the addition of $5,173,334 in loans held for investment through our merger with The First on April l, 2025, resulting in an increase of $4,774,908 in the year-to-date average balance of loans held for investment from June 2025.

Previous wording

Investment income, on a tax equivalent basis, increased $20,989 to $33,403 for the first quarter of 2026 from $12,414 for the first quarter of 2025. The increase in investment income, on a tax equivalent basis, was primarily due to the acquisition of The First’s investment portfolio. The tax equivalent yield on the investment portfolio for the first quarter of 2026 was 3.50%, up 118 basis points from 2.32% for the same period in 2025.

Current wording

Investment income, on a tax equivalent basis, increased $7,571 to $36,797 for the second quarter of 2026 from $29,226 for the second quarter of 2025. Investment income, on a tax equivalent basis, increased $28,560 for the six months ended June 30, 2026 to $70,200 from $41,640 for the same period in 2025. The increase in investment income, on a tax equivalent basis, for the second quarter of 2026, as compared to the same period in 2025, was driven by a higher average balance of securities. Accelerated bond discount accretion also contributed $2,672 to net interest income in the second quarter of 2026. The increase in investment income, on a tax equivalent basis, for the six months ended June 30, 2026, as compared to the same period in 2025, was primarily due to the acquisition of The First’s investment portfolio. The tax equivalent yield on the investment portfolio for the second quarter of 2026 was 3.76%, up 48 basis points from 3.28% for the same period in 2025. The tax equivalent yield on the investment portfolio for the six months ended June 30, 2026 was 3.63%, up 72 basis points from 2.91% for the same period in 2025.

Previous wording

Interest expense was $114,561 for the first quarter of 2026 as compared to $86,133 for the same period in 2025. The increase in interest expense was primarily due to the assumption of The First’s deposits and borrowed funds.

Current wording

Interest expense was $117,686 for the second quarter of 2026 as compared to $125,039 for the same period in 2025. Interest expense was $232,247 for the six months ended June 30, 2026 as compared to $211,172 for the same period in 2025. The decrease in interest expense for the second quarter of 2026 as compared to the same period in 2025 was driven largely by the aforementioned rate cuts during the second half of 2025. The increase in interest expense for the first half of 2026 as compared to the first half of 2025 was primarily due to the assumption of The First’s deposits and borrowed funds.

Previous wording

The cost of total deposits was 1.94% and 2.22% for the first quarter of 2026 and 2025, respectively. The increase in deposit expense and decrease in cost is attributable to the acquisition of The First’s deposits. The cost of total deposits was also affected by the Federal Reserve’s rate cuts in the third and fourth quarters of 2025. The Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous, to address liquidity needs or as otherwise deemed advisable due to market conditions.

Current wording

The cost of total deposits was 1.96% and 2.12% for the second quarter of 2026 and 2025, respectively, and 1.95% and 2.16% for the six months ended June 30, 2026 and 2025, respectively. The cost of total deposits for both the second quarter and the first half of 2026 was affected by the aforementioned rate cuts by the Federal Reserve. The increase in deposit expense and decrease in cost for the first half of 2026 as compared to the first half of 2025 is attributable to the acquisition of The First’s deposits. The Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous, to address liquidity needs or as otherwise deemed advisable due to market conditions.

Previous wording

The increase in interest expense on borrowings is due to higher average short-term borrowings and the additional subordinated notes and other long-term borrowings added as a result of the merger with The First.

Current wording

The increase in interest expense on borrowings for the six months ended June 30, 2026 is due to higher average short-term borrowings and the additional subordinated notes and other long-term borrowings added as a result of the merger with The First.

Previous wording

Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our wealth management and mortgage banking operations, realized gains and losses on the sale of securities and all other noninterest income. Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. The acquisition of The First’s operations was the primary driver of the increase in noninterest income for the three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our wealth management and mortgage banking operations and all other noninterest income. Other noninterest income includes income from our SBA banking division, our capital markets division, dividends earned on our stock in the Federal Home Loan Bank and the Federal Reserve Bank, and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. The acquisition of The First’s operations was the primary driver of the increase in noninterest income for the six months ended June 30, 2026 as compared to the same period in 2025.

Previous wording

Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of mortgage loans to be sold totaled $342,536 in the first quarter of 2026 compared to $303,158 for the same period in 2025. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.

Current wording

Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of mortgage loans to be sold totaled $410,416 in the second quarter of 2026 compared to $491,627 for the same period in 2025. Originations of mortgage loans to be sold totaled $752,952 in the six months ended June 30, 2026 compared to $794,785 for the same period in 2025. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.

Previous wording

Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. The acquisition of The First’s operations was the primary driver of the increase in noninterest expense for the three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. The decrease in noninterest expense for the second quarter of 2026 as compared to the same period in 2025 is due to the lack of merger and conversion related expenses in the second quarter of 2026 as well as the realization of cost savings in salaries and employee benefits and data processing driven primarily by synergies realized from the acquisition of The First. At the same time, the acquisition of The First’s operations was the primary driver of the increase in noninterest expense for the six months ended June 30, 2026 as compared to the same period in 2025.

Previous wording

The efficiency ratio is a measure of productivity in the banking industry. (This ratio is a measure of our ability to turn expenses into revenue. That is, the ratio is designed to reflect the percentage of one dollar that we must expend to generate a dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The improvement in our efficiency ratio for the three months ended March 31, 2026 as compared to the same period in 2025 was driven by revenue growth while at the same time controlling noninterest expenses and eliminating duplicative expenses during the integration of The First into our business model.

Current wording

The efficiency ratio is a measure of productivity in the banking industry. (This ratio is a measure of our ability to turn expenses into revenue. That is, the ratio is designed to reflect the percentage of one dollar that we must expend to generate a dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The improvement in our efficiency ratio for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was driven by revenue growth while at the same time controlling noninterest expenses and eliminating duplicative expenses during the integration of The First.

Previous wording

The increase in the Company’s income before income taxes for the three months ended March 31, 2026 as compared to the same period in 2025 was the primary driver of the increase in income taxes.

Current wording

The increase in the Company’s income before income taxes for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was the primary driver of the increase in income taxes.

Previous wording

Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses arising at the time of foreclosure of properties are charged against the allowance for credit losses. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated Statements of Income.

Current wording

Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses and gains arising at the time of foreclosure of properties are charged against or credited to, as applicable, the allowance for credit losses. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated Statements of Income.

Previous wording

Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for credit losses on loans at March 31, 2026. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due on which interest was still accruing were $68,597 at March 31, 2026 as compared to $89,162 at December 31, 2025.

Current wording

Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for credit losses on loans at June 30, 2026. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due on which interest was still accruing were $31,141 at June 30, 2026 as compared to $89,162 at December 31, 2025.

Previous wording

Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans. The allowance for credit losses is available to absorb credit losses inherent in the loans held for investment portfolio. Loan losses are charged against the allowance for credit losses when management confirms the uncollectability of a loan balance. Subsequent recoveries, if any, are credited to the allowance. Management evaluates the adequacy of the allowance on a quarterly basis.The following table presents the allocation of the allowance for credit losses on loans and the percentage of each loan category to total loans for each of period presented.

Current wording

Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans. The allowance for credit losses is available to absorb credit losses inherent in the loans held for investment portfolio. Loan losses are charged against the allowance for credit losses when management confirms the uncollectability of a loan balance. Subsequent recoveries, if any, are credited to the allowance. The provision for credit losses on loans charged to operating expense is an amount that, in the judgment of management, is necessary to maintain the allowance for credit losses on loans at a level adequate to meet the inherent risks of losses in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. The following table presents the allocation of the allowance for credit losses on loans and the percentage of each loan category to the total allowance for each of the periods presented.

Previous wording

The increase in the allowance for credit losses in the first quarter of 2026 as compared to December 31, 2025 was primarily driven by an increase in non-performing loans, changes in the macroeconomic environment and qualitative factors partially moderated by reduction in the loan portfolio. The provision increased in select residential related pools due to the risk of potential stagflation and value declines. The Company’s allowance for credit loss considers current conditions, economic projections, primarily the national unemployment rate and GDP over a reasonable and supportable period of two years, historical loss data, and environmental factors. For more information about the allowance for credit losses, see the “Critical Accounting Estimates” section in this Item below. The provision for credit losses on loans charged to operating expense is an amount that, in the judgment of management, is necessary to maintain the allowance for credit losses on loans at a level adequate to meet the inherent risks of losses in our loan portfolio. The Company recorded a provision for credit losses on loans of $4,224 or 0.09% of average loans (annualized), for the three months ended March 31, 2026, as compared to $2,050, or 0.06% of average loans (annualized), during the three months ended March 31, 2025. The table below reflects the activity in the allowance for credit losses on loans for the periods presented:

Current wording

The increase in the allowance for credit losses as of June 30, 2026 as compared to December 31, 2025 was primarily driven by loan growth, including both acquisition-related and organic growth, coupled with changes in the macroeconomic environment and qualitative factors partially moderated by improvements in the asset credit quality. Provisioning for select residential-related pools increased due to the risk of a potential period of economic stagnation accompanied by persistent inflationary pressures as well as declines in collateral value. The Company’s allowance for credit loss considers current conditions, economic projections, primarily the national unemployment rate and GDP over a reasonable and supportable period of two years, historical loss data, and environmental factors. For more information about the allowance for credit losses, see the “Critical Accounting Estimates” section in this Item below. The Company recorded a provision for credit losses on loans of $1,166 or 0.02% of average loans (annualized), for the three months ended June 30, 2026, as compared to $75,400, or 1.64% of average loans (annualized), during the three months ended June 30, 2025. The provision for credit losses on loans in the second quarter of 2025 was primarily driven by the Day 1 acquisition provision related to the merger with The First. The table below reflects the activity in the allowance for credit losses on loans for the periods presented:

Previous wording

Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments. The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the table below.

Current wording

Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments. The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the tables below.

Previous wording

Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. Within the next twelve months the securities portfolio is forecasted to generate cash flow through principal payments and maturities equal to approximately 14.09% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments. At March 31, 2026, securities with a carrying value of $1,746,741 were pledged to secure government, public fund and trust deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $1,760,542 similarly pledged at December 31, 2025.

Current wording

Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. Within the next twelve months the securities portfolio is forecasted to generate cash flow through principal payments and maturities equal to approximately 13.32% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments. At June 30, 2026, securities with a carrying value of $1,638,865 were pledged to secure government, public fund and trust deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $1,760,542 similarly pledged at December 31, 2025.

Previous wording

Other sources available for meeting liquidity needs include federal funds purchased, short and long-term advances from the FHLB and borrowings from the Federal Reserve Discount Window. Interest is charged at the prevailing market rate on federal funds purchased, FHLB advances and borrowings from the Federal Reserve Discount Window. There were $300,000 and $550,000 in short-term borrowings from the FHLB at March 31, 2026 and December 31, 2025, respectively. Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no outstanding long-term advances with the FHLB at March 31, 2026 or December 31, 2025. The total amount of the remaining credit available to us from the FHLB at March 31, 2026 was $5,480,190. The credit available at the Federal Reserve Discount Window at March 31, 2026 was $706,245 with no borrowings outstanding as of such date. We also maintain lines of credit with other commercial banks totaling $140,000. These are unsecured lines of credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at March 31, 2026 or December 31, 2025.

Current wording

Other sources available for meeting liquidity needs include federal funds purchased, short and long-term advances from the FHLB and borrowings from the Federal Reserve Discount Window. Interest is charged at the prevailing market rate on federal funds purchased, FHLB advances and borrowings from the Federal Reserve Discount Window. There were $310,000 and $550,000 in short-term borrowings from the FHLB at June 30, 2026 and December 31, 2025, respectively. Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no outstanding long-term advances with the FHLB at June 30, 2026 or December 31, 2025. The total amount of the remaining credit available to us from the FHLB at June 30, 2026 was $5,519,985. The credit available at the Federal Reserve Discount Window at June 30, 2026 was $1,067,639 with no borrowings outstanding as of such date. We also maintain lines of credit with other commercial banks totaling $140,000. These are unsecured lines of credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at June 30, 2026 or December 31, 2025.

Previous wording

Finally, we can access the capital markets to meet liquidity needs. The Company maintains a shelf registration statement with the SEC. The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will file with the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes or as otherwise described in the prospectus supplement applicable to the offering and could include the expansion of the Company’s banking and wealth management operations as well as other business opportunities. Our recently-completed $300,000 subordinated notes offering described above in Note 15, “Subsequent Events” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, and our common stock offering completed in July 2024 reflect our access of the capital markets as described in this paragraph. We have accessed the capital markets to generate liquidity in the form of subordinated notes in previous years, and we have also assumed subordinated notes as part of acquisitions. The carrying value of subordinated notes, net of unamortized debt issuance costs, was $359,434 at March 31, 2026.

Current wording

Finally, we can access the capital markets to meet liquidity needs. The Company maintains a shelf registration statement with the SEC. The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will file with the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes or as otherwise described in the prospectus supplement applicable to the offering and could include the expansion of the Company’s banking and wealth management operations as well as other business opportunities. Our $300,000 subordinated notes offering completed in May 2026 and our common stock offering completed in July 2024 reflect our access of the capital markets as described in this paragraph. The carrying value of subordinated notes, net of unamortized debt issuance costs, was $655,284 at June 30, 2026.

Previous wording

Cash provided by operating activities for the three months ended March 31, 2026 was $100,055, as compared to $50,098 for the three months ended March 31, 2025.

Current wording

Cash provided by operating activities for the six months ended June 30, 2026 was $182,486, as compared to $19,535 for the six months ended June 30, 2025.