SOUTH PLAINS FINANCIAL, INC.

Previous wording

The Company maintains an Internet web site at www.spfi.bank. The Company makes available, free of charge, on its web site (underwww.spfi.bank/financials-filings/sec-filings ) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (underwww.spfi.bank/corporate-governance/documents-charters ) links to the Company’s Code of Conduct and the charters for its board committees. In addition, the SEC maintains an Internet site (atwww.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Current wording

The Company maintains an Internet web site atwww.spfi.bank. The Company makes available, free of charge, on its web site (underwww.spfi.bank/financials-filings/sec-filings ) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (underwww.spfi.bank/corporate-governance/documents-charters ) links to the Company’s Code of Conduct and the charters for its board committees. In addition, the SEC maintains an Internet site (atwww.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Previous wording

We had net income of $16.3 million, or $0.96 per diluted common share, for the three months ended September 30, 2025, compared to net income of $11.2 million, or $0.66 per diluted common share for the three months ended September 30, 2024. Return on average equity (annualized) was 13.89% and return on average assets (annualized) was 1.47% for the three months ended September 30, 2025, compared to 10.36% and 1.05%, respectively, for the three months ended September 30, 2024.

Current wording

We had net income of $14.5 million, or $0.85 per diluted common share, for the three months ended March 31, 2026, compared to net income of $12.3 million, or $0.72 per diluted common share, for the three months ended March 31, 2025. Return on average equity (annualized) was 11.81% and return on average assets (annualized) was 1.31% for the three months ended March 31, 2026, compared to 11.30% and 1.16%, respectively, for the three months ended March 31, 2025. The increase in net income of $2.3 million was primarily the result of an increase of $4.3 million in net interest income and $670 thousand in noninterest income, partially offset by an increase of $2.5 million in noninterest expense.

Previous wording

Net interest income is the principal source of the Company’s net income and represents the difference between interest income (interest and fees earned on assets, primarily loans and investment securities) and interest expense (interest paid on deposits and borrowed funds). We generate interest income from interest-earning assets that we own, including loans and investment securities. We incur interest expense from interest-bearing liabilities, including interest-bearing deposits and other borrowings, notably FHLB advances and subordinated notes. To evaluate net interest income, we measure and monitor (i) yields on our loans and other interest-earning assets, (ii) the costs of our deposits and other funding sources, (iii) our net interest spread and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income on a fully tax-equivalent basis divided by average interest-earning assets.

Current wording

Net interest income is the principal source of the Company’s net income and represents the difference between interest income (interest and fees earned on assets, primarily loans and investment securities) and interest expense (interest paid on deposits and borrowed funds). We generate interest income from interest-earning assets that we own, including loans and investment securities. We incur interest expense from interest-bearing liabilities, including interest-bearing deposits and other borrowings, notably Federal Home Loan Bank of Dallas (“FHLB”) advances and subordinated notes. To evaluate net interest income, we measure and monitor (i) yields on our loans and other interest-earning assets, (ii) the costs of our deposits and other funding sources, (iii) our net interest spread and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income on a fully tax-equivalent basis divided by average interest-earning assets.

Previous wording

The following tables present, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. For purposes of this table, interest income, net interest margin and net interest spread are shown on a fully tax-equivalent basis.

Current wording

The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. For purposes of this table, interest income, net interest margin and net interest spread are shown on a fully tax-equivalent basis.

Previous wording

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following tables set forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volume and rate have been allocated to volume.

Current wording

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volume and rate have been allocated to volume.

Previous wording

Net interest income for the three months ended September 30, 2025 was $43.0 million, compared to $37.3 million for the three months ended September 30, 2024, an increase of $5.7 million, or 15.4%, and was comprised of an increase of $2.9 million in interest income and a decrease of $2.8 million in interest expense. The growth in interest income was primarily attributable to an increase of $2.4 million in loan interest income, which was a result of growth of $23.6 million in average loans outstanding and an increase of 24 basis points in the yield on loans. The $2.8 million decrease in interest expense was primarily related to a 49 basis point decrease in the interest rate paid on interest-bearing deposits over the same period in 2024, partially offset by an increase of $71.5 million in average interest-bearing deposits. Additionally, average noninterest-bearing demand deposits increased $34.1 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Current wording

Net interest income for the three months ended March 31, 2026 was $42.9 million, compared to $38.5 million for the three months ended March 31, 2025, an increase of $4.3 million, or 11.2%. The increase in net interest income was comprised of an increase of $2.7 million, or 4.5%, in interest income and a decrease of $1.6 million, or 7.5%, in interest expense. The growth in interest income was predominately attributable to increases of $2.1 million in loan interest income and $1.0 million in interest on other interest-earning assets. The increase in loan interest income was mainly due to growth of $55.6 million in average loans outstanding and a 16 basis point increase in the yield on loans. The increase in interest income on other interest-earning assets was due to an increase of $170.0 million in the average balance of these assets, partially offset by a decline of 53 basis points in the related yield due to the decreases in the federal funds rate during the last four months of 2025.

Previous wording

For the three months ended September 30, 2025, net interest margin and net interest spread were 4.05% and 3.08%, respectively, compared to 3.65% and 2.55%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above.

Current wording

For the three months ended March 31, 2026, net interest margin and net interest spread were 4.04% and 3.18%, respectively, compared to 3.81% and 2.87%, respectively, for the same period in 2025, which reflects the changes in interest income and interest expense discussed above.

Previous wording

Credit risk is inherent in the business of making loans. We establish an allowance for credit losses (“ACL”) through charges to earnings, which are shown in the consolidated statements of comprehensive income (loss) as the provision for credit losses. Credit losses on loans are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to our earnings. The provision for credit losses and the amount of allowance for each period are dependent upon many factors, including loan growth, net charge offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas.

Current wording

Credit risk is inherent in the business of making loans. We establish an allowance for credit losses (“ACL”) through charges to earnings, which are shown in the consolidated statements of comprehensive income as the provision for credit losses. Credit losses on loans are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to our earnings. The provision for credit losses and the amount of allowance for each period are dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas.

Previous wording

The Company recorded a provision for credit losses of $500 thousand for the three months ended September 30, 2025, which was comparable to $495 thousand for the three months ended September 30, 2024.

Current wording

The provision for credit losses for the three months ended March 31, 2026 was $260 thousand, which was comparable to $420 thousand for the three months ended March 31, 2025.

Previous wording

Noninterest income for the three months ended September 30, 2025 was $11.2 million, compared to $10.6 million for the three months ended September 30, 2024, an increase of $530 thousand, or 5.0%. Significant changes in the components of noninterest income are detailed below.

Current wording

Noninterest income for the three months ended March 31, 2026 was $11.3 million, compared to $10.6 million for the three months ended March 31, 2025, an increase of $670 thousand, or 6.3%. Significant changes in the components of noninterest income are detailed below.

Previous wording

Mortgage banking activities - Income from mortgage banking activities increased $685 thousand, or 36.2%, to $2.6 million for the three months ended September 30, 2025 from $1.9 million for the three months ended September 30, 2024. This increase was mainly the result of a $925 thousand negative fair value adjustment to our mortgage servicing rights portfolio in the third quarter of 2025 compared to a negative fair value adjustment of $2.1 million in the third quarter of 2024. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which declined less during the third quarter of 2025 as compared to the same period of 2024. This increase was partially offset by decreases in other mortgage income related to a decline in originations of loans held for sale in the third quarter of 2025 as compared to the same period of 2024.

Current wording

Mortgage banking activities - Income from mortgage banking activities increased $1.8 million, or 85.4%, to $3.9 million for the three months ended March 31, 2026 from $2.1 million for the three months ended March 31, 2025. This increase was primarily due to a $250 thousand positive fair value adjustment to our mortgage servicing rights portfolio in the first quarter of 2026 compared to a negative fair value adjustment of $1.6 million in the first quarter of 2025. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which increased during the first quarter of 2026 as compared to decreasing during the first quarter of 2025.

Previous wording

Other income and fees - Other income and fees decreased $652 thousand, or 27.0% for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of a net decrease of $590 thousand recognized for property insurance proceeds during the third quarter of 2024 as compared to the same period in 2025.

Current wording

Other income and fees - Other income and fees decreased $1.3 million, or 69.1%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily the result of a loss of $801 thousand in a SBIC investment, due to negative performance of one of the companies in the fund, and a decrease of $125 thousand in gain on sales of fixed assets, all in the first quarter of 2026 as compared to the same period in 2025.

Previous wording

Noninterest expense for the three months ended September 30, 2025 was $33.0 million compared to $33.1 million for the three months ended September 30, 2024, a decrease of $104 thousand, or 0.3%. Significant changes in the components of noninterest expense are detailed below.

Current wording

Noninterest expense for the three months ended March 31, 2026 was $35.5 million compared to $33.0 million for the three months ended March 31, 2025, an increase of $2.5 million, or 7.6%. Significant changes in the components of noninterest expense are detailed below. There was a total of $1.5 million in acquisition related expenses recorded in the first quarter of 2026.

Previous wording

Salaries and employee benefits - Salaries and employee benefits increased $646 thousand, or 3.4%, from $18.8 million for the three months ended September 30, 2024 to $19.4 million for the three months ended September 30, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.

Current wording

Salaries and employee benefits - Salaries and employee benefits increased $713 thousand, or 3.7%, from $19.4 million for the three months ended March 31, 2025 to $20.2 million for the three months ended March 31, 2026. This increase was primarily driven by annual salary adjustments, which became effective in January of 2026, and based on new lender hires during the last twelve months.

Previous wording

At September 30, 2025, there was $1.57 billion in adjustable rate loans, with $875.0 million of these loans that mature or reprice in the next twelve months. Of these loans that mature or reprice in the next twelve months, $603.0 million will reprice immediately upon changes in the underlying index rate, with the remaining $272.0 million being subject to rate floors above the current index or a future repricing date. The Wall Street Journal prime rate is the predominate index used by the Bank. Further as of September 30, 2025, there is $192.9 million of fixed rate loans that mature in the next twelve months.

Current wording

At March 31, 2026, there was $1.6 billion in adjustable rate loans, with $904.0 million of these loans that mature or reprice in the next twelve months. Of these loans that mature or reprice in the next twelve months, $632.2 million will reprice immediately upon changes in the underlying index rate, with the remaining $271.8 million being subject to rate ceilings, floors above the current index, or a future repricing date. The Wall Street Journal prime rate is the predominate index used by the Bank.

Previous wording

The Bank is primarily involved in real estate, commercial, agricultural and consumer lending activities with customers throughout Texas and Eastern New Mexico. We have a collateral concentration, as 72.7% of our loans were secured by real property as of September 30, 2025, compared to 73.7% as of December 31, 2024. We believe that these loans are not concentrated in any one single property type and that they are geographically dispersed throughout the areas we serve. Although the Bank has diversified portfolios, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the markets in which it operates, which consist primarily of agribusiness, wholesale/retail, oil and gas and related businesses, healthcare industries and institutions of higher education. Commercial real estate loans and residential construction loans represent 37.2% of loans held for investment as of September 30, 2025 and represented 40.1% of loans held for investment as of December 31, 2024. Further, 96% of the total dollar amount of these loans are secured by collateral located in the State of Texas.

Current wording

The Bank is primarily involved in real estate, commercial, agricultural and consumer lending activities with customers throughout Texas and Eastern New Mexico. We have a collateral concentration, as 72.4% of our loans were secured by real property as of March 31, 2026, compared to 71.6% as of December 31, 2025. We believe that these loans are not concentrated in any one single property type and that they are geographically dispersed throughout the areas we serve. Although the Bank has diversified portfolios, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the markets in which it operates, which consist primarily of agribusiness, wholesale/retail, oil and gas and related businesses, healthcare industries and institutions of higher education. Commercial real estate loans and residential construction loans represent 37.3% of loans held for investment as of March 31, 2026 and represented 37.0% as of December 31, 2025. Further, 96% of the total dollar amount of these loans are secured by collateral located in the state of Texas.

Previous wording

Commercial real estate loans decreased $83.1 million, or 7.4%, to $1.04 billion as of September 30, 2025 from $1.12 billion as of December 31, 2024. The decrease was primarily driven by decreases of $105.4 million in multi-family loans and $30.3 million in hospitality loans, partially offset by increases in residential and commercial land development loans and other commercial real estate loans.

Current wording

Commercial real estate loans decreased $11.7 million, or 1.1%, to $1.05 billion as of March 31, 2026 from $1.06 billion as of December 31, 2025. The decrease was primarily driven by a decrease of $31.0 million in multi-family loans, partially offset by an increase of $22.2 million in commercial land development loans.

Previous wording

Commercial specialized loans decreased $11.2 million, or 2.9%, to $377.8 million as of September 30, 2025 from $389.0 million as of December 31, 2024. This decrease was primarily due to net repayments of $9.2 million in seasonal agricultural-related loans and a decrease of $9.3 million in loans to finance and investment companies, partially offset by an increase of $7.3 million in energy sector loans.

Current wording

Commercial specialized loans decreased $24.5 million, or 6.0%, to $384.9 million as of March 31, 2026 from $409.4 million as of December 31, 2025. This decrease was primarily due to net repayments of $24.4 million in seasonal agricultural-related loans.

Previous wording

Consumer and other loans increased $26.8 million, or 3.0%, to $912.6 million as of September 30, 2025, from $885.8 million as of December 31, 2024. The growth in these loans was primarily a result of an increase of $26.2 million in residential mortgage loans. As of September 30, 2025, our consumer loan portfolio was comprised of $592.6 million in 1-4 family residential loans, $256.3 million in auto loans, and $63.7 million in other consumer loans.

Current wording

Consumer and other loans decreased $3.5 million, or 0.4%, to $907.6 million as of March 31, 2026 from $911.1 million as of December 31, 2025. As of March 31, 2026, our consumer loan portfolio was comprised of $589.0 million in 1-4 family residential loans, $256.1 million in auto loans, and $62.6 million in other consumer loans.

Previous wording

The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.13 billion at September 30, 2025 and $1.22 billion at December 31, 2024. Nonowner-occupied commercial real estate loans are made up of income-producing commercial real estate property loans and construction, acquisition, and development property loans. As of September 30, 2025, total income-producing commercial real estate property loans totaled $771.3 million and was comprised of $210.5 million of multi-family property loans, $187.9 million of retail property loans, $144.3 million of office property loans, $30.7 million in hospitality loans, and $197.9 million in industrial and other property loans. Industrial and other property loans include types such as industrial, warehouse, mini-storage, and convenience stores. As of September 30, 2025, total construction, acquisition, and development property loans totaled $362.5 million and was comprised of $98.0 million in residential construction property loans and $264.5 million of commercial construction and other land development loans. The weighted average loan-to-value of income-producing nonowner-occupied commercial real estate loans was approximately 55% at September 30, 2025. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 58% at September 30, 2025.

Current wording

The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.16 billion at March 31, 2026 and $1.16 billion at December 31, 2025. Nonowner-occupied commercial real estate loans are made up of income-producing commercial real estate property loans and construction, acquisition, and development property loans. As of March 31, 2026, total income-producing commercial real estate property loans totaled $769.1 million and was comprised of $198.6 million of multi-family property loans, $181.8 million of retail property loans, $140.9 million of office property loans, $149.7 million in industrial and warehouse loans, $41.8 million in hospitality loans, and $56.3 million in other property loans. Other property loans include types such as mini-storage and convenience stores. As of March 31, 2026, total construction, acquisition, and development property loans totaled $387.3 million and was comprised of $103.4 million in residential construction property loans and $283.9 million of commercial construction and other land development loans. The weighted average loan-to-value of income-producing nonowner-occupied commercial real estate loans was approximately 58% at March 31, 2026. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 57% at March 31, 2026.

Previous wording

Owner-occupied commercial real estate loans totaled $410.5 million at September 30, 2025 and $366.8 million at December 31, 2024.

Current wording

Owner occupied commercial real estate loans totaled $416.7 million at March 31, 2026 and $419.0 million at December 31, 2025.

Previous wording

The ACL for loans was $44.1 million at September 30, 2025, compared to $43.2 million at December 31, 2024, an increase of $888 thousand, or 2.1%. The increase is a result of a provision for credit losses on loans of $3.2 million being recorded during the nine months ended September 30, 2025, partially offset by net charge-offs of $2.3 million during the period. The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

Current wording

The ACL for loans was $44.8 million at March 31, 2026, compared to $45.1 million at December 31, 2025, a decrease of $309 thousand, or 0.7%. The decrease is the result of net charge-offs and no provision for credit losses on loans during the first quarter of 2026. The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the uncertain impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts, the prolonged elevated interest rate environment and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

Previous wording

At September 30, 2025, our total nonaccrual loans were $8.5 million, or 0.28% of total loans held for investment, as compared to $22.1 million, or 0.72% of total loans held for investment, at December 31, 2024. Any loans within this amount that exceeded $250 thousand were specifically analyzed and specific valuation allowances were established as necessary and included in the ACL for loans as of September 30, 2025 to cover any probable loss. This decrease of $13.6 million was predominantly due to a $19.0 million loan, which was previously on nonaccrual, that was repaid in full during the second quarter of 2025. This decrease was partially offset with three loans totaling $7.8 million being placed on nonaccrual status during the second and third quarters of 2025.

Current wording

At March 31, 2026, our total nonaccrual loans were $3.7 million, or 0.12% of total loans held for investment, as compared to $7.1 million, or 0.22% of total loans held for investment, at December 31, 2025. These loans within this amount that exceeded $250 thousand were specifically analyzed and specific valuation allowances were established as necessary and included in the ACL for loans as of March 31, 2026 to cover any probable loss. The decrease of $3.4 million is primarily the result of a $3.9 million loan on nonaccrual status at December 31, 2025 being repaid in full during the first quarter of 2026. This decrease was partially offset by other loans being placed on nonaccrual status during the first quarter of 2026.

Previous wording

Nonperforming loans were $9.7 million at September 30, 2025, as compared to $24.0 million at December 31, 2024. This decrease is mainly due to the nonaccrual changes noted above.

Current wording

Nonperforming loans were $5.1 million at March 31, 2026 and $9.8 million at December 31, 2025. This decrease is mainly due to the nonaccrual changes noted above and a reduction of $1.4 million in loans past due 90 days or more.

Previous wording

If a borrower on a restructured accruing loan has demonstrated performance under the previous terms, is not experiencing financial difficulty and shows the capacity to continue to perform under the restructured terms, the loan will remain on accrual status. Otherwise, the loan will be placed on nonaccrual status until the borrower demonstrates a sustained period of performance, which generally requires six consecutive months of payments.

Current wording

If a borrower on a modified accruing loan has demonstrated performance under the previous terms, is not experiencing financial difficulty and shows the capacity to continue to perform under the restructured terms, the loan will remain on accrual status. Otherwise, the loan will be placed on nonaccrual status until the borrower demonstrates a sustained period of performance, which generally requires six consecutive months of payments.

Previous wording

Our securities portfolio decreased $6.1 million, or 1.1%, to $571.1 million at September 30, 2025, compared to $577.2 million at December 31, 2024. The decrease was primarily due to $20.8 million in maturities, prepayments and calls, net of purchases, partially offset by a $16.7 million increase in the fair value of securities available for sale at September 30, 2025 as compared to December 31, 2024.

Current wording

Total securities at March 31, 2026 were $602.9 million, representing an increase of $35.3 million, or 6.2%, compared to $567.5 million at December 31, 2025. The increase was primarily due to $37.0 million in purchases, net of maturities, prepayments and calls and a $1.1 million increase in the fair value of securities available for sale at March 31, 2026 as compared to December 31, 2025.

Previous wording

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At September 30, 2025, the fair value of the Company’s securities available for sale was $75.0 million lower than the amortized cost. At September 30, 2025, the Company evaluated whether the decline in fair value has resulted from credit losses or other factors. Within this evaluation, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agency, and adverse conditions specifically related to the security, among other factors. Based on management’s evaluation no unrealized losses on securities were determined to be due to credit loss. Additionally, we anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not probable that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity, thus no ACL or losses have been recognized or realized in the consolidated financial statements for securities in the portfolio.

Current wording

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At March 31, 2026, the fair value of the Company’s available for sale securities was $71.1 million lower than the amortized cost. At March 31, 2026, the Company evaluated whether the decline in fair value has resulted from credit losses or other factors. Within this evaluation, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agency, and adverse conditions specifically related to the security, among other factors. Based on management’s evaluation no unrealized losses on securities were determined to be due to credit loss. Additionally, we anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not probable that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity, thus no ACL or losses have been recognized or realized in the consolidated financial statements for securities in the portfolio.

Previous wording

Deposits represent the Company’s primary and most vital source of funds. We offer a variety of deposit products including demand deposits accounts, interest-bearing products, savings accounts and certificate of deposits. We remained focused on gathering noninterest-bearing demand deposit accounts through loan production, customer referrals, marketing staffs, mobile and online banking and various involvements with community networks.

Current wording

Deposits represent the Company’s primary and most vital source of funds. We offer a variety of deposit products including demand deposits accounts, interest-bearing products, savings accounts and certificate of deposits. We put continued effort into gathering noninterest-bearing demand deposit accounts through loan production, customer referrals, marketing staffs, mobile and online banking and various involvements with community networks.

Previous wording

Total deposits at September 30, 2025 were $3.88 billion, representing an increase of $260.3 million, or 7.2%, compared to $3.62 billion at December 31, 2024. The increase since December 31, 2024 was due to organic growth and occurred broadly across commercial and retail deposits, with growth in both noninterest-bearing and interest-bearing deposits. As of September 30, 2025, 27.1% of total deposits were comprised of noninterest-bearing demand accounts, 62.0% of interest-bearing non-maturity accounts and 10.9% of time deposits.

Current wording

Total deposits at March 31, 2026 were $4.03 billion, representing an increase of $153.5 million, or 4.0%, compared to $3.87 billion at December 31, 2025. The increase in deposits was mainly due to a seasonal increase in public fund deposits and organic growth occurring broadly across retail and commercial deposits, with growth in both noninterest-bearing and interest-bearing deposits. As of March 31, 2026, 25.6% of total deposits were comprised of noninterest-bearing demand accounts, 63.4% of interest-bearing non-maturity accounts and 11.0% of time deposits.

Previous wording

The estimated amount of uninsured deposits as of September 30, 2025 was $1.38 billion. This represented approximately 34% of total deposits. Excluding collateralized public fund deposits, uninsured and uncollateralized deposits was 27% as of September 30, 2025.

Current wording

The estimated amount of uninsured deposits as of March 31, 2026 was $1.5 billion. This represented approximately 37% of total deposits and excludes $400.7 million of collateralized public fund deposits.

Previous wording

FHLB Advances. The FHLB allows us to borrow, both short and long-term, on a blanket floating lien status collateralized by first mortgage loans and commercial real estate loans as well as FHLB stock. At September 30, 2025 and December 31, 2024, we had total remaining borrowing capacity from the FHLB of $1.30 billion and $1.11 billion, respectively, with no outstanding balance. We had no FHLB borrowings during the three and nine months ended September 30, 2025 or 2024.

Current wording

FHLB Advances. The FHLB allows us to borrow, both short and long-term, on a blanket floating lien status collateralized by first mortgage loans and commercial real estate loans as well as FHLB stock. At March 31, 2026 and December 31, 2025, we had total remaining borrowing capacity from the FHLB of $1.29 billion and $1.27 billion, respectively, with no outstanding balance. We had no FHLB borrowings during the three months ended March 31, 2026 or 2025.

Previous wording

The Company may use FHLB letters of credit to pledge to certain public deposits. There was no outstanding balance of FHLB letters of credit at September 30, 2025. The outstanding balance at December 31, 2024 was $75.0 million.

Current wording

The Company may use FHLB letters of credit to pledge to certain public deposits. There was no outstanding balance of FHLB letters of credit at March 31, 2026 and December 31, 2025.

Previous wording

Federal Reserve Bank of Dallas. The Bank has a line of credit with the Federal Reserve Bank of Dallas (the “FRB”). The amount of the line is determined on a monthly basis by the FRB. The line is collateralized by a blanket floating lien on all agriculture, commercial and consumer loans. The amount of the line was $688.6 million and $654.0 million at September 30, 2025 and December 31, 2024, respectively, with no outstanding balance. We had no FRB borrowings during the three and nine months ended September 30, 2025 or 2024.

Current wording

Federal Reserve Bank of Dallas. The Bank has a line of credit with the Federal Reserve Bank of Dallas (the “FRB”). The amount of the line is determined on a monthly basis by the FRB. The line is collateralized by a blanket floating lien on all agriculture, commercial and consumer loans. The amount of the line was $701.8 million and $659.7 million at March 31, 2026 and December 31, 2025, respectively. There were no amounts outstanding on the FRB line of credit at March 31, 2026 and December 31, 2025. We had no long-term FRB borrowings during the three months ended March 31, 2026 or 2025.

Previous wording

Lines of Credit. The Bank has uncollateralized lines of credit with multiple banks as a source of funding for liquidity management. The total amount of the lines was $140.0 million as of September 30, 2025 and December 31, 2024, respectively. There were no short-term borrowings as of September 30, 2025 and December 31, 2024.

Current wording

Lines of Credit. The Bank has uncollateralized lines of credit with multiple banks as a source of funding for liquidity management. The total amount of the lines was $140.0 million as of March 31, 2026 and December 31, 2025. The lines were not used, other than testing during the three months ended March 31, 2026 or the three months ended March 31, 2025.

Previous wording

Subordinated Debt. In December 2018, the Company issued $14.1 million of subordinated notes that have a maturity date of December 2030 and an average fixed rate of 6.41% for the first seven years. After the fixed rate period, these notes will float at the Wall Street Journal prime rate, with a floor of 4.0% and a ceiling of 7.5%. These notes pay interest quarterly, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations.

Current wording

Subordinated Debt. In December 2018, the Company issued $14.1 million of subordinated notes that have a maturity date of December 2030 and an average fixed rate of 6.41% for the first seven years. After the fixed rate periods, these notes will float at the Wall Street Journal prime rate, with a floor of 4.0% and a ceiling of 7.5%. These notes pay interest quarterly, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations. As of March 31, 2026, the total amount of subordinated debt outstanding was $14.1 million.

Previous wording

Our liquidity position is supported by management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks, federal funds sold, and fair value of unpledged investment securities. Other available sources of liquidity include wholesale deposits, and additional borrowings from correspondent banks, FHLB advances, and the Federal Reserve discount window. At September 30, 2025, the Bank had the capacity to borrow funds from the FHLB and the Federal Reserve discount window of up to approximately $1.3 billion and $688.6 million, respectively.

Current wording

Our liquidity position is supported by management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks, federal funds sold, and fair value of unpledged investment securities. Other available sources of liquidity include wholesale deposits, and additional borrowings from correspondent banks, FHLB advances, and the FRB discount window. At March 31, 2026, the Bank had the capacity to borrow funds from the FHLB and the Federal Reserve discount window of up to approximately $1.29 billion and $701.8 million, respectively.

Previous wording

Total stockholders’ equity increased to $477.8 million as of September 30, 2025, compared to $438.9 million as of December 31, 2024, an increase of $38.9 million, or 8.9%. The increase from December 31, 2024 was primarily the result of $43.2 million in net income for the nine months ended September 30, 2025 and an increase in accumulated other comprehensive income (“AOCI”) of $9.5 million related to fair value changes in available for sale securities and related fair value hedges, partially offset by $7.5 million of dividends paid and $8.5 million in repurchases of common stock for the nine months ended September 30, 2025.

Current wording

Total stockholders’ equity increased to $504.9 million as of March 31, 2026, compared to $493.8 million as of December 31, 2025, an increase of $11.1 million, or 2.2%. The increase from December 31, 2025 was primarily the result of $14.5 million in net earnings, partially offset by $2.8 million of dividends paid for the three months ended March 31, 2026.

Previous wording

The table below reflects the Company’s (on a consolidated basis) and the Bank’s capital ratios as of the dates indicated.

Current wording

The table below summarizes the capital requirements applicable to us and the Bank in order to be considered “well capitalized” from a regulatory perspective, as well as our and the Bank’s capital ratios as of the dates indicated.

Previous wording

On September 17, 2019, the federal banking agencies jointly finalized a rule to be effective January 1, 2020 and intended to simplify the regulatory capital requirements described above for qualifying community banking organizations that opt into the Community Bank Leverage Ratio (“CBLR”) framework, as required by Section 201 of the EGRRCPA. The final rule became effective on January 1, 2020, and the CBLR framework became available for banks to use beginning with their March 31, 2020 Call Reports. Under the final rule, if a qualifying community banking organization opts into the CBLR framework and meets all requirements under the framework, it will be considered to have met the well-capitalized ratio requirements under the “prompt corrective action” regulations described above and will not be required to report or calculate risk-based capital. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. Although the Company and the Bank are qualifying community banking organizations, the Company and the Bank have elected not to opt in to the CBLR framework at this time and will continue to follow the Basel III capital requirements as described in Part I, Item 1, “Business,” under the subheading “Supervision and Regulation—Regulatory Capital Requirements,” in the 2024 Annual Report on Form 10-K.

Current wording

On September 17, 2019, the federal banking agencies jointly finalized a rule to be effective January 1, 2020 and intended to simplify the regulatory capital requirements described above for qualifying community banking organizations that opt into the Community Bank Leverage Ratio (“CBLR”) framework, as required by Section 201 of the EGRRCPA. The final rule became effective on January 1, 2020, and the CBLR framework became available for banks to use beginning with their March 31, 2020 Call Reports. Under the final rule, if a qualifying community banking organization opts into the CBLR framework and meets all requirements under the framework, it will be considered to have met the well-capitalized ratio requirements under the “prompt corrective action” regulations described above and will not be required to report or calculate risk-based capital. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. On November 25, 2025, the federal banking agencies jointly proposed changes to the CBLR framework intended to encourage broader adoption, including reducing the required leverage ratio from 9.0% to 8.0%; however, the proposed rule has not yet been finalized. Although the Company and the Bank are qualifying community banking organizations, the Company and the Bank have elected not to opt in to the CBLR framework at this time and will continue to follow the requirements of the Basel III capital framework as described above.

Previous wording

We repurchased stock in accordance with its previously-announced stock repurchase program during the nine months ended September 30, 2025. For the three months ended September 30, 2025, we did not repurchase any shares of common stock. For the nine months ended September 30, 2025, we repurchased 259,046 shares of common stock for a total of $8.5 million. These shares were retired immediately upon repurchase and not included in treasury stock. See Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds,” of this Form 10-Q for further information.

Current wording

The Company did not repurchase any stock in accordance with its previously-announced stock repurchase programs during the three months ended March 31, 2026. See Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds,” of this Form 10-Q for further information.