ENTERPRISE FINANCIAL SERVICES CORP
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 27, 2026
EFSC$62.05-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001025835-25-000039
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-27.
0001025835-26-000058
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 170 current paragraphs.
83 unchanged; 63 reworded; 21 added; 18 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 38 previous and 40 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
•The Bank acquired 12 branches from First Interstate Bank, including certain deposits and loans, and the owned real estate and fixed and other assets associated with the 12 branches. The Company acquired $609 million in deposits, and certain, mostly commercially-oriented loans with outstanding balances of approximately $292 million as of December 31, 2025. The transaction added 10 branches in Arizona and two branches in Kansas City, and expands the Company’s presence in those markets.
Current report
•A solar provider from which the Company had purchased $24.1 million of transferrable solar tax credits declared bankruptcy. The bankrupt solar provider indirectly owned, through a complex structure of multiple entities, the solar projects generating the tax credits that the Company purchased. As part of the bankruptcy, the bankrupt solar provider sold and transferred equity interests in certain of those entities. As a result of this transfer, the $24.1 million of solar tax credits purchased by the Company were recaptured. The Company previously purchased an insurance policy to insure against recapture risk and anticipates proceeds from the insurance policy to cover the $24.1 million of recaptured tax credits and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits.
Current report
•The Company redeemed $63.3 million of subordinated debt that had a floating rate of three-month Term SOFR plus a spread of 5.66%. The redemption was funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 2.50%.
Current report
•Net interest income was $626.7 million, an increase of $58.6 million over the prior year. NIM increased to 4.21% in 2025, from 4.16% in 2024, primarily due to higher average loan and securities balances, higher yields on the securities portfolio, and lower short-term interest rates that decreased deposit interest expense. Average loans and securities increased $472.6 million and $753.8 million, respectively, compared to 2024. While the decline in market interest rates reduced the yield on loans 28 basis points, the yield on securities increased 51 basis points compared to 2024. The total cost of deposits was 1.77% in 2025 compared to 2.12% in 2024.
Current report
•Noninterest income was $113.1 million, an increase of $43.4 million from $69.7 million in 2024. Noninterest income in 2025 includes $32.1 million of anticipated insurance proceeds from a pending claim related to a recapture event during the third quarter 2025 with respect to a $24.1 million solar tax credit. There is an offsetting amount of $32.1 million in income tax expense related to the solar tax credit recapture.
Current report
•Noninterest expense was $429.8 million in 2025, a 12% increase from $385.0 million in 2024. The increase in noninterest expense was primarily from higher deposit costs due to an increase in average deposit vertical balances, an increase in compensation due an expanded associate base and the onboarding of the associates from the fourth quarter 2025 Branch Acquisition, along with other expenses related to the Branch Acquisition. The increase was partially offset by a $4.9 million decline in core conversion expenses due to the completion of the core implementation in the fourth quarter 2024. The core efficiency ratio 1 was 59.3% in 2025, compared to 58.4% in 2024.
Current report
During 2024, noted the following significant developments:
Current report
Total tax-equivalent interest income of $900.1 million increased $40.6 million in 2025 primarily due to a $42.2 million increase in interest income from investment securities. Higher interest income on investment securities was primarily due to a $753.8 million increase in average securities balances and a 51 basis point increase in yield on investment securities. Average securities represented 22% and 18% of earnings assets for 2025 and 2024, respectively. Average loan balances increased $472.6 million during the year primarily from organic loan growth and the Branch Acquisition, partially offset by a 28 basis point decrease in loan yield resulting in a $0.2 million decrease in loan interest income.
Current report
As part of the normal, ongoing review of state tax apportionment, the Company's state statutory tax rate was increased in the fourth quarter. Due to the increase, the Company’s blended federal and state tax rate was approximately 25.1% in 2025, compared to 24.8% in 2024. Included in tax expense during 2025 was $24.1 million in recaptured tax credits as discussed above and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits. Excluding the impact of the recaptured tax credits and related insurance proceeds, the adjusted effective tax rate 2 for 2025, after adjusting for permanent tax differences such as tax exempt income and tax credits, is approximately 20.0% compared to 19.9% in 2024. See “Item 8. Note 15 – Income Taxes” for additional information.
Current report
2 Adjusted effective tax rate is a non-GAAP measure. A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”
Current report
The following table presents a breakdown of C&I loans by size at the periods indicated:
Current report
The following table presents a breakdown of consumer loans by size at the periods indicated:
Current report
Provision and ACL
Current report
Nonperforming loans at December 31, 2025 increased $40.1 million, or 94%, when compared to December 31, 2024. The addition to nonperforming loans during 2025 was primarily related to seven real estate loans to special purpose entities (each an “SPE Borrower”) affiliated with two commercial banking relationships in Southern California that share some common ownership. Litigation resulting from a business dispute between the owners of the entities resulted in all of the SPE Borrowers filing bankruptcy in the first quarter 2025, which was subsequently dismissed. In the fourth quarter 2025, the Company foreclosed on six of the seven properties serving as collateral for the loans. The six properties were transferred to OREO at fair market value, less selling costs. Based on each individual property’s fair value, a net charge-off of $4.0 million and a gain on transfer of $6.2 million was recorded. The seventh property with a book value of $4.0 million was foreclosed on in the first quarter of 2026. The following table provides a summary of the six properties foreclosed in 2025 by collateral type:
Current report
Other than these foreclosures, the increase in nonperforming loans during 2025 was driven primarily by net charge-offs of $24.3 million and a relationship with two loans totaling $28.0 million that went on nonaccrual. These loans are well-secured with real estate collateral and the Company expects to collect the full value of the outstanding loans. Subsequent to December 31, 2025, $17.5 million in nonperforming loans were fully paid off in the first quarter of 2026.
Current report
OREO
Current report
Investment Securities
Current report
Stockholders’ equity
Current report
At December 31, 2024, total regulatory capital included $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%. Beginning June 1, 2025, the subordinated debentures bore interest at a floating rate per annum equal to a benchmark rate of three-month term SOFR (as defined in the Indenture, dated May 21, 2020, between the Company and U.S. Bank National Association, as trustee, and subsequent First Supplemental Indenture), plus 566 basis points. On September 2, 2025, the Company redeemed the 2030 Notes funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 250 basis points. Prior to being redeemed, the 2030 Notes bore interest at a floating rate then equal to 9.98% per annum, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year.
Current report
ACL
Current report
Adjusted Effective Tax Rate
Removed paragraphs (18)
Previous report
•NIM decreased to 4.16% in 2024, from 4.43% in 2023, primarily due to the impact of higher interest expense on the deposit portfolio from an increase in deposit rates and average balances. The total cost of deposits was 2.12% in 2024 compared to 1.58% in 2023. Offsetting the decline in NIM was a $995.0 million increase in average interest earning assets, which resulted in total net interest income of $568.1 million, a $5.5 million increase over the prior year.
Previous report
•Noninterest income was $69.7 million, an increase of $1.0 million from $68.7 million in 2023. Noninterest expense was $385.0 million in 2024, an 11% increase from $348.2 million in 2023. The increase in noninterest expense was primarily from higher customer deposit servicing costs due to higher average balances and an increase in earnings credit rates, an increase in compensation due to the recruitment of new relationship bankers and annual merit increases, and expenses related to the core system conversion. The core efficiency ratio 1 was 58.4% in 2024, compared to 53.4% in 2023.
Previous report
•The Company’s effective tax rate was 19.9% in 2024 compared to 21.3% in 2023.
Previous report
During 2023, we announced the following significant transactions:
Previous report
•The process of converting to a leading core operating system was initiated.
Previous report
Total tax equivalent interest income increased $86.5 million in 2024 primarily due to a $67.0 million increase in loan interest income. The increase was primarily due to an increase in average loan balances of $665.8 million during the year. In addition, the loan yield increased 20 basis points from 6.67% in 2023 to 6.87% in 2024. Tax equivalent interest income on securities (taxable and non-taxable) in 2024 increased $14.0 million from 2023, primarily due to increases of $7.3 million in interest income on average balances and $6.7 million in yield. Average securities represented 18% of earnings assets in both 2024 and 2023.
Previous report
The Company’s blended federal and state tax rate was approximately 24.8% in 2024 and 2023. The effective tax rate, which is adjusted for permanent differences, such as tax exempt income and tax credits, was 19.9% in 2024 compared to 21.3% in 2023. The effective tax rate decrease was driven by tax credit opportunities the Company has deployed as part of its tax planning strategy. See “Item 8. Note 16 – Income Taxes” for additional information.
Previous report
The following table presents a breakdown of commercial & industrial loans by size at the periods indicated:
Previous report
The following table presents a breakdown of other loans by size at the periods indicated:
Previous report
Provision and Allowance for Credit Losses
Previous report
Nonperforming loans at December 31, 2024 decreased $1.0 million, or 2%, when compared to December 31, 2023. The decrease in nonperforming loans during 2024 was primarily from principal payments of $29.0 million and charge-offs of $21.9 million, partially offset by additions to nonaccrual loans of $55.7 million.
Previous report
Other real estate
Previous report
The following table summarizes the changes in other real estate:
Previous report
Investments
Previous report
Shareholders’ equity
Previous report
Total regulatory capital includes $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%. The interest rate on these debentures resets to a floating rate based on 3 month term SOFR plus a spread of 5.66% in June of 2025. When the interest rate resets, the debentures become callable and the inclusion in regulatory capital begins to phase out over a five year period.
Previous report
The FCA ceased publishing the most common USD LIBOR settings (overnight, 1-month. 3-month, 6-month and 12-month) after September 30, 2024. LIBOR was the most liquid and common interest rate index in the world and was commonly referenced in financial instruments. With the cessation of LIBOR, the Company has selected term SOFR as the replacement index for the majority of its variable rate loans and began providing customer notifications in early 2023. The Company ceased using LIBOR and ICE swap rates in new contracts and began issuing SOFR based loans in December 2021.
Previous report
Allowance for Credit Losses
Reworded paragraphs (63)
Previous wording
Our Company offers a broad range of business and personal banking services including wealth management. Lending services include commercial and industrial, commercial real estate, real estate construction and development, residential real estate, specialty, and other loans. A wide variety of deposit products and a complete suite of treasury management and international trade services complement our lending capabilities. The Company’s results of operations are also affected by prevailing economic conditions, competition, government policies and other actions of regulatory agencies.
Current wording
The Company offers a broad range of business and personal banking services including wealth management. Lending services include C&I, CRE, real estate construction and development, residential real estate, specialty, and consumer loans. A wide variety of deposit products and a complete suite of treasury management and international trade services complement our lending capabilities. The Company’s results of operations are also affected by prevailing economic conditions, competition, government policies and other actions of regulatory agencies.
Previous wording
The Company’s financial condition, operating results and liquidity in 2024 continued to be impacted by monetary policy actions. The Federal Reserve decreased the target federal funds rate 100 basis points in the fourth quarter 2024, following a 100 basis point increase in 2023. The Federal Reserve has begun to loosen its monetary policy, but has indicated it will continue to reduce its balance sheet namely through a reduction in bond holdings. These actions represent the Federal Reserve’s response to an environment of high inflation and elevated interest rates following a period of highly expansionary fiscal support from the federal government during the COVID-19 pandemic in 2020-2021.
Current wording
The Company’s financial condition, operating results and liquidity in 2025 continued to be impacted by monetary policy actions. The Federal Reserve decreased the target federal funds rate 75 basis points in 2025, following a 100 basis point decrease in 2024. This follows the period of 2022 to 2023 when the Federal Reserve increased the target federal funds rate 525 basis points.
Previous wording
2 Common dividends per share divided by diluted earnings per share.
Current wording
2 Dividends per common share divided by diluted earnings per common share.
Previous wording
During 2024, we announced the following significant transactions:
Current wording
During 2025, we noted the following significant developments:
Previous wording
•Dividends paid in 2023 of $1.00 per share increased $0.10 per share, or 11%, compared to $0.90 per share in 2022.
Current wording
•Dividends paid in 2025 of $1.22 per share increased $0.16 per share, or 15%, compared to $1.06 per share in 2024.
Previous wording
•The Company reported net income of $185.3 million, or $4.83 per diluted share for 2024, compared to $194.1 million, or $5.07 per diluted share for 2023. PPNR 1 for 2024 was $255.2 million, compared to $284.8 million in 2023. PPNR ROAA 1 for 2024 and 2023 was 1.72% and 2.06%, respectively. The decrease in PPNR 1 and PPNR ROAA 1 was primarily due to increases in employee compensation and benefits, deposit costs, and expenses incurred in connection with the core system conversion, partially offset by an increase in operating revenue. Offsetting the decrease in PPNR 1 and PPNR ROAA 1 was a $15.1 million decrease in the provision for credit losses in 2024 compared to 2023, due to an improvement in overall asset quality.
Current wording
•The Company reported net income of $201.4 million, or $5.31 per diluted share for 2025, compared to $185.3 million, or $4.83 per diluted share for 2024. PPNR 1 for 2025 was $274.7 million, compared to $255.2 million in 2024. PPNR ROAA 1 for 2025 and 2024 was 1.70% and 1.72%, respectively. The increase in PPNR 1 was primarily due to higher net interest income that benefited from an organic increase in average interest-earning asset balances and liquidity provided through the Branch Acquisition, and lower rates paid on interest-bearing liabilities. These increases were partially offset by an increase in noninterest expense due to the Branch Acquisition, merit increases, higher headcount and higher deposit costs from growth in the deposit verticals.
Previous wording
1 Average balances include non-accrual loans. Interest income includes net loan fees of $9.6 million, $13.8 million, and $16.7 million for the years ended December 31, 2024, 2023, and 2022 respectively. Loan fees in 2022 included Paycheck Protection Program fees of $4.1 million.
Current wording
1 Average balances include nonaccrual loans. Interest income includes loan fees of $7.0 million, $9.6 million, and $13.8 million for the years ended December 31, 2025, 2024, and 2023 respectively.
Previous wording
2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were $8.4 million, $8.1 million, and $7.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Current wording
2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were $11.7 million, $8.4 million, and $8.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Previous wording
Net interest income (on a tax equivalent basis) was $576.5 million for 2024, compared to $570.7 million for 2023, an increase of $5.9 million. The increase in net interest income in 2024 was primarily due to a higher average yield on interest earning assets and organic loan growth, which was partially offset by an increase in the average cost paid on interest bearing liabilities.
Current wording
Net interest income (on a tax-equivalent basis) was $638.5 million for 2025, compared to $576.5 million for 2024, an increase of $61.9 million. The increase in net interest income in 2025 was primarily due to higher average interest-earning asset balances and a decrease in the average rates paid on interest-bearing liabilities.
Previous wording
Overall, average interest-earning assets increased $995.0 million, or 8%, to $13.9 billion for the year ended December 31, 2024, primarily due to success in growing the deposit portfolio. The loan portfolio expanded and excess liquidity was deployed into the investment portfolio and other interest-earning assets. Volume growth of the balance sheet drove an increase in interest income on earning assets of $58.3 million, while higher loan and securities yields drove interest income on interest-earning assets up by $28.2 million in 2024 compared to 2023.
Current wording
Overall, average interest-earning assets increased $1.3 billion, or 9%, to $15.1 billion for the year ended December 31, 2025. Excess liquidity provided through the Branch Acquisition was deployed into the securities portfolio and other interest-earning assets. Volume growth of the balance sheet drove an increase in interest income on earning assets of $62.8 million, partially offset by a decrease of $22.1 million in yield on interest-earning assets in 2025 compared to 2024.
Previous wording
Total interest expense increased $80.6 million in 2024 primarily due to increased deposit interest expense. The increase in deposit interest expense reflects higher rates paid on deposits, as well as successful marketing efforts that increased average deposits. Remixing of the deposit portfolio from noninterest-bearing and lower cost accounts into higher cost accounts contributed to the increase in deposit interest expense in 2024. Total average interest-bearing deposits increased to $8.5 billion, an increase of $996.3 million, or 13%, in 2024 over the average for 2023. Average noninterest-bearing deposits declined $88.8 million, or 2%, in 2024 compared to the average for 2023. Average noninterest-bearing deposits represented 31% of total average deposits in 2024, compared to 36% in 2023. Overall, average interest-bearing liabilities increased $934.9 million, or 12%, for the year ended December 31, 2024. The shift in volume from noninterest-bearing deposit accounts into higher cost deposit accounts increased interest expense in 2024 by $29.0 million, while the increase in the average cost of interest-bearing liabilities increased interest expense $51.6 million in 2024.
Current wording
Total interest expense decreased $21.3 million in 2025 primarily due to decreased rates paid on interest-bearing liabilities. The decrease in deposit interest expense reflects lower rates paid on deposits, partially offset by successful marketing efforts and acquired deposits in connection with the Branch Acquisition that increased average deposit balances. Total average interest-bearing deposits increased to $9.1 billion, an increase of $643.8 million, or 8%, in 2025 over the average for 2024. Average noninterest-bearing deposits increased $483.4 million, or 12%, in 2025 compared to the average for 2024. Average noninterest-bearing deposits represented 33% of total average deposits in 2025, compared to 32% in 2024. Overall, average interest-bearing liabilities increased $722.9 million, or 8%, for the year ended December 31, 2025 as compared to the prior year end. The increase in the average balance of interest-bearing liabilities increased interest expense in 2025 by $23.4 million, which was partially offset by the decrease in the average cost of interest-bearing liabilities that decreased interest expense $44.7 million in 2025.
Previous wording
The tax-equivalent net interest margin was 4.16% for 2024, compared to 4.43% for 2023. The primary driver of the decrease in net interest margin from 2023 to 2024 was higher interest expense on the deposit portfolio. In 2023, the Federal Reserve increased interest rates three times for a total of 100 basis points. In the fourth quarter 2024, the Federal Reserve lowered the federal funds target rate by 100 basis points. As of December 31, 2024, variable-rate loans comprised approximately 60% of total loans. The earning-asset yield increased 20 basis points to 6.20% in 2024, compared to 6.00% in 2023. Comparatively, the cost of interest-bearing liabilities increased 65 basis points to 3.20%, from 2.55% in 2023.
Current wording
The tax-equivalent net interest margin was 4.21% for 2025, compared to 4.16% for 2024. The primary driver of the increase in net interest margin from 2024 to 2025 was lower interest expense on the deposit portfolio. Since September 2024, the Federal Reserve has reduced the federal funds target rate 175 basis points. As of December 31, 2025, variable-rate loans comprised approximately 60% of total loans. The earning-asset yield decreased 26 basis points to 5.94% in 2025, compared to 6.20% in 2024. Comparatively, the cost of interest-bearing liabilities decreased 47 basis points to 2.73%, from 3.20% in 2024.
Previous wording
Noninterest income increased $1.0 million, or 1%, in 2024 compared to 2023. This increase was primarily due to a $1.8 million increase in service charges on deposit accounts, partially offset by a $0.9 million decrease in other income. Other income decreased primarily due to lower private equity and community development income ($3.1 million) and gains on the sale of SBA loans ($0.6 million), offset by an increase in gains on sale of other real estate owned ($2.9 million). Private equity and community development income are not consistent sources of income and fluctuate based on distributions and earnings from the underlying funds. In 2024, the Company sold the guaranteed portion of SBA 7(a) loans of $23.1 million for a gain of $1.4 million, compared to $42.1 million and $2.0 million, respectively, in 2023.
Current wording
Noninterest income increased $43.4 million, or 62%, in 2025 compared to 2024. The increase in noninterest income was primarily due to $32.1 million of anticipated insurance proceeds from a third quarter 2025 pending claim related to a recapture event with respect to a solar tax credit that the Company purchased and applied to prior taxable periods. Excluding this item, noninterest income increased primarily due to an $11.5 million increase in other income. Other income increased primarily due to higher BOLI income ($3.7 million), an increase in gains on the sale of SBA loans ($2.8 million), and an increase in net gain on OREO ($3.2 million). Private equity and community development income are not consistent sources of income and fluctuate based on distributions and earnings from the underlying funds. In 2025, the Company sold the guaranteed portion of SBA 7(a) loans of $78.2 million for a gain of $4.2 million, compared to $23.1 million and $1.4 million, respectively, in 2024.
Previous wording
Noninterest expense increased $36.9 million, or 11%, in 2024 compared to 2023. The increase was attributed primarily to an increase in compensation and benefits due to annual merit increases and the recruitment of new relationship bankers, a $16.4 million increase in deposit costs, and a $4.5 million increase in data processing primarily related to the core system conversion. The total cost of the core conversion in noninterest expense was $4.9 million in 2024. For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts. These costs are reflected in noninterest expense as Deposit costs. The increase in deposit costs in 2024 is due to organic growth in the deposit verticals and an increase in market interest rates that increased the earnings credit rate and related expenses for those accounts. Average balances in the deposit verticals were approximately $3.1 billion and $2.6 billion, resulting in an average deposit vertical cost of 2.82% and 2.75% for 2024 and 2023, respectively.
Current wording
Noninterest expense increased $44.8 million, or 12%, in 2025 compared to 2024. The increase was attributed primarily to an increase in compensation and benefits due to annual merit increases, an expanded associate base, the onboarding of the associates from the Branch Acquisition, and the recruitment of new relationship bankers. The total cost of the Branch Acquisition in noninterest expense was $3.7 million in 2025. The increase from 2024 was also primarily due to a $14.6 million increase in deposit costs due to an increase in average deposit vertical balances. For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit allowance on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts. These costs are reflected in noninterest expense as deposit costs. Average balances in the deposit verticals were approximately $3.8 billion and $3.1 billion, resulting in an average deposit vertical cost of 2.75% and 2.82% for 2025 and 2024, respectively.
Previous wording
The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total shareholders’ equity), as applicable:
Current wording
The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total stockholders’ equity), as applicable:
Previous wording
The Company has a diversified loan portfolio, with no particular concentration of credit in any one economic sector other than those noted in the table of loans by NAICS code below; however, a substantial portion of the portfolio, including the C&I category, is secured by real estate. The ability of the Company’s borrowers to honor their contractual obligations is partially dependent upon the local economy and its effect on the real estate market.
Current wording
The Company has a diversified loan portfolio, with no particular concentration of credit in any one economic sector other than those noted in the table of loans by NAICS code below; however, a substantial portion of the portfolio, including the C&I category, is secured by real estate. The ability of the Company’s borrowers to honor their contractual obligations is partially dependent upon the local economy and its effect on the real estate market. Included in total loans at December 31, 2025 are $292.0 million of loans from the Branch Acquisition.
Previous wording
The Company continues to focus on originating high-quality C&I loan relationships as they allow for cross selling opportunities involving other banking products. Our specialized products, especially sponsor finance, life insurance premium financing, and tax credit lending, consist of primarily C&I loans, and have contributed significantly to the Company’s C&I loan growth. These loans are sourced through relationships developed with wealth and estate planning firms, private equity funds and tax credit specialists and are not bound geographically to our markets. As a result, these specialized loan products offer opportunities to expand and diversify our overall geographic concentration by entering into new markets.
Current wording
The Company continues to focus on originating high-quality C&I loan relationships as they allow for cross selling opportunities involving other banking products. Our specialized products, especially sponsor finance, life insurance premium financing, and tax credit lending, consist of primarily C&I loans, and have contributed significantly to the Company’s C&I loan growth. These loans are sourced through relationships developed with wealth and estate planning firms, private equity funds and tax credit specialists and are not bound geographically to our markets. As a result, these specialized loan products offer opportunities to expand and diversify our overall geographic concentration by entering into new markets. C&I also represents loans to state and political subdivisions, loans to nondepository financial institutions, and loans to purchase, or are fully secured by, investment securities.
Previous wording
•Our commercial real estate loans, including investor-owned and owner-occupied categories, primarily represent commercial property loans on which the primary source of repayment is income from the property for investor-owned and the operating business for owner-occupied. These loans are principally underwritten based on the cash flow coverage of the property, the Company’s loan to value guidelines, and generally require either the limited or full guaranty of principal sponsors of the credit. The Company also maintains standards for amortization and maturity terms. Commercial real estate loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral. In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations. Annually, management prepares an assessment of credit risk in the various loan portfolios, with a significant portion of the commercial loan portfolio subject to review. These reviews consider the Company’s collateral position as well as exposure to a given industry sector. The Company performs site visits as part of the underwriting process, in addition to stress tests for vacancy, rental and interest rates on certain property types. The Company believes that the loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry, geography or devaluation of a specific collateral type.
Current wording
•Our CRE loans, including investor-owned and owner-occupied categories, primarily represent commercial property loans on which the primary source of repayment is income from the property for investor-owned and the operating business for owner-occupied. These loans are principally underwritten based on the cash flow coverage of the property, the Company’s loan to value guidelines, and generally require either the limited or full guaranty of principal sponsors of the credit. The Company also maintains standards for amortization and maturity terms. CRE loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral. In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations. Annually, management prepares an assessment of credit risk in the various loan portfolios, with a significant portion of the commercial loan portfolio subject to review. These reviews consider the Company’s collateral position as well as exposure to a given industry sector. The Company performs site visits as part of the underwriting process, in addition to stress tests for vacancy, rental and interest rates on certain property types. The Company believes that the loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry, geography or devaluation of a specific collateral type.
Previous wording
•Construction and land development loans relating primarily to residential and commercial properties, represent financing secured by real estate under development for eventual sale or undeveloped ground. At December 31, 2024, $334.2 million of these loans include the use of interest reserves and follow standard underwriting guidelines. Construction projects are monitored by the loan officer and a centralized independent loan disbursement function.
Current wording
•Construction and land development loans relating primarily to residential and commercial properties, represent financing secured by real estate under development for eventual sale or undeveloped ground. At December 31, 2025, $378.5 million of these loans include the use of interest reserves and follow standard underwriting guidelines. Construction projects are monitored by the loan officer and a centralized independent loan disbursement function.
Previous wording
Other loans represent loans to individuals, loans to state and political subdivisions, loans to nondepository financial institutions, and loans to purchase or are fully secured by investment securities. Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter.
Current wording
Consumer loans represent loans to individuals. Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter.
Previous wording
At December 31, 2024 and 2023, the Company had an agricultural loan portfolio of $121.8 million and $229.7 million, respectively. The Company continues to wind down this portfolio over time as the loans mature or pay down. The Company does not intend to enter into new agricultural loans.
Current wording
At December 31, 2025 and 2024, the Company had an agricultural loan portfolio of $69.3 million and $121.8 million, respectively. The Company continues to wind down this portfolio over time as the loans mature or pay down. The Company does not intend to enter into new agricultural loans.
Previous wording
The following table presents a breakdown of commercial real estate loans (investor owned and owner occupied) by size at the periods indicated:
Current wording
The following table presents a breakdown of CRE loans (investor owned and owner occupied) by size at the periods indicated:
Previous wording
The Company had $513.7 million and $482.0 million of investor owned office real estate loans as of December 31, 2024 and 2023, respectively. The Company also had $322.5 million and $271.8 million of multifamily commercial real estate loans as of December 31, 2024 and 2023, respectively.
Current wording
The Company had $574.8 million and $513.7 million of investor owned office real estate loans as of December 31, 2025 and 2024, respectively. The Company also had $399.0 million and $322.5 million of multifamily CRE loans as of December 31, 2025 and 2024, respectively.
Previous wording
The following table presents a breakdown of total loans by MSA, excluding specialty and other loans, at the periods indicated:
Current wording
The following table presents a breakdown of total loans by MSA, excluding specialty and consumer loans, at the periods indicated:
Previous wording
Loan guarantees, primarily on SBA 7(a) loans, totaled $947.7 million and $932.1 million at December 31, 2024 and 2023, respectively.
Current wording
Loan guarantees, primarily on SBA 7(a) loans, totaled $960.1 million and $947.7 million at December 31, 2025 and 2024, respectively.
Previous wording
SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, commercial real estate loans secured by a 1st lien. These loans predominantly have a 75% portion guaranteed by the SBA.
Current wording
SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, CRE loans secured by a 1st lien. These loans predominantly have a 75% portion guaranteed by the SBA.
Previous wording
The majority of variable loans are based on the prime rate or SOFR. At December 31, 2024, $4.6 billion or 68% of variable rate loans were subject to an interest rate floor. Most variable rate loan originations have one-to three-year maturities. Management monitors this mix as part of its interest rate risk management. The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio. These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million and $350.0 million at December 31, 2024 and 2023, respectively. See “Interest Rate Risk” of this MD&A section for additional information.
Current wording
The majority of variable rate loans are based on the prime rate or SOFR. At December 31, 2025, $4.8 billion or 68% of variable rate loans were subject to an interest rate floor. Most variable rate loan originations have one-to three-year maturities. Management monitors this mix as part of its interest rate risk management. The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio. These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million at both December 31, 2025 and 2024. See “Interest Rate Risk” of this MD&A section for additional information.
Previous wording
The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date. The Company also records reversals of interest on nonaccrual loans and interest recoveries directly through the provision of credit losses.
Current wording
The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL on loans at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date. The Company also records reversals of interest on nonaccrual loans and interest recoveries directly through the provision of credit losses.
Previous wording
The CECL methodology requires economic forecasts to be factored into determining estimated losses. As a result, CECL is designed to typically require a higher level of provision at the start of an economic downturn. The decrease in the provision for credit losses in 2024 was primarily due to improved credit quality, including a reduction in net charge-offs. The higher provision for credit losses in the prior year was primarily due to loan growth, net charge-offs and the increase in nonperforming loans. The provision for credit losses in 2023 also included the impact of the impairment of an available-for-sale investment security, related to a subordinated debt security in a publicly-traded bank that failed in the first quarter of 2023.
Current wording
The CECL methodology requires economic forecasts to be factored into determining estimated losses. As a result, CECL is designed to typically require a higher level of provision at the start of an economic downturn. The increase in the provision for credit losses in 2025 was primarily due to loan growth, net charge-offs and the increase in nonperforming loans. The higher provision for credit losses in 2024 was also primarily due to loan growth, net charge-offs and the increase in nonperforming loans.
Previous wording
The allowance for credit losses was 1.23% of total loans at December 31, 2024, compared to 1.24%, and 1.41%, at December 31, 2023 and 2022, respectively. The decrease in the allowance to total loans ratio in 2024 compared to 2023 was primarily due to a shift in the mix of the loan portfolio to categories with lower reserve requirements, improvement in the economic forecast and net loan charge-offs of $17.5 million.
Current wording
The ACL on loans was 1.19% of total loans at December 31, 2025, compared to 1.23%, and 1.24%, at December 31, 2024 and 2023, respectively. The decrease in the allowance to total loans ratio in 2025 compared to 2024 was primarily due to an improvement in the economic forecast, a reduction in qualitative reserves, and net loan charge-offs of $24.3 million. The Company adopted a new accounting standard in the current quarter that resulted in the $3.3 million credit mark on the acquired loan portfolio from the Branch Acquisition being added directly to the ACL in purchase accounting and no provision for credit losses was recognized on the acquired loans.
Previous wording
See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the allowance for credit losses methodology.
Current wording
See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the ACL methodology.
Previous wording
See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and other real estate. The following table presents the categories of nonperforming assets and other ratios, excluding government guaranteed portions, as of the dates indicated.
Current wording
See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and OREO. The following table presents the categories of nonperforming assets and other ratios, excluding government guaranteed portions, as of the dates indicated.
Previous wording
At December 31, 2024, our portfolio of investment securities was $2.8 billion, or 18% of total assets, compared to $2.4 billion, or 16% of total assets as of December 31, 2023. The portfolio is comprised of both available-for-sale and held-to-maturity securities.
Current wording
At December 31, 2025, our portfolio of investment securities was $3.7 billion, or 22% of total assets, compared to $2.8 billion, or 18% of total assets as of December 31, 2024. The portfolio is comprised of both available-for-sale and held-to-maturity securities.
Previous wording
The table below sets forth the carrying value of investment securities, excluding the allowance for credit losses:
Current wording
The table below sets forth the carrying value of investment securities, excluding the ACL:
Previous wording
The allowance for credit losses on held-to-maturity debt securities was $0.3 million and $0.8 million at December 31, 2024 and 2023, respectively. The Company had no debt securities classified as trading at December 31, 2024, or 2023.
Current wording
The ACL on held-to-maturity debt securities was $0.1 million and $0.3 million at December 31, 2025 and 2024, respectively. The Company had no debt securities classified as trading at December 31, 2025 or December 31, 2024.
Previous wording
Yields on tax-exempt securities are computed on a taxable equivalent basis using a tax rate of 24.8%. Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties.
Current wording
Yields on tax-exempt securities are computed on a taxable equivalent basis using a tax rate of 25.1%. Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties.
Previous wording
Other investments primarily consist of the FHLB capital stock, common stock investments related to our trust preferred securities, community development funds, and other investments in private equity funds, primarily SBICs. These investments do not have a stated maturity.
Current wording
The following table details the balance of FHLB capital stock and other investments. Other investments consist primarily of common stock investments related to our trust preferred securities, community development funds, and investments in private equity funds, primarily SBICs. These investments do not have a stated maturity.
Previous wording
Total deposits increased $970.1 million, primarily due to client deposit growth. Brokered certificates of deposit increased $1.8 million, to $484.6 million at December 31, 2024. Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings. The brokered certificates of deposit balance has a weighted average cost of 4.50% and a weighted average remaining term of 9 months at December 31, 2024. The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services. These deposits totaled $3.4 billion and $2.8 billion at the end of 2024 and 2023, respectively.
Current wording
Total deposits increased $1.5 billion primarily due to organic deposit growth, as well as $609.5 million of deposits from the Branch Acquisition. Brokered certificates of deposit increased $237.4 million, to $722.0 million at December 31, 2025. Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings. The brokered certificates of deposit balance has a weighted average cost of 3.98% and a weighted average remaining term of six months at December 31, 2025. The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services. These deposits totaled $3.8 billion and $3.4 billion at the end of 2025 and 2024, respectively.
Previous wording
Average total deposits were $12.5 billion for the year ended December 31, 2024, an increase of $907.5 million, or 8%, from December 31, 2023. The increase in 2024 was primarily due to organic growth in money market and interest-bearing demand accounts.
Current wording
Average total deposits were $13.6 billion for the year ended December 31, 2025, an increase of $1.1 billion, or 9%, from December 31, 2024. The increase in 2025 was primarily due to acquired deposits related to the Branch Acquisition, and organic growth in noninterest-bearing demand accounts, interest-bearing demand accounts, and money market accounts.
Previous wording
As of December 31, 2024, estimated uninsured deposits totaled $4.5 billion, including $268.2 million of certificates of deposit. At December 31, 2023 estimated uninsured deposits totaled $4.3 billion. Estimated uninsured deposits include $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2024 and 2023, respectively.
Current wording
Estimated uninsured deposits totaled $5.1 billion, including $289.9 million of certificates of deposit, as of December 31, 2025, and $4.5 billion as of December 31, 2024. Estimated uninsured deposits include $0.4 billion and $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2025 and 2024, respectively.
Showing the first 40 of 63 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•The Company had a return on average assets of 1.24%. This drove a 11.0% increase in tangible book value per share in 2025.
Current report — wording carried from elsewhere
•The Company repurchased 258,739 shares of its common stock at a weighted-average share price of $54.60.
Current report — wording carried from elsewhere
The following table summarizes the changes in OREO: