Merchants Bancorp

Note 1: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank and MIP. Merchants Bank’s primary operating subsidiaries include MCC, MCS, and MCI. All directly and indirectly owned subsidiaries of Merchants Bancorp are collectively referred to as the “Company.”

The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2025, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2025 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included to present fairly the financial position as of September 30, 2026, and the results of operations, cash flows and changes in shareholders’ equity for the three and nine months ended September 30, 2026. All interim amounts have not been audited and the results of operations for the three and nine months ended September 30, 2026, herein are not necessarily indicative of the results of operations to be expected for the entire year.

Principles of Consolidation

The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2026 and 2025 include results from the Company, and its wholly owned subsidiaries, Merchants Bank and MIP. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS, and MCI, as well as all direct and indirectly owned subsidiaries owned by Merchants Bancorp.

The results of Merchants Foundation, Inc., a nonprofit corporation, are consolidated with the Company’s unaudited condensed consolidated financial statements in all periods presented.

In addition, when the Company makes an equity investment in or has a relationship with an entity for which it holds a variable interest, it is evaluated for consolidation requirements under ASC Topic 810. Accordingly, the Company assesses the entities for potential consolidation as a VIE and would only consolidate those entities for which it is the primary beneficiary. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest with significant exposure to the entity’s economics. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size, and form of the Company’s involvement with the entity are evaluated. Alternatively, under the voting interest model, it would only consolidate those entities for which it has a controlling interest.

The Company holds a variable interest in an investment for which it is the primary beneficiary, and its results have been consolidated in all periods presented. The investment is recorded on the unaudited condensed consolidated balance sheets in other assets and the significant liabilities in borrowings. Additionally, the Company has certain variable interest investments where it was not deemed to be the primary beneficiary of as of September 30, 2026 and December 31, 2025. These VIEs are not consolidated and the equity method or proportional amortization method of accounting has been applied. The Company will analyze whether the primary beneficiary designation has changed through triggering events on a prospective basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See*Note 8: Variable Interest Entities (VIEs)*for additional information about VIEs.

On September 14, 2026, the Company acquired The Loan Exchange for total consideration of $13.9 million. The acquisition resulted in the recognition of approximately $11.1 million of goodwill. The purchase accounting remains subject to adjustment during the measurement period as additional information regarding facts and circumstances existing as of the acquisition date becomes available. The results of operations of The Loan Exchange have been included in the Company’s consolidated financial statements from the date of acquisition and were not material to the Company’s consolidated results for the three and nine months ended September 30, 2026.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and use judgements that affect the reported amounts of assets, liabilities, revenues, and expenses. The estimates are based upon historical experience and on various other assumptions that management believes are reasonable under the current circumstances. These estimates form the basis for making judgements about the carrying value of certain assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates under different assumptions or conditions.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans and fair values of servicing rights and financial instruments.

Significant Accounting Policies

The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. For additional information regarding significant accounting policies, see the Company’s 2025 Annual Report on Form 10–K.

Reclassifications

Certain reclassifications have been made in the 2025 footnotes to the unaudited condensed consolidated financial statements to conform to the footnotes to the unaudited condensed consolidated financial statement presentation as of and for the three and nine months ended September 30, 2026. These reclassifications had no effect on the unaudited condensed consolidated financial statements as a whole nor on net income.

Other

The Company and its subsidiaries can be parties to various claims and proceedings arising in the normal course of business. Management, after consultation with legal counsel, believes that the contingent liabilities, if any, arising from such proceedings and claims will not be material to the Company’s consolidated financial position or results of operations.

New Accounting Pronouncements Not Yet Adopted

The Company continually monitors potential FASB accounting pronouncement and SEC release changes. The following pronouncements and releases have been deemed to have the most applicability to the Company’s financial statements:

FASB 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 an ASU which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, and amortization)

included in certain expense captions presented on the face of our unaudited condensed consolidated statements of income.

The updates in ASU 2024-03 are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. An entity may apply the ASU on a prospective basis to financial statements for annual periods beginning after the effective date. The Company is continuing to evaluate the disclosure requirements within this ASU.

FASB ASU 2025-08 – Financial Instruments – Credit Losses – Purchased Loans

In November 2025, the FASB issued an ASU to simplify and enhance comparability in the accounting for purchased loans under CECL. This update will require updates to CECL models and accounting processes for the new category of certain acquired loans.

The updates in ASU 2025-08 are effective for fiscal periods beginning after December 15, 2026, including interim periods. An entity shall apply the ASU on a prospective basis to financial statements for annual periods beginning after the effective date. Early adoption is permitted. The Company is continuing to evaluate the impact of adopting this new guidance.

Note 2: Investment Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities available for sale and held to maturity were as follows:

Accrued interest on securities available for sale totaled $4.7 million at September 30, 2026 and $3.8 million at December 31, 2025, and is excluded from the estimate of credit losses.

Accrued interest on securities held to maturity totaled $4.9 million at September 30, 2026 and $5.0 million at December 31, 2025, and is excluded from the estimate of credit losses.

The amortized cost and fair value of securities available for sale at September 30, 2026, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call

or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

During the three and nine months ended September 30, 2026 and 2025, no securities available for sale were sold.

The following tables show the Company’s gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, for which an ACL has not been recorded, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2026 and December 31, 2025:

Allowance for Credit Losses

There wereno credit-related factors underlying unrealized losses on available for sale securities at September 30, 2026 and December 31, 2025, accordinglyno allowance for credit losses has been recorded. Furthermore, unrealized losses on the Company’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is attributable to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach maturity and/or the interest rate environment returns to conditions similar to when these securities were purchased.

Securities held to maturity are primarily comprised of non-Agency mortgage-backed senior securities secured by multi-family, single-family or healthcare properties, and Agency mortgage-backed securities secured by multi-family properties. The Agency securities held to maturity are Ginnie Mae mortgage-backed securities and backed by the full faith and credit of the U.S. government and have an implicit or explicit government guarantee. Accordingly, no allowance for credit losses has been recorded for these securities.

For non-Agency mortgage-backed senior securities, qualitative factors are evaluated, including the timeliness of principal and interest payments under the contractual terms of the securities, as well as the investment ratings assigned to the securities by third parties and their qualification to be pledged to FHLB as collateral. In the event credit stress in the underlying loans is identified in any single security, risk grades and collateral values are evaluated to determine whether Merchants Bank has exposure to credit losses.

The Company has a held to maturity, non-Agency, mortgage-backed security with an amortized cost and fair value of $323.0 million at September 30, 2026, acquired via a mortgage securitization transaction facilitated by the Company, which has experienced delinquencies in some of the underlying loans. As of September 30, 2026,35% of the portfolio was delinquent. Additionally, the security is a senior tranche that has credit protection from the first 17.5% of losses. The Company continues to receive timely interest payments on this security, which is current as of September 30, 2026. The Company is not expected to have credit losses based on the loan-to-value of the underlying loans, its credit protection and expected cash flows. However, given the delinquencies on some of the underlying loans, the Company has classified the security as Special Mention as of September 30, 2026. This same security had an amortized cost value of $438.4 million and fair value of $437.5 million and was also classified as Special Mention at December 31, 2025. All other securities held to maturity were classified as Pass as of September 30, 2026 and December 31, 2025. No allowance for credit losses was recorded for this, or any other non-Agency securities, as of September 30, 2026 and December 31, 2025. SeeNote 4: Loans and Allowance for Credit Losses on Loans for more information on the definitions of risk classifications for both loans and securities.

Note 3: Mortgage Loans in Process of Securitization

Mortgage loans in process of securitization are recorded at fair value with changes in fair value recorded in earnings. These include multi-family rental real estate loan originations to be sold as Ginnie Mae mortgage-backed securities and Fannie Mae and Freddie Mac participation certificates, all of which are pending settlements with firm investor commitments to purchase the securities, typically occurring within 30 days. The aggregate positive fair value

adjustment recorded in mortgage loans in process of securitization was $2.4 million and $5.2 million as of September 30, 2026 and December 31, 2025, respectively.

Note 4: Loans and Allowance for Credit Losses on Loans

Most loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost at their outstanding principal balances adjusted for charge-offs, the ACL-Loans, and deferred fees or costs, including premiums or discounts on purchased loans.

Certain loans receivable are measured at fair value. These loans were previously designated as held for sale and measured at fair value and continue to be measured at fair value as loans receivable (held for investment) in accordance with the Company’s valuation election.

For loans receivable held at amortized cost or fair value, interest income is accrued based on the unpaid principal balance.

The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately from the related loan balance on the unaudited condensed consolidated balance sheets. Accrued interest on loans totaled $50.8 million and $51.4 million at September 30, 2026 and December 31, 2025, respectively.

The Company also elected not to measure an allowance for credit losses for accrued interest receivables. The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past-due status is based on contractual terms of the loan. Loans may be placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest subsequently collected on these loans is applied to the principal balance until the loan can be returned to an accrual status, which is no less than six months from the initial classification as nonaccrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

For all loan portfolio segments, the Company charges off loans, or portions thereof, when available information indicates that all contractual principal is uncollectable. Available information may include, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. All delinquent loans will be charged to the ACL-Loans at 121 days past due for unsecured loans, and when actual loss is determined for secured loans.

For loan modifications, interest income is recognized on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms.

The Company offers mortgage warehouse repurchase agreements to third parties to fund mortgage loans held for sale from closing until sale to an investor. Under a warehousing arrangement, the Company funds a mortgage loan as secured financing. The warehousing arrangement is secured by the underlying mortgages and a combination of deposits, personal guarantees, and advance rates, and may be cross collateralized with other loans. The Company typically holds the collateral until it is sent under a bailee arrangement instructing the investor to send proceeds to the Company. Typical investors are large financial institutions or government agencies. Interest earned from the time of funding to the time of sale is recognized as interest income as accrued. Warehouse fees are accrued as noninterest income.

Loan Portfolio Summary‌

Loans receivable at September 30, 2026 and December 31, 2025 include:

Risk characteristics applicable to each segment of the loan portfolio are described as follows.

Mortgage Warehouse Repurchase Agreements (MTG WHRA): Under its warehouse program, the Company provides warehouse financing arrangements to approved mortgage companies for their origination and sale of residential mortgage and multi-family loans. Loans secured by mortgages on existing one-to-four family dwellings or one-to-four family residential properties under construction, may be originated or purchased and placed through each mortgage warehouse facility.

As a secured repurchase agreement, collateral pledged to the Company secures each individual mortgage until the mortgage company sells the loan in the secondary market. Traditional secured warehouse repurchase agreements and participation agreements typically carry a base interest rate of SOFR, plus a margin, or the mortgage note rate.

Risk is evident if there is a change in the fair value of mortgage loans originated by mortgage companies in warehouse, the sale of which is the expected source of repayment under a warehouse facility. However, the warehouse customers are required to hedge the change in value of these loans to mitigate the risk, typically through forward sales contracts.

Residential Real Estate Loans (RES RE): Real estate loans are secured by owner-occupied one-to-four family residences. Repayment of residential real estate loans is primarily dependent on the personal income and assets of the borrowers. Credit risk for these loans is driven by those factors, as well as the credit rating of the borrowers and property values. In addition to loans originated for sale, and some loans receivable, included in this segment are All-in-One© first-lien HELOC products that link a borrower’s mortgage and deposit account into a single facility and have typically carried a base interest rate of One-Year CMT, plus a margin. Originations since March 2025 are tied to 30-day SOFR, plus a margin.

Multi-Family Financing (MF FIN): The Company specializes in originating multi-family financing that can be Market Rate or Affordable. The portfolio includes loans for construction, acquisition, refinance, or permanent financing. Loans are typically secured by real estate mortgages, assignment of LIHTCs, and/or equity interest in the underlying properties. All loans are assessed and reviewed at a minimum based on borrower strength/experience, historical property performance, market trends, projected financial performance with regards to intended strategy, and source of repayment. Independent third-party reports are used to ensure legal conformity and support valuations of the assets. Exit strategies and sources of repayment are provided through the secondary market via governmental programs, strategic refinances, LIHTC equity installments, and cashflow from the properties. Repayment of these loans may include refinancing to a permanent loan or sale of the property, as well as successful operation of a business or property and the borrower’s cash flows. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values, and the local economy in the related market area. Interest rate risk is mitigated by borrower purchased rate caps, interest reserves, liquidity covenants, and forward commitments from GSEs. These loans are well-collateralized and underwritten to agency guidelines. Loans included in this segment typically carry a base rate of 30-day SOFR, that adjusts on a monthly basis, plus a margin. The Company focuses on loan classes that are underwritten to FHA or GSE guidelines or can be sold in the secondary market.

**Healthcare Financing (HC FIN):**The healthcare financing portfolio includes customized loan products for need-based, independent living, assisted living, memory care, and skilled nursing projects. A variety of loan products are available to accommodate rehabilitation, acquisition, and refinancing of healthcare properties. Credit risk in these loans is primarily driven by local demographics and the expertise of the operators of the facilities. Repayment of these loans may include refinancing to a permanent loan or sale of the property, as well as successful operation of a business or property and the borrower’s cash flows. These loans are well-collateralized and underwritten to agency guidelines. Loans included in this segment typically carry a base rate of 30-day SOFR that adjusts on a monthly basis, plus a margin. The Company focuses on loan classes that are underwritten to FHA guidelines or can be sold in the secondary market.

** **Commercial Lending and Commercial Real Estate Loans (CML & CRE): The commercial lending and commercial real estate portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions, as well as loans to commercial customers to finance land and improvements. It also includes lines of credit collateralized by servicing rights that are assessed for fair value quarterly at the Company’s request. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations. SBA loans are included in this category. SBA 7(a) loans are partially guaranteed by the U.S. Small Business Administration, which mitigates the Bank's credit risk exposure. The Company typically sells the guaranteed portion of these loans into the secondary market, generating gain on sale revenue while retaining servicing rights that are recognized as servicing assets.

Agricultural Production and Real Estate Loans (AG & AGRE): Agricultural production loans are generally comprised of seasonal operating lines of credit to grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. The Company also offers long-term financing to purchase agricultural real estate. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating-year based on industry-developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop and other farm assets as considered necessary. The Company is approved to sell agricultural loans in the secondary market through Farmer Mac and uses this relationship to manage interest rate risk within the portfolio. Agricultural real estate loans included in this segment are typically structured with a one-year ARM, three-year ARM or five-year ARM indexed to CMT, plus a margin. Agriculture production, livestock, and equipment loans are structured with variable rates that are indexed to prime or fixed for terms not exceeding five years.

Consumer and Margin Loans (CON & MAR): Consumer loans are those loans secured by household assets. Margin loans are those loans secured by marketable securities. The term and maximum amount for these loans are

determined by considering the purpose of the loan, the margin (advance percentage against value) in all collateral, the primary source of repayment, and the borrower’s other related cash flow.

ACL-Loans

The ACL-Loans is the Company’s estimate of current expected life of loan credit losses. Loans receivable is presented net of the allowance to reflect the principal balance expected to be collected over the contractual term of the loans. This life of loan allowance is established through a provision for credit losses included in net interest income after provision for credit losses as loans are recorded in the unaudited condensed consolidated financial statements. The provision for a reporting period also reflects increases or decreases in the allowance related to changes in credit loss expectations. Actual credit losses are charged against the allowance when management believes the loan balance, or a portion thereof, is uncollectible. Subsequent recoveries, if any, are credited to the allowance.

The ACL-Loans is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans considering relevant available information from internal and external sources, including historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. The allowance also incorporates reasonable and supportable forecasts. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The level of the ACL-Loans is believed to be adequate to absorb expected future losses in the loan portfolio as of the measurement date.

The ACL-Loans consists of individually evaluated loans and pooled loan components. The Company’s primary portfolio segmentation is by loans with similar risk characteristics. Loans risk graded substandard and worse are individually evaluated for expected credit losses. For individually evaluated loans that are collateral dependent, the Company may use the fair value of the collateral, less estimated costs to sell, as a practical expedient as of the reporting date to determine the carrying amount of an asset and the allowance for credit losses, as applicable. A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or the sale of the collateral when the borrower is experiencing financial difficulty as of the reporting date.

To calculate the ACL-Loans, the portfolio is segmented by loans with similar risk characteristics.

Loan characteristics used in determining the segmentation include the underlying collateral, type, or purpose of the loan, and expected credit loss patterns. The initial estimation of expected credit losses for each segment is based on historical credit loss experience and management’s judgement. Given the Company’s historical credit loss experience, peer and industry data was also incorporated into the measurement. Expected life of loan credit losses are quantified using discounted cash flows and remaining life methodologies.

Model results are supplemented by qualitative adjustments for risk factors relevant in assessing the expected credit losses within the portfolio segments. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor.

The models utilized and the applicable qualitative adjustments require assumptions and management judgement that can be subjective in nature. The above measurement approach is also used to estimate the expected credit losses associated with unfunded loan commitments, which also incorporates expected utilization rates.

The following tables present, by loan portfolio segment, the activity in the ACL-Loans for the three and nine months ended September 30, 2026 and 2025:

The Company recorded a total provision for credit losses of $12.0 million for the three months ended September 30, 2026. The $12.0 million total provision for credit losses consisted of $10.0 million for the ACL-Loans as shown above plus $2.0 million for the ACL-OBCE’s and net of a $6,000 release for the ACL-Guarantees, related to a loan securitization.

The Company recorded a total provision for credit losses of $29.2 million for the three months ended September 30, 2025. The $29.2 million total provision for credit losses consisted of $31.0 million for the ACL-Loans as shown above, net of a $1.8 million release for the ACL-OBCE’s.

The Company recorded a total provision for credit losses of $36.5 million for the nine months ended September 30, 2026. The $36.5 million total provision for credit losses consisted of $36.6 million for the ACL-Loans as shown above, net of a $109,000 release for the ACL-OBCE’s and net of a $19,000 release for the ACL-Guarantees, related to a loan securitization.

The Company recorded a total provision for credit losses of $90.0 million for the nine months ended September 30, 2025. The $90.0 million total provision for credit losses consisted of $95.0 million for the ACL-Loans as shown above, net of a $4.6 million release for the ACL-OBCE’s and net of a $0.4 million release for the ACL-Guarantees, related to a loan securitization.

The following table presents, by loan portfolio segment, the activity in the ACL-Loans, for the year-ended December 31, 2025:

The table below presents the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses as of September 30, 2026 and December 31, 2025:

There were no significant changes to the types of collateral securing the Company’s collateral dependent loans compared to December 31, 2025.

Internal Risk Categories

The Company evaluates the loan risk grading system definitions and ACL-Loans methodology on an ongoing basis. In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans:

Pass - Loans that are considered to be of acceptable credit quality, and not classified as Special Mention, Substandard, or Doubtful. Also included are loans classified as Watch loans, which represent loans that remain sound and collectible but exhibit characteristics that warrant closer ongoing monitoring by management.

Special Mention – Loans classified as Special Mention have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not warrant adverse classification. Loans with questions or concerns regarding collateral, adverse market conditions impacting future performance, and declining financial trends would be considered for Special Mention.

Substandard - Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. When a loan in the form of a line of credit is downgraded to Substandard, it is evaluated for credit losses and future draws under the line of credit require the approval of a Senior Credit Officer or above.

Doubtful - Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables present the credit risk profile of the Company’s loan receivable portfolio based on internal risk rating category and origination year as of September 30, 2026 and December 31, 2025:

Note: Year of origination is originally based on the origination date of a loan and updated when the maturity date is amended due to extension or modification.

All loans held for sale were pass grade as of September 30, 2026 and are not included in the table above. The Company did not have any material revolving loans converted to term loans that were not re-underwritten at September 30, 2026.

Note: Year of origination is originally based on the origination date of a loan and updated when the maturity date is amended due to extension or modification.

All loans held for sale were pass grade as of December 31, 2025 and are not included in the table above. The Company did not have any material revolving loans converted to term loans that were not re-underwritten at December 31, 2025.

Delinquent Loans

The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of September 30, 2026 and December 31, 2025.

There wereno loans held for sale past due as of September 30, 2026.

The table above excludesone multi-family loan of $0.3 million, 30-59 days past due, classified as held for sale that was past due as of December 31, 2025.

Nonperforming Loans and Assets

Nonaccrual loans, including modified loans to borrowers experiencing financial difficulty that have not met the six-month minimum performance criterion, are reported as nonperforming loans. For all loan classes, it is the Company’s policy to have any modified loans which are on nonaccrual status prior to being modified, remain on nonaccrual status until six months of satisfactory borrower performance, at which time management would consider its return to accrual status. A loan is generally classified as nonaccrual when the Company believes that receipt of principal and interest is doubtful under the terms of the loan agreement. Generally, this is at 90 days or more past due. The amount of interest income recognized on nonaccrual financial assets was $3.3 million and $3.9 million for the three and nine months ended September 30, 2026, respectively, and was inconsequential for the three and nine months ended September 30, 2025.

The following table presents the Company’s nonperforming loans at September 30, 2026 and December 31, 2025.

The Company did not have any loans classified as held for sale on nonaccrual or 90 days past due and accruing as of September 30, 2026 or December 31, 2025.

The Company did not have any nonaccrual loans without an estimated ACL at September 30, 2026 or December 31, 2025.

Fair Value Option

The Company has elected the fair value option for certain loans held for sale and certain loans initially held for sale subsequently transferred to loans receivable. For these loans, interest income is recorded in the condensed consolidated statements of income based on the unpaid principal balance amount of interest income earned on the financial assets (except any that are on nonaccrual status). None of these loans were 90 days or more past due, or on nonaccrual, as of September 30, 2026 or December 31, 2025. The interest income for these loans is included in the interest income on loans on the condensed consolidated statements of income.

The difference between the aggregate fair value and the aggregate unpaid principal balances of loans for which the fair value option has been elected was as follows:

Changes in the fair value are recorded as gains and losses and are reflected on the condensed consolidated income statement in gain on sale of loans for loans held for sale and other noninterest income for loans receivable held at fair value.

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers in financial difficulty by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted.

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

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty. Loans with risk classifications of Pass and Special Mention were part of the pooled loan ACL analysis. Loans classified as Substandard or worse were individually evaluated for credit losses and specific reserves were established, if applicable. At September 30, 2026, there was $1.2 million in specific reserves recorded on troubled loan modifications disclosed above. The Company had a commitment to lend $4.6 million and $0 as of September 30, 2026 and 2025, respectively, to the borrowers included in the tables above.

The Company closely monitors the performance of loans that were modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans as of September 30, 2026 and 2025 for loans modified within the twelve months preceding the respective reporting date.

During the nine months ended September 30, 2026 two healthcare andone multi-family loans totaling $44.1 million defaulted after receiving payment delay and/or term extension modifications, within the previous twelve months, related to the borrowers’ financial difficulty. During the nine months ended September 30, 2025, there wereno payment defaults on loans to borrowers whose loans were modified due to financial difficulties within the previous twelve months.

Foreclosures

There were $8.5 million and $3.5 million of residential loans in process of foreclosure as of September 30, 2026 and December 31, 2025, respectively.

Loans Purchased

The Company purchased $78.0 million and $50.1 million of loans during the nine months ended September 30, 2026 and 2025, respectively.

Standby Letters of Credit

The Company issues instruments, in the normal course of business with customers, that are considered financial guarantees. Standby letters of credit guarantees are issued in connection with agreements made by customers to counterparties. Standby letters of credit are contingent upon failure of the customer to perform the terms of the underlying contract. Although credit risk associated with the standby letters of credit is essentially the same as that associated with extending loans to customers and is subject to normal credit policies, the Company has never had to fund a standby letter of credit. The terms of these standby letters of credit range from less thanone tonine years. These commitments are not recorded in the unaudited condensed consolidated financial statements. The total for these guarantees at September 30, 2026 and December 31, 2025 was $204.5 million and $186.5 million, respectively.

Supplemental Cash Flow Information

Supplemental cash flow information related to loans is presented in the table below.

Note 5: Qualified Affordable Housing and Other Tax Credits

The Company invests in LIHTC limited liability partnerships and LLCs. The primary purpose of these investments is to earn an adequate return of capital through the receipt of low-income housing tax credits. Those investments are recorded at cost and then amortized using the proportional amortization method. The investments are included in other assets on the unaudited condensed consolidated balance sheets, with any unfunded commitments included in other liabilities. The investments are amortized as a component of income tax expense. The tax credits recognized reduced income tax expense for the period.

The Company also has a pool of investments that are held for sale and are accounted for at the lower of cost or market. These investments include projects that are awaiting syndication in LIHTC funds through our MCI subsidiary. The investments are included in other assets on the unaudited condensed consolidated balance sheets.

The Company is the primary beneficiary in one of its joint venture investments, therefore the results of this entity are consolidated, and the benefits of the new market fund are recognized through tax credits as a component of income tax expense. The Company consolidates this joint venture because it has the power to direct the activities that most significantly impacts the entity’s economic performance and has an obligation to absorb losses or the right to receive benefits that could be significant to the VIE.

The following table summarizes theamortization expense andtax credits recognized for the Company’s low-income housing investments for the three and nine months ended September 30, 2026 and 2025. The amounts in the table below are included in the condensed consolidated statements of income as part of provision for tax expense.

Acquisition Fee Revenue Recognition and Other LIHTC Receivables

The Company serves as a general partner for several syndicated LIHTC funds in which a common investor holds an 85.00-99.99% limited partner interest. Under the applicable agreements, the Company, as general partner, forms the funds, identifies and acquires qualifying investments, manages the funds, and facilitates the delivery of tax credits to the limited partner. These activities are inputs to a single integrated performance obligation that is satisfied over time. The Company measures progress based on the applicable contractual pricing-model calculation and true-up, which reflects expected tax-credit delivery and vesting, the limited partner’s target yield, and contribution timing. Acquisition fees are included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the related uncertainty is resolved.

During the three months ended September 30, 2026, the Company and the limited partner completed the final pricing-model calculation and true-up for one of these LIHTC funds. The Company recognized$3.0 million of revenue for the three and nine months ended September 30, 2026.

Upon completion of the true-up, the Company’s right to the$3.0 million of previously constrained acquisition fee was unconditional, with only the passage of time required before payment. Accordingly, the Company recorded a corresponding receivable in other assets on the unaudited consolidated condensed balance sheet.

The Company may be entitled to future fees of up to approximately$31.7 million of additional acquisition fees under its other LIHTC fund arrangements with the same limited partner. As of September 30, 2026, these fees remained subject to contractual pricing-model calculation and true-up provisions involving expected tax-credit delivery and vesting, the limited partner’s target yield, and contribution timing. Depending on the fund arrangement, these uncertainties may extend through 2029. The related variable consideration remained fully constrained and was excluded from the transaction price because it was not probable that a significant revenue reversal would not occur when the uncertainties were resolved. Accordingly, the Company had not recognized revenue or recorded a contract asset or receivable for these fees as of September 30, 2026. The Company reassesses the constraint at each reporting date.

The Company also advanced these LIHTC funds $101.7 million and $102.7 million as of September 30, 2026 and December 31, 2025, respectively, to fund the acquisition of LIHTC investment projects. These advances represent long-term funding provided to the funds, and repayment is expected to be funded through future capital contributions from the limited partner. These advances do not arise from contracts with customers and, accordingly, are outside the scope of ASC 606. They are included in other assets on the unaudited condensed consolidated balance sheets and are periodically assessed for recoverability.

Supplemental Cash Flow Information

The following table presents non-cash and supplemental information related to the Company’s qualified affordable housing investments.

Note 6: Leases

The Company has operating leases for various locations with terms ranging fromone toten years. Some operating leases include options to extend. The extensions were included in the ROU asset if the likelihood of extension was reasonably certain. The Company elected not to separate non-lease components from lease components for its operating leases.

Supplemental balance sheet information related to leases is presented in the table below as of September 30, 2026 and December 31, 2025:

The table below presents the components of lease expenses for the three and nine months ended September 30, 2026 and 2025. Operating lease expenses are included in occupancy and equipment expense on the unaudited condensed consolidated statements of income.

Supplemental cash flow information related to leases is presented in the tables below.

Note 7: Other Assets and Receivables

The following items are included in other assets and receivables on the unaudited condensed consolidated balance sheets.

Qualified Affordable Housing

Information regarding qualified affordable housing investments is disclosed elsewhere inNote 5: Qualified Affordable Housing and Other Tax Credits.

Income Tax Receivable

The Company had federal and state income tax receivables of $173.2 million and $181.5 million as of September 30, 2026 and December 31, 2025, respectively. These receivables were primarily related to the acquisition of $23.1 million and $151.3 million of transferable tax credits by the Company in 2026 and 2025, respectively, and represent the amounts due from the Internal Revenue Service claimed on federal income tax returns for which refunds had not been received as of the respective balance sheet dates. The Company evaluates the collectability of the federal income tax receivable at each reporting date. Based on management’s assessment, including consideration of amounts, and applicable statutory refund provisions, the Company believes the receivable is collectible. The balance will be reduced upon receipt of the related cash refunds.

Joint Ventures

The Company has investments in various joint ventures totaling $46.2 million and $47.0 million at September 30, 2026 and December 31, 2025, respectively. These investments are primarily made up of investments in debt funds totaling $30.4 million and $32.0 million at September 30, 2026 and December 31, 2025, respectively. The Company was not a primary beneficiary in any of these joint venture investments. Results from the entities are not required to be consolidated and are accounted for under the equity method of accounting. The Company is obligated to make additional investments over the next several years. There was an obligation of $8.4 million as of September 30, 2026 and December 31, 2025. See*Note 8: Variable Interest Entities (VIEs)*for additional information about VIE’s.

Freestanding Credit Enhancements

In December 2024, the Company executed a CDS on a reference pool of warehouse loans with an initial principal balance of $1.2 billion. The initial pool consists of warehouse participation certificates, classified as loans held for sale, but could in the future also include warehouse repurchase agreements, classified as loans receivable. The CDS covers a protected tranche of the first 12.5% of losses on the notional amount. Annual CDS premium payments equal 0.8% of the portfolio notional amount and is recorded as noninterest expense. Merchants will continually replenish maturing or non-renewing loans with substantially similar loans subject to mutual agreement of buyer and seller during a replenishment period, subject to a minimum balance of$1.2 billion and a maximum balance of $2.0 billion. The risk transfer agreement has a replenishment period of 36 months but can be extended to a maximum of 48 months.

The CDS is not accounted for as a derivative. The derivative scope exception for certain financial guarantees is utilized, as recovery payments are contingent on the failure of the debtor to pay their past due obligations, which are preconditions to the guarantee. Accordingly, the CDS has been accounted for as a freestanding credit enhancement and does not offset the Company’s estimate of expected credit losses. Therefore, the ACL-loans will continue to be recorded without considering potential recoveries from freestanding credit enhancement contracts. Upon initial execution, there was no CDS recovery asset established because the loans in the pool were participation certificates that were classified as loans held for sale and carry no ACL-loans. When repurchase agreements are in the pool, they are classified as loans receivable, and a CDS recovery asset would be established in other assets, with an equal benefit to CDS recovery income in other noninterest income.

As of September 30, 2026 and December 31, 2025, there wereno CDS recovery assets established. The total loan pool balance was $1.2 billion and $2.0 billion as of September 30, 2026 and December 31, 2025, respectively.

Leases and Other Items

Other items included in other assets and receivables on the unaudited condensed consolidated balance sheets are disclosed elsewhere or are not individually significant. SeeNote 11: Derivative Financial Instruments andNote 6: Leases for further information.

Note 8: Variable Interest Entities

A VIE is a corporation, partnership, limited liability company, or any other legal structure used to conduct activities or hold assets generally that either:

The Company has invested in single-family, multi-family, and healthcare debt financing entities, as well as low-income housing syndicated funds that are deemed to be VIEs. The Company also has deemed certain mortgage-backed securitizations (REMIC trusts) as VIEs that were established in conjunction with multi-family and healthcare loan sales and securitization transactions. Accordingly, the entities were assessed for potential consolidation under the VIE model that requires primary beneficiaries to consolidate the entity’s results. A primary beneficiary is defined as the party that meets both of the following conditions: (i) the power to direct the activities that most significantly impact the economic performance of the entity, and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. To determine if an interest has significant exposure to the entity’s economics, both qualitative and quantitative factors regarding the nature, size, and form of involvement with the entity are evaluated.

At September 30, 2026 the Company determined it was not the primary beneficiary for most of its VIEs, largely because it does not have the power to direct the activities that most significantly impact the economic performance of the entity or the obligation to absorb losses or the rights to receive benefits that in either case could potentially be significant to the VIE. Evaluation and assessment of VIEs for consolidation is performed on an ongoing basis by management. Any changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing reassessment.

The table below reflects the investments in the VIEs, as well as the maximum exposure to loss in connection with unconsolidated VIEs and liabilities for binding, unfunded commitments at September 30, 2026 and December 31, 2025. The Company’s maximum exposure to loss associated with its unconsolidated VIEs consists of the capital invested plus any unfunded equity commitments. These investments and unfunded liabilities for VIEs are recorded in other assets and other liabilities, respectively, on the unaudited condensed consolidated balance sheets. Also included in the maximum loss exposure are loans to VIEs that are included in loans receivable. Although the REMIC trusts are not recognized on the balance sheet, the maximum exposure to loss is the carrying value of the securities acquired as part of the securitization transactions, as well as a loan to a third party of the REMIC trust. For more information about the mortgage-backed securitizations or LIHTC investments seeNote 2: Securities andNote 5: Qualified Affordable Housing and Other Tax Credits.

Note 9: Deposits

Deposits were comprised of the following at September 30, 2026 and December 31, 2025:

Maturities for certificates of deposit are as follows:

Certificates of deposit of $250,000 or more totaled $270.6 million and $497.5 million at September 30, 2026 and December 31, 2025, respectively.

Note 10: Borrowings

Borrowings were comprised of the following at September 30, 2026 and December 31, 2025:

FHLB

On September 30, 2026, the Company entered into a new variable-rate debt agreement with the FHLB for an advance that has put and call options attached to it. The balance of the advance was $2.0 billion as of September 30, 2026, and matures on December 29, 2026. The variable interest rate is based on the Federal Funds effective rate, plus 15 basis points, which was 4.03% on September 30, 2026. The FHLB has a put option to cancel the agreement 60 days after the initial execution date and the Company has a call option to cancel the agreement at any time, withone day’s notice.

On September 30, 2026, the Company entered into a new variable-rate debt agreement with the FHLB for an advance that has put and call options attached to it. The balance of the advance was $1.0 billion as of September 30, 2026, and matures on December 29, 2026. The variable interest rate is based on the Federal Funds effective rate, plus 15 basis points, which was 4.03% on September 30, 2026. The FHLB has a put option to cancel the agreement 60 days after the initial execution date and the Company has a call option to cancel the agreement at any time, withone day’s notice.

Note 11: Derivative Financial Instruments

The Company uses non-hedging designated derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities.

Internal Interest Rate Risk Management

The Company enters into interest rate lock commitments with potential borrowers to fund specific mortgage loans that will be sold into the secondary market and enters into forward contracts for the future delivery of mortgage loans to third party investors. The forward contracts are entered into in order to economically hedge the effect of changes in interest rates resulting from the Company’s commitment to fund the loans. Forward contracts and interest rate lock agreements are accounted for as derivatives at fair value with changes in fair value reflected in other noninterest income on the unaudited condensed consolidated statements of income.

Interest rate swaps are used by the Company to manage exposure to changes in interest rates associated with certain fixed-rate assets and liabilities, including loans and funding instruments. Because these derivative instruments are not designated as accounting hedges, changes in their fair value are recognized in earnings and included in other noninterest income. Net periodic settlements, representing the difference between fixed-rate and floating-rate cash flows under the swap agreements, are included in interest income for loan-related swaps and in interest expense for funding-related swaps.

The Company entered into a contract containing put options and interest rate floors on securities it acquired from a warehouse customer. These provide protection and offset losses in value of certain securities accounted for under the fair value option. The gain (loss) on the put options is substantially equal and offsetting to the fair value adjustment of securities available for sale, resulting in an inconsequential net gain or loss in other noninterest income. This helps mitigate interest rate risk and minimizes impacts of market fluctuations on the securities available for sale that the

Company elected to account for under the fair value option with changes in fair value reflected in earnings. The Company also entered into interest rate floor contracts withtwo warehouse loan customers to minimize interest rate risk. All changes in the fair value of these options and floors have been included in other noninterest income.

Credit Risk Management

Since 2024, the Company has executed contracts as the buyer of credit protection through the credit default swap market. These contracts were purchased to manage credit risk associated with specific multi-family and healthcare mortgage loans. Under the terms of the contracts, the Company will be compensated for certain credit-related losses on a pool of covered loans. As of September 30, 2026, the protection sellers have posted aggregate collateral of $142.7 million related to their obligations under the contracts. The collateral is not included on the Company’s unaudited condensed consolidated balance sheets.

A CDS is considered a derivative, but is not designated as an accounting hedge, and is recorded at fair value, with changes in fair value reflected in credit risk transfer premium expense on the unaudited condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets while derivative instruments with a negative fair value are reported in other liabilities on the unaudited condensed consolidated balance sheets.

The following table presents the notional amount and fair value of interest rate locks, forward contracts, interest rate swaps, put options, interest rate floors, and credit default swaps utilized by the Company at September 30, 2026 and December 31, 2025. These tables exclude the fair value adjustment on loans commonly hedged with these derivatives.

The following table summarizes the periodic changes in the fair value of the above derivative financial instruments on the unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2026 and 2025.

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Derivatives on Behalf of Customers

The Company offers derivative contracts to some customers in connection with their Interest Rate Risk Management (“IRRM”) needs. These derivatives include back-to-back interest rate swap, cap, and floor arrangements. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. These derivatives generally work together as an economically neutral interest rate position to assist the customer, but the Company does not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability are recorded as a charge or credit to current earnings in other noninterest income, typically resulting in no net earnings impact.

The fair values of IRRM derivative assets and liabilities related to back-to-back derivatives on behalf of customers with back-to-back interest rate swap, cap or floor arrangements were recorded on the unaudited condensed consolidated balance sheets as follows:

The gross gains and losses on these derivative assets and liabilities were recorded in other noninterest income on the unaudited condensed consolidated statements of income as follows:

The Company pledged zero and $10.0 million in collateral to secure its obligations under IRRM contracts at September 30, 2026 and December 31, 2025, respectively.

Note 12: Disclosures about Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities

Recurring Measurements

The following tables present the fair value measurements of assets and liabilities recognized on the accompanying unaudited condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2026 and December 31, 2025: