ALERUS FINANCIAL CORP

Previous wording

The following discussion explains the Company’s financial condition and results of operations as of and for the three and six months ended June 30, 2026 and 2025*. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company*’s Annual Report on Form 10-K for the year ended December 31, 2025*, filed with the SEC on March 4, 2026.*

Current wording

The following discussion explains the Company’s financial condition and results of operations as of and for the three and nine months ended September 30, 2026 and 2025*. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company*’s Annual Report on Form 10-K for the year ended December 31, 2025*, filed with the SEC on March 4, 2026.*

Previous wording

Net income for the six months ended June 30, 2026 was $43.8 million, or $1.70 per diluted common share, a $10.3 million, or 30.6%, increase compared to $33.6 million, or $1.30 per diluted common share, for the six months ended June 30, 2025. Earnings for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 increased primarily due to an increase in net interest income of $8.4 million and an increase in noninterest income of $4.4 million, partially offset by an increase in noninterest expense of $4.5 million.

Current wording

Net income for the nine months ended September 30, 2026 was $63.0 million, or $2.46 per diluted common share, an increase of $12.5 million, or 24.8%, compared to $50.5 million, or $1.95 per diluted common share, for the nine months ended September 30, 2025. The increase in net income for the nine months ended September 30, 2026 was primarily driven by an increase in net interest income of $12.0 million and an increase in noninterest income of $9.3 million, partially offset by an increase in noninterest expense of $7.8 million.

Previous wording

Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three and six months ended June 30, 2026 and 2025.

Current wording

Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three and nine months ended September 30, 2026 and 2025.

Previous wording

Net interest income for the three months ended June 30, 2026 was $47.7 million, an increase of $4.7 million, or 10.9%, compared to $43.0 million for the three months ended June 30, 2025. Interest income increased for the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by higher interest income on investment securities following the strategic balance sheet repositioning in the fourth quarter of 2025, partially offset by less purchase accounting accretion. Interest expense decreased $4.5 million, or 16.3%, from the second quarter of 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts in the second half of 2025.

Current wording

Net interest income for the three months ended September 30, 2026 was $46.7 million, an increase of $3.6 million, or 8.3%, compared to $43.1 million for the three months ended September 30, 2025. Interest income decreased $0.5 million, or 0.6%, compared to the third quarter of 2025, primarily due to lower purchase accounting accretion and lower average interest-bearing cash balances, partially offset by higher interest income on investment securities following the strategic balance sheet repositioning completed during the fourth quarter of 2025. Interest expense decreased $4.0 million, or 14.7%, from the third quarter of 2025, as average rates paid on deposits and short-term borrowings declined primarily driven by Federal Reserve rate cuts implemented during the second half of 2025.

Previous wording

Net interest income for the six months ended June 30, 2026 was $92.6 million, an increase of $8.4 million, or 10.0%, compared to $84.2 million for the six months ended June 30, 2025. Interest income increased for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to higher interest income on investment securities following the strategic balance sheet repositioning in the fourth quarter of 2025, partially offset by less purchase accounting accretion. Interest expense decreased $9.4 million, or 17.3%, from the six months ended June 30, 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts in the second half of 2025.

Current wording

Net interest income for the nine months ended September 30, 2026 was $139.3 million, an increase of $12.0 million, or 9.4%, compared to $127.3 million for the nine months ended September 30, 2025. Interest income increased compared to the nine months ended September 30, 2025, primarily due to higher interest income on investment securities following the strategic balance sheet repositioning completed during the fourth quarter of 2025, partially offset by lower purchase accounting accretion. Interest expense decreased $13.5 million, or 16.5%, compared to the nine months ended September 30, 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts implemented during the second half of 2025.

Previous wording

The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three and six months ended June 30, 2026 and 2025. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis.

Current wording

The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three and nine months ended September 30, 2026 and 2025. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis.

Previous wording

The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2026, compared to no provision for credit losses for the second quarter of 2025.

Current wording

The Company recorded a provision for credit losses of $2.2 million for the third quarter of 2026, compared to no provision for credit losses for the third quarter of 2025.

Previous wording

The Company recorded a provision release of $4.4 million for the six months ended June 30, 2026, compared to a provision for credit losses of $0.9 million for the six months ended June 30, 2025. The provision release in the first quarter of 2026 was primarily driven by changes to loan balances and loan mix, largely due to decreases in balances in the commercial real estate construction, land and development pool, which is reserved at a higher rate than most other loan pools, in addition to decreases in reserves on individually evaluated loans.

Current wording

The Company recorded a provision release of $2.2 million for the nine months ended September 30, 2026, compared to a provision for credit losses of $0.9 million for the nine months ended September 30, 2025. The provision release recognized during the first nine months September 30, 2026 was primarily driven by changes to loan balances and loan mix, largely due to declines in balances within the commercial real estate construction, land and development portfolio, which carries a higher reserve rate than most other loan pools. The release was also driven by lower reserves associated with individually evaluated loans.

Previous wording

The following table presents the Company’s noninterest income for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents the Company’s noninterest income for the three and nine months ended September 30, 2026 and 2025:

Previous wording

Total noninterest income for the three months ended June 30, 2026 was $32.9 million, an increase of $1.2 million, or 3.7%, from the three months ended June 30, 2025. The increase was driven by an increase in other noninterest income, retirement and benefit services revenue, and service charges on deposit accounts, partially offset by a decrease in the gain on sale of non-mortgage loans. Other noninterest income increased $1.7 million, or 86.1%, compared to the second quarter of 2025, primarily driven by a gain on the sale of a property in the Rochester, Minnesota market, increased swap fee income, and mutual fund investment gains related to the underlying assets of the deferred compensation plans. Retirement and benefit services revenue increased $1.3 million, or 8.3%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by recurring annual income. Service charges on deposit accounts increased $0.4 million, or 62.6%, compared to the second quarter of 2025, primarily due to a reclassification of fees from other noninterest income to service charges on deposit accounts revenue in the first quarter of 2026. Gain on sale of non-mortgage loans decreased $2.1 million, or 100.0%, compared to the second quarter of 2025 due to a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025.

Current wording

Total noninterest income for the nine months ended September 30, 2026 was $98.1 million, an increase of $9.3 million, or 10.5%, compared to $88.8 million for the nine months ended September 30, 2025. The increase was primarily driven by higher retirement and benefit services revenue, mortgage banking revenue, other noninterest income, and service charges on deposit accounts, partially offset by the absence of a gain on sale of non-mortgage loans recognized in the prior-year period. Retirement and benefit services revenue increased $3.8 million, or 7.8%, compared to the nine months ended September 30, 2025, primarily driven by recurring annual income. Mortgage banking revenue increased $1.4 million, or 16.3%, primarily due to an increase in the mortgage servicing rights valuation and higher sold loan volume. Other noninterest income increased $2.9 million, or 43.2%, primarily driven by gains on the sale of real estate, increased swap fee income, and mutual fund investment gains related to the underlying assets of deferred compensation plans. Service charges on deposit accounts increased $1.2 million, or 60.2%, primarily due to the reclassification of certain fees from other noninterest income to service charges on deposit accounts revenue beginning in the first quarter of 2026.

Previous wording

The following table presents noninterest expense for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents noninterest expense for the three and nine months ended September 30, 2026 and 2025:

Previous wording

Total noninterest expense for the three months ended June 30, 2026 was $52.9 million, a $4.4 million, or 9.2%, increase compared to $48.4 million for the three months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, and other noninterest expense. Compensation increased $1.8 million, or 7.4%, primarily due to annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $1.4 million, or 61.7%, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments, as well as an increase in legal fees. Other noninterest expense increased $1.5 million, or 104.3%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs.

Current wording

Total noninterest expense for the three months ended September 30, 2026 was $53.9 million, an increase of $3.3 million, or 6.6%, compared to $50.5 million for the three months ended September 30, 2025. The increase was primarily driven by higher compensation expense, professional fees and assessments, and other noninterest expense. Compensation increased $1.1 million, or 4.5%, primarily due to annual merit increases and increases in deferred compensation plan liabilities resulting from mutual fund investment gains on the underlying plan assets. Professional fees and assessments increased $1.1 million, or 41.9%, primarily due to the reclassification of consulting services and certain third-party vendor expenses from business services, software and technology expense, as well as higher legal fees. Other noninterest expense increased $0.8 million, or 41.0%, primarily due to higher other real estate owned balances and related holding costs, as well as increased corporate insurance costs.

Previous wording

Total noninterest expense for the six months ended June 30, 2026 was $103.3 million, a $4.5 million, or 4.5%, increase compared to $98.8 million for the six months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, occupancy and equipment expense, and other noninterest expense, offset by decreases in intangible amortization expense and employee taxes and benefits. Compensation increased $2.9 million, or 6.2%, primarily due to higher annual bonus expense, annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $2.2 million, or 42.1%, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments, as well as an increase in legal fees. Occupancy and equipment expense increased $1.5 million, or 26.6%, primarily driven by facility investments and the strategic realignment of locations from owned to leased space. Other noninterest expense increased $0.7 million, or 16.6%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. For the six months ended June 30, 2026, intangible amortization expense decreased $1.5 million, or 27.1%, from the six months ended June 30, 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF transaction. For the six months ended June 30, 2026, employee taxes and benefits decreased $1.0 million, or 7.0%, from the six months ended June 30, 2025, primarily due to lower claims on group insurance.

Current wording

Total noninterest expense for the nine months ended September 30, 2026 was $157.1 million, an increase of $7.8 million, or 5.2%, compared to $149.3 million for the nine months ended September 30, 2025. The increase was primarily driven by higher compensation expense, professional fees and assessments, occupancy and equipment expense, and other noninterest expense, partially offset by lower intangible amortization expense. Compensation expense increased $4.1 million, or 5.6%, primarily due to annual merit increases, and increases in deferred compensation plan liabilities resulting from mutual fund investment gains on the underlying plan assets. Professional fees and assessments increased $3.4 million, or 42.0%, primarily due to the reclassification of consulting services and certain third-party vendor expenses from business services, software and technology expense, as well as higher legal fees. Occupancy and equipment expense increased $2.1 million, or 25.6%, primarily due to facility investments and the strategic realignment of locations from owned to leased space. Other noninterest expense increased $1.5 million, or 24.1%, primarily due to higher other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Intangible amortization expense decreased $2.2 million, or 27.1%, compared to the nine months ended September 30, 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF transaction.

Previous wording

For the three months ended June 30, 2026, the Company recognized income tax expense of $6.4 million on $27.3 million of pre-tax income, resulting in an effective tax rate of 23.5%, compared to income tax expense of $6.1 million on $26.4 million of pre-tax income for the three months ended June 30, 2025, resulting in an effective tax rate of 23.2%.

Current wording

For the three months ended September 30, 2026, the Company recognized income tax expense of $5.8 million on pre-tax income of $25.0 million, resulting in an effective tax rate of 23.3%, compared to income tax expense of $5.1 million on pre-tax income of $22.0 million, resulting in an effective tax rate of 23.2%, for the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, the Company recognized income tax expense of $13.7 million on $57.5 million of pre-tax income, resulting in an effective tax rate of 23.8%, compared to income tax expense of $10.3 million on $43.9 million of pre-tax income for the six months ended June 30, 2025, resulting in an effective tax rate of 23.6%.

Current wording

For the nine months ended September 30, 2026, the Company recognized income tax expense of $19.5 million on pre-tax income of $82.5 million, resulting in an effective tax rate of 23.6%, compared to income tax expense of $15.5 million on pre-tax income of $65.9 million, resulting in an effective tax rate of 23.4%, for the nine months ended September 30, 2025.

Previous wording

The selected financial information presented for each segment sets forth net interest income, provision for loan losses, noninterest income, and direct and indirect noninterest expense overhead allocations. Corporate administration includes all remaining income and expenses not allocated to the three operating segments. Certain reclassification adjustments have been made between corporate administration and the various lines of business for consistency in presentation.

Current wording

The selected financial information presented for each segment sets forth net interest income, provision (credit) for loan losses, noninterest income, and direct and indirect noninterest expense overhead allocations. Corporate administration includes all remaining income and expenses not allocated to the three operating segments. Certain reclassification adjustments have been made between corporate administration and the various lines of business for consistency in presentation.

Previous wording

The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 26 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 13 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet.

Current wording

The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 25 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 13 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet.

Previous wording

The following table presents the banking segment income statement, inclusive of corporate administration income, for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents the banking segment income statement, inclusive of corporate administration income, for the three and nine months ended September 30, 2026 and 2025:

Previous wording

The following table presents the retirement and benefit services segment income statement for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents the retirement and benefit services segment income statement for the three and nine months ended September 30, 2026 and 2025:

Previous wording

The following table presents the wealth advisory services segment income statement for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents the wealth advisory services segment income statement for the three and nine months ended September 30, 2026 and 2025:

Previous wording

Total assets were $5.3 billion as of June 30, 2026, an increase of $58.6 million, or 1.1%, compared to December 31, 2025. The increase was primarily due to an increase of $41.8 million in cash and cash equivalents, an increase of $20.1 million in available-for-sale investment securities, an increase of $8.5 million in other assets, and an increase of $4.8 million in loans held for sale, partially offset by a decrease of $4.8 million in loans held for investment.

Current wording

Total assets were $5.4 billion as of September 30, 2026, an increase of $173.0 million, or 3.3%, compared to December 31, 2025. The increase was primarily attributable to a $136.7 million increase in loans, a $35.5 million increase in available-for-sale investment securities, and an $18.0 million increase in other assets. These increases were partially offset by decreases of $2.1 million in loans held for sale and $1.4 million in cash and cash equivalents.

Previous wording

Total loans outstanding were $4.0 billion as of June 30, 2026, a decrease of $13.8 million, or 0.3%, from December 31, 2025. The decrease was primarily driven by a $41.6 million decrease in consumer loans, partially offset by a $27.9 million increase in commercial loans.

Current wording

Total loans outstanding were $4.2 billion as of September 30, 2026, an increase of $136.7 million, or 3.4%, from December 31, 2025. The increase was primarily driven by growth in commercial loans of $188.8 million, partially offset by a decrease in consumer loans of $52.0 million.

Previous wording

Agricultural loans include loans secured by farmland and loans for agricultural production. Farmland includes purposes such as crop and livestock production. Farmland loans are typically written with amortizing payment structures. Collateral values for farmland are determined based upon appraisals and evaluations in accordance with established policy guidelines and maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Agricultural production loans are for the purpose of financing working capital and/or capital investment for agriculture production activities. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate in applicable. Agricultural production loans are primarily paid by the operating cash flow of the borrower. Agricultural production loans may be secured or unsecured.

Current wording

Agricultural loans include loans secured by farmland and loans for agricultural production. Farmland includes purposes such as crop and livestock production. Farmland loans are typically written with amortizing payment structures. Collateral values for farmland are determined based upon appraisals and evaluations in accordance with established policy guidelines and maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Agricultural production loans are for the purpose of financing working capital and/or capital investment for agriculture production activities. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate if applicable. Agricultural production loans are primarily paid by the operating cash flow of the borrower. Agricultural production loans may be secured or unsecured.

Previous wording

The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of June 30, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $41.0 million, or 3.4%, decrease from December 31, 2025. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations.

Current wording

The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of September 30, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $51.4 million, or 4.3%, decrease from December 31, 2025. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations.

Previous wording

Interest income lost on nonaccrual loans was approximately $0.4 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the six months ended June 30, 2026 and 2025.

Current wording

Interest income lost on nonaccrual loans was approximately $1.4 million and $3.8 million for the nine months ended September 30, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the nine months ended September 30, 2026 and 2025.

Previous wording

Total nonperforming loans were $7.5 million at June 30, 2026, compared to $69.1 million as of December 31, 2025. The decrease was primarily driven by the sale of three non-performing loans representing a construction, land and development relationship. There were no historical charge-offs on this relationship and there were no charge-offs recognized as a result of the transaction.

Current wording

Total nonperforming loans were $6.9 million at September 30, 2026, compared to $69.1 million as of December 31, 2025. The decrease was primarily driven by the sale of three non-performing loans representing a construction, land and development relationship. There were no historical charge-offs on this relationship and there were no charge-offs recognized as a result of the transaction.

Previous wording

OREO and repossessed assets were $9.6 million at June 30, 2026, compared to $0.3 million as of December 31, 2025. The increase was primarily driven by the transfer of one 1-4 family property and one apartment complex to OREO in the second quarter of 2026.

Current wording

OREO and repossessed assets were $9.4 million at September 30, 2026, compared to $0.3 million as of December 31, 2025. The increase was primarily driven by the transfer of one 1-4 family property and one apartment complex to OREO in the second quarter of 2026.

Previous wording

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $3.5 million and $4.8 million as of June 30, 2026 and 2025, respectively.

Current wording

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $3.6 million and $3.7 million as of September 30, 2026 and 2025, respectively.

Previous wording

Total deposits were $4.2 billion as of June 30, 2026, a decrease of $0.1 million, or 0.0%, from December 31, 2025. Interest-bearing deposits increased $48.2 million during this period, while noninterest-bearing deposits decreased $48.3 million. The decrease in total deposits was due to seasonal outflows from public funds depositors.

Current wording

Total deposits were $4.3 billion as of September 30, 2026, an increase of $111.2 million, or 2.7%, from December 31, 2025. Interest-bearing deposits increased $105.6 million during this period, while noninterest-bearing deposits increased $5.6 million.

Previous wording

The following table presents the average balances and rates of the Company’s deposit portfolio for the three months ended June 30, 2026 and 2025:

Current wording

The following table presents the average balances and rates of the Company’s deposit portfolio for the three and nine months ended September 30, 2026 and 2025:

Previous wording

The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.5 billion at June 30, 2026 and approximately $1.4 billion December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.

Current wording

The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.6 billion at September 30, 2026 and approximately $1.4 billion December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.

Previous wording

Stockholders’ equity increased $18.2 million, or 3.2%, to $583.1 million as of June 30, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 9.05% as of June 30, 2026, from 8.72% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.81% as of June 30, 2026, from 10.28% as of December 31, 2025.

Current wording

Stockholders’ equity increased $11.9 million, or 2.1%, to $576.9 million as of September 30, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 8.77% as of September 30, 2026, from 8.72% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.52% as of September 30, 2026, from 10.28% as of December 31, 2025.

Previous wording

As of June 30, 2026, the Company had on balance sheet liquidity of $400.7 million, compared to $568.8 million as of December 31, 2025. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, unencumbered securities available‑for‑sale, and over collateralized securities pledging positions available-for-sale.

Current wording

As of September 30, 2026, the Company had on balance sheet liquidity of $403.3 million, compared to $547.7 million as of December 31, 2025. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, and unencumbered securities available‑for‑sale.

Previous wording

As of both June 30, 2026 and December 31, 2025, the Company had off balance sheet liquidity of $2.2 billion. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity.

Current wording

As of September 30, 2026 the Company had off balance sheet liquidity of $2.5 billion, compared to $2.2 billion as of December 31, 2025. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity.

Previous wording

The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of June 30, 2026, the Company did not have any federal funds purchased, and had $345.0 million in short-term borrowings from the FHLB. As of June 30, 2026, the Company had $2.0 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.0 billion from the FHLB. In addition, the Company can borrow up to $125.0 million through the unsecured lines of credit the Company has established with five other correspondent banks.

Current wording

The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of September 30, 2026, the Company had federal funds purchased in the amount of $98.4 million, and had $220.0 million in short-term borrowings from the FHLB. As of September 30, 2026, the Company had $2.0 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.0 billion from the FHLB. In addition, the Company can borrow up to $145.0 million through the unsecured lines of credit the Company has established with five other correspondent banks.