FIRST INTERSTATE BANCSYSTEM INC

Previous 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 Unaudited Consolidated Financial Statements and other financial information contained in this Form 10-Q 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.

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 Unaudited Consolidated Financial Statements and other financial information contained in this Form 10-Q in their entirety, and not to rely on any single financial measure. See “Non-GAAP Reconciliations” included herein for a reconciliation to the most directly comparable GAAP financial measures.

Previous wording

We are a financial and bank holding company focused on community banking. Since our incorporation in Montana in 1971, we have grown both organically and through strategic acquisitions. As of November 6, 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 lending opportunities to clients that participate in a wide variety of industries, including:

Current wording

We are a financial and bank holding company focused on community banking. Since our incorporation in Montana in 1971, we have grown both organically and through strategic acquisitions. As of April 30, 2026, we operated 273 banking offices, including branches and detached drive-up facilities, in communities across ten states—Colorado, Idaho, Iowa, Missouri, Montana, Nebraska, 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

As of September 30, 2025, we had consolidated assets of $27.3 billion, deposits of $22.6 billion, net loans held for investment of $15.6 billion, and total stockholders’ equity of $3.4 billion.

Current wording

As of March 31, 2026, we had consolidated assets of $26.4 billion, deposits of $21.9 billion, net loans held for investment of $14.5 billion, and total stockholders’ equity of $3.4 billion.

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, 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.

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 Federal Deposit Insurance Corporation (“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 community banking footprint spans across the Rocky Mountain, Pacific Northwest, Midwest, and Southwest regions.

Current wording

Our community banking footprint spans across the Rocky Mountain, Pacific Northwest, and Midwest regions.

Previous wording

Pending Sale of Certain Nebraska Branches

Current wording

Sale of Certain Nebraska Branches

Previous wording

On October 10, 2025, the Bank closed the previously disclosed transaction with Enterprise Bank & Trust (“Enterprise Bank”), a wholly-owned subsidiary of Enterprise Financial Services Corp, pursuant to which Enterprise Bank acquired twelve branches from the Bank, including approximately $645 million in deposits and certain commercially-oriented loans with outstanding balances of $305 million, and the owned real estate and fixed and other assets associated with the branches. The branches included all of the Bank’s Kansas and Arizona locations, with ten branches in Arizona and two branches in Kansas. At September 30, 2025, $305.0 million of loans were held-for-sale in connection with the then pending sale of the Arizona and Kansas branches. For more information, see “Note 3 - Loans Held For Sale” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Current wording

On April 10, 2026, the Bank closed the previously disclosed transaction with Security First Bank (“Security First”) pursuant to which Security First acquired eleven Nebraska branches from the Bank, including approximately $244.2 million in deposits and loans with outstanding balances of $64.1 million and the owned real estate and fixed and other assets associated with the branches.

Previous wording

Planned Closure of Four Nebraska Branches

Current wording

Closure of Four Nebraska Branches

Previous wording

As previously announced, following a strategic review, the Company expects to close four additional branches in Nebraska in the first quarter of 2026. These branch closures are intended to enhance operational efficiency and better position the Company for long-term success. Subsequent to the pending sale of eleven Nebraska branches and the closure of these four branches the Company will have 29 branches remaining in Nebraska.

Current wording

The Company closed four additional branches in Nebraska in the first quarter of 2026. These branch closures were intended to enhance operational efficiency and better position the Company for long-term success. Subsequent to the sale and closures, the Company has 29 branches remaining in Nebraska.

Previous 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 September 30, 2025, indirect loans represented approximately 3.4% of loan balances and 80.1% of our consumer loan portfolio.

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. Since discontinuing new originations, the indirect loan portfolio has continued to decline through scheduled amortization and normal portfolio runoff. This runoff is expected to continue over the remaining contractual terms of the existing loans, which generally mature in seven years or less. At March 31, 2026, indirect loans represented approximately 2.8% of loan balances and 76.6% of our consumer loan portfolio.

Previous wording

The Company has ample liquidity, and its capital ratios exceed all regulatory requirements to be deemed “well-capitalized” as of September 30, 2025. Our deposit base is diversified, including by depositor, which includes individuals, businesses across multiple industries, governmental units, and other entities, as well as geographically, across the communities we serve.

Current wording

The Company has ample liquidity, and its capital ratios exceed all regulatory requirements to be deemed “well-capitalized” as of March 31, 2026. Our deposit base is diversified, including by depositor, which includes individuals, businesses across multiple industries, governmental units, and other entities, as well as geographically, across the communities we serve in our 10-state footprint.

Previous wording

As of September 30, 2025, our FDIC insured deposits were 65.1% of total deposits, including accounts eligible for pass-through insurance. As of October 31, 2025, the Bank had available borrowing capacity of $5.5 billion with the Federal Home Loan Bank (“FHLB”) and $2.7 billion with the Federal Reserve Bank (“FRB”) based on pledged investment securities and loan collateral.

Current wording

As of March 31, 2026, our FDIC insured deposits were 64.4% of total deposits, including accounts eligible for pass-through insurance. As of April 30, 2026, the Bank had available borrowing capacity of $5.0 billion with both the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”) based on pledged investment securities and loan collateral.

Previous wording

The Company’s quarterly yield on interest earning assets decreased to 4.73% as of September 30, 2025 from 4.76% as of June 30, 2025, and decreased from 4.83% as of September 30, 2024.

Current wording

The Company’s quarterly yield on interest earning assets decreased to 4.63% for the three months ended March 31, 2026 from 4.67% for the three months ended December 31, 2025, and decreased from 4.75% for the three months ended March 31, 2025.

Previous 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 1.45% during the three months ended September 30, 2025 from 1.50% during the three months ended June 30, 2025, and decreased from 1.86% during the three months ended September 30, 2024. During the third 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 September 30, 2025 to 3.34% from 3.30% during the three months ended June 30, 2025 and from 3.01% for the three months ended September 30, 2024. The Company’s FTE net interest margin, a non-GAAP financial measure, increased to 3.36% during the three months ended September 30, 2025, from 3.32% during the three months ended June 30, 2025, and increased from 3.04% during the three months ended September 30, 2024.

Current wording

During the first quarter of 2026, the changes in the mix and cost of funds were partially offset by the changes in the mix and yield on earning assets, resulting in an increase in the Company’s net interest margin during the three months ended March 31, 2026 to 3.41% from 3.36% during the three months ended December 31, 2025. The Company’s net FTE interest margin, a non-GAAP financial measure, increased to 3.43% during the three months ended March 31, 2026, from 3.38% during the three months ended December 31, 2025.

Previous wording

The Company expects to see continued volatility in the economic markets, which may include recessionary signs in the economy resulting from, among other things, uncertain conditions due to changes in U.S. policies like the implementation of new tariffs, retaliatory tariffs, and other trade policies. These uncertain conditions could have adverse impacts on the balance sheet and income statement of the Company for the remainder of the year.

Current wording

The Company expects to see continued volatility in the economic markets, which may include recessionary signs in the economy resulting from, among other things, uncertain conditions due to changes in U.S. policies like the implementation of new tariffs, retaliatory tariffs, and other trade policies as well as geopolitical uncertainty, including the recent military conflict involving Iran and related disruptions in global energy markets. These uncertain conditions could have adverse impacts on the balance sheet and income statement of the Company for the remainder of the year.

Previous wording

A slowdown, downturn, or recession in the U.S. economy or changes in U.S. trade policies could impact the Company by impacting the level of deposits held by our clients, whether through a higher volume of withdrawals or through a lower volume of deposits. Client deposits are one of the Company’s primary lending sources. The credit quality of the Company’s loans may also be impacted if clients must weather adverse economic conditions which could result in an increase in credit losses or other related expenses. For example, we believe macroeconomic conditions contributed to slower lease-up in our multifamily portfolio, which resulted in an increase in criticized assets during the second quarter of 2025. In the third quarter of 2025, criticized assets improved as compared to the second quarter. For additional information regarding criticized assets, see “Note – Loans Held for Investment – Credit Quality Indicators” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Current wording

A slowdown, downturn, or recession in the U.S. economy or changes in U.S. trade policies could impact the Company, including by impacting the level of deposits held by our clients, whether through a higher volume of withdrawals or through a lower volume of deposits. Client deposits are one of the Company’s primary lending sources. The credit quality of the Company’s loans may also be impacted if clients must weather adverse economic conditions which could result in an increase in credit losses or other related expenses. For example, the estimated effects of current and forecasted economic conditions are reflected in the Company’s provision for credit losses and allowance for credit losses. During the first quarter of 2026, the Company recorded a $6.7 million provision for credit losses, and the allowance for credit losses increased to 1.33% of loans held for investment at March 31, 2026, from 1.26% at December 31, 2025. During the same period, non-performing assets increased approximately 17.5%, primarily due to a single client relationship comprised of commercial and commercial real estate loans. For additional information regarding non-performing assets, allowance for credit losses, and credit quality indicators, see “Note – Loans Held for Investment – Credit Quality Indicators” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Previous wording

Our consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant accounting policies we follow are summarized in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, and are also referenced in “Note 1 – Basis of Presentation” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report. There have been no material changes during the third quarter of 2025 in our critical accounting estimates and policies from the critical accounting estimates and policies as described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

Our consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant accounting policies we follow are summarized in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, and are also referenced in “Note 1 – Basis of Presentation” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report. There have been no material changes during the first quarter of 2026 in our critical accounting estimates and policies from the critical accounting estimates and policies as described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Net income increased $19.4 million to $193.3 million, or $1.87 per diluted share, during the nine months ended September 30, 2025, as compared to net income of $173.9 million, or $1.69 per diluted share, for the same period in 2024, which is primarily attributable to higher net interest income and lower provision for credit losses, partially offset by lower noninterest income and higher income tax expense during the 2025 period.

Current wording

Net income increased $10.0 million to $60.2 million, or $0.61 per diluted share, during the three months ended March 31, 2026, as compared to net income of $50.2 million, or $0.49 per diluted share, for the same period in 2025, which is primarily attributable to a $13.3 million lower provision for credit losses, partially offset by lower net interest income.

Previous wording

Net interest income, the largest source of our operating income, is derived from interest, dividends, and fees received on interest earning assets, less interest expense incurred on interest bearing liabilities. Interest earning assets primarily include loans and investment securities. Interest bearing liabilities include deposits, short-term borrowings, and various other forms of indebtedness. Net interest income is affected by the level of interest rates, changes in interest rates, the speed of changes to interest rates, and changes in the volume and composition of interest earning assets and interest-bearing liabilities. Changes in interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income. Other factors like volume of loans, investment securities, and other interest earning assets compared to the volume of interest-bearing deposits, short-term borrowings, and other indebtedness also cause changes in our net interest income between periods. Noninterest-bearing sources of funds, such as demand deposits and stockholders’ equity, help to support earning assets.

Current wording

Net interest income, the largest source of our operating income, is derived from interest, dividends, and fees received on interest earning assets, less interest expense incurred on interest bearing liabilities. Interest earning assets primarily include loans and investment securities. Interest bearing liabilities include deposits, short-term borrowings, and various other forms of indebtedness. Net interest income is affected by the level of interest rates, changes in interest rates, the speed of changes to interest rates, and changes in the volume and composition of interest earning assets and interest-bearing liabilities. Changes in the interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income. Other factors like volume of loans, investment securities, and other interest earning assets compared to the volume of interest-bearing deposits, short-term borrowings, and other indebtedness also cause changes in our net interest income between periods. Noninterest-bearing sources of funds, such as demand deposits and stockholders’ equity, help to support earning assets.

Previous wording

Net interest income increased $1.3 million during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to a decrease in interest expense resulting from decreased rates on other borrowed funds along with a decrease in average other borrowed funds balances, partially offset by lower interest income on investment securities as a result of a decrease in average rates and average investment security balances and as a result of a decrease in average loan balances.

Current wording

Net interest income decreased $4.3 million during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to a decrease in interest and fee income on loans resulting from a decrease in average loan balances, partially offset by lower interest expense on deposits due to a decrease in average rates and other borrowed funds.

Previous wording

Net interest income included interest accretion related to the fair value of acquired loans of $3.5 million during the three months ended September 30, 2025, compared to interest accretion of $4.4 million during the three months ended September 30, 2024.

Current wording

Net interest income included interest accretion related to the fair value of acquired loans of $3.1 million during the three months ended March 31, 2026, compared to interest accretion of $4.7 million during the three months ended March 31, 2025.

Previous wording

Our net interest margin ratio increased 33 basis points to 3.34% for the three months ended September 30, 2025, as compared to 3.01% for the same period in 2024 and our net FTE interest margin ratio, a non-GAAP financial measure, increased 32 basis points for the three months ended September 30, 2025, as compared to the same period in 2024. Exclusive of the impact of interest accretion on acquired loans, the net FTE interest margin ratio increased 33 basis points to 3.30% during the three months ended September 30, 2025, as compared to 2.97% for the same period in 2024. The increases in the net interest margin ratio were primarily a result of lower interest expense resulting from decreased other borrowed funds balances.

Current wording

Our net interest margin ratio increased 22 basis points to 3.41% for the three months ended March 31, 2026, as compared to 3.19% for the same period in 2025 and our net FTE interest margin ratio, a non-GAAP financial measure, increased 21 basis points for the three months ended March 31, 2026, as compared to the same period in 2025. Exclusive of the impact of interest accretion on acquired loans, the net FTE interest margin ratio increased 24 basis points to 3.38% during the three months ended March 31, 2026, as compared to 3.14% for the same period in 2025. The increases in the net interest margin ratio were primarily a result of lower interest expense resulting from decreased other borrowed funds balances.

Previous wording

The table below sets forth a summary of the changes in interest income and interest expense resulting from estimated changes in average asset and liability balances (volume) and estimated changes in average interest rates (referred to as “rate”) for the three and the nine months ended September 30, 2025 and 2024. Changes which are not due solely to volume or rate have been allocated to these categories based on the respective percent changes in average volume and average rate as they compare to each other.

Current wording

The table below sets forth a summary of the changes in interest income and interest expense resulting from estimated changes in average asset and liability balances (volume) and estimated changes in average interest rates (referred to as “rate”) for the three months ended March 31, 2026 and 2025. Changes which are not due solely to volume or rate have been allocated to these categories based on the respective percent changes in average volume and average rate as they compare to each other.

Previous wording

The Company recorded a zero provision for credit losses, resulting from a reduction of credit losses of $1.5 million on loans held for investment and a provision for credit losses for unfunded commitments of $1.5 million during the three months ended September 30, 2025, as compared to a $19.8 million provision for credit losses during same period in 2024. Net charge-offs were $2.3 million or an annualized 0.06% of average loans outstanding during the three months ended September 30, 2025, as compared to net charge-offs of $27.4 million, or an annualized 0.60% of average loans outstanding during the same period in 2024. Net loan charge-offs in the third quarter of 2025 were composed of charge-offs of $6.7 million, which were partially offset by recoveries of $4.4 million.

Current wording

The Company recorded a $6.7 million provision for credit losses, resulting from a provision for credit losses of $6.8 million on loans held for investment and a reduction of credit losses for unfunded commitments of $0.1 million during the three months ended March 31, 2026, as compared to a $20.0 million provision for credit losses during same period in 2025. Net charge-offs were $2.4 million or an annualized 0.06% of average loans outstanding during the three months ended March 31, 2026, as compared to net charge-offs of $9.0 million, or an annualized 0.21% of average loans outstanding during the same period in 2025. Net loan charge-offs in the first quarter of 2026 were composed of charge-offs of $6.5 million, which were partially offset by recoveries of $4.1 million.

Previous wording

Payment services revenues consist of interchange fees that merchants pay for processing electronic payment transactions and ATM service fees. Payment services revenues decreased $1.9 million during the three months ended September 30, 2025, as compared to the same period in 2024. For the nine months ended September 30, 2025, payment services revenues decreased $4.0 million, as compared to the same period in 2024, primarily due to a decrease in credit card interchange revenue and a decrease in debit card revenues.

Current wording

Payment services revenues consist of interchange fees that merchants pay for processing electronic payment transactions and ATM service fees. Payment services revenues decreased $1.5 million during the three months ended March 31, 2026, as compared to the same period in 2025. The year-over-year decrease was mainly the result of lower consumer credit card interchange during the first quarter of 2026 as compared to the first quarter of 2025, related to the outsourcing of consumer credit cards in the second quarter of 2025.

Previous wording

Employee benefits expense decreased $1.5 million during the three months ended September 30, 2025 as compared to the same period in 2024, primarily due to lower medical costs. Employee benefits expense increased $0.2 million during the nine months ended September 30, 2025 as compared to the same period in 2024.

Current wording

Employee benefits expense increased $1.2 million during the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to higher health insurance costs of $3.1 million, partially offset by $1.6 million of lower long-term incentive accruals during the first quarter of 2026.

Previous wording

Occupancy, net expense increased $1.4 million during the three months ended September 30, 2025 and increased $4.5 million during the nine months ended September 30, 2025, as compared to the same periods in 2024, primarily due to increases in janitorial, maintenance, repairs, and snow removal costs.

Current wording

Outsourced technology services increased $1.7 million during the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to increases in software and maintenance costs.

Previous wording

Other expenses primarily include advertising and public relations costs; office supply, postage, freight, telephone, and travel expenses; donations expense; debit and credit card expenses; board of director fees; legal expenses; and other losses. Other expenses increased $2.7 million during the three months ended September 30, 2025 and increased $5.0 million during the nine months ended September 30, 2025, primarily resulting from increases in donation expense and the write-down of the fixed assets associated with the Arizona and Kansas branches pending disposition compared to the same periods in 2024.

Current wording

Other expenses primarily include advertising and public relations costs; office supply, postage, freight, telephone, and travel expenses; donations expense; debit and credit card expenses; board of director fees; legal expenses; and other losses. Other expenses decreased $1.9 million during the three months ended March 31, 2026 primarily resulting from decreases in donation expense and losses on sale of fixed assets compared to the same period in 2025.

Previous wording

Our effective federal tax rate was 17.8% for the three months ended September 30, 2025 compared to 18.6% for the three months ended September 30, 2024, and was 18.3% for the nine months ended September 30, 2025 compared to 18.5% for the nine months ended September 30, 2024. Fluctuations in effective federal income tax rates are primarily driven by changes in actual and forecasted pre-tax income.

Current wording

Our effective federal tax rate was 17.8% for the three months ended March 31, 2026 compared to 18.8% for the three months ended March 31, 2025. Fluctuations in effective federal income tax rates are primarily driven by changes in actual and forecasted pre-tax income.

Previous wording

State income tax applies primarily to pretax earnings generated within Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, and South Dakota. Our effective state tax rate was 5.0% for the three months ended September 30, 2025 compared to 5.2% for the three months ended September 30, 2024 and was 5.1% for the nine months ended September 30, 2025 compared to 5.2% for the nine months ended September 30, 2024.

Current wording

State income tax applies primarily to pretax earnings generated within Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Oregon, and South Dakota. Our effective state tax rate was 4.5% for the three months ended March 31, 2026 compared to 5.6% for the three months ended March 31, 2025.

Previous wording

Total assets decreased $1,804.5 million, or 6.2%, to $27,332.9 million as of September 30, 2025, from $29,137.4 million as of December 31, 2024, primarily due to decreases in investment securities and loans. Significant fluctuations in balance sheet accounts are discussed below. More information regarding the results as of December 31, 2024 can be found in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

Total assets decreased $213.8 million, or 0.8%, to $26,426.8 million as of March 31, 2026, from $26,640.6 million as of December 31, 2025, primarily due to decreases in loans and cash and cash equivalents which were partially offset by an increase in investment securities. Significant fluctuations in balance sheet accounts are discussed below. More information regarding the results as of December 31, 2025 can be found in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

We manage our investment portfolio to obtain the highest yield possible while meeting our credit and interest rate risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements. Our portfolio principally comprises U.S. treasury notes, U.S. government agency, U.S. government agency commercial mortgage-backed securities, U.S. government residential mortgage-backed securities, U.S. government agency collateralized mortgage obligations, collateralized loan obligation, corporate securities, and tax-exempt municipal securities.

Current wording

We manage our investment portfolio to obtain the highest yield possible while meeting our credit and interest rate risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements. Our portfolio principally comprises U.S. treasury notes, obligations of U.S. government agencies, U.S. government agency commercial mortgage-backed securities, U.S. agency government residential mortgage-backed securities, U.S. government agency collateralized mortgage obligations, collateralized loan obligation, corporate securities, and tax-exempt municipal securities.

Previous wording

Debt securities rated in the highest category by nationally recognized rating agencies and debt securities backed by the U.S. Government and government sponsored agencies, both on a direct and indirect basis, represented approximately 94.5% and 93.9% of the investment portfolio’s available-for-sale and held-to maturity segments, respectively, at September 30, 2025. All other held-to-maturity debt securities rated below AAA, not backed by the U.S. Government or government sponsored agencies, or which are not rated represented approximately 6.1% of total held-to maturity debt securities at September 30, 2025.

Current wording

Debt securities rated in the highest category by nationally recognized rating agencies and debt securities backed by the U.S. Government and government sponsored agencies, both on a direct and indirect basis, represented approximately 95.8% and 94.1% of the investment portfolio’s available-for-sale and held-to-maturity segments, respectively, at March 31, 2026.

Previous wording

As of September 30, 2025 and December 31, 2024, the estimated duration of our investment portfolio was 3.5 and 3.7 years, respectively.

Current wording

As of March 31, 2026 and December 31, 2025, the estimated duration of our investment portfolio was 3.3 years.

Previous wording

As of September 30, 2025 and December 31, 2024, we had $5,797.6 million and $6,296.7 million, respectively, of investment securities that had been in a continuous loss position for more than twelve months. Gross unrealized losses on these securities totaled $495.6 million as of September 30, 2025, and were attributable to changes in interest rates. At September 30, 2025 and December 31, 2024, the Company had no allowance for credit losses on available-for-sale securities and an allowance for credit losses on held-to maturity securities classified as corporate and municipal securities of $0.7 million and $0.9 million, respectively.

Current wording

As of March 31, 2026 and December 31, 2025, we had $5,297.6 million and $5,645.8 million, respectively, of investment securities that had been in a continuous loss position for more than twelve months. Gross unrealized losses on these securities totaled $455.8 million as of March 31, 2026, and were attributable to changes in interest rates. At March 31, 2026 and December 31, 2025, the Company had no allowance for credit losses on available-for-sale securities and an allowance for credit losses on held-to maturity securities classified as corporate and municipal securities of $0.5 million.

Previous wording

Loans held for investment, net of deferred fees and costs, decreased $2,010.5 million to $15,834.4 million as of September 30, 2025 as compared to $17,844.9 million as of December 31, 2024.

Current wording

Loans held for investment, net of deferred fees and costs, decreased $473.2 million to $14,728.4 million as of March 31, 2026 as compared to $15,201.6 million as of December 31, 2025.

Previous wording

The Company discontinued accepting applications to originate indirect loans during the first quarter of 2025, which resulted in $66.8 million of continued amortization for the indirect portfolio in the third quarter of 2025. See “—Indirect Loans” above for additional information. The Company sold $74.2 million of consumer credit card loans in the second quarter of 2025. See “—Consumer Credit Card Outsourcing” above for additional information. Additionally, as of September 30, 2025, the Company transferred $305.0 million of loans held for investment to loans held for sale related to the then pending sale of the Arizona and Kansas branches, which closed on October 10, 2025. See “—Sale of Arizona and Kansas Branches” above for additional information regarding the transaction. The remaining decline in loan balances is due to paydowns and maturities.

Current wording

The Company discontinued accepting applications to originate indirect loans during the first quarter of 2025, which resulted in $58.1 million of continued amortization for the indirect portfolio in the first quarter of 2026. The remaining decline in loan balances is due to larger agricultural loan payoffs, and other loan paydowns and payoffs during the first quarter of 2026.

Previous wording

Non-accrual loans. We generally place loans on non-accrual status when they become 90 days past due unless they are well secured and in the process of collection or if the collection of principal and interest is in doubt. When a loan is placed on non-accrual status, any interest previously accrued but not collected is reversed from income. Non-accrual loans increased approximately $43.3 million, or 31.3%, to $181.6 million as of September 30, 2025, from $138.3 million as of December 31, 2024, primarily due to an increase in non-accrual commercial real estate of $18.8 million and agricultural real estate of $21.6 million during 2025. As of September 30, 2025 there were approximately $101.0 million of non-accrual loans for which there was no related allowance for credit losses, as these loans had sufficient collateral securing the loan for repayment.

Current wording

Non-accrual loans. We generally place loans on non-accrual status when they become 90 days past due unless they are well secured and in the process of collection or if the collection of principal and interest is in doubt. When a loan is placed on non-accrual status, any interest previously accrued but not collected is reversed from income. Non-accrual loans increased approximately $21.3 million, or 16.0%, to $154.8 million as of March 31, 2026, from $133.5 million as of December 31, 2025, primarily due to a single client relationship comprised of commercial and commercial real estate loans. As of March 31, 2026, there were approximately $53.1 million of non-accrual loans for which there was no related allowance for credit losses, as these loans had sufficient collateral securing the loan for repayment.

Previous wording

Loans contractually past due 90 days or more and still accruing interest. Loans past due 90 days or more accruing interest were $0.6 million as of September 30, 2025 compared to $3.0 million as of December 31, 2024.

Current wording

Loans contractually past due 90 days or more and still accruing interest. Loans past due 90 days or more accruing interest were $1.1 million as of March 31, 2026 compared to $1.4 million as of December 31, 2025.

Previous wording

Other Real Estate Owned (OREO). OREO consists of real property acquired through foreclosure on the collateral underlying defaulted loans. We record OREO at fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate at the time it is acquired, is recorded as a charge against the allowance for credit losses. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified. OREO decreased $0.9 million, or 20.9%, to $3.4 million as of September 30, 2025, from $4.3 million as of December 31, 2024.

Current wording

Other Real Estate Owned (OREO). OREO consists of real property acquired through foreclosure on the collateral underlying defaulted loans. We record OREO at fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate at the time it is acquired, is recorded as a charge against the allowance for credit losses. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified. OREO increased $3.2 million, or 94.1%, to $6.6 million as of March 31, 2026, from $3.4 million as of December 31, 2025.