Esquire Financial Holdings, Inc.

NOTE 1 — Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Interim Consolidated Financial Statements include the accounts of Esquire Financial Holdings, Inc. (“Esquire”) and its wholly owned subsidiary, Esquire Bank, N.A. (“Esquire Bank” or the “Bank”), collectively referred to as “the Company.” All significant intercompany accounts and transactions have been eliminated in consolidation. On August 1, 2026 (the “merger-date”), the Company completed its merger (the “Merger”) with Signature Bancorporation, Inc., the parent company of Signature Bank of Chicago (collectively “Signature”). See Note 2, “Business Combination,” for the transaction details.

The accompanying unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial information. In the opinion of management, the Interim Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis. These financial statements and the accompanying notes should be read in conjunction with the Company’s audited financial statements for the years ended December 31, 2025 and 2024. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any other period.

Business Combinations Policy

The Company accounts for business combinations under the acquisition method of accounting. Identifiable assets acquired and liabilities assumed are recognized at their merger-date fair values, except for items subject to specific recognition or measurement exceptions under U.S. GAAP, including acquired-loan allowances for credit losses, income taxes and share-based payment awards. Goodwill is the excess of consideration transferred over the recognized amounts of identifiable net assets acquired. For items whose initial accounting is incomplete, provisional amounts may be adjusted during the measurement period as information about facts and circumstances existing at the merger-date becomes available. The measurement period ends when the necessary information is obtained, or when the Company determines that additional information is not obtainable, and may not exceed one year from the merger-date. Merger-related costs are expensed as incurred.

Goodwill Policy

Goodwill is not amortized but is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company has selected October 31 as its annual goodwill impairment testing date. The Company has determined that it hasone reporting unit for purposes of evaluating goodwill for impairment.

The Company may first perform a qualitative assessment to determine whether a quantitative impairment test is necessary. Factors considered include economic, industry and market conditions, overall financial performance, changes in expected operating results, and sustained declines in the Company’s stock price. If the qualitative assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying amount, or if the Company elects to bypass the qualitative impairment test, a quantitative test is performed.

Under the quantitative impairment test, the reporting unit’s fair value is compared with its carrying amount, including goodwill. An impairment loss is recognized for the amount by which the carrying amount exceeds fair value, limited to the carrying amount of goodwill allocated to the reporting unit.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the Consolidated Financial Statements.

Change in Allowance Methodology

During the quarter ended September 30, 2026, the Company changed the methodology used to estimate the allowance for credit losses on its legacy Esquire loan portfolio from a static pool Weighted Average Remaining Maturity (“WARM”) methodology to a Discounted Cash Flow (“DCF”) methodology, effective August 1, 2026. The change was made in conjunction with the Company's merger with Signature and management's reassessment of the estimation methodology appropriate for the combined company on a prospective basis.

The DCF methodology replaces the historical loss rates used in the WARM methodology with peer-group loss history derived from FFIEC Call Report data for banks with comparable asset size and loan portfolio characteristics. Probabilities of default are developed from regression models that relate peer default rates to macroeconomic variables, principally the unemployment rate and gross domestic product, using Federal Open Market Committee forecasts. Loss given default is based on peer loss experience. The model projects loan-level contractual cash flows adjusted for prepayment and curtailment assumptions derived from industry benchmark data, probabilities of default, loss given default, and recovery timing of 24 months from charge-off (six months for consumer loans), and discounts expected cash flows at each loan's effective interest rate. Management determined that DCF better reflects the contractual cash-flow characteristics of the legacy Esquire portfolio and future new loans that will be originated under the combined company. The change does not indicate that the former methodology was inappropriate when previously applied.

Purchased seasoned loan pools from the Company's merger with Signature are closed pools. Loans originated after August 1, 2026 are evaluated in the DCF pools. The acquired pools are evaluated using a non-discounted expected cash flow methodology that uses the same assumptions as the DCF methodology but does not discount expected cash flows. Acquired loans were recorded at fair value, which includes a purchase discount. A discounted methodology would require an effective interest rate that equates each loan's expected cash flows to its purchase price. Measuring on the unpaid principal balance is consistent with how the merger-date allowance was determined under the gross-up approach. It also keeps the remaining noncredit discount, which is recognized in interest income, separate from the allowance.

Management concluded that the change reflects new information and changing risk characteristics of the loan portfolio resulting from the Company’s merger with Signature rather than a correction of an error or a change in accounting principle, which was accounted for as a change in accounting estimate, with prospective application beginning August 1, 2026. Prior-period amounts were not restated or presented on a pro forma basis for this change in accounting estimate. The methodology change resulted in no material impact to the allowance for credit losses and the related provision for credit losses in the current period.

Allowance for Credit Losses and Loans Held for Investment

The Company's loan portfolio consists of originated loans and loans acquired in connection with the Signature Merger completed on August 1, 2026. Acquired loans include purchased seasoned loans ("PSL") and purchased credit deteriorated loans ("PCD"). For originated loans evaluated collectively, the Company estimates expected credit losses using a discounted cash flow methodology that compares amortized cost with the present value of expected cash flows. For acquired PSL loans evaluated collectively, the Company uses a non-discounted expected cash flow methodology that measures expected losses without discounting. Both methodologies incorporate loan-level repayment projections, probabilities of default, loss-given-default assumptions, prepayments or curtailments, and reasonable and supportable economic forecasts. Qualitative adjustments address risks not sufficiently reflected in the quantitative estimates. Loans that do not share similar risk characteristics with other loans are evaluated individually, including the acquired PCD loans identified for individual evaluation.

The Company groups loans for collective evaluation based on similar risk characteristics, including loan or product type, collateral and occupancy characteristics, repayment source, and acquired-loan classification. Commercial and industrial lending distinguishes attorney lending from other commercial lending. Commercial real estate lending distinguishes owner-occupied from non-owner-occupied properties. These distinctions represent modeling pools within the Company’ssix portfolio segments (which correspond to thesix loan classes presented in Note 4). Other lending categories include multifamily, construction and land development, residential mortgage and home equity, and consumer lending, including post-settlement loans. Originated and acquired PSL pools are evaluated separately using the respective methodologies described above. The acquired PSL pools are closed to new loans. The Company reassesses whether loans continue to share similar risk characteristics and evaluates loans individually when they no longer share the characteristics of an applicable pool.

Acquired loans were evaluated as of the merger-date to determine whether they met the definition of purchased credit deteriorated loans. PCD loans were evaluated individually and accounted for under the gross-up approach. All acquired loans that did not meet the definition of PCD assets qualified as purchased seasoned loans and were accounted for under the gross-up approach prescribed by Accounting Standards Codification (“ASC”) 326 and Accounting Standards Update (“ASU”) 2025-08. The merger-date allowance components for PSL and PCD loans were reflected through purchase accounting and did not result in an initial provision for credit losses. The merger-date expected loss amount deemed uncollectible on the identified PCD loan was not recognized on the Company’s balance sheet. Subsequent changes in expected credit losses are recognized through provision for credit losses or a reversal of provision.

At September 30, 2026, acquired PSL loans had an amortized cost of $1.32 billion and an allowance for credit losses of $17.1 million, and acquired PCD loans had an amortized cost of $2.4 million withno allowance.

Please see "Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" for a discussion of areas in the accompanying unaudited Consolidated Financial Statements utilizing significant estimates.

Standards Adopted in 2026

In November 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-08, “Financial Instruments - Credit Losses (Topic 326): Purchased Loans”. The ASU expands the use of the gross-up approach to include purchased seasoned loans, defined as loans (excluding credit cards) acquired without significant credit deterioration and deemed to be seasoned. Acquired non-PCD loans obtained through a business combination qualify as purchased seasoned loans, except for excluded asset types. For qualifying loans obtained outside a business combination or initially recognized through consolidation of a variable interest entity, the loan must be acquired more than 90 days after origination and the acquirer must not have been involved in its origination. The change is intended to reduce complexity and subjectivity in loan purchase transactions, and to reduce the risk of double counting expected credit losses that are already reflected in fair value determinations made at the time of the Merger. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods; early adoption is permitted. The Company adopted ASU 2025-08 effective January 1, 2026 and applied it prospectively to loans acquired on or after that date. The guidance was applied to qualifying loans acquired in the Signature Merger. See the acquired-loan accounting discussion above.

NOTE 2 — Business Combination

Signature Merger

On August 1, 2026, Esquire Financial Holdings, Inc. completed its Merger with Signature Bancorporation, Inc., the parent company of Signature Bank of Chicago, pursuant to the Agreement and Plan of Merger-dated March 11, 2026 (the “Merger Agreement”). At the closing, Esquire Merger Sub, Inc. merged with and into Signature Bancorporation, with Signature Bancorporation continuing as the surviving entity, and immediately thereafter, Signature Bancorporation merged with and into Esquire, with Esquire continuing as the surviving corporation. Signature Bank then merged with and into Esquire Bank, National Association, with Esquire Bank continuing as the surviving bank (collectively, the "Merger").

The Merger combines Esquire’s national litigation and payment-processing verticals with Signature’s established Chicago and Midwest commercial banking franchise. Management’s principal reasons for the Merger were to expand the Company’s presence in the Chicago and Midwest markets and combine the two companies’ commercial banking capabilities and customer relationships.

Each outstanding share of Signature common stock, was converted into the right to receive 2.671 shares of Esquire common stock, with cash paid in lieu of fractional shares. The Company issued 3.449 million shares of common stock to former Signature shareholders. The fair value of the common stock issued was based on the closing price of Esquire common stock on July 31, 2026.

Outstanding Signature stock options vested in connection with the Merger, were assumed by Esquire and were converted into options to purchase Esquire common stock in accordance with the Merger Agreement. These stock options were accounted for as modified awards as of the merger-date with the merger-date fair-value-based measure of the replacement awards totaling $21.4 million, of which, $20.3 million was attributable to pre-combination service and included in consideration transferred. The remaining $1.1 million was attributable to post-combination service and is being recognized as compensation expense over 4.8 years subsequent to the merger-date.

The Merger was accounted for as a business combination using the acquisition method of accounting, with Esquire identified as the accounting acquirer. Accordingly, the assets acquired and liabilities assumed were recorded at their estimated fair values as of the merger-date. The following allocation is subject to refinement during the measurement period, which will not exceed one year from the merger-date, as the Company completes its valuation of loans, deposits, core deposit intangible, deferred taxes, contingencies, and other items. Measurement-period adjustments will be recognized in the period in which the adjustment amounts are determined, including the effect on earnings that would have been recognized if the accounting had been completed as of the merger-date.

Goodwill of $246.9 million is not expected to be deductible for federal income tax purposes.

The following is a description of the valuation methodologies used to estimate the fair values of significant assets and liabilities presented above.

Loans – Merger-date fair values were estimated using discounted cash flow analyses incorporating contractual cash flows and market participant assumptions regarding prepayments, expected credit losses, recovery timing, servicing costs and discount rates.

Acquired loans are evaluated as of the merger-date to determine whether they have experienced more-than-insignificant deterioration in credit quality since origination and qualify as purchased financial assets with credit deterioration. The assessment considers credit quality at origination and Merger, including risk ratings, payment performance, nonaccrual status and borrower-specific information. All acquired non-PCD loans that meet the purchased seasoned loan criteria are classified as PSL. For both PCD assets and purchased seasoned loans, the merger-date allowance for credit losses is added to the allocated purchase price to establish the initial amortized cost basis, without an initial charge to provision for credit losses. Amounts deemed uncollectible at the merger-date are not recognized on the acquiree balance sheet. Subsequent changes in expected credit losses are recognized through provision for credit losses or a reversal of provision.

The Company estimates the allowance for acquired PSL loans evaluated collectively using a non-discounted expected cash flow methodology. Loan-level projections incorporate contractual repayment terms, expected prepayments or curtailments, probabilities of default, loss-given-default assumptions and reasonable and supportable economic forecasts. Unlike the discounted cash flow methodology applied to originated loan pools, expected losses on acquired PSL pools are measured without discounting. Acquired PCD loans that do not share similar risk characteristics with other loans are evaluated individually using borrower-specific expected collections and recovery information.

The noncredit discount is the excess of unpaid principal balance over the initial amortized cost basis after the allowance gross-up. The noncredit discount or premium is recognized in interest income using the applicable interest method, subject to the Company’s nonaccrual policy. The credit-related amount reflected in the initial allowance is not accreted into interest income.

Acquired PSL loans had a fair value of $1.36 billion and contractual principal of $1.40 billion at the merger-date. The Company’s best estimate of contractual cash flows not expected to be collected was $18.2 million, which was recognized as the initial allowance for credit losses on these loans.

Deposits – Demand, savings and time deposit fair values generally approximate carrying amounts.

Core deposit intangible - The core deposit intangible was valued using the income approach, specifically the cost savings method, incorporating assumptions about deposit attrition, alternative funding costs, servicing costs and discount rates. The intangible is amortized over an estimated useful life of 8 years using sum of the years digits amortization method, which reflects the pattern in which the economic benefits are expected to be consumed. Amortization expense is included in noninterest expense on the Consolidated Statements of Income. The gross carrying amount, accumulated amortization and net carrying amount at September 30, 2026 were $49.3 million, $1.8 million and $47.5 million, respectively. Amortization expense was $1.8 million for the three and nine months ended September 30, 2026.

Goodwill - Residual after recognizing identifiable assets acquired and liabilities assumed at fair value.

The following table presents unaudited supplemental pro forma information as if the Merger had occurred on January 1, 2025. The unaudited pro forma information includes adjustments for (i) accreting and amortizing the discounts and premiums associated with the estimated fair value adjustments to acquired loans, (ii) the amortization of recognized intangible assets arising from the Merger, and (iii) the related estimated income tax effects. The pro forma amounts below do not reflect the Company's expectations as of the date of the pro forma information of further operating cost savings and other business synergies expected to be achieved, including revenue growth as a result of the Merger. As a result, actual amounts may be different from the unaudited pro forma information presented.

NOTE 3 — Debt Securities

The following tables summarize the major categories of securities as of the dates indicated:

Mortgage-backed securities included all pass-through certificates guaranteed by FHLMC, FNMA, or GNMA and the CMOs are backed by government agency pass-through certificates. CMOs, by virtue of the underlying residential collateral or structure, are fixed rate current pay sequentials. As actual maturities may differ from contractual maturities

because certain borrowers have the right to call or prepay certain obligations, these securities are not considered to have a single maturity date.

Concurrent with the Merger, the Company sold $340.0 million of securities available-for-sale, net of paydowns, acquired from Signature for the three and nine months ended September 30, 2026. There wereno sales of securities during the three and nine months ended September 30, 2025. There wasno recognized gain or loss on sale of securities for the three and nine months ended September 30, 2026 and 2025.

At September 30, 2026, securities having a fair value of $454.6 million were pledged to the Federal Home Loan Bank of New York (“FHLB NY”) for borrowing capacity totaling $425.1 million. At December 31, 2025, securities having a fair value of $252.4 million were pledged to the FHLB NY for borrowing capacity totaling $235.7 million.

At September 30, 2026, securities having a fair value of $43.3 million were pledged to the Federal Reserve Bank of New York (“FRB”) for borrowing capacity totaling $42.0 million. At December 31, 2025, securities having a fair value of $49.6 million were pledged to the FRB for borrowing capacity totaling $48.1 million.

The following table provides the gross unrealized and unrecognized losses and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized or unrecognized loss position:

Management evaluates securities available-for-sale in unrealized loss positions to determine whether the impairment is due to credit-related factors. Due to the decline in fair value being attributable to changes in interest rates, not credit quality and because the Company does not have the intent to sell the securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider the securities to be impaired at September 30, 2026.

As of September 30, 2026 and December 31, 2025, none of the Company’s available-for-sale securities were in an unrealized loss position due to credit, and thereforeno allowance for credit losses on available-for-sale securities was required. Additionally, there wasno allowance for credit losses on securities held-to-maturity due to the high credit quality composition consisting of issuances from government sponsored agencies as of September 30, 2026 and December 31, 2025.

Accrued interest receivable on securities totaling $2.0 million at September 30, 2026 and $1.1 million at December 31, 2025, was included in Accrued interest receivable in the Consolidated Statements of Financial Condition and excluded from amortized cost and estimated fair value in the tables above.

NOTE 4 — Loans

The composition of loans by class is summarized as follows:

Loans acquired from Signature were recorded at fair value on the merger-date, including an interest rate discount of $16.6 million. At September 30, 2026, the remaining unaccreted interest rate discount was $15.6 million and is reflected as a reduction of the loan balances presented above. Accretion of this discount increased interest income on loans by $1.0 million for both the three and nine months ended September 30, 2026.

Commercial loans include commercial Litigation-Related loans of $1.45 billion and other commercial loans of $680.0 million at September 30, 2026. Commercial loans include commercial Litigation-Related loans of $1.18 billion and other commercial loans of $67.2 million at December 31, 2025.

The following tables present the activity in the allowance for credit losses by class for the three months ending September 30, 2026 and September 30, 2025:

The following tables present the activity in the allowance for credit losses by class for the nine months ending September 30, 2026 and September 30, 2025:

At September 30, 2026, the Company had undrawn committed and uncommitted Commercial Litigation-Related lines of credit totaling $99.6 million and $1.01 billion, respectively, at September 30, 2026 compared to $106.9 million and $797.5 million, respectively, at December 31, 2025.

There wasno provision for credit losses on unfunded commitments for the three and nine months ended September 30, 2026. The allowance for credit losses on unfunded commitments, included in accrued expenses and other liabilities, was $1.2 million at September 30, 2026, including $706 thousand assumed in the Signature Merger, and $500 thousand at December 31, 2025. There wasno provision for credit losses on unfunded commitments for the three and nine months ended September 30, 2025.

As of September 30, 2026, there was one collateral dependent multifamily loan secured by real estate totaling $4.4 million and one collateral dependent commercial loan secured by business assets totaling $711 thousand, with no associated specific reserve on the Consolidated Statements of Financial Condition. Loans acquired in the Signature Merger that were individually evaluated totaled $3.5 million at September 30, 2026, including PCD loans of $2.4 million, and had no associated allowance. As of December 31, 2025, there was one collateral dependent multifamily loan secured by real estate totaling $7.8 million and one collateral dependent commercial loan secured by business assets totaling $736 thousand, with no associated specific reserve for either loan on the Consolidated Statements of Financial Condition.

The following tables present the aging of the past due loans measured at amortized cost, excluding deferred origination cost, net of fees, due to immateriality, by class of loans as of September 30, 2026 and December 31, 2025:

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed whenever a credit is extended, renewed or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans.

The Company uses the following definitions for risk ratings:

Special Mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

The following is a summary of the credit risk profile of loans, measured at amortized cost, by internally assigned grade as of the periods indicated. The years represent the year of origination for non-revolving loans.

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For smaller dollar commercial and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

Loan Modifications to Borrowers Experiencing Financial Difficulty

During the three and nine months ended September 30, 2026 the Company did not modify the terms of any loans or commitments to lend to borrowers experiencing financial difficulty in the form of an interest rate reduction, term extension, principal forgiveness, or other-than-insignificant payment delay.

During the three months ended September 30, 2025, the Company did not modify the terms of any loans or commitments to lend to borrowers experiencing financial difficulty in the form of an interest rate reduction, term extension, principal forgiveness, or other-than-insignificant payment delay. During the nine months ended September 30, 2025 the Company modified the terms of one $10.9 million multifamily loan which was restructured into two notes for $8.0 million and $2.9 million, respectively, with an extension resulting in an 18 month remaining term where the $2.9 million note was charged off and the $8.0 million note was at market terms.

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company modifiedone multifamily loan in the second quarter of 2025 for a borrower experiencing financial difficulty. During the nine months ended September 30, 2026, the Company foreclosed on the property securing this nonaccrual multifamily loan (totaling $7.8 million), recorded it as other real estate owned OREO, recorded a charge-off totaling $3.2 million (consisting of principal and certain costs to perfect its lien), sold the OREO to an unrelated third party, and partially funded the sale, which was accounted for as a new loan.

Pledged Loans

At September 30, 2026, loans totaling $584.4 million were pledged to the FHLB for borrowing capacity totaling $398.1 million. At December 31, 2025, loans totaling $319.4 million were pledged to the FHLB for borrowing capacity totaling $219.8 million.

Purchased Credit-Deteriorated Loans (“PCD”)

PCD loans acquired in the Signature Merger are included in the tables in this note by class. The reconciliation of the purchase price of PCD loans to their par value at the merger-date is presented in Note 2 “Business Combination”.

NOTE 5 — Subordinated Notes

In connection with the Merger on August 1, 2026, the Company assumed $7.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “Notes”) originally issued by Signature on May 31, 2018. The Notes were recorded at their merger-date fair value of $7.0 million, which approximated amortized cost.

The Notes bear interest at a floating rate equal tothe Secured Overnight Financing Rate plus 3.00% and a spread adjustment of 0.26161%, which resets quarterly. Interest is payable quarterly, and the Notes mature on June 1, 2028, unless redeemed earlier. The Notes became callable on June 1, 2023 and may be redeemed at the Company’s option, in whole or in part, on any quarterly interest payment due date. At September 30, 2026, the interest rate was 7.16%.

At September 30, 2026, the outstanding principal balance was $7.0 million and the carrying amount was $7.0 million. The Company hadno subordinated notes outstanding at December 31, 2025.

NOTE 6 — Noninterest Income

The majority of the Company’s revenue-generating transactions are not subject to ASC 606, Revenue from Contracts with Customers, including revenue generated from financial instruments, such as loans, letters of credit, and investment securities. Descriptions of revenue-generating activities that are within the scope of ASC 606, and are presented in the Consolidated Statements of Income as components of noninterest income, are as follows:

The Company has made no significant judgments in applying the revenue guidance prescribed in ASC 606 that affect the determination of the amount and timing of revenue from the above-described contracts with customers.

NOTE 7 — Share-Based Payment Plans

The Company issues incentive and non-statutory stock options, restricted stock awards (“RSAs”), and performance restricted stock units (“PSUs”) to certain employees and directors pursuant to its equity incentive plans, which have been approved by the stockholders. Share-based awards are granted by the Compensation Committee of the Board of Directors.

Under the plans, options are granted with an exercise price equal to the fair value of the Company’s stock at the date of the grant. Options granted vest over three tofive years and haveten-year contractual terms. All options provide for accelerated vesting upon a change in control (as defined in the plans).

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses assumptions for expected stock price volatility, expected terms of options granted, and risk-free interest rate. Expected volatilities are based on peer volatility. The Company uses peer data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on peer data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

Restricted shares are granted at the fair value on the date of grant and vest over three tosix years with athird vesting at each of the last three anniversary dates. Restricted shares have the same voting rights as common stock and nonvested restricted shareholders do not have rights to the accrued dividends until vested.

Share payouts of PSUs will be earned based on the Company’s performance with respect totwo equally weighted metrics, return on average assets and diluted EPS growth. Performance is measured against pre-established financial targets over atwo-year performance period and will cliff vest on thethree-year anniversary from the date of grant. Compensation expense on PSUs is based upon the fair value of the shares on the date of the grant for the expected aggregate share payout.

The following table presents a summary of the activity related to options for the nine months ended September 30, 2026:

The Company recognized compensation expense related to options of $246 thousand and $188 thousand for the three months ended September 30, 2026 and 2025, respectively. The Company recognized compensation expense related to options of $659 thousand and $557 thousand for the nine months ended September 30, 2026 and 2025, respectively. At September 30, 2026, unrecognized compensation cost related to nonvested options was approximately $2.1 million and is expected to be recognized over a weighted average period of 3.22 years. The intrinsic value for outstanding options, net of expected forfeitures was $31.6 million at September 30, 2026. The intrinsic value for exercisable options was $29.6 million at September 30, 2026.

Information related to stock option exercises during each period is as follows:

The following table presents a summary of the activity related to restricted stock for the nine months ended September 30, 2026:

The Company recognized compensation expense related to restricted stock of $1.2 million and $975 thousand for the three months ended September 30, 2026 and 2025, respectively. The Company recognized compensation expense related to restricted stock of $3.9 million and $2.7 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, there was $10.4 million of total unrecognized compensation cost related to nonvested shares granted under the plan. The cost is expected to be recognized over a weighted-average period of 3.11 years.

The following table presents a summary of the activity related to PSUs for the nine months ended September 30, 2026:

The Company recognized compensation expense related to PSUs of $304 thousand and $140 thousand for the three months ended September 30, 2026 and 2025, respectively. The Company recognized compensation expense related to PSUs of $852 thousand and $358 thousand for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, there was $2.3 million of total unrecognized compensation cost related to nonvested PSUs based on the expected aggregate share payout to be recognized over a weighted-average period of 2.01 years.

NOTE 8 — Earnings per Share

The factors used in the earnings per share computation follow:

Share-based awards totaling 43,395 and 25,641 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2026 and 2025, respectively, because they were anti-dilutive. Share-based awards totaling 43,251 and 44,156 shares of common stock were not considered in computing diluted earnings per common share for the nine months ended September 30, 2026 and 2025, respectively, because they were anti-dilutive.

NOTE 9 — Leases

The Company recognizes the present value of its operating lease payments related to its office facilities and retail branches as operating lease assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. These operating lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at the lease commencement date in order to determine present value.

Short-term lease payments, those leases with original terms of 12 months or less, are recognized in the Consolidated Statements of Income, on a straight-line basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options is typically at the Company’s discretion. Renewal options are included in the operating lease liability if it is reasonably certain that the renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not included in the measurement of the lease liability since they are generally able to be segregated. The Company does not sublease any of its leased properties. The Company does not lease properties from any related parties.

As of September 30, 2026, right of use (“ROU”) lease assets and related lease liabilities were $3.3 million and $3.8 million, respectively. As of December 31, 2025, ROU lease assets and related lease liabilities were $2.1 million and $2.6 million, respectively. ROU assets are included within Other assets and related lease liabilities are included within Accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. The increase in ROU assets

and related lease liabilities in 2026 was due to the Company’s acquisition of operating leases related to Signature’s headquarters and retail branches.

As of September 30, 2026, the Company was obligated under several non-cancelable leases for certain premises and equipment. The minimum annual rental commitments, exclusive of taxes and other charges, under non-cancelable lease agreements for premises at September 30, 2026, are summarized as follows:

In addition to the table above, as of September 30, 2026, the Company had an additional operating lease commitment for its future corporate headquarters of approximately $24.4 million that has been executed but not yet commenced. This operating lease is expected to commence no earlier than the end of the second quarter of 2027 with a lease term of 12.25 years.

The components of total lease cost are as follows:

NOTE 10 — Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values.

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant 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.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

For available-for-sale securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

Assets and liabilities measured at fair value on a recurring basis are summarized below:

There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2026 and 2025.

Assets measured at fair value on a non-recurring basis are summarized below:

The following table presents the quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis at September 30, 2026:

The following tables present the carrying amounts and fair values (represents exit price) of financial instruments not carried at fair value at September 30, 2026 and December 31, 2025:

NOTE 11 — Accumulated Other Comprehensive Loss

The following presents changes in accumulated other comprehensive loss by component, net of tax, for the three and nine months ended September 30, 2026 and 2025:

There wereno reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2026 and 2025.