FIRST INTERSTATE BANCSYSTEM INC

Previous wording

In addition to financial measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this document contains non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.

Current wording

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”) in the United States, this document contains non-GAAP financial measures where management believes it would be helpful to understand our results of operations or financial position. The Company’s management believes that the non-GAAP financial measures provide additional information about ongoing operations and enhance comparability of results of operations with prior periods by presenting financial results without the impact of items or events that may obscure trends in the Company’s underlying performance. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.

Previous wording

Fully-Taxable Equivalent Basis. Interest income, yields, and ratios on an FTE basis are considered non-GAAP financial measures. Management believes net interest income on an FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent. We encourage readers to consider the Consolidated Financial Statements and other financial information contained in this Form 10-K in their entirety, and not to rely on any single financial measure.

Current wording

Fully-Taxable Equivalent Basis. The Company adjusts its net interest income to include its interest income on a fully-taxable equivalent (FTE) basis and further adjusts to exclude purchase accounting interest accretion on acquired loans. Interest income, yields, and ratios on an FTE basis are considered non-GAAP financial measures. Net interest margin (FTE) is calculated as annualized net interest income on an FTE basis divided by average earning assets. Management believes net interest income on an FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent. These measures are considered standard measures of comparison within the banking industry. We encourage readers to consider the Consolidated Financial Statements and other financial information contained in this Form 10-K in their entirety, and not to rely on any single financial measure. See Non-GAAP Financial Measures included herein for a reconciliation to the most directly comparable GAAP financial measures.

Previous wording

We are a financial and bank holding company headquartered in Billings, Montana. As of December 31, 2024, we had consolidated assets of $29.1 billion, deposits of $23.0 billion, loans held for investment of $17.8 billion, and total stockholders’ equity of $3.3 billion.

Current wording

We are a financial and bank holding company headquartered in Billings, Montana. As of December 31, 2025, we had consolidated assets of $26.6 billion, deposits of $22.1 billion, loans held for investment of $15.2 billion, and total stockholders’ equity of $3.4 billion.

Previous wording

As of December 31, 2024, we had 300 banking offices in operation, including branches and detached drive-up facilities, in communities across Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming. Through our bank subsidiary, FIB, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, governmental entities, and others throughout our market areas. Our clients participate in a wide variety of industries, including:

Current wording

As of December 31, 2025, we operated 289 banking offices, including branches and detached drive-up facilities, in communities across twelve states— Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming. Through our bank subsidiary, First Interstate Bank, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, government entities, and others throughout our market areas. We are proud to provide financial services and products to clients that participate in a wide variety of industries, including:

Previous wording

Our principal expenses include: (i) interest expense on deposit accounts and other borrowings; (ii) salaries and employee benefits; (iii) information technology and communication costs primarily associated with maintaining loan and deposit functions; (iv) furniture, equipment, and occupancy expenses for maintaining our facilities; (v) professional fees, including FDIC insurance assessments; (vi) income tax expense; (vii) provisions for credit losses; (viii) intangible amortization; (ix) other real estate owned expenses; and (x) other segment expenses including legal expenses, advertising and promotion, credit card rewards expense, fees associated with originating and closing loans, insurance, and other expenses necessary to support our employees and service our clients. From time to time, we have incurred, and may incur in the future, costs related to our strategic acquisitions and other transactions.

Current wording

Our principal expenses include: (i) interest expense on deposit accounts and other borrowings; (ii) salaries and employee benefits; (iii) information technology and communication costs primarily associated with maintaining loan and deposit functions; (iv) furniture, equipment, and occupancy expenses for maintaining our facilities; (v) professional fees, including FDIC insurance assessments; (vi) income tax expense; (vii) provisions for credit losses; (viii) intangible amortization; (ix) other real estate owned expenses; and (x) other segment expenses including advertising and promotion, donations, credit card rewards expense, fees associated with originating and closing loans, insurance, and other expenses necessary to support our employees and service our clients. From time to time, we have incurred, and may incur in the future, costs related to our strategic acquisitions, divestitures and other transactions.

Previous wording

Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed, adjustable, and variable rate loans. Our real estate loans comprise commercial real estate, construction (including residential, commercial, and land development construction loans), residential, agricultural, and other real estate loans. Fluctuations in the loan portfolio are directly related to the economies of the communities we serve. While each loan we originate must meet minimum underwriting standards we establish through our credit policies, our bankers are granted limited discretion to approve and price loans within pre-approved limits which assures that we are responsive to community needs in each market area and remain competitive. We fund our loan portfolio primarily with the core deposits from our clients and cash flows off of the investment portfolio. Historically, we have not relied on brokered deposits as a source of funding. We have also utilized wholesale funding sources to a limited extent. For additional information about our underwriting standards and loan approval process, see “Business—Lending Activities,” included in Part I, Item 1 of this report.

Current wording

Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed, adjustable, and variable rate loans. Our real estate loans comprise commercial real estate, construction (including residential, commercial, and land development construction loans), residential, agricultural, and other real estate loans. Fluctuations in the loan portfolio are directly related to the economies of the communities we serve. While each loan we originate must meet minimum underwriting standards we establish through our credit policies, our bankers are granted limited discretion to approve and price loans within pre-approved limits which assures that we are responsive to community needs in each market area and remain competitive. We fund our loan portfolio primarily with the core deposits from our clients. Historically, we have not relied on brokered deposits as a source of funding. We have also utilized wholesale funding sources to a limited extent. For additional information about our underwriting standards and loan approval process, see “Business—Lending Activities,” included in Part I, Item 1 of this report.

Previous wording

In January 2025, we announced our plans to stop originating indirect loans as of February 28, 2025, in which indirect loans are created when we purchase consumer loan contracts advanced for the purchase of automobiles, boats, and other consumer goods from the consumer product dealer network within the market areas we serve. The decision was based on the operating performance of the indirect loan business and our desire to focus our resources on relationship banking opportunities. At December 31, 2024, indirect loans represented approximately 4.0% of loan balances and 77.4% of our consumer loan portfolio. Approximately 30% to 40% of our indirect loan balances are estimated to amortize over the 12 months after we stop originating indirect loans.

Current wording

In January 2025, we announced our plans to stop originating indirect loans as of February 28, 2025. Under our indirect lending program, indirect loans were created when we purchased consumer loan contracts advanced for the purchase of automobiles, boats, recreational vehicles, and other consumer goods from the consumer product dealer network within the market areas we serve. At December 31, 2025, indirect loans represented approximately 3.1% of loan balances and 78.4% of our consumer loan portfolio.

Previous wording

As of December 31, 2024, our FDIC insured deposits consisted of 64.4% of total deposits, including accounts eligible for pass-through insurance. As of February 25, 2025, the Bank had available borrowing capacity of $4.4 billion with the Federal Home Loan Bank (“FHLB”) and $1.9 billion with the Federal Reserve Bank (“FRB”) based on pledged investment securities and loan collateral.

Current wording

As of December 31, 2025, our FDIC insured deposits were 63.8% of total deposits, including accounts eligible for pass-through insurance. As of February 19, 2026, the Bank had available borrowing capacity of $5.0 billion with the Federal Home Loan Bank (“FHLB”) and $3.9 billion with the Federal Reserve Bank (“FRB”) based on pledged investment securities and loan collateral.

Previous wording

The Federal Reserve stated its current objective is to return the rate of inflation to 2.0% and it is closely monitoring the progress that has been made to achieve this goal. The Federal Reserve increased short-term interest rates 525 basis points between March 16, 2022 and July 29, 2023. With general inflationary pressures easing since July 2023, the Federal Reserve had paused any further changes to short-term interest rates only to decrease them by 100 basis points between September and December 2024. While many financial industry experts have speculated that rates will decline further in the near-term, the Federal Reserve has not yet provided definitive guidance on any further changes to short-term interest rates.

Current wording

With general inflationary pressures easing since July 2023, the Federal Reserve had paused any further changes to short-term interest rates until September 2024 and then decreased them by a total of 100 basis points in 2024 and an additional 75 basis points in 2025.

Previous wording

The Company’s quarterly yield on interest earning assets increased to 4.86% as of December 31, 2024 from 4.83% as of September 30, 2024, and 4.69% as of December 31, 2023.

Current wording

The Company’s quarterly yield on interest earning assets decreased to 4.67% as of December 31, 2025 from 4.73% as of September 30, 2025, and decreased from 4.86% as of December 31, 2024.

Previous wording

The sustained elevation of short-term interest rates impacted the Company’s cost of funds, primarily resulting from the shift of noninterest-bearing deposits into higher-cost, interest-bearing, and time deposit balances as well as variable rate debt. The Company’s cost of funds decreased to 1.72% during the three months ended December 31, 2024, from 1.86% during the three months ended September 30, 2024, and was stable compared to the three months ended December 31, 2023. During the fourth quarter of 2024, the lower interest expense resulting from decreased borrowings resulted in an increase of the Company’s net interest margin during the three months ended December 31, 2024 to 3.18% from 3.01% during the three months ended September 30, 2024 and from 2.99% for the three months ended December 31, 2023. The Company’s FTE net interest margin increased to 3.20% during the three months ended December 31, 2024, from 3.04% during the three months ended September 30, 2024, and from 3.01% during the three months ended December 31, 2023.

Current wording

The recent declines in short-term interest rates have benefited the Company’s cost of funds, primarily resulting in reduced rates on variable rate debt and deposits. The Company’s cost of funds decreased to 1.35% during the three months ended December 31, 2025, from 1.45% during the three months ended September 30, 2025, and decreased from 1.72% during the three months ended December 31, 2024. During the fourth quarter of 2025, the changes in the mix and cost of funds was partially offset by the change in the mix and yield on earning assets, resulting in an increase of the Company’s net interest margin during the three months ended December 31, 2025 to 3.36% from 3.34% during the three months ended September 30, 2025 and from 3.18% for the three months ended December 31, 2024. The Company’s FTE net interest margin, a non-GAAP financial measure, increased to 3.38% during the three months ended December 31, 2025, from 3.36% during the three months ended September 30, 2025, and increased from 3.20% during the three months ended December 31, 2024. For annual comparisons refer to “Results of Operations – Net Interest Income” included in this report below.

Previous wording

As a banking institution, we manage and evaluate our financial condition and our results of operations. We monitor and evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against both our own historical levels as well as the financial condition and performance of comparable banking institutions in our region and nationally.

Current wording

As a banking institution, we manage and evaluate our financial condition and our results of operations. We monitor and evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as the various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against both our own historical levels as well as the financial condition and performance of comparable banking institutions in our region and nationally.

Previous wording

Principal tools we use to manage and evaluate the results of our operations include tracking performance through metrics such as return on average equity, return on average assets, efficiency ratio, noninterest expense as a percent of total average assets, earnings per share, credit quality metrics, total shareholder return, net interest income, noninterest income, noninterest expense, and net income.

Current wording

Principal tools we use to manage and evaluate the results of our operations include tracking performance through metrics such as return on average equity, return on average tangible common equity, return on average assets, efficiency ratio, noninterest expense as a percent of total average assets, earnings per share, credit quality metrics, total shareholder return, net interest income, noninterest income, noninterest expense, and net income.

Previous wording

Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of similar bank holding companies on factors that include return on average assets, return on average equity, total shareholder return, and growth in earnings.

Current wording

Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of similar bank holding companies on factors that include return on average assets, return on average equity, return on average tangible common equity, total shareholder return, and growth in earnings.

Previous wording

We manage and evaluate our financial condition by focusing on liquidity, the diversification and quality of our loans, the adequacy of our ACL, the diversification and terms of our deposits, the level of our short-term borrowings and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure, and the adequacy of our capital levels. We seek to maintain sufficient levels of cash and investment securities to meet potential payment and funding obligations, and we evaluate our liquidity on factors that include the levels of cash and highly liquid assets relative to our liabilities, the quality and maturities of our investment securities, the ratio of loans held for investment to deposits, and any reliance on brokered certificates of deposit or other wholesale funding sources.

Current wording

We manage and evaluate our financial condition by focusing on liquidity, the diversification and quality of our loans, the adequacy of our allowance for credit losses, the diversification and terms of our deposits, the level of our short-term borrowings and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure, and the adequacy of our capital levels. We seek to maintain sufficient levels of cash and investment securities to meet potential payment and funding obligations, and we evaluate our liquidity on factors that include the levels of cash and highly liquid assets relative to our liabilities, the quality and maturities of our investment securities, the ratio of loans held for investment to deposits, and any reliance on brokered certificates of deposit or other wholesale funding sources.

Previous wording

We seek to maintain a diverse and high-quality loan portfolio and evaluate our asset quality on factors that include the allocation of our loans among loan types, credit exposure to any single borrower or industry type, non-performing assets as a percentage of loans held for investment and other real estate owned (“OREO”), and loan charge-offs as a percentage of average loans. We maintain our ACL based on an estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period at each balance sheet date.

Current wording

We seek to maintain a diverse and high-quality loan portfolio and evaluate our asset quality on factors that include the allocation of our loans among loan types, credit exposure to any single borrower or industry type, non-performing assets as a percentage of loans held for investment and other real estate owned (“OREO”), and loan charge-offs as a percentage of average loans. We maintain our allowance for credit losses based on an estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period as of the balance sheet date.

Previous wording

The ACL represents our estimate of credit losses expected over the life of loans at each balance sheet date, which is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Increases in the ACL are recorded through net income as a provision for credit loss expense. Decreases in the ACL are recorded through net income as a reversal of provision for credit loss expense. Loans are charged-off against the ACL when management confirms the uncollectibility of a loan balance. Expected recoveries recorded do not exceed the aggregate of loan amounts previously charged-off. The ACL represents management’s estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period with one-year reversion period for economic conditions.

Current wording

The allowance for credit losses represents our estimate of credit losses expected over the life of loans, which is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Increases in the allowance for credit losses are recorded through net income as a provision for credit loss expense. Decreases in the allowance for credit losses are recorded through net income as a reversal of provision for credit loss expense. Loans are charged-off against the allowance for credit losses when management confirms the uncollectibility of a loan balance. Expected recoveries recorded do not exceed the aggregate of loan amounts previously charged-off. The allowance for credit losses represents management’s estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period with one-year reversion period for economic conditions.

Previous wording

We perform a quarterly assessment of the risks inherent in our loan portfolio, as well as a detailed review of each significant loan we have assessed to have weaknesses that does not share common risk characteristics with other loans. Based on this analysis, we record a provision for credit losses in order to maintain the ACL at appropriate levels. In determining the ACL, management estimates the ACL balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Current wording

We perform a quarterly assessment of the risks inherent in our loan portfolio, as well as a detailed review of each significant loan we have assessed to have weaknesses that does not share common risk characteristics with other loans. Based on this analysis, we record a provision for credit losses in order to maintain the allowance for credit losses at appropriate levels. In determining the allowance for credit losses, management estimates the allowance for credit losses balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Previous wording

The ACL is maintained at an amount we believe to be sufficient to provide for estimated losses expected over the life of the loans at each balance sheet date resulting from management’s assessment of the quantitative and qualitative factors utilized to determine the ACL. Management monitors trends in the loan portfolio, including changes in the levels of past due, internally classified, and non-performing loans. Changes in the estimates and assumptions are possible and may have a material impact on our ACL, and as a result, on our consolidated financial statements or results of operations.

Current wording

The allowance for credit losses is maintained at an amount we believe to be sufficient to provide for estimated losses expected over the life of the loans at each balance sheet date resulting from management’s assessment of the quantitative and qualitative factors utilized to determine the allowance for credit losses. Management monitors trends in the loan portfolio, including changes in the levels of past due, internally classified, and non-performing loans. Changes in the estimates and assumptions are possible and may have a material impact on our allowance for credit losses, and as a result, on our consolidated financial statements or results of operations.

Previous wording

See “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” for a description of the methodology used to determine the ACL and our policy pertaining to acquired loans. See “Notes to Consolidated Financial Statements—Loans” for a discussion on the factors driving changes in the amount of the ACL. See also Part I, Item 1A, “Risk Factors—Credit Risks.”

Current wording

See “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” for a description of the methodology used to determine the allowance for credit losses and our policy pertaining to acquired loans. See “Notes to Consolidated Financial Statements—Loans Held for Investment” for a discussion on the factors driving changes in the amount of the allowance for credit losses. See also Part I, Item 1A, “Risk Factors—Credit Risks.”

Previous wording

The following discussion and analysis is intended to provide detail about the results of operations by comparing the years ended December 31, 2024 to December 31, 2023. A similar discussion and analysis that compares the fiscal year 2023 to the fiscal year ended December 31, 2022, may be found in Part II, Item 7, “Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024, which is incorporated herein by reference.

Current wording

The following discussion and analysis is intended to provide detail about the results of operations by comparing the years ended December 31, 2025 to December 31, 2024. A similar discussion and analysis that compares the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2023, may be found in Part II, Item 7, “Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, which is incorporated herein by reference.

Previous wording

Net interest income decreased $57.2 million during 2024, as compared to the same period in 2023, primarily due to increased interest income on loans as a result of higher loan yields, which was more than offset by higher interest expense on deposits and declines in interest and dividends on investment securities as a result of a decrease in average investment security balances during the comparable periods.

Current wording

Net interest income increased $3.8 million during 2025, as compared to 2024, primarily due to lower costs of funds as a result of decreased interest expense due to lower average other borrowed funds balances and decreased interest expense as a result of lower rates on savings and time deposits, which was partially offset by lower interest and dividends on investment securities and loans as a result of a decrease in average balances during the comparable periods.

Previous wording

Net interest income included interest accretion related to the fair value of acquired loans of $24.6 million during 2024 as compared to $20.4 million in 2023, of which $7.2 million was the result of early loan payoffs during 2024, as compared to $2.5 million in 2023. There were$5.5 million andno material recoveries of previously charged-off loan interest in 2024 and 2023, respectively.

Current wording

Net interest income included interest accretion related to the fair value of acquired loans of $15.0 million during 2025 as compared to $24.6 million in 2024, of which $3.0 million was the result of early loan payoffs during 2025, as compared to $7.2 million in 2024.

Previous wording

Our net interest margin ratio decreased 10 basis points to 3.02% during 2024, as compared to 3.12% in 2023. Our net FTE interest margin ratio, a non-GAAP financial measure, decreased 10 basis points to 3.04% during 2024, as compared to 3.14% in 2023. Exclusive of the impact of interest accretion on acquired loans, our 2024 net FTE interest margin ratio decreased 12 basis points over our similarly calculated net interest margin ratio in 2023.

Current wording

Our net interest margin ratio increased 28 basis points to 3.30% during 2025, as compared to 3.02% in 2024. Our net FTE interest margin ratio, a non-GAAP financial measure, increased 28 basis points to 3.32% during 2025, as compared to 3.04% in 2024. Exclusive of the impact of interest accretion on acquired loans, our 2025 net FTE interest margin ratio increased 31 basis points over our similarly calculated net interest margin ratio in 2024.

Previous wording

The following table presents, for the periods indicated, condensed average balance sheet information using daily average balances, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest-bearing liabilities.

Current wording

For the periods indicated, the following table presents average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest-bearing liabilities.

Previous wording

The table below provides a reconciliation of the GAAP measure of net interest margin to the non-GAAP measure of net FTE interest margin.

Current wording

The table below provides a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure.

Previous wording

Fluctuations in the provision for credit losses reflect charge-offs and recoveries as well as management’s estimate of possible credit losses based upon the composition of our loan portfolio, evaluation of the borrowers’ ability to repay, collateral value underlying loans, loan loss trends, and estimated effects of current and forecasted economic conditions on our loans held for investment and investment securities portfolios.

Current wording

Fluctuations in the provision for credit losses reflect charge-offs and recoveries as well as management’s estimate of possible credit losses based upon the composition of our loan portfolio, evaluation of the borrowers’ ability to repay, collateral value of underlying loans, loan loss trends, and estimated effects of current and forecasted economic conditions on our loans held for investment and investment securities portfolios.

Previous wording

During 2024, the Company recorded a provision for credit losses of $67.8 million, as compared to a $32.2 million provision for credit losses in 2023. The 2024 provision includes a provision for credit losses of $80.9 million related to loans held for investment, reduction of credit losses of $13.2 million related to unfunded commitments, and a provision for credit losses of $0.1 million related to held-to-maturity securities. The provision incorporated the impact of credit movement during the year, changes in loan balances, the attributes of the current portfolio, asset quality metrics, a review of the current economic outlook, and net charge-offs of $104.5 million, or 0.57% of average loans outstanding, for 2024, primarily consisting of a $49.3 million commercial and industrial loan, a $15.9 million commercial real estate loan, and $13.0 million related to two construction real estate loans, compared to $23.5 million, or 0.13% of average loans outstanding in 2023.

Current wording

During 2025, the Company recorded a provision for credit losses of $26.8 million, as compared to a $67.8 million provision for credit losses in 2024. The 2025 provision includes a provision for credit losses of $26.5 million related to loans held for investment and $0.7 million related to unfunded commitments, and a reduction of credit losses of $0.4 million related to held-to-maturity securities. The provision incorporated the impact of credit movement during the year, changes in loan balances, the attributes of the current portfolio, asset quality metrics, a review of the current economic outlook, and net charge-offs. Net charge-offs for 2025 were $39.2 million, or 0.24% of average loans outstanding compared to $104.5 million, or 0.57% of average loans outstanding in 2024.

Previous wording

For information regarding our non-performing loans, see “Non-Performing Assets” included herein. For information regarding our ACL, see “Financial Condition—Allowance for Credit Losses” included herein.

Current wording

For information regarding our non-performing loans, see “Non-Performing Assets” included herein. For more information on our allowance for credit losses, see “Financial Condition—Allowance for Credit Losses” included herein.

Previous wording

Noninterest income also contributes to our operating results with fee-based revenues such as payment services, mortgage banking and wealth management revenues, service charges on deposit accounts, and other service charges, commissions, and fees. The following table presents the composition of our noninterest income as of the dates indicated:

Current wording

Noninterest income also contributes to our operating results with fee-based revenues such as payment services, mortgage banking and wealth management revenues, service charges on deposit accounts, and other service charges, commissions, and fees. The following table presents the composition of our noninterest income for the periods indicated:

Previous wording

Noninterest income increased $31.1 million in 2024 as compared to the same period in 2023. Significant components of these fluctuations are discussed below.

Current wording

Noninterest income increased $55.3 million in 2025 as compared to 2024. Significant components of these fluctuations are discussed below.

Previous wording

Payment services revenues consist of interchange revenue that merchants pay for processing electronic payment transactions, associated fees earned from the issuance of business credit cards, consumer credit cards, and debit cards, and ATM service fees. Payment services revenues decreased $2.8 million in 2024 as compared to the same period in 2023, mainly as result of decreased business credit card volume.

Current wording

Payment services revenues consist of interchange revenue that merchants pay for processing electronic payment transactions, associated fees earned from the issuance of business credit cards, consumer credit cards (prior to the outsourcing of the consumer credit card business in the second quarter of 2025), debit cards, and ATM service fees. Payment services revenues decreased $5.7 million in 2025 as compared to 2024, mainly related to the outsourcing of consumer credit cards in the second quarter of 2025.

Previous wording

Wealth management revenues are principally comprised of fees earned for management of trust assets and investment services. Wealth management revenues increased $3.5 million in 2024 as compared to the same period in 2023, mainly as a result of an increase in trust services. The Company had $8.1 billion of assets under management at December 31, 2024 compared to $8.0 billion at December 31, 2023.

Current wording

Wealth management revenues are principally comprised of fees earned for management of trust assets and investment services. Wealth management revenues increased $1.8 million in 2025 as compared to 2024, mainly as a result of an increase in estate and trust services. The Company had $8.7 billion of assets under management at December 31, 2025 compared to $8.1 billion at December 31, 2024.

Previous wording

Service charge fees primarily consist of treasury services and overdraft charges on deposit accounts. These service charges increased $2.7 million in 2024, as compared to the same period in 2023. The increase in 2024 is mainly driven by increases in ACH, wire, sweep, and healthcare treasury service fees.

Current wording

Service charge fees primarily consist of treasury services and overdraft charges on deposit accounts. These service charges increased $1.3 million in 2025, as compared to 2024. The increase in 2025 is mainly driven by increases in ACH, wire, sweep, and healthcare treasury service fees.

Previous wording

Other income primarily includes company-owned life insurance revenues, check printing income, agency stock dividends, and gains on sales of miscellaneous assets. Other income increased $6.5 million in 2024 as compared to the same period in 2023, primarily due to an increase in the cash surrender value of company-owned life insurance of $2.0 million, $1.5 million gain on sale of assets, and a decrease of $2.3 million on the disposition of loans compared to the 2023 period.

Current wording

Other income primarily includes company-owned life insurance revenues, check printing income, agency stock dividends, and gains on sales of miscellaneous assets. Other income increased $58.9 million in 2025 as compared to 2024, primarily due to the $62.7 million gain from the sale of the Arizona and Kansas branches, which transaction closed on October 10, 2025, partially offset by a gain-on-sale of assets decrease of $4.5 million during the 2025 period.

Previous wording

Noninterest expense decreased $19.4 million in 2024 as compared to the same period in 2023. The decrease was primarily a result of a $9.0 million reduction in special FDIC insurance assessment fees and a $21.3 million reduction in other expenses, partially offset by an increase in salaries and wages. Significant components of noninterest expense are discussed below.

Current wording

Noninterest expense increased $2.9 million in 2025 as compared to 2024. The increase was primarily a result of increases to occupancy, net, other expenses, professional fees, and salaries and wages, partially offset by decreases in special FDIC insurance assessment fees, OREO expense, and employee benefits. Significant components of noninterest expense are discussed below.

Previous wording

Salaries and wages expense primarily consist of salaries, severance, commissions, overtime, bonus accrual, and temporary employee expenses. Salaries and wages expense increased $7.8 million in 2024 as compared to the same period in 2023, primarily as a result of higher short-term incentive accruals in 2024, which were partially offset by lower salaries and wages and net severance costs as a result of the reduction in work force in December 2023.

Current wording

Salaries and wages expense primarily consist of salaries, severance, commissions, overtime, bonus accrual, and temporary employee expenses. Salaries and wages expense increased $3.7 million in 2025 as compared to 2024, primarily as a result of higher severance and salaries and wages, which were partially offset by lower short-term incentive accruals related to the Company’s performance and lower deferred loan costs in 2025.

Previous wording

Employee benefits include payroll taxes, medical insurance, long term incentive, and 401K plans. Employee benefits expense increased $1.1 million in 2024 as compared to the same period in 2023, primarily due to higher long term incentive accruals in 2024 because of low incentive accruals related to Company performance in 2023, which were partially offset by lower health insurance costs and lower payroll tax costs in 2024.

Current wording

Employee benefits include payroll taxes, medical insurance, long term incentive, and 401K plans. Employee benefits expense decreased $1.8 million in 2025 as compared to 2024, primarily due to lower health insurance costs, which were partially offset by higher long term incentive accruals and higher payroll tax costs in 2025.

Previous wording

Outsourced technology services primarily include technology services related to the core system platform, software as a service, automated teller machines, technology equipment and software maintenance. Outsourced technology services expense decreased $2.8 million in 2024 as compared to the same period in 2023, primarily due to lower core processing costs in 2024.

Current wording

Outsourced technology services primarily include technology services related to the core system platform, software as a service, automated teller machines, technology equipment and software maintenance. Outsourced technology services expense increased $1.3 million in 2025 as compared to 2024, primarily due to higher software maintenance costs, which were partially offset by lower core processing costs in 2025.

Previous wording

OREO expense, net includes expenses and income, gain or loss on sale, and valuation adjustments on property acquired through foreclosure on defaulted loans. OREO expense, net increased $2.6 million in 2024 as compared to the same period in 2023 as a result of downward valuation adjustments in 2024 partially offset by a decrease in expenses and gains on sale during the same period.

Current wording

OREO expense, net includes expenses and income, gain or loss on sale, and valuation adjustments on property acquired through foreclosure on defaulted loans. OREO expense, net decreased $3.6 million in 2025 as compared to 2024 as a result of downward valuation adjustments in 2024 partially offset by an increase to gains on sale during the same period.