ServisFirst Bancshares, Inc.

Previous wording

The following discussion and analysis is designed to provide a better understanding of various factors relating to the results of operations and financial condition of ServisFirst Bancshares, Inc. (the “Company”) and its wholly-owned subsidiary, ServisFirst Bank (the “Bank”). This discussion is intended to supplement and highlight information contained in the accompanying unaudited consolidated balance sheets as of June 30, 2026 and December 31, 2025 and consolidated statements of income for the three and six months ended June 30, 2026 and June 30, 2025.

Current wording

The following discussion and analysis is designed to provide a better understanding of various factors relating to the results of operations and financial condition of ServisFirst Bancshares, Inc. (the “Company”) and its wholly-owned subsidiary, ServisFirst Bank (the “Bank”). This discussion is intended to supplement and highlight information contained in the accompanying unaudited consolidated balance sheets as of September 30, 2026 and December 31, 2025 and consolidated statements of income for the three and nine months ended September 30, 2026 and September 30, 2025.

Previous wording

Statements in this document that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). The words “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. The Company cautions that such forward-looking statements, wherever they occur in this quarterly report or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of those factors are beyond our ability to control or predict. These factors include, but are not limited to: general economic conditions, especially in the credit markets and in the Southeast; the impact of tariffs, trade wars and other conflicts on general economic conditions; performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued or re-emerging inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and nonbank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, “Forward-Looking Statements” and “Risk Factors” in our subsequent Quarterly Reports on Form 10-Q and our other U.S. Secur…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Statements in this document that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). The words “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. The Company cautions that such forward-looking statements, wherever they occur in this quarterly report or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of those factors are beyond our ability to control or predict. These factors include, but are not limited to: general economic conditions, especially in the credit markets and in the Southeast; the impact of tariffs, trade wars and other conflicts on general economic conditions; performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued or re-emerging inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; increased competition from both banks and nonbank financial institutions; and the timing, amount and price of repurchases of common stock under our repurchase program. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, “Forward-Looking Statements” an…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are a bank holding company under the Bank Holding Company Act of 1956 and are headquartered in Birmingham, Alabama. Our wholly-owned subsidiary, ServisFirst Bank, an Alabama banking corporation, provides commercial banking services through full-service banking offices located in Alabama, Florida, Georgia, North and South Carolina, Tennessee, Texas and Virginia. The Bank recently entered the Houston, Texas market with plans of opening a new office there in the coming weeks. Through the Bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.

Current wording

We are a bank holding company under the Bank Holding Company Act of 1956 and are headquartered in Birmingham, Alabama. Our wholly-owned subsidiary, ServisFirst Bank, an Alabama banking corporation, provides commercial banking services through full-service banking offices located in Alabama, Florida, Georgia, North and South Carolina, Tennessee, Texas and Virginia. Through the Bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.

Previous wording

As of June 30, 2026, we had consolidated total assets of $18.35 billion, an increase of $618.3 million, or 3.5%, from $17.73 billion at December 31, 2025. Total loans were $14.48 billion at June 30, 2026, an increase of $781.6 million, or 5.7%, from $13.70 billion at December 31, 2025. Total deposits were $14.55 billion at June 30, 2026, an increase of $329.7 million, or 2.3%, from $14.22 billion at December 31, 2025. Noninterest-bearing demand deposits comprised most of the increase in deposits, increasing by $311.1 million.

Current wording

As of September 30, 2026, we had consolidated total assets of $18.32 billion, an increase of $592.5 million, or 3.3%, from $17.73 billion at December 31, 2025. Total loans were $14.74 billion at September 30, 2026, an increase of $1.04 billion, or 7.6%, from $13.70 billion at December 31, 2025. Total deposits were $14.09 billion at September 30, 2026, a decrease of $131.7 million, or 0.9%, from $14.22 billion at December 31, 2025. The decrease was partially offset by an increase of $226.0 million in noninterest-bearing demand deposits.

Previous wording

We reported net income and net income available to common stockholders of $85.8 million for the quarter ended June 30, 2026, compared to net income and net income available to common stockholders of $61.4 million for the second quarter of 2025. Basic and diluted earnings per common share were both $1.57 for the three months ended June 30, 2026, compared to $1.12 in the corresponding period in 2025.

Current wording

We reported net income and net income available to common stockholders of $87.3 million for the quarter ended September 30, 2026, compared to net income and net income available to common stockholders of $65.6 million for the third quarter of 2025. Basic and diluted earnings per common share were both $0.80 for the three months ended September 30, 2026, compared to $0.60 in the corresponding period in 2025.

Previous wording

Net income was $168.8 million and net income available to common stockholders was $168.7 million for the six months ended June 30, 2026, compared to net income and net income available to common stockholders of $124.6 million for the six months ended June 30, 2025. Basic and diluted earnings per common share were both $3.09 for the six months ended June 30, 2026, compared to $2.28 for both for the corresponding period in 2025. Changes in income and expenses are more fully explained in “Results of Operations” below.

Current wording

Net income was $256.1 million and net income available to common stockholders was $256.0 million for the nine months ended September 30, 2026, compared to net income and net income available to common stockholders of $190.2 million for the nine months ended September 30, 2025. Basic and diluted earnings per common share were both $2.34 for the nine months ended September 30, 2026, compared to $1.74 for both for the corresponding period in 2025. Changes in income and expenses are more fully explained in “Results of Operations” below.

Previous wording

The following table presents select ratios of our results of operations for the three and six months ended June 30, 2026, and 2025.

Current wording

The following table presents select ratios of our results of operations for the three and nine months ended September 30, 2026, and 2025.

Previous wording

At June 30, 2026, we had $1.0 million in federal funds sold, compared to $6.1 million at December 31, 2025. We also maintain balances at the Federal Reserve Bank of Atlanta, which earn interest. At June 30, 2026, we had $1.08 billion in balances at the Federal Reserve, compared to $1.00 billion at December 31, 2025. At June 30, 2026, we had $250.4 million in securities purchased under agreements to resell, compared to $498.9 million at December 31, 2025.

Current wording

At September 30, 2026, we had $25.1 million in federal funds sold, compared to $6.1 million at December 31, 2025. We also maintain balances at the Federal Reserve Bank of Atlanta, which earn interest. At September 30, 2026, we had $724.4 million in balances at the Federal Reserve, compared to $1.00 billion at December 31, 2025. At September 30, 2026, we had $299.0 million in securities purchased under agreements to resell, compared to $498.9 million at December 31, 2025.

Previous wording

Debt securities available-for-sale totaled $995.1 million at June 30, 2026 and $1.07 billion at December 31, 2025. During the three months ended June 30, 2025, the Company sold available-for-sale mortgage-backed securities with an amortized cost base of $70.5 million, and recorded a pre-tax loss of $8.6 million as a result of our portfolio restructuring during 2025. Debt securities held to maturity totaled $635.5 million at June 30, 2026 and $660.1 million at December 31, 2025. We had paydowns of $44.6 million on mortgage-backed securities and government agencies, maturities of $90.4 million on municipal bonds and treasury securities, and calls of $47.5 million on corporate securities during the six months ended June 30, 2026. We purchased $50.0 million in mortgage-backed securities and $33.7 million in corporate securities during the six months ended June 30, 2026. For a tabular presentation of debt securities available for sale and held to maturity at June 30, 2026 and December 31, 2025, see “Note 4 – Securities” in our Notes to Consolidated Financial Statements.

Current wording

Debt securities available-for-sale totaled $968.5 million at September 30, 2026 and $1.07 billion at December 31, 2025. During the three months ended September 30, 2026, the Company sold available-for-sale U.S. Treasury securities with an amortized cost basis of $430.1 million and recorded a pre-tax gain of $148,000. During the three and nine months ended September 30, 2025, the Company sold available-for-sale mortgage-backed securities with amortized cost bases of $83.8 million and $153.9 million, respectively, and recorded pre-tax losses of $7.8 million and $16.4 million as a result of our portfolio restructuring during 2025. Debt securities held to maturity totaled $594.6 million at September 30, 2026 and $660.1 million at December 31, 2025. We had paydowns of $64.9 million on mortgage-backed securities and government agencies, maturities of $118.9 million on municipal bonds and treasury securities, and calls of $67.5 million on corporate securities during the nine months ended September 30, 2026. We purchased $50.0 million in mortgage-backed securities, $440.4 million in U.S. Treasury securities, and $37.7 million in corporate securities during the nine months ended September 30, 2026. For a tabular presentation of debt securities available for sale and held to maturity at September 30, 2026 and December 31, 2025, see “Note 4 – Securities” in our Notes to Consolidated Financial Statements.

Previous wording

We do not invest in collateralized debt obligations. As of June 30, 2026, we had $392.2 million of bank and bank holding company-issued debt. All such bonds, if rated, were rated BBB or better by Kroll Bond Rating Agency at the time of our initial investment, and all other corporate bonds held were rated A‑1 or better by Standard & Poor’s or Moody’s at the time of purchase The total investment portfolio has a combined average credit rating of AA as of June 30, 2026.

Current wording

We do not invest in collateralized debt obligations. As of September 30, 2026, we had $373.4 million of bank and bank holding company-issued debt. All such bonds, if rated, were rated BBB or better by Kroll Bond Rating Agency at the time of our initial investment, and all other corporate bonds held were rated A‑ or better by Standard & Poor’s or Moody’s at the time of purchase. The total investment portfolio has a combined average credit rating of AA as of September 30, 2026.

Previous wording

The carrying value of debt securities pledged to secure public funds on deposit and for other purposes as required by law was $1.17 billion and $1.23 billion as of June 30, 2026 and December 31, 2025, respectively.

Current wording

The carrying value of debt securities pledged to secure public funds on deposit and for other purposes as required by law was $1.08 billion and $1.23 billion as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

At June 30, 2026, we had total loans of $14.48 billion, an increase of $781.6 million, or 5.7%, from $13.70 billion at December 31, 2025. The majority of this growth occurred in non-owner occupied commercial loans, increasing $520.2 million, or 11.3% since December 31, 2025.

Current wording

At September 30, 2026, we had total loans of $14.74 billion, an increase of $1.04 billion, or 7.6%, from $13.70 billion at December 31, 2025. The majority of this growth occurred in non-owner occupied commercial loans, increasing $537.8 million, or 11.7% since December 31, 2025.

Previous wording

Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, we utilize a discounted cash flow, probability of default / loss given default or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates and gross domestic product. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long-term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter and are dependent on the current economic environment among other factors. See “Note 1 – General” in the Notes to Consolidated Financial Statements included in Item 1. Consolidated Financial Statements elsewhere in this report.

Current wording

Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, we utilize a discounted cash flow, probability of default / loss given default or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates and gross domestic product. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long-term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter and are dependent on the current economic environment among other factors. See “Note 5 – Loans” in the Notes to Consolidated Financial Statements included in Item 1. Consolidated Financial Statements elsewhere in this report.

Previous wording

The following table presents a summary of the allowance for credit losses, net charge-offs and certain credit ratios for the three and six months ended June 30, 2026 and 2025.

Current wording

The following table presents a summary of the allowance for credit losses, net charge-offs and certain credit ratios for the three and nine months ended September 30, 2026 and 2025.

Previous wording

Total nonperforming loans at June 30, 2026, which include nonaccrual loans and loans 90 or more days past due and still accruing, increased $2.1 million, or 1.3%, to $171.0 million from $168.8 million at December 31, 2025. Of this total, nonaccrual loans of $169.7 million at June 30, 2026 represented a net increase of $1.4 million from nonaccrual loans at December 31, 2025. The majority of the increase in non-performing assets is attributable to two relationships, both of which are secured by real estate. Excluding credit card accounts, there were four loans 90 or more days past due and still accruing totaling $1.1 million at June 30, 2026, compared to two loans totaling $323,000 at December 31, 2025. Loans made to borrowers experiencing financial difficulty that were modified during the three months ended June 30, 2026 and 2025 were $1.5 million and $494,000, respectively.

Current wording

Total nonperforming loans at September 30, 2026, which include nonaccrual loans and loans 90 or more days past due and still accruing, decreased $7.2 million, or 4.3%, to $161.6 million from $168.8 million at December 31, 2025. Of this total, nonaccrual loans of $160.1 million at September 30, 2026 represented a net decrease of $8.3 million from nonaccrual loans at December 31, 2025. Excluding credit card accounts, there were ten loans 90 or more days past due and still accruing totaling $1.4 million at September 30, 2026, compared to two loans totaling $323,000 at December 31, 2025. Loans made to borrowers experiencing financial difficulty that were modified during the three months ended September 30, 2026 and 2025 were $1.2 million and $17.4 million, respectively.

Previous wording

OREO and repossessed assets at June 30, 2026 were $4.8 million, an increase of $2.3 million, or 87.1%, from $2.6 million at December 31, 2025. The following table summarizes OREO and repossessed asset activity for the six months ended June 30, 2026 and 2025:

Current wording

OREO and repossessed assets at September 30, 2026 were $14.9 million, an increase of $12.3 million, or 475.5%, from $2.6 million at December 31, 2025. The following table summarizes OREO and repossessed asset activity for the nine months ended September 30, 2026 and 2025:

Previous wording

We rely on increasing our deposit base to fund loan and other asset growth. Each of our markets is highly competitive. We compete for local deposits by offering attractive products with competitive rates. We expect to have a higher average cost of funds for local deposits than competitor banks due to our lack of an extensive branch network. Our management’s strategy is to offset the higher cost of funding with a lower level of operating expense and firm pricing discipline for loan products. We have promoted electronic banking services by providing them without charge and by offering in-bank customer training. At June 30, 2026, our total deposits were $14.55 billion, an increase of $329.7 million, or 2.3%, from $14.22 billion at December 31, 2025.

Current wording

We rely on increasing our deposit base to fund loan and other asset growth. Each of our markets is highly competitive. We compete for local deposits by offering attractive products with competitive rates. We expect to have a higher average cost of funds for local deposits than competitor banks due to our lack of an extensive branch network. Our management’s strategy is to offset the higher cost of funding with a lower level of operating expense and firm pricing discipline for loan products. We have promoted electronic banking services by providing them without charge and by offering in-bank customer training. At September 30, 2026, our total deposits were $14.09 billion, a decrease of $131.7 million, or 0.9%, from $14.22 billion at December 31, 2025.

Previous wording

At June 30, 2026 and December 31, 2025, we estimate that we had approximately $9.68 billion and $9.69 billion, respectively, in uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit. The uninsured deposit data for 2026 and 2025 reflects the deposit insurance impact of “combined ownership segregation” of escrow and other accounts at an aggregate level but does not reflect an evaluation of all of the account styling distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations.

Current wording

At September 30, 2026 and December 31, 2025, we estimate that we had approximately $9.20 billion and $9.69 billion, respectively, in uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit. The uninsured deposit data for 2026 and 2025 reflects the deposit insurance impact of “combined ownership segregation” of escrow and other accounts at an aggregate level but does not reflect an evaluation of all of the account styling distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations.

Previous wording

Our borrowings consist of federal funds purchased and subordinated notes payable. We had $1.58 billion and $1.47 billion at June 30, 2026 and December 31, 2025, respectively, in federal funds purchased from correspondent banks that are clients of our correspondent banking unit. The average rate paid on these borrowings was 3.74% for the quarter ended June 30, 2026. Other borrowings consist of $34.75 million of the Company’s 4% Subordinated Notes due October 21, 2030, which were issued in a private placement in October 2020 and pay interest semi-annually. The Notes can be prepaid at any time.

Current wording

Our borrowings consist of federal funds purchased and subordinated notes payable. We had $1.97 billion and $1.47 billion at September 30, 2026 and December 31, 2025, respectively, in federal funds purchased from correspondent banks that are clients of our correspondent banking unit. The average rate paid on these borrowings was 3.78% for the quarter ended September 30, 2026. Other borrowings consist of $34.75 million of the Company’s 4% Subordinated Notes due October 21, 2030, which were issued in a private placement in October 2020 and pay interest semi-annually. The Notes can be prepaid at any time.

Previous wording

The retention of existing deposits and attraction of new deposit sources through new and existing customers is critical to our liquidity position. If our liquidity was to decline due to deposit withdrawals, we have procedures that provide for certain actions under varying liquidity conditions. These actions include borrowing from existing correspondent banks, selling or participating loans, and curtailing loan commitments and funding. At June 30, 2026, our liquid assets, represented by cash and due from banks, federal funds sold, securities purchased with agreements to resell and unpledged available-for-sale and held-to-maturity debt securities, totaled $1.72 billion. The Bank had loans pledged to both the Federal Home Loan Bank and the Federal Reserve Bank of Atlanta, which provided approximately $3.40 billion and $2.56 billion, respectively, in available funding. The Bank’s policy limits on brokered deposits would allow for up to $4.59 billion in available funding for brokered deposits. Additionally, the Bank had approximately $312.0 million in available unused federal funds lines of credit with regional banks, subject to certain restrictions and collateral requirements, to meet short term funding needs.

Current wording

The retention of existing deposits and attraction of new deposit sources through new and existing customers is critical to our liquidity position. If our liquidity was to decline due to deposit withdrawals, we have procedures that provide for certain actions under varying liquidity conditions. These actions include borrowing from existing correspondent banks, selling or participating loans, and curtailing loan commitments and funding. At September 30, 2026, our liquid assets, represented by cash and due from banks, federal funds sold, securities purchased with agreements to resell and unpledged available-for-sale and held-to-maturity debt securities, totaled $1.45 billion. The Bank had loans pledged to both the Federal Home Loan Bank and the Federal Reserve Bank of Atlanta, which provided approximately $3.36 billion and $2.59 billion, respectively, in available funding. The Bank’s policy limits on brokered deposits would allow for up to $4.58 billion in available funding for brokered deposits. Additionally, the Bank had approximately $247.1 million in available unused federal funds lines of credit with regional banks, subject to certain restrictions and collateral requirements, to meet short term funding needs.

Previous wording

The following table illustrates, during the periods presented, the mix of our funding sources and the assets in which those funds are invested as a percentage of our average total assets for the period indicated. Average assets totaled $18.01 billion and $17.89 billion, respectively, for the three and six months ended June 30, 2026.

Current wording

The following table illustrates, during the periods presented, the mix of our funding sources and the assets in which those funds are invested as a percentage of our average total assets for the period indicated. Average assets totaled $18.32 billion and $18.04 billion, respectively, for the three and nine months ended September 30, 2026.

Previous wording

Total stockholders' equity attributable to us at June 30, 2026 was $1.98 billion, or 10.78% of total assets. At December 31, 2025, total stockholders' equity attributable to us was $1.85 billion, or 10.44% of total assets.

Current wording

Total stockholders' equity attributable to us at September 30, 2026 was $2.04 billion, or 11.12% of total assets. At December 31, 2025, total stockholders' equity attributable to us was $1.85 billion, or 10.44% of total assets.

Previous wording

We reported net income and net income available to common stockholders of $85.8 million for the quarter ended June 30, 2026, compared to net income and net income available to common stockholders of $61.4 million for the second quarter of 2025. Net income was $168.8 million and net income available to common stockholders was $168.7 million for the six months ended June 30, 2026, compared to net income and net income available to common stockholders of $124.6 million for the six months ended June 30, 2025. The increase in net income for both the three and six months ended June 30, 2026 compared to 2025 was driven by growth in both net interest income and noninterest income, adjusted for $8.6 million of securities losses in the second quarter of 2025.

Current wording

We reported net income and net income available to common stockholders of $87.3 million for the quarter ended September 30, 2026, compared to net income and net income available to common stockholders of $65.6 million for the third quarter of 2025. Net income was $256.1 million and net income available to common stockholders was $256.0 million for the nine months ended September 30, 2026, compared to net income and net income available to common stockholders of $190.2 million for the nine months ended September 30, 2025. The increase in net income for both the three and nine months ended September 30, 2026 compared to 2025 was driven by growth in both net interest income and noninterest income, even after adjusting for the $148,000 securities gains for the quarter and nine months ended September 30, 2026, and $7.8 million and $16.4 million of securities losses for the quarter and nine months ended September 30, 2025, respectively.

Previous wording

Basic and diluted earnings per common share were both $1.57 for the three months ended June 30, 2026, compared to $1.12 in the corresponding period in 2025. Basic and diluted earnings per common share were both $3.09 for the six months ended June 30, 2026, compared to $2.28 for both in the corresponding period in 2025. Return on average assets for the three and six months ended June 30, 2026 was 1.91% and 1.90% compared to 1.40% and 1.42%, respectively, for the corresponding periods in 2025. Return on average common stockholders' equity for the three and six months ended June 30, 2026 was 17.71% and 17.81%, respectively, compared to 14.56% and 15.08%, respectively, for the corresponding periods in 2025.

Current wording

Basic and diluted earnings per common share were both $0.80 for the three months ended September 30, 2026, compared to $0.60 in the corresponding period in 2025. Basic and diluted earnings per common share were both $2.34 for the nine months ended September 30, 2026, compared to $1.74 for both in the corresponding period in 2025. Return on average assets for the three and nine months ended September 30, 2026 was 1.89% and 1.90% compared to 1.47% and 1.44%, respectively, for the corresponding periods in 2025. Return on average common stockholders' equity for the three and nine months ended September 30, 2026 was 17.26% and 17.62%, respectively, compared to 14.88% and 15.01%, respectively, for the corresponding periods in 2025.

Previous wording

Taxable-equivalent net interest income increased $24.4 million, or 18.5%, to $156.1 million for the three months ended June 30, 2026 compared to $131.8 million for the corresponding period in 2025, and increased $49.0 million, or 19.2%, to $304.4 million for the six months ended June 30, 2026 compared to $255.4 million for the corresponding period in 2025. The taxable-equivalent yield on interest-earning assets increased to 5.82% for the three months ended June 30, 2026 from 5.80% for the corresponding period in 2025, and increased to 5.79% for the six months ended June 30, 2026 from 5.76% for the corresponding period in 2025. The yield on loans for the three months ended June 30, 2026 was 6.23% compared to 6.37% for the corresponding period in 2025, and 6.21% compared to 6.34% for the six months ended June 30, 2026 and June 30, 2025, respectively. The cost of total interest-bearing liabilities decreased to 2.91% for the three months ended June 30, 2026 compared to 3.50% for the corresponding period in 2025, and decreased to 2.88% for the six months ended June 30, 2026 from 3.55% for the corresponding period in 2025. Net interest margin for the three months ended June 30, 2026 was 3.63% compared to 3.10% for the corresponding period in 2025, and 3.58% for the six months ended June 30, 2026 compared to 3.01% for the corresponding period in 2025.

Current wording

Taxable-equivalent net interest income increased $26.4 million, or 19.8%, to $159.9 million for the three months ended September 30, 2026 compared to $133.5 million for the corresponding period in 2025, and increased $75.4 million, or 19.4%, to $464.3 million for the nine months ended September 30, 2026 compared to $388.9 million for the corresponding period in 2025. The taxable-equivalent yield on interest-earning assets increased to 5.84% for the three months ended September 30, 2026 from 5.82% for the corresponding period in 2025, and increased to 5.80% for the nine months ended September 30, 2026 from 5.79% for the corresponding period in 2025. The yield on loans for the three months ended September 30, 2026 was 6.24% compared to 6.34% for the corresponding period in 2025, and 6.22% compared to 6.35% for the nine months ended September 30, 2026 and September 30, 2025, respectively. The cost of total interest-bearing liabilities decreased to 2.93% for the three months ended September 30, 2026 compared to 3.55% for the corresponding period in 2025, and decreased to 2.91% for the nine months ended September 30, 2026 from 3.55% for the corresponding period in 2025. Net interest margin for the three months ended September 30, 2026 was 3.63% compared to 3.09% for the corresponding period in 2025, and 3.60% for the nine months ended September 30, 2026 compared to 3.04% for the corresponding period in 2025.

Previous wording

The Federal Reserve Bank’s targeted federal funds rate was 4.25 – 4.50% at June 30, 2025 compared to its current range as of June 30, 2026 of 3.50 – 3.75%.

Current wording

The Federal Reserve Bank’s targeted federal funds rate was 4.00 – 4.25% at September 30, 2025 compared to its current range as of September 30, 2026 of 3.75 – 4.00%.

Previous wording

The following tables show, for the three and six months ended June 30, 2026 and June 30, 2025, the average balances of each principal category of our assets, liabilities and stockholders' equity, and an analysis of net interest revenue. The accompanying tables reflect changes in our net interest margin as a result of changes in the volume and rate of our interest-earning assets and interest-bearing liabilities for the same periods. Changes as a result of mix or the number of days in the periods have been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. The tables are presented on a taxable-equivalent basis where applicable:

Current wording

The following tables show, for the three and nine months ended September 30, 2026 and September 30, 2025, the average balances of each principal category of our assets, liabilities and stockholders' equity, and an analysis of net interest revenue. The accompanying tables reflect changes in our net interest margin as a result of changes in the volume and rate of our interest-earning assets and interest-bearing liabilities for the same periods. Changes as a result of mix or the number of days in the periods have been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. The tables are presented on a taxable-equivalent basis where applicable:

Previous wording

The provision for credit losses on loans was $11.7 million for the three months ended June 30, 2026, an increase of $286,000 from $11.4 million for the three months ended June 30, 2025, and was $22.3 million for the six months ended June 30, 2026, an increase of $4.4 million from $17.9 million for the six months ended June 30, 2025. The ACL as of June 30, 2026, March 31, 2026, and June 30, 2025, totaled $181.9 million, $173.9 million, and $170.0 million, or 1.26%, 1.25%, and 1.28% of loans, net of unearned income, respectively. Annualized net credit charge-offs to quarter-to-date average loans were 0.11% for the three months ended June 30, 2026, a 9 basis points decrease compared to 0.20% for the second quarter of 2025. Annualized net credit charge-offs to year-to-date average loans were 0.17% for the six months ended June 30, 2026, compared to 0.19% for the corresponding period in 2025. Nonperforming loans increased to $171.0 million, or 1.18% of total loans, at June 30, 2026 from $168.8 million, or 1.23% of total loans at December 31, 2025, and increased compared to $72.2 million, or 0.55% of total loans, at June 30, 2025. See the section captioned “Asset Quality” located elsewhere in this item for additional discussion related to provision for credit losses.

Current wording

The provision for credit losses on loans was $14.9 million for the three months ended September 30, 2026, an increase of $5.6 million from $9.3 million for the three months ended September 30, 2025, and was $37.2 million for the nine months ended September 30, 2026, an increase of $9.9 million from $27.2 million for the nine months ended September 30, 2025. The ACL as of September 30, 2026, June 30, 2026, and September 30, 2025, totaled $189.0 million, $181.9 million, and $170.2 million, or 1.28%, 1.26%, and 1.28% of loans, net of unearned income, respectively. Annualized net credit charge-offs to quarter-to-date average loans were 0.21% for the three months ended September 30, 2026, a 6 basis points decrease compared to 0.27% for the third quarter of 2025. Annualized net credit charge-offs to year-to-date average loans were 0.19% for the nine months ended September 30, 2026, compared to 0.22% for the corresponding period in 2025. Nonperforming loans decreased to $161.6 million, or 1.10% of total loans, at September 30, 2026 from $168.8 million, or 1.23% of total loans at December 31, 2025, and decreased compared to $167.6 million, or 1.26% of total loans, at September 30, 2025. See the section captioned “Asset Quality” located elsewhere in this item for additional discussion related to provision for credit losses.

Previous wording

Noninterest income totaled $12.9 million for the three months ended June 30, 2026, compared to $421,000 in the corresponding period in 2025, and totaled $23.7 million for the six months ended June 30, 2026, compared to $8.7 million in the corresponding period in 2025.

Current wording

Noninterest income totaled $13.1 million for the three months ended September 30, 2026, compared to $2.8 million in the corresponding period in 2025, and totaled $36.8 million for the nine months ended September 30, 2026, compared to $11.5 million in the corresponding period in 2025.

Previous wording

Noninterest expense totaled $50.0 million for the three months ended June 30, 2026, an increase of $5.8 million, or 13.0%, compared to the corresponding period in 2025, and totaled $97.3 million for the six months ended June 30, 2026, an increase of $7.0 million, or 7.8%, from the corresponding period in 2025.

Current wording

Noninterest expense totaled $52.2 million for the three months ended September 30, 2026, an increase of $4.2 million, or 8.8%, compared to the corresponding period in 2025, and totaled $149.6 million for the nine months ended September 30, 2026, an increase of $11.3 million, or 8.1%, from the corresponding period in 2025.

Previous wording

Income tax expense was $21.4 million for the three months ended June 30, 2026 compared to $15.2 million for the same period in 2025, and was $39.4 million for the six months ended June 30, 2026, compared to $31.1 million for the same period in 2025. Our effective tax rate for the three and six months ended June 30, 2026 was 19.94% and 18.91%, respectively, compared to 19.82% and 19.94% for the corresponding periods in 2025, respectively. During the first quarter of 2026, we purchased Investment Tax Credits, which reduced our tax expense. We recognized excess tax benefits as an income tax credit to our income tax expense from the exercise of stock options and vesting of restricted stock during the three and six months ended June 30, 2026 of $36,000 and $265,000, respectively, compared to $234,000 and $704,000 for three and six months ended June 30, 2025, respectively. Our primary permanent differences are related to tax exempt income on securities, state income tax benefit on real estate investment trust dividends, various qualifying tax credits and change in cash surrender value of bank-owned life insurance.

Current wording

Income tax expense was $18.1 million for the three months ended September 30, 2026 compared to $13.3 million for the same period in 2025, and was $57.5 million for the nine months ended September 30, 2026, compared to $44.3 million for the same period in 2025. Our effective tax rate for the three and nine months ended September 30, 2026 was 17.21% and 18.34%, respectively, compared to 16.81% and 18.89% for the corresponding periods in 2025, respectively. We recognized excess tax benefits as an income tax credit to our income tax expense from the exercise of stock options and vesting of restricted stock during the three and nine months ended September 30, 2026 of $37,000 and $302,000, respectively, compared to $81,000 and $785,000 for three and nine months ended September 30, 2025, respectively. Our primary permanent differences are related to tax exempt income on securities, state income tax benefit on real estate investment trust dividends, various qualifying tax credits and change in cash surrender value of bank-owned life insurance.

Previous wording

The accounting principles we follow and our methods for applying these principles conform to U.S. generally accepted accounting principles (“GAAP”) and to general practices within the banking industry. To prepare consolidated financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. In management’s opinion, certain accounting policies have a more significant impact than others on the Company’s financial reporting. The allowance for credit losses and income taxes are particularly significant for the Company’s financial reporting. Information concerning our accounting policies and critical accounting estimates with respect to these items is available in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no changes to the accounting policies for the allowance for credit losses or income taxes during the three and six months ended June 30, 2026.

Current wording

The accounting principles we follow and our methods for applying these principles conform to U.S. generally accepted accounting principles (“GAAP”) and to general practices within the banking industry. To prepare consolidated financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. In management’s opinion, certain accounting policies have a more significant impact than others on the Company’s financial reporting. The allowance for credit losses and income taxes are particularly significant for the Company’s financial reporting. Information concerning our accounting policies and critical accounting estimates with respect to these items is available in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no changes to the accounting policies for the allowance for credit losses or income taxes during the three and nine months ended September 30, 2026.