Third Coast Bancshares, Inc.

Previous wording

We are a bank holding company with headquarters in Humble, Texas that operates through our wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, TCCC. We focus on providing commercial banking solutions to small and medium-sized businesses and professionals with operations in our markets. We provide financial results based on a fiscal year ending December 31 as a single reportable segment. Our market expertise, coupled with a deep understanding of our customers’ needs, allows us to deliver tailored financial products and services. We currently operate twenty-one branches, with ten branches in the Greater Houston market, three branches in the Dallas-Fort Worth market, six branches in the Austin-San Antonio market, one branch in Detroit, Texas, and one branch in Ballinger, Texas. As of June 30, 2026, we had, on a consolidated basis, total assets of $6.74 billion, total loans of $5.44 billion, total deposits of $5.86 billion and total shareholders’ equity of $670.8 million.

Current wording

We are a bank holding company with headquarters in Humble, Texas that operates through our wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, TCCC. We focus on providing commercial banking solutions to small and medium-sized businesses and professionals with operations in our markets. We provide financial results based on a fiscal year ending December 31 as a single reportable segment. Our market expertise, coupled with a deep understanding of our customers’ needs, allows us to deliver tailored financial products and services. We currently operate twenty branches, with ten branches in the Greater Houston market, two branches in the Dallas-Fort Worth market, six branches in the Austin-San Antonio market, one branch in Detroit, Texas, and one branch in Ballinger, Texas. As of September 30, 2026, we had, on a consolidated basis, total assets of $6.81 billion, total loans of $5.49 billion, total deposits of $5.92 billion and total shareholders’ equity of $674.9 million.

Previous wording

On February 1, 2026, we completed our merger with Keystone Bancshares, Inc. (“Keystone”), the parent company of Keystone Bank, SSB (“Keystone Bank”), a Texas state savings bank, pursuant to the terms of the Agreement and Plan of Reorganization, dated as of October 22, 2025, by and among the Company, Arch Merger Sub, Inc. (“Merger Sub”), a Texas corporation and a wholly owned subsidiary of the Company, and Keystone (the “Merger Agreement”).

Current wording

On February 1, 2026, we completed our merger with Keystone Bancshares, Inc. (“Keystone”), the parent company of Keystone Bank, SSB (“Keystone Bank”), a Texas state savings bank, pursuant to the terms of the Agreement and Plan of Reorganization, dated as of October 22, 2025, by and among the Company, Arch Merger Sub, Inc. (“Arch Merger Sub”), a Texas corporation and a wholly owned subsidiary of the Company, and Keystone (the “Keystone Merger Agreement”).

Previous wording

Pursuant to the Merger Agreement, on February 1, 2026, Merger Sub merged with and into Keystone (the “Merger”), with Keystone surviving as a wholly owned subsidiary of the Company. Immediately following the Merger, Keystone merged with and into the Company, with the Company surviving the merger (the “Second Step Merger”). Immediately following the Second Step Merger, Keystone Bank merged with and into the Bank, with the Bank surviving the merger. In connection with the Merger, we issued approximately 2.6 million shares of our common stock and paid approximately $20.0 million in cash.

Current wording

Pursuant to the Keystone Merger Agreement, on February 1, 2026, Arch Merger Sub merged with and into Keystone (the “ Keystone Merger”), with Keystone surviving as a wholly owned subsidiary of the Company. Immediately following the Keystone Merger, Keystone merged with and into the Company, with the Company surviving the merger (the “Keystone Second Step Merger”). Immediately following the Keystone Second Step Merger, Keystone Bank merged with and into the Bank, with the Bank surviving the merger. In connection with the Merger, we issued approximately 2.6 million shares of our common stock and paid approximately $20.0 million in cash.

Previous wording

Net interest income increased $21.8 million, or 23.6%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to increased interest income, partially offset by increased interest expense. The increase in interest income primarily resulted from an increase in loans, slightly offset by a decrease in loan yields. The increase in interest expense primarily resulted from an increase in interest-bearing demand deposits, slightly offset by a reduction in rates paid on interest-bearing demand deposits. Average loans increased from $4.00 billion for the six months ended June 30, 2025 to $5.17 billion for the six months ended June 30, 2026, primarily as a result of the Merger. The yield on loans for the six months ended June 30, 2026 was 7.03%, compared to 7.70% for the six months ended June 30, 2025. Interest expense related to interest bearing deposit accounts was $84.9 million and $73.8 million for six months ended June 30, 2026 and 2025, respectively. Average interest-bearing deposits increased from $3.71 billion for the six months ended June 30, 2025 to $4.94 billion for the six months ended June 30, 2026, primarily as a result of the Merger. The average rate paid on interest-bearing deposits decreased from 4.01% for the six months ended June 30, 2025 to 3.47% for the six months ended June 30, 2026. For the six months ended June 30, 2026, net interest margin and net interest spread were 3.75% and 3.17%, respectively, compared to 4.02% and 3.31%, respectively, for the six months ended June 30, 2025.

Current wording

Net interest income increased $30.4 million, or 21.3%, during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to increased interest income, partially offset by increased interest expense. The increase in interest income primarily resulted from an increase in loans, slightly offset by a decrease in loan yields. The increase in interest expense primarily resulted from an increase in interest-bearing demand deposits, slightly offset by a reduction in rates paid on interest-bearing demand deposits. Average loans increased from $4.06 billion for the nine months ended September 30, 2025 to $5.25 billion for the nine months ended September 30, 2026, primarily as a result of the Keystone Merger. The yield on loans for the nine months ended September 30, 2026 was 7.01%, compared to 7.73% for the nine months ended September 30, 2025. Interest expense related to interest bearing deposit accounts was $129.6 million and $112.8 million for nine months ended September 30, 2026 and 2025, respectively. Average interest-bearing deposits increased from $3.77 billion for the nine months ended September 30, 2025 to $4.99 billion for the nine months ended September 30, 2026, primarily as a result of the Keystone Merger. The average rate paid on interest-bearing deposits decreased from 4.00% for the nine months ended September 30, 2025 to 3.47% for the nine months ended September 30, 2026. For the nine months ended September 30, 2026, net interest margin and net interest spread were 3.73% and 3.14%, respectively, compared to 4.05% and 3.34%, respectively, for the nine months ended September 30, 2025.

Previous wording

Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $7.2 million and $7.3 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $10.6 million and $12.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net interest income increased $10.9 million, or 22.1%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to increased interest income, partially offset by increased interest expense. The increase in interest income primarily resulted from an increase in loans, slightly offset by a decrease in loan yields. The increase in interest expense primarily resulted from an increase in interest-bearing demand deposits, slightly offset by a reduction in rates paid on interest-bearing demand deposits. Average loans increased from $4.02 billion for the three months ended June 30, 2025 to $5.37 billion for the three months ended June 30, 2026, primarily as a result of the Merger. The yield on loans for the three months ended June 30, 2026 was 7.06%, compared to 7.95% for the three months ended June 30, 2025. Interest expense related to interest bearing deposit accounts was $43.4 million and $37.5 million for three months ended June 30, 2026 and 2025, respectively. Average interest-bearing deposits increased from $3.77 billion for the three months ended June 30, 2025 to $5.11 billion for the three months ended June 30, 2026, primarily as a result of the Merger. The average rate paid on interest-bearing deposits decreased from 4.00% for the three months ended June 30, 2025 to 3.41% for the three months ended June 30, 2026. For the three months ended June 30, 2026, net interest margin and net interest spread were 3.83% and 3.25%, respectively, compared to 4.22% and 3.52%, respectively, for the three months ended June 30, 2025.

Current wording

Net interest income increased $8.7 million, or 17.1%, during the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to increased interest income, partially offset by increased interest expense. The increase in interest income primarily resulted from an increase in loans, slightly offset by a decrease in loan yields. The increase in interest expense primarily resulted from an increase in interest-bearing demand deposits, slightly offset by a reduction in rates paid on interest-bearing demand deposits. Average loans increased from $4.18 billion for the three months ended September 30, 2025 to $5.40 billion for the three months ended September 30, 2026, primarily as a result of the Keystone Merger. The yield on loans for the three months ended September 30, 2026 was 6.95%, compared to 7.79% for the three months ended September 30, 2025. Interest expense related to interest bearing deposit accounts was $44.7 million and $39.0 million for three months ended September 30, 2026 and 2025, respectively. Average interest-bearing deposits increased from $3.89 billion for the three months ended September 30, 2025 to $5.08 billion for the three months ended September 30, 2026, primarily as a result of the Keystone Merger. The average rate paid on interest-bearing deposits decreased from 3.98% for the three months ended September 30, 2025 to 3.49% for the three months ended September 30, 2026. For the three months ended September 30, 2026, net interest margin and net interest spread were 3.70% and 3.08%, respectively, compared to 4.10% and 3.41%, respectively, for the three months ended September 30, 2025.

Previous wording

Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $4.0 million and $4.8 million for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $3.4 million and $5.3 million for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

The provision for credit losses for both the six months ended June 30, 2026 and 2025 was $2.6 million. The provisions for each period related primarily to provisioning for new loans and commitments booked during the periods. No provision for credit losses for securities was recorded for the six months ended June 30, 2026 and 2025.

Current wording

The provision for credit losses for the nine months ended September 30, 2026 was $3.2 million, compared to $5.3 million for the nine months ended September 30, 2025. The provisions for each period related primarily to provisioning for new loans and commitments booked during the periods. No provision for credit losses for securities was recorded for the nine months ended September 30, 2026 and 2025.

Previous wording

As of June 30, 2026, the allowance for credit losses for loans totaled $53.6 million, or 0.99% of total loans, compared to $43.9 million, or 1.00% of total loans, as of December 31, 2025. The increase in the allowance for credit losses for loans was primarily due to the Merger. At June 30, 2026, the allowance for credit losses for unfunded loan commitments was $2.0 million, compared to $1.8 million at December 31, 2025. No allowance for credit losses for securities was recorded as of June 30, 2026 or December 31, 2025.

Current wording

As of September 30, 2026, the allowance for credit losses for loans totaled $54.4 million, or 0.99% of total loans, compared to $43.9 million, or 1.00% of total loans, as of December 31, 2025. The increase in the allowance for credit losses for loans was primarily due to the Keystone Merger. At September 30, 2026, the allowance for credit losses for unfunded loan commitments was $1.7 million, compared to $1.8 million at December 31, 2025. No allowance for credit losses for securities was recorded as of September 30, 2026 or December 31, 2025.

Previous wording

The increase in noninterest income of $6.0 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to the gain on sale of factored receivables and increased service charges and fees.

Current wording

The increase in noninterest income of $8.7 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to the gain on sale of factored receivables and increased service charges and fees.

Previous wording

The increase in noninterest income of $5.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was primarily due to the gain on sale of factored receivables and increased service charges and fees.

Current wording

The increase in noninterest income of $2.7 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, was primarily due to increased service charges and fees, other real estate rental income and upfront swap fees.

Previous wording

The increase in noninterest expense of $19.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to increases in salaries and employee benefit expenses, increases in legal and professional fees, and increases in other expenses.

Current wording

The increase in noninterest expense of $32.2 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to increases in salaries and employee benefit expenses, increases in legal and professional fees, increases in loan operations and other real estate owned expense, and increases in other expenses.

Previous wording

Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $49.6 million for the six months ended June 30, 2026, an increase of $13.1 million, or 35.8%, compared to $36.5 million for the same period in 2025. The increase was primarily due to merger-related expenses, increased salary expense resulting from new hires and increased bonus expense. For the six months ended June 30, 2026, the average number of employees was 477, compared to an average number of employees of 380 for the six months ended June 30, 2025.

Current wording

Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $74.6 million for the nine months ended September 30, 2026, an increase of $18.5 million, or 33.0%, compared to $56.1 million for the same period in 2025. The increase was primarily due to merger-related expenses, increased salary expense resulting from new hires and increased bonus expense. For the nine months ended September 30, 2026, the average number of employees was 482, compared to an average number of employees of 385 for the nine months ended September 30, 2025.

Previous wording

Other noninterest expenses were $3.6 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to an increase in amortization expense of core deposit intangibles related to the Merger.

Current wording

Other noninterest expenses were $5.3 million and $3.5 million for the nine months ended September 30, 2026 and 2025, respectively. The increase was primarily due to an increase in amortization expense of core deposit intangibles related to the Keystone Merger.

Previous wording

The increase in noninterest expense of $9.6 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was primarily due to increases in salaries and employee benefit expenses and increases in other expenses, primarily due to the Merger.

Current wording

The increase in noninterest expense of $12.7 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, was primarily due to increases in salaries and employee benefit expenses, increases in legal and professional fees, increases in loan operations and other real estate owned expense, and increases in other expenses.

Previous wording

Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $24.8 million for the three months ended June 30, 2026, an increase of $6.6 million, or 36.4%, compared to $18.2 million for the same period in 2025. The increase was primarily due to merger-related expenses, increased salary expense resulting from new hires and increased bonus expense. For the three months ended June 30, 2026, the average number of employees was 509, compared to an average number of employees of 386 for the three months ended June 30, 2025.

Current wording

Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $25.0 million for the three months ended September 30, 2026, an increase of $5.4 million, or 27.7%, compared to $19.6 million for the same period in 2025. The increase was primarily due to merger-related expenses, increased salary expense resulting from new hires and increased bonus expense. For the three months ended September 30, 2026, the average number of employees was 502, compared to an average number of employees of 393 for the three months ended September 30, 2025.

Previous wording

Other noninterest expenses were $2.2 million and $1.4 million for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily due to an increase in amortization expense of core deposit intangibles related to the Merger, an increase in expenses related to Federal Home Loan Bank letters of credit and an increase in expenses related to investor relations and public filings.

Current wording

Other noninterest expenses were $1.7 million and $1.1 million for the three months ended September 30, 2026 and 2025, respectively. The increase was primarily due to an increase in amortization expense of core deposit intangibles related to the Keystone Merger, an increase in expenses related to Federal Home Loan Bank letters of credit and an increase in expenses related to investor relations and public filings.

Previous wording

The effective tax rate for the six months ended June 30, 2026 was less than the statutory tax rate of 21% due to the utilization of purchased federal income tax credits which reduced our tax liability during the quarter.

Current wording

The effective tax rate for the nine months ended September 30, 2026 was less than the statutory tax rate of 21% due to the utilization of purchased federal income tax credits which reduced our tax liability during the year.

Previous wording

Total assets were $6.74 billion as of June 30, 2026, compared to $5.34 billion as of December 31, 2025. The increase in total assets of $1.39 billion was primarily a result of the Merger during the six months ended June 30, 2026.

Current wording

Total assets were $6.81 billion as of September 30, 2026, compared to $5.34 billion as of December 31, 2025. The increase in total assets of $1.46 billion was primarily a result of the Keystone Merger during the nine months ended September 30, 2026.

Previous wording

As of June 30, 2026, total loans were $5.44 billion, an increase of $1.04 billion, or 23.7%, compared to $4.39 billion as of December 31, 2025, primarily as a result of the Merger. Real estate loans and commercial and industrial loans accounted for the majority of the loan growth, increasing $638.7 million and $463.0 million, respectively, from December 31, 2025. The growth was partially offset by a $60.3 million decrease in municipal and other loans from December 31, 2025. Total loans as a percentage of deposits were 92.8% and 95.0% as of June 30, 2026 and December 31, 2025, respectively. Total loans as a percentage of assets were 80.7% and 82.3% as of June 30, 2026 and December 31, 2025, respectively.

Current wording

As of September 30, 2026, total loans were $5.49 billion, an increase of $1.10 billion, or 25.0%, compared to $4.39 billion as of December 31, 2025, primarily as a result of the Keystone Merger. Real estate loans and commercial and industrial loans accounted for the majority of the loan growth, increasing $705.8 million and $462.2 million, respectively, from December 31, 2025. The growth was partially offset by a $69.4 million decrease in municipal and other loans from December 31, 2025. Total loans as a percentage of deposits were 92.7% and 95.0% as of September 30, 2026 and December 31, 2025, respectively. Total loans as a percentage of assets were 80.7% and 82.3% as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

Owner-occupied commercial real estate loans are a key component of our lending strategy to owner-operated businesses, representing a large percentage of our total commercial real estate loans. Owner-occupied commercial real estate loans increased $149.3 million, or 34.3%, to $584.0 million as of June 30, 2026 from $434.7 million as of December 31, 2025.

Current wording

Owner-occupied commercial real estate loans are a key component of our lending strategy to owner-operated businesses, representing a large percentage of our total commercial real estate loans. Owner-occupied commercial real estate loans increased $175.0 million, or 40.3%, to $609.7 million as of September 30, 2026 from $434.7 million as of December 31, 2025.

Previous wording

Non-owner-occupied commercial real estate loans are loans for income producing properties and are generally for retail strip centers, office buildings, self-storage facilities, and multi and single tenant office warehouses, all within our markets. Non-owner-occupied commercial real estate loans increased $221.7 million, or 31.2%, to $932.1 million as of June 30, 2026 from $710.4 million as of December 31, 2025.

Current wording

Non-owner-occupied commercial real estate loans are loans for income producing properties and are generally for retail strip centers, office buildings, self-storage facilities, and multi and single tenant office warehouses, all within our markets. Non-owner-occupied commercial real estate loans increased $277.8 million, or 39.1%, to $988.2 million as of September 30, 2026 from $710.4 million as of December 31, 2025.

Previous wording

Residential Real Estate Loans. Residential real estate loans consist of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is predominately comprised of loans secured by 1-4 family homes, which are investor owned. While we do have some owner-occupied 1-4 family residential loans, we have not historically pursued this product line; however, we do offer limited mortgage products through our mortgage department. Our multi-family residential loan portfolio is comprised of loans secured by properties deemed multi-family, which includes apartment buildings. Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans increased $196.8 million, or 59.0%, to $530.2 million as of June 30, 2026 from $333.4 million as of December 31, 2025. The increase was primarily a result of the Merger.

Current wording

Residential Real Estate Loans. Residential real estate loans consist of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is predominately comprised of loans secured by 1-4 family homes, which are investor owned. While we do have some owner-occupied 1-4 family residential loans, we have not historically pursued this product line; however, we do offer limited mortgage products through our mortgage department. Our multi-family residential loan portfolio is comprised of loans secured by properties deemed multi-family, which includes apartment buildings. Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans increased $181.1 million, or 54.3%, to $514.5 million as of September 30, 2026 from $333.4 million as of December 31, 2025. The increase was primarily a result of the Keystone Merger.

Previous wording

Construction, Development and Other Loans. Construction and development loans are comprised of loans used to fund construction, land acquisition and land development. The properties securing the portfolio are primarily in the Greater Houston and Dallas markets and are generally diverse in terms of type. During 2021, we expanded our construction and development portfolio through the formation of our builder finance group, which provides traditional homebuilder lines secured by lots and single-family homes, and land acquisition and development loans. This group also finances bond anticipation notes and lines of credit to large national institutional tier-one funds that invest equity in various real estate assets. Construction, development and other loans increased $64.5 million, or 7.8%, to $887.8 million as of June 30, 2026 from $823.4 million as of December 31, 2025. The increase was primarily a result of the Merger.

Current wording

Construction, Development and Other Loans. Construction and development loans are comprised of loans used to fund construction, land acquisition and land development. The properties securing the portfolio are primarily in the Greater Houston and Dallas markets and are generally diverse in terms of type. During 2021, we expanded our construction and development portfolio through the formation of our builder finance group, which provides traditional homebuilder lines secured by lots and single-family homes, and land acquisition and development loans. This group also finances bond anticipation notes and lines of credit to large national institutional tier-one funds that invest equity in various real estate assets. Construction, development and other loans increased $65.6 million, or 8.0%, to $888.9 million as of September 30, 2026 from $823.4 million as of December 31, 2025. The increase was primarily a result of the Keystone Merger.

Previous wording

Commercial and industrial loans increased $463.0 million, or 24.3%, to $2.37 billion as of June 30, 2026 from $1.91 billion as of December 31, 2025.

Current wording

Commercial and industrial loans increased $462.2 million, or 24.2%, to $2.37 billion as of September 30, 2026 from $1.91 billion as of December 31, 2025.

Previous wording

We had $54.4 million in nonperforming assets as of June 30, 2026, compared to $29.9 million as of December 31, 2025. The increase was primarily due to the transfer of a $17.1 million loan to other real estate owned, offset by the placement on nonaccrual of three relationships totaling $10.1 million and an decrease of $5.8 million in loans over 90 days past due and still accruing. Included in nonperforming assets, nonperforming loans were $27.1 million and $21.5 million as of June 30, 2026 and December 31, 2025, respectively.

Current wording

We had $56.0 million in nonperforming assets as of September 30, 2026, compared to $29.9 million as of December 31, 2025. The increase was primarily due to the transfer of a $17.1 million loan to other real estate owned and the placement on nonaccrual of six relationships totaling $13.3 million, offset by a decrease of $5.4 million in loans over 90 days past due and still accruing. Included in nonperforming assets, nonperforming loans were $29.0 million and $21.5 million as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

As of June 30, 2026, the allowance for credit losses for loans totaled $53.6 million, or 0.99% of total loans. As of December 31, 2025, the allowance for credit losses for loans totaled $43.9 million, or 1.00% of total loans. The increase in our allowance for credit losses for loans was primarily due to the $6.8 million initial allowance on acquired loans resulting from the Merger and $2.7 million provision for credit losses on loans for the six months ended June 30, 2026.

Current wording

As of September 30, 2026, the allowance for credit losses for loans totaled $54.4 million, or 0.99% of total loans. As of December 31, 2025, the allowance for credit losses for loans totaled $43.9 million, or 1.00% of total loans. The increase in our allowance for credit losses for loans was primarily due to the $6.8 million initial allowance on acquired loans resulting from the Keystone Merger and $3.2 million provision for credit losses on loans for the nine months ended September 30, 2026.

Previous wording

As of June 30, 2026, the carrying amount of the available-for-sale security portfolio was $405.3 million, compared to $383.2 million as of December 31, 2025, an increase of $22.1 million, or 5.8%. The increase relates primarily to maturities, calls and paydowns of $2.48 billion offset by net acquisitions of $2.50 billion in agencies, municipal securities, mortgage-back securities and corporate bonds during the six months ended June 30, 2026. Investment securities available-for-sale represented 6.0% and 7.2% of total assets as of June 30, 2026 and December 31, 2025, respectively.

Current wording

As of September 30, 2026, the carrying amount of the available-for-sale security portfolio was $461.5 million, compared to $383.2 million as of December 31, 2025, an increase of $78.3 million, or 20.4%. The increase relates primarily to net acquisitions of $5.19 billion in agencies, municipal securities, mortgage-back securities and corporate bonds offset by maturities, calls and paydowns of $5.09 billion during the nine months ended September 30, 2026. Investment securities available-for-sale represented 6.8% and 7.2% of total assets as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

During April and June 2025, the Company completed two securitizations totaling $250 million of revolving commercial real estate loans secured by interests in 1-4 family residential dwellings located throughout the United States. In connection with the transactions, the Company purchased Class A-1 asset backed notes, Series 2025-1, for a total of $78 million on April 1, 2025; and Class A-1 asset backed notes, Series 2025-2 for a total of $127.5 million on June 3, 2025. The Company is not affiliated with the issuer of the notes.

Current wording

During April and June 2025, the Company completed two securitizations totaling $250 million of revolving commercial real estate loans secured by interests in 1-4 family residential dwellings located throughout the United States. In connection with the transactions, the Company purchased Class A-1 asset backed notes, Series 2025-1, for a total of $78 million on April 1, 2025; and Class A-1 asset backed notes, Series 2025-2 for a total of $127.5 million on June 3, 2025.

Previous wording

Further information regarding the securitization of commercial real estate loans is presented in Note 3 - Loans and Allowance for Credit Losses.

Current wording

The Company is not affiliated with the issuer of the notes. Further information regarding the securitization of commercial real estate loans is presented in Note 3 - Loans and Allowance for Credit Losses.

Previous wording

The weighted average life of our investment portfolio was 3.99 years as of both June 30, 2026 and December 31, 2025.

Current wording

The weighted average life of our investment portfolio was 4.56 years and 3.99 years as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

Total deposits as of June 30, 2026 were $5.86 billion, an increase of $1.23 billion, or 26.6%, compared to $4.63 billion as of December 31, 2025. Noninterest-bearing deposits as of June 30, 2026 were $642.7 million, an increase of $147.7 million, or 29.8%, compared to $495.0 million as of December 31, 2025. Total interest-bearing account balances as of June 30, 2026 were $5.21 billion, an increase of $1.08 billion, or 26.2%, from $4.13 billion as of December 31, 2025.

Current wording

Total deposits as of September 30, 2026 were $5.92 billion, an increase of $1.30 billion, or 28.1%, compared to $4.63 billion as of December 31, 2025. Noninterest-bearing deposits as of September 30, 2026 were $721.2 million, an increase of $226.2 million, or 45.7%, compared to $495.0 million as of December 31, 2025. Total interest-bearing account balances as of September 30, 2026 were $5.20 billion, an increase of $1.07 billion, or 25.9%, from $4.13 billion as of December 31, 2025.

Previous wording

The ratio of average noninterest-bearing deposits to average total deposits for the six months ended June 30, 2026 was 10.4% and for the year ended December 31, 2025 was 10.5%.

Current wording

The ratio of average noninterest-bearing deposits to average total deposits for the nine months ended September 30, 2026 was 10.8% and for the year ended December 31, 2025 was 10.5%.

Previous wording

Federal Home Loan Bank (FHLB) Advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of June 30, 2026 and December 31, 2025, borrowing capacity available under this arrangement was $870.3 million and $499.5 million, respectively. We had no FHLB advances outstanding at June 30, 2026 or December 31, 2025. Our cost of FHLB advances was 3.42% and 4.41% for the six months ended June 30, 2026 and for the year ended December 31, 2025, respectively. In addition, letters of credit with the FHLB in the amount of $617.2 million and $592.0 million were outstanding at June 30, 2026 and December 31, 2025, respectively. The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from July 2026 through December 2027 as of June 30, 2026.

Current wording

Federal Home Loan Bank (FHLB) Advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of September 30, 2026 and December 31, 2025, borrowing capacity available under this arrangement was $697.2 million and $499.5 million, respectively. We had no FHLB advances outstanding at September 30, 2026 or December 31, 2025. Our cost of FHLB advances was 3.59% and 4.41% for the nine months ended September 30, 2026 and for the year ended December 31, 2025, respectively. In addition, letters of credit with the FHLB in the amount of $793.5 million and $592.0 million were outstanding at September 30, 2026 and December 31, 2025, respectively. The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from October 2026 through December 2027 as of September 30, 2026.

Previous wording

Line of Credit - Senior Debt. The Company has a $70.0 million revolving line of credit facility that was modified effective March 10, 2026, whereby the facility was increased by $15.0 million. The modification did not affect the note rate, which remains unchanged at The Wall Street Journal US Prime Rate, as such changes from time to time, less 0.625%, with a floor rate of 5.00% per annum. Interest continues to be payable quarterly on the 10 th day of March, June, September and December through maturity date of March 10, 2028. All principal and unpaid interest is due at maturity. The note is secured by 100% of the outstanding stock of the Bank and is senior in rights to the subordinated debt described below. Prior to the modification, the $55.0 million facility was due on March 10, 2026. At June 30, 2026 and December 31, 2025, the outstanding balance was $60.4 million and $37.9 million, respectively.

Current wording

Line of Credit - Senior Debt. The Company has a $70.0 million revolving line of credit facility that was modified effective March 10, 2026, whereby the facility was increased by $15.0 million. The modification did not affect the note rate, which remains unchanged at The Wall Street Journal US Prime Rate, as such changes from time to time, less 0.625%, with a floor rate of 5.00% per annum. Interest continues to be payable quarterly on the 10 th day of March, June, September and December through maturity date of March 10, 2028. All principal and unpaid interest is due at maturity. The note is secured by 100% of the outstanding stock of the Bank and is senior in rights to the subordinated debt described below. Prior to the modification, the $55.0 million facility was due on March 10, 2026. At September 30, 2026 and December 31, 2025, the outstanding balance was $62.4 million and $37.9 million, respectively.

Previous wording

Our cost of our senior debt and note payable was 6.02% and 6.20% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Our cost of our senior debt and note payable was 6.01% and 6.13% for the nine months ended September 30, 2026 and year ended December 31, 2025, respectively.

Previous wording

Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. The Company has a Borrower-in-Custody (“BIC”) arrangement in place with the Federal Reserve Bank of Dallas. The arrangement provides the Bank with the ability to secure collateralized contingency funding from the Federal Reserve Bank's Discount Window by pledging its commercial and industrial loans on a blanket floating lien status. As of June 30, 2026 and December 31, 2025, total borrowing capacity under this arrangement was $1.9 billion and $1.5 billion, respectively. The Company had no advances outstanding under these lines as of June 30, 2026 or December 31, 2025.

Current wording

Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. The Company has a Borrower-in-Custody (“BIC”) arrangement in place with the Federal Reserve Bank of Dallas. The arrangement provides the Bank with the ability to secure collateralized contingency funding from the Federal Reserve Bank's Discount Window by pledging its commercial and industrial loans on a blanket floating lien status. As of September 30, 2026 and December 31, 2025, total borrowing capacity under this arrangement was $1.8 billion and $1.5 billion, respectively. The Company had no advances outstanding under these lines as of September 30, 2026 or December 31, 2025.

Previous wording

For the six months ended June 30, 2026 and for the year ended December 31, 2025, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.

Current wording

For the nine months ended September 30, 2026 and for the year ended December 31, 2025, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.

Previous wording

At June 30, 2026, the Company had borrowing capacity available under FHLB advances of $870.3 million, line of credit - senior debt of $9.6 million, the Federal Reserve Bank of Dallas Discount Window of $1.9 billion, and federal funds lines of credit of $41.5 million. At December 31, 2025, the Company had borrowing capacity under FHLB advances of $499.5 million, line of credit - senior debt of $17.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.5 billion, and federal funds lines of credit of $36.5 million.

Current wording

At September 30, 2026, the Company had borrowing capacity available under FHLB advances of $697.2 million, line of credit - senior debt of $7.6 million, the Federal Reserve Bank of Dallas Discount Window of $1.8 billion, and federal funds lines of credit of $41.5 million. At December 31, 2025, the Company had borrowing capacity under FHLB advances of $499.5 million, line of credit - senior debt of $17.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.5 billion, and federal funds lines of credit of $36.5 million.

Previous wording

The following table illustrates, during the periods presented, the composition of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the periods indicated. Average assets were $6.37 billion for the six months ended June 30, 2026 and $4.98 billion for the year ended December 31, 2025.

Current wording

The following table illustrates, during the periods presented, the composition of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the periods indicated. Average assets were $6.47 billion for the nine months ended September 30, 2026 and $4.98 billion for the year ended December 31, 2025.