FIRST INTERSTATE BANCSYSTEM INC

(1) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc., and its consolidated subsidiaries, including its wholly-owned subsidiary, First Interstate Bank (“FIB” or “Bank”) (collectively, the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at September 30, 2026 and December 31, 2025, the results of operations, changes in stockholders’ equity, and cash flows for each of the three and the nine months ended September 30, 2026 and 2025, in conformity with U.S. generally accepted accounting principles (“GAAP”). The balance sheet information at December 31, 2025 is derived from audited consolidated financial statements. The unaudited consolidated financial statements have been prepared in conformity with the required interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X; and therefore, do not include all of the information and footnotes required by GAAP for a complete set of financial statements.

The Company has identified one reporting unit and one operating segment, community banking, which encompasses commercial and consumer banking services to serve a similar base of clients utilizing company-wide offerings of similar products and services managed through similar processes and platforms offered to individuals, businesses, municipalities, and other entities, whose primary sources of revenue are interest income on loans, investment securities and other interest-earning assets and fee income earned on its products and services. Its expenses consist of interest expense on deposits and borrowed funds, provision for credit losses, other operating expenses and income taxes, as further described below. The Company manages its business activities on a consolidated basis.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer who is charged with management of the Company and is responsible for the evaluation of operating performance and decision making about the allocation of capital and resources.

The CODM regularly assesses performance of the single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income.

The Company’s 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 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. See the consolidated financial statements for other financial information regarding the Company’s operating segment.

The accounting policies of the segment are the same as those described in "Note 1 - Summary of Significant Accounting Policies" of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which includes a description of significant accounting policies. Operating results for the three and the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

(2) INVESTMENT SECURITIES

The amortized cost and the approximate fair values of investment securities are summarized as follows:

The following tables show the gross unrealized losses and fair values of available-for-sale investment securities and the length of time individual investment securities have been in an unrealized loss position as of September 30, 2026 and December 31, 2025.

The Company determines the allowance for credit losses on both available-for-sale and held-to-maturity investment securities by a discounted cash flow approach, when needed, using each security’s effective interest rate at the time of purchase or upon acquisition. The allowance for credit losses for available-for-sale investment securities is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows, however, the amount of credit losses is limited to the amount of a security’s unrealized loss. The allowance for credit losses on held-to-maturity investment securities is representative of current expected credit losses that management expects to be incurred over the life of the investment and established through a charge to provision for credit losses in current period earnings. For held-to-maturity investment securities, the Company has the intent and ability to hold these investment securities to maturity.

The investment securities portfolio primarily contains securities that are guaranteed by a sovereign entity or are generally considered to have non-credit related risks, such as interest rate risk or liquidity factors. The Company considers whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred.

As of September 30, 2026 and December 31, 2025, the Company had 764 and 633 individual available-for-sale investment securities, respectively, that were in an unrealized loss position, which was related primarily to fluctuations in current interest rates. As of September 30, 2026, the Company does not intend to sell nor is it more likely than not the Company will be required to sell any available-for-sale securities with unrealized losses.

The Company hadno allowance for credit losses on available-for-sale investment securities as of September 30, 2026 and December 31, 2025.

On a quarterly basis, the Company refreshes the credit quality indicator of each held-to-maturity security. As of September 30, 2026 and December 31, 2025, the held-to-maturity portfolio is primarily composed of investment grade or better securities. The Company had a $0.1 million and a $0.5 million allowance for credit losses for held-to-maturity corporate and state, county, and municipal investment securities as of September 30, 2026 and December 31, 2025, respectively.

As of September 30, 2026 and December 31, 2025, the Company had $30.1 million and $27.8 million, respectively, of accrued interest receivable from investment securities on the consolidated balance sheets. Accrued interest receivable is presented as a separate line item on the consolidated balance sheets and is not included in the carrying value of our securities.

During the three and the nine months ended September 30, 2026 and 2025, there wereno gross realized gains or losses on the disposition of available-for-sale investment securities.

The following schedule represents the amortized cost and fair value of debt securities by contractual maturity date. Actual maturities may differ from their expected or contractual maturities because the related contracts permit in some instances issuers or borrowers to prepay the underlying obligations, with or without prepayment penalties.

As of September 30, 2026, the Company held investment securities callable within one year having amortized costs and estimated fair values of $824.5 million and $789.3 million, respectively. These investment securities are primarily included in the “after five years” categories in the table above.

As of September 30, 2026 and December 31, 2025, the Company had securities with carrying values of $2,702.9 million and $2,983.6 million, respectively, for investment securities pledged to secure public deposits, derivatives, and securities sold under repurchase agreements that had estimated fair values as of September 30, 2026 and December 31, 2025, of $2,420.1 million and $2,781.2 million, respectively. All securities sold under repurchase agreements are with clients and mature on the next banking day. The Company retains possession of the underlying securities sold under repurchase agreements.

As of September 30, 2026 and December 31, 2025, the Company held $106.3 million in equity securities primarily in a combination of Federal Reserve Bank and Federal Home Loan Bank (“FHLB”) stocks, which are restricted nonmarketable securities acquired to meet regulatory requirements and related to outstanding borrowings. These securities are carried at cost.

(3) LOANS HELD FOR SALE

Residential mortgage loans that the Company originated with the intent to sell are recorded at fair value. The following table presents for the dates indicated (i) residential mortgage loans recorded at fair value and (ii) other loans held for sale at lower of cost or market by class of receivable at December 31, 2025 that were related to the sale of eleven Nebraska branches (which closed on April 10, 2026).

(4) LOANS HELD FOR INVESTMENT

The following table presents loans by class of receivable and portfolio segment as of the dates indicated:

Allowance for Credit Losses

The following tables represent, by loan portfolio segments, the activity in the allowance for credit losses for loans held for investment:

Collateral-Dependent Loans

A collateral-dependent loan relies substantially on the operation or sale of the collateral securing the loan for repayment. A loan may become collateral-dependent when foreclosure is probable or the borrower is experiencing financial difficulty and its sources of repayment become inadequate over time.

The following tables present the principal balance of collateral-dependent loans by class of receivable as of the dates indicated:

Loans are considered past due if the required principal and interest payments have not been received 30 days or more past the contractual payment due date. Loans classified in the following table as 90 days or more past due continue to accrue interest. The following tables present the contractual aging of the Company’s recorded principal balance of loans by class of receivable as of the dates indicated:

(1) As of September 30, 2026 and December 31, 2025, none of our non-accrual loans were earning interest income. Additionally, $0.8 million and $3.2 million of interest income was recognized on non-accrual loans during the three and the nine months ended September 30, 2026, respectively, and $2.0 million and $3.5 million interest income was recognized on non-accrual loans during the three and the nine months ended September 30, 2025, respectively. There were $0.5 million and $2.1 million in reversals of accrued interest during the three and the nine months ended September 30, 2026, respectively, and $0.4 million and $2.9 million in reversals of accrued interest during the three and the nine months ended September 30, 2025, respectively.

(2) As of September 30, 2026 and December 31, 2025, there were approximately $60.4 million and $59.8 million, respectively, of non-accrual loans for which there was no related allowance for credit loss, as these loans had sufficient collateral securing the loan for repayment.

(3) As of September 30, 2026, there were approximately $4.6 million, $4.7 million, and $84.7 million of non-accrual loans that were 30-59 days past due, 60-89 days past due, and 90 days or more past due, respectively. As of December 31, 2025, there were approximately $4.5 million, $3.8 million, and $60.5 million of non-accrual loans that were 30-59 days past due, 60-89 days past due, and 90 days or more past due, respectively.

Modifications to Borrowers Experiencing Financial Difficulty

Modifications of loans are made in the ordinary course of business and are completed on a case-by-case basis through negotiation with the borrower in connection with the ongoing loan collection processes. Loan modifications are made to provide payment relief to borrowers experiencing financial difficulty.

From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things.

The following tables present the amortized cost basis of loans, by class and by type of modification, at September 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the periods indicated. The percentage of the principal balance of loans that were modified to borrowers in financial distress as compared to the principal balance of each class of receivable is also presented below:

(1) Based on the principal balance as of period end, divided by the period end principal balance of the corresponding class of receivables.

(2) As of September 30, 2026 and 2025, the Company excluded $0.6 million and $0.7 million, respectively, in accrued interest from the amortized cost of the identified loans.

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the periods indicated:

The Company monitors the performance of loan modifications to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Of the accruing loans that were modified during the twelve-months ended September 30, 2026 and 2025, there were $1.9 million and $0.8 million of loans classified as past due 30 days or more, respectively, with the remaining accruing loans performing in accordance with the modified terms and classified as current at September 30, 2026 and 2025. Of the non-accrual loans that were modified during the twelve-months ended September 30, 2026 and 2025, there were $28.9 million and $10.5 million of loans classified as past due 30 days or more, respectively, with the remaining non-accrual loans performing in accordance with the modified terms and classified as current at September 30, 2026 and 2025.

There wereno commitments to lend additional funds related to the loan modifications to borrowers experiencing financial difficulty during the three months ended September 30, 2026 and 2025.

There were $20.0 million and $2.1 million of payment defaults on non-accrual loans subsequent to their modifications during the twelve-months ended September 30, 2026 and 2025. The Company considers a payment default to occur when the loan is 90 days or more past due or the loan is placed on non-accrual status after the modification. The Company monitors the performance of modified loans on an ongoing basis. In the event of subsequent default, the allowance for credit losses continues to be reassessed based on an individual evaluation of each loan. The modifications made during the periods presented did not significantly impact the Company’s determination of the allowance for credit losses.

Credit Quality Indicators

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans based on relevant information about the ability of borrowers to service their debt. The factors considered by the Company include, among other factors, the borrower’s current financial information, historical payment experience, credit documentation, public information, and current economic trends. The Company analyzes loans individually to classify the credit risk of the loans. This analysis generally includes loans with an outstanding balance greater than $1.0 million, which are generally considered non-homogeneous loans, such as commercial loans and commercial real estate loans. This analysis is performed no less than on an annual basis, depending upon the size of exposure and the contractual obligations governing the borrower’s financial reporting frequency. Homogeneous loans, including small business loans, are typically monitored by payment performance. The Company internally risk rates its loans in accordance with a Uniform Classification System developed jointly by the various bank regulatory agencies. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators in addition to the 6 Pass ratings in its 10-point rating scale:

Special Mention — includes loans that exhibit a potential weakness in financial condition, loan structure, or documentation that warrants management’s close attention. If not promptly corrected, the potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard — includes loans that are inadequately protected by the current net worth and paying capacity of the borrowers which have well-defined weaknesses that jeopardize the liquidation of the debt. Although the primary source of repayment for a substandard loan may not currently be sufficient, collateral or other sources of repayment are sufficient to satisfy the debt.

Doubtful — includes loans that exhibit pronounced weaknesses based on currently existing facts, conditions, and values to a point where collection or liquidation for full repayment is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered pass-rated loans. Pass-rated loans can be assets where there is virtually no credit risk, such as cash secured loans with funds on deposit with the Bank. Pass-rated loans also include loans that are on our watch lists; these loans are currently performing but are subject to closer monitoring due to certain risk factors or emerging weaknesses that could, if not corrected, result in future deterioration of repayment capacity. These loans do not meet the criteria for classification as Special Mention or a criticized asset, but are included on the bank’s internal watch list to ensure proactive management and early identification of potential credit issues.

The Company evaluates the credit quality and loan performance for the allowance for credit losses of the following classes of receivables by origination year using the origination date or the loan’s subsequent renewal or modification date based on the aforementioned risk scale as of and for the periods ended:

The Company evaluates the credit quality, loan performance, and the allowance for credit losses of its residential and consumer loan portfolios based primarily on the aging status of the loan and borrower payment activity. Accordingly, loans on non-accrual status and loans past due 90 days or more and still accruing interest are considered non-performing for purposes of credit quality evaluation. The following tables present the recorded investment of these loan portfolios based on the credit risk profile of loans that are performing and loans that are non-performing by origination year using the origination date or the loan’s subsequent renewal or modification date as of the periods ended:

The following tables summarize the current-period gross charge-offs by class of receivable and portfolio segment as of the dates indicated:

In the normal course of business, there wereno material purchases of portfolio loans andno material sales of loans held for investment during the three and the nine months ended September 30, 2026 or 2025.

(5) DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through the management of its business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and derivative financial instruments. The Company enters into derivative financial instruments, such as interest rate swap contracts to manage or hedge exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and interest rate exposures. The Company does not enter into interest rate swap agreements for trading or speculative purposes.

The Company sells residential mortgage loans on either a best efforts or mandatory delivery basis. The Company charges a fee for these transactions, which is included in mortgage banking revenues on the consolidated statements of income which werenot material for the periods ended September 30, 2026 and 2025.

The Company also enters into derivative contracts related to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with a third-party financial institution. The Company charges a fee for these transactions, which is included in other service charges, commissions, and fees on the consolidated statements of income which werenot material for the periods ended September 30, 2026 and 2025.

For more information regarding our use of derivative instruments and related accounting policies, see Note 8 of our Form 10-K for the year ended December 31, 2025.

The following table summarizes the fair values of our derivative instruments on a gross and net basis for the periods indicated. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to account for the impact of legally enforceable master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Securities collateral related to legally enforceable master netting agreements is not offset on the consolidated balance sheets.

There wasno unrealized fair value gain or loss on cash flow hedging derivative instruments recognized in other comprehensive income during the three and the nine months ended September 30, 2026, andno unrealized fair value gain or loss on cash flow hedging derivative instruments recognized in other comprehensive income during the three months ended September 30, 2025 and an unrealized fair value loss of $1.9 million for the nine months ended September 30, 2025. All derivatives are carried at fair value in either other assets or other liabilities and all related cash flows are reported in the operating section of the consolidated statements of cash flows.

The tables below present the gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of the dates indicated:

Credit-risk-related Contingent Feature

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness.

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well / adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations. Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as a publicly issued prompt corrective action directive, cease and desist order, or a capital maintenance agreement that required the Bank to maintain a specific capital level. If the Bank had breached any of these provisions at September 30, 2026 or December 31, 2025, it could have been required to settle its obligations under the agreements at the termination value.

As of September 30, 2026 and December 31, 2025, the fair value of derivatives in a net liability position that have contingent features described above waszero. As of September 30, 2026 and December 31, 2025, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and hasnot posted excess collateral. At September 30, 2026 and December 31, 2025, the Company had not breached any of the settlement acceleration provisions.

(6) CAPITAL STOCK

The Company’s common stock is traded on the NASDAQ stock market under the symbol “FIBK.”

As of September 30, 2026, the Company is authorized to issue an aggregate of 150,100,000 shares of capital stock, of which 150,000,000 shares are designated as common stock, and 100,000 are designated as preferred stock. Our common stock is uncertificated and hasone vote per share.

The Company had 93,514,753 shares and 101,105,745 shares of common stock outstanding as of September 30, 2026 and December 31, 2025, respectively, andno shares of preferred stock outstanding as of September 30, 2026 and December 31, 2025.

On August 28, 2025, the board of directors of the Company adopted a new stock repurchase program, pursuant to which the Company has been authorized to repurchase up to $150.0 million worth of its issued and outstanding shares of common stock on or prior to March 31, 2027, which is the expiration date of the program. On January 27, 2026, the board of directors authorized an increase to the repurchase program of an additional $150.0 million, and on July 22, 2026 the board of directors authorized a further increase to the repurchase program of an additional $150.0 million, bringing the total repurchase authorization since August 2025 to $450.0 million. Any repurchased shares will be returned to authorized but unissued shares of common stock, as permitted under applicable Delaware law.

During the three months ended September 30, 2026,2,041,198 shares of common stock were repurchased under the stock repurchase program at a total cost of $76.3 million or at a weighted-average price of $37.37 per share. During the nine months ended September 30, 2026,6,363,860 shares of common stock were repurchased under the stock repurchase program at a total cost of $229.0 million or at a weighted-average price of $35.98 per share. As of September 30, 2026, following these repurchases, approximately $103.4 million remained available for future purchases under the program. The additional stock repurchases during the three and the nine months ended September 30, 2026 and 2025, were redemptions of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants in the Company’s equity compensation plans.

(7) EARNINGS PER COMMON SHARE

Basic earnings per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period presented, excluding unvested restricted stock. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares determined for the basic earnings per share computation plus the dilutive effects of stock-based compensation using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share for the periods presented:

The Company had 488,480 and 768,247 shares of unvested restricted stock as of September 30, 2026 and 2025, respectively, that were not included in the computation of diluted earnings per common share because performance conditions for vesting had not been met.

(8) REGULATORY CAPITAL

As of September 30, 2026 and December 31, 2025, the Company exceeded all capital adequacy requirements to which it is subject. Actual capital amounts and ratios for the Company and its subsidiary Bank, as of September 30, 2026 and December 31, 2025 are presented in the following tables:

(1) The capital conservation buffer is an additional 2.5% of the amount necessary to meet the minimum risk-based capital requirements for total, tier 1, and common equity tier 1 risk-based capital.

(2) The ratios to meet the requirements to be deemed “well-capitalized” are only applicable to FIB. However, the Company manages its capital position as if the requirements apply to the consolidated company and has presented the ratios as if they also applied on a consolidated basis.

(9) COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is involved in various claims and litigation. The Company establishes accruals for legal matters when potential losses associated with the actions become probable and the amount of loss can be reasonably estimated. There is no assurance that the ultimate resolution of these matters will not significantly exceed the amounts that the Company has accrued. Accruals for legal matters are based on management’s best judgment after consultation with counsel and others. In the opinion of management, following consultation with legal counsel, the ultimate liability or disposition of all such claims and litigation is not expected to have a material adverse effect on the consolidated financial condition, results of operations, or liquidity of the Company.

As of September 30, 2026, the Company had commitments under construction contracts of $5.1 million.

Based on the specific terms stated in the agreements, the Company didnot have a significant amount of sold residential mortgage loans with recourse provisions still in effect as of September 30, 2026. The Company did not repurchase a significant amount of loans from secondary market investors under the terms of loan sales agreements during the period ended September 30, 2026. The risk of recourse and the subsequent requirement of loan repurchase to the Company is not significant, and accordingly no liabilities have been established related to such. In addition, the Company made various representations and warranties associated with the sale of loans. The Company has not incurred significant losses resulting from these provisions during the period ended September 30, 2026.

(10) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk to meet the financing needs of its clients. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of amounts recorded in the consolidated balance sheets. Commitments to extend credit are agreements to lend to a client so long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as the credit risk involved in extending loan facilities to clients. The Company’s policy for obtaining collateral, and determining the nature of such collateral, is essentially the same as in the Company’s policies for making commitments to extend credit. The estimated fair value of the obligation undertaken by the Company in issuing standby letters of credit is included in accounts payable and accrued expenses in the Company’s consolidated balance sheets.

The following table presents our financial instruments with off-balance sheet risk, as well as the activity in the allowance for off-balance sheet credit losses related to those financial instruments:

(11) OTHER COMPREHENSIVE INCOME

The gross amounts of each component of other comprehensive (loss) income and the related tax effects for the periods indicated are as follows:

The components of accumulated other comprehensive loss, net of related tax effects, are as follows:

(12) FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For more information about our valuation methodologies for assets and liabilities measured at fair value, as well as the fair value hierarchy, see Note 23 of our Form 10-K for the year ended December 31, 2025.

Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:

Additionally, from time to time, certain assets are measured at fair value on a non-recurring basis. Adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to credit deterioration. The following table presents information about the Company’s assets and liabilities measured at fair value on a non-recurring basis with an adjustment during the period presented. The fair values may not be current as of the reporting date but represent fair values as of the most recent fair value change that occurred within the reporting period. Accordingly, carrying values may not equal the current fair value:

Collateral-dependent Loans. Collateral-dependent loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral. The collateral-dependent loans are reported at fair value through specific valuation allowance allocations. When it is determined that the fair value of a collateral-dependent loan is less than the recorded investment in the loan, an allowance for credit losses is recognized on the loan for the difference between the recorded investment and the fair value of the collateral less costs to sell. Collateral values are estimated using independent appraisals and management estimates of current market conditions. As of September 30, 2026 and December 31, 2025, the Company had collateral-dependent loans with a carrying value of $120.1 million and $102.1 million, respectively.

Long-lived Assets to be Disposed of by Sale. Long-lived assets to be disposed of by sale are carried at the lower of carrying value or fair value less estimated costs to sell. The fair values of long-lived assets to be disposed of by sale are based upon observable market data and management estimates of current market conditions. As of September 30, 2026, the Company had long-lived assets to be disposed of by sale with carrying and fair values aggregating $5.0 million. As of December 31, 2025, the Company had long-lived assets to be disposed of by sale with carrying and fair values aggregating $6.1 million.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair values:

The Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. The methodologies for estimating the fair value of financial instruments that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for estimating the fair value of other financial instruments are discussed below. For financial instruments bearing a variable interest rate where no credit risk exists, it is presumed that recorded book values are reasonable estimates of fair value.

Financial Assets. Carrying values of cash, cash equivalents, and accrued interest receivable approximate fair values due to the liquid and/or short-term nature of these instruments. Fair values for investment securities held-to-maturity are obtained from an independent pricing service, which considers observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, trading levels, trade execution data, market consensus prepayment speeds, credit information, and the investment’s terms and conditions, among other things. Fair values of fixed rate loans and variable rate loans that reprice on an infrequent basis are estimated by discounting future cash flows using current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality using an exit price notion. Carrying values of variable rate loans that reprice frequently, and with no change in credit risk, approximate the fair values of these instruments. The estimated fair values for all loans are then reduced by the estimated life-of-the-loan aggregate credit losses in the loan portfolio.

Financial Liabilities. The fair values of demand deposits, savings accounts, securities sold under repurchase agreements, and accrued interest payable are the amounts that are payable on demand at the reporting date. The fair values of fixed-maturity certificates of deposit are estimated using external market rates that are currently offered for deposits that have similar remaining maturities. The fixed and floating rate subordinated debentures, floating rate subordinated term loans, other borrowed funds, fixed rate subordinated term debts, and capital lease obligations are estimated by discounting future cash flows using current rates for advances that have similar characteristics.

Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit, based on fees currently charged to enter into similar agreements, is not significant.

The estimated fair values of financial instruments that are reported in the Company’s consolidated balance sheets, and are segregated by the level of the valuation inputs within the fair value hierarchy that are utilized to measure fair value, are as follows:

(13) RECENT AUTHORITATIVE ACCOUNTING GUIDANCE

ASU 2023-06, “Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative”In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative that amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company does not anticipate the adoption of ASU 2023-06 will have a significant impact on the Company’s financial position, results of operations, or liquidity.

ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses”In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses that require public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this Update do not change or remove current expense disclosure requirements. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of the standard and does not anticipate it will have a significant impact on the Company’s financial position, results of operations, or liquidity.

ASU 2025-12, “Codification Improvements”In December 2025, the FASB issued ASU 2025-12, Codification Improvements to facilitate Codification updates for a broad range of topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. An entity may elect to early adopt the amendments on an issue-by-issue basis. The Company is currently evaluating the impact of the standard and does not anticipate it will have a significant impact on the Company’s financial position, results of operations, or liquidity.

(14) SUBSEQUENT EVENTS

Subsequent events have been evaluated for potential recognition and disclosure through the date the Company’s financial statements were filed with the SEC. On October 21, 2026, the Company declared a quarterly dividend to common shareholders of $0.47 per share, to be paid on November 13, 2026 to shareholders of record as of November 3, 2026.

On October 1, 2026, the Company redeemed in full the trust securities of FI Statutory Trust V at a redemption price of 100% of the principal amount of the issued and outstanding debt securities plus accrued and unpaid interest through September 30, 2026. The redemption included all of the outstanding debt securities ($10.3 million aggregate principal amount) which obligated the issuer trust to concurrently redeem all of the outstanding trust securities ($10.0 million aggregate principal amount of capital securities and $0.3 million aggregate principal amount of common securities), included in the consolidated balance sheet caption “subordinated debentures held by subsidiary trusts”.

On October 1, 2026, the Company redeemed in full the trust securities of FI Statutory Trust VI at a redemption price of 100% of the principal amount of the issued and outstanding debt securities plus accrued and unpaid interest through September 30, 2026. The redemption included all of the outstanding debt securities ($10.3 million aggregate principal amount) which obligated the issuer trust to concurrently redeem all of the outstanding trust securities ($10.0 million aggregate principal amount of capital securities and $0.3 million aggregate principal amount of common securities), included in the consolidated balance sheet caption “subordinated debentures held by subsidiary trusts”.

On October 6, 2026, the Company caused a redemption notice to be sent to holders of the trust securities of HF Financial Capital Trust V. The Company expects to redeem in full those trust securities on December 1, 2026, at a redemption price of 100% of the principal amount of the issued and outstanding debt securities plus accrued and unpaid interest through November 30, 2026. The redemption would include all of the outstanding debt securities ($5.3 million aggregate principal amount), which would obligate the issuer trust to concurrently redeem all of the outstanding trust securities ($5.0 million capital securities and $0.3 million common securities), included in the consolidated balance sheet caption “subordinated debentures held by subsidiary trusts”.

From October 1, 2026 to October 30, 2026, the Company purchased approximately 935 thousand shares of common stock at a total cost of approximately $33.2 million under the stock repurchase program. Shares purchased since inception of the stock repurchase program from August 2025 through October 30, 2026 totaled approximately 11.0 million shares of common stock at a total cost of approximately $379.7 million.

No other undisclosed events requiring recognition or disclosure were identified.