National Bank Holdings Corp

Previous wording

The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the three months ended March 31, 2025, and with our annual report onForm 10-K (file number 001-35654), which includes our audited consolidated financial statements and related notes as of and for the years ended December 31, 2024, 2023 and 2022. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” located elsewhere in this quarterly report and in Item 1A“Risk Factors” in the annual report onForm 10-K, referenced above, and should be read herewith.

Current wording

The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the three and six months ended June 30, 2025, and with our annual report onForm 10-K (file number 001-35654), which includes our audited consolidated financial statements and related notes as of and for the years ended December 31, 2024, 2023 and 2022. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” located elsewhere in this quarterly report and in Item 1A“Risk Factors” in the annual report onForm 10-K, referenced above, and should be read herewith.

Previous wording

Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services to our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, we are innovating and building strategic fintech partnerships with the goal of delivering a comprehensive digital financial ecosystem for our clients. We are focused on providing small and medium-sized businesses with alternative digital access to address borrowing, depository and cash management needs, while also providing information management and access to digital payment tools, under the safety of a regulated bank. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho, as well as our ongoing investment in digital solutions and strategic acquisitions position us well for growth opportunities. As of March 31, 2025, we had $10.1 billion in assets, $7.6 billion in loans, $8.4 billion in deposits, $1.3 billion in equity and $1.0 billion in assets under management in our trust and wealth management business.

Current wording

Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services to our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, we are innovating and building strategic fintech partnerships with the goal of delivering a comprehensive digital financial ecosystem for our clients. We are focused on providing small- and medium-sized businesses with alternative digital access to address borrowing, depository and cash management needs, while also providing information management and access to digital payment tools, under the safety of a regulated bank. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho, as well as our ongoing investment in digital solutions and strategic acquisitions position us well for growth opportunities. As of June 30, 2025, we had $10.0 billion in assets, $7.5 billion in loans, $8.3 billion in deposits, $1.4 billion in equity and $1.0 billion in assets under management in our trust and wealth management business.

Previous wording

Macroeconomic pressures, including uncertainty in tariff policies, have resulted in volatility and uncertainty in the banking industry and many other industries. The sustained higher-interest rate environment, declines in the fair value of securities, lack of available funding, uninsured deposits, wait-and-see attitudes of clients, and risk from concentrations in loan and deposit segments along with declines in commercial real estate property values are drawing increased scrutiny on financial institutions. Liquidity within the financial services sector has tightened, and we expect the intense competition for deposits throughout our markets to continue. While these are widespread challenges for the banking industry, the Company has not experienced a material impact to our financial condition, operations, client base, liquidity, capital position or risk profile.

Current wording

Macroeconomic pressures, including uncertainty in tariff policies, have resulted in volatility and uncertainty in the banking industry and many other industries. The sustained higher-interest rate environment and wait-and-see attitudes of clients are drawing increased scrutiny on financial institutions. Liquidity within the financial services sector has tightened, and we expect the intense competition for deposits throughout our markets to continue. While these are widespread challenges for the banking industry, the Company has not experienced a material impact to our financial condition, operations, client base, liquidity, capital position or risk profile.

Previous wording

Additionally, we face continual challenges implementing our business strategy. These include growing our assets, particularly loans, and deposits amidst intense competition, changing interest rates, adhering to changes in the regulatory environment and identifying and consummating disciplined acquisition and other expansionary opportunities in a very competitive and inflationary environment. In connection with our digital growth strategy and our digital solution 2UniFi, we have made and will continue to make investments in and also partner with third-party fintech companies. The innovations these companies develop for utilization by 2UniFi may prove difficult to successfully integrate into our existing operations and may require additional operational and control systems to manage fraud, cybersecurity, operational, legal and compliance risks.

Current wording

Additionally, we face continual challenges implementing our business strategy. These include growing our assets, particularly loans, and deposits amidst intense competition, changing interest rates, adhering to changes in the regulatory environment and identifying and consummating disciplined acquisition and other expansionary opportunities in a very competitive and inflationary environment. In connection with our digital growth strategy and our digital financial ecosystem 2UniFi, we have made and will continue to make investments in and also partner with third-party fintech companies. The innovations these companies develop for utilization by 2UniFi may prove difficult to successfully integrate into our existing operations and may require additional operational and control systems to manage fraud, cybersecurity, operational, legal and compliance risks.

Previous wording

Future growth in our interest income will ultimately be dependent on our ability to originate high-quality loans and source other high-quality earning assets such as investment securities as well as our ability to access liquidity and manage our cost of funds. During the years ended December 31, 2023 and 2022, the Federal Reserve increased prevailing interest rates by a total of 100 and 425 basis

Current wording

Future growth in our interest income will ultimately be dependent on our ability to originate high-quality loans and source other high-quality earning assets such as investment securities as well as our ability to access liquidity and manage our cost of funds. During the years ended December 31, 2023 and 2022, the Federal Reserve increased prevailing interest rates by a total of 100 and 425 basis points, respectively. In the second half of 2024, the Federal Reserve decreased the prevailing interest rates by a total of 100 basis

Previous wording

points, respectively. In the second half of 2024, the Federal Reserve decreased the prevailing interest rates by a total of 100 basis points. While further cuts in 2025 remain unclear, our future earnings will be impacted by the Federal Reserve’s future interest rate policy decisions. Management employs risk management policies to monitor and limit exposure to changes in market rates, which is discussed in more detail in the Asset/Liability Management and Interest Rate Risk section of Management’s Discussion and Analysis.

Current wording

points. While further cuts in 2025 remain unclear, our future earnings will be impacted by the Federal Reserve’s future interest rate policy decisions. Management employs risk management policies to monitor and limit exposure to changes in market rates, which is discussed in more detail in the Asset/Liability Management and Interest Rate Risk section of Management’s Discussion and Analysis.

Previous wording

Certain financial measures and ratios we present, including “tangible assets,” “average tangible assets,” “return on average tangible assets,” “tangible common equity,” “tangible common equity to tangible assets,” “return on average tangible common equity,” “tangible common book value,” “tangible common book value per share,” “tangible common equity to tangible assets,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “adjusted net income,” “adjusted earnings per share – diluted,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” “efficiency ratio excluding other intangible assets amortization FTE, adjusted for the loss on security sales,” “pre-provision net revenue,” “pre-provision net revenue FTE,” “pre-provision net revenue FTE, adjusted for the loss on security sales,” “non-interest income adjusted for the loss on security sales,” “non-interest expense excluding other intangible assets amortization,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on an FTE basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

Current wording

Certain financial measures and ratios we present, including “tangible assets,” “average tangible assets,” “return on average tangible assets,” “tangible common equity,” “tangible common equity to tangible assets,” “return on average tangible common equity,” “tangible common book value,” “tangible common book value per share,” “tangible common equity to tangible assets,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “adjusted net income,” “adjusted earnings per share – diluted,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” “efficiency ratio excluding other intangible assets amortization FTE, adjusted for the loss on security sales,” “pre-provision net revenue,” “pre-provision net revenue FTE,” “pre-provision net revenue FTE, adjusted for the loss on security sales,” “non-interest income adjusted for the loss on security sales,” “non-interest expense excluding other intangible assets amortization,” and “FTE” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. GAAP. We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on an FTE basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

Previous wording

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

Current wording

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these differences by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

Previous wording

Total assets were $10.1 billion at March 31, 2025, increasing $291.2 million, or 3.0%, from December 31, 2024. Cash and cash equivalents increased $118.5 million from December 31, 2024, and investment securities increased $280.6 million. Loans totaled $7.6 billion and $7.8 billion at March 31, 2025 and December 31, 2024, respectively, and the allowance for credit losses totaled $90.2 million and $94.5 million at March 31, 2025 and December 31, 2024, respectively. During the three months ended March 31, 2025, lower-cost transaction deposits increased $147.7 million to $7.4 billion, compared to December 31, 2024. Total deposits increased $186.3 million to $8.4 billion at March 31, 2025, compared to December 31, 2024.

Current wording

Total assets were $10.0 billion at June 30, 2025, increasing $191.0 million, or 1.9%, from December 31, 2024. Cash and cash equivalents increased $168.6 million from December 31, 2024, and investment securities increased $288.5 million. Loans totaled $7.5 billion and $7.8 billion at June 30, 2025 and December 31, 2024, respectively, and the allowance for credit losses totaled $88.9 million and $94.5 million at June 30, 2025 and December 31, 2024, respectively. Lower-cost transaction deposits totaled $7.2 billion at June 30, 2025 and December 31, 2024. Total deposits increased $31.6 million to $8.3 billion at June 30, 2025, compared to December 31, 2024.

Previous wording

Total investment securities available-for-sale were $634.4 million at March 31, 2025, compared to $527.5 million at December 31, 2024. During the three months ended March 31, 2025 and 2024, purchases of available-for-sale securities totaled $142.2 million and $106.6 million, respectively. Paydowns and maturities totaled $48.4 million and $45.7 million during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Total investment securities available-for-sale were $631.9 million at June 30, 2025, compared to $527.5 million at December 31, 2024. Purchases of available-for-sale securities during the six months ended June 30, 2025 and 2024 totaled $160.5 million and $138.4 million, respectively. Paydowns and maturities totaled $74.6 million and $72.1 million during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

As of March 31, 2025 and December 31, 2024, nearly all of the available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed-rate and adjustable-rate FHLMC, FNMA and GNMA securities. The other mortgage-backed securities are comprised of securities backed by FHLMC, FNMA and GNMA securities.

Current wording

As of June 30, 2025 and December 31, 2024, nearly all the available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed rate and adjustable rate FHLMC, FNMA and GNMA securities. The other mortgage-backed securities are comprised of securities backed by FHLMC, FNMA and GNMA securities.

Previous wording

At March 31, 2025 and December 31, 2024, adjustable-rate securities comprised 12.5% and 5.9%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed-rate amortizing securities with 10- to 30-year contractual maturities, with a weighted average coupon of 2.41% per annum and 2.31% per annum at March 31, 2025 and December 31, 2024, respectively.

Current wording

At June 30, 2025 and December 31, 2024, adjustable rate securities comprised 12.6% and 5.9%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed rate amortizing securities with 10- to 30-year contractual maturities, with a weighted average coupon of 2.45% per annum and 2.31% per annum at June 30, 2025 and December 31, 2024, respectively.

Previous wording

The available-for-sale investment portfolio included $79.9 million of unrealized losses and $2.3 million of unrealized gains at March 31, 2025. At December 31, 2024, the available-for-sale investment portfolio included $90.9 million of unrealized losses and $0.5 million of unrealized gains. We believe any unrealized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were impaired. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.

Current wording

The available-for-sale investment portfolio included $75.5 million of unrealized losses and $2.9 million of unrealized gains at June 30, 2025. At December 31, 2024, the available-for-sale investment portfolio included $90.9 million of unrealized losses and $0.5 million of unrealized gains. We believe any unrealized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were impaired. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.

Previous wording

Held-to-maturity investment securities totaled $706.9 million at March 31, 2025, compared to $533.1 million at December 31, 2024, an increase of $173.8 million, or 32.6%. Purchases during the three months ended March 31, 2025 totaled $190.6 million. There were no purchases of held-to-maturity securities during the three months ended March 31, 2024. Maturities and paydowns of held-to-maturity securities totaled $17.0 million and $14.4 million during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Held-to-maturity investment securities totaled $717.2 million at June 30, 2025, compared to $533.1 million at December 31, 2024, an increase of $184.1 million, or 34.5%. Purchases during the six months ended June 30, 2025 totaled $260.3 million. There were no

Previous wording

The fair value of the held-to-maturity investment portfolio included $71.7 million of unrealized losses and $1.6 million of unrealized gains at March 31, 2025. At December 31, 2024, the held-to-maturity investment portfolio included $81.8 million of unrealized losses and $51 thousand of unrealized gains.

Current wording

The fair value of the held-to-maturity investment portfolio included $67.0 million of unrealized losses and $3.0 million of unrealized gains at June 30, 2025. At December 31, 2024, the held-to-maturity investment portfolio included $81.8 million of unrealized losses and $51 thousand of unrealized gains.

Previous wording

Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of March 31, 2025 and December 31, 2024 was 4.7 years and 5.6 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 3.8 years and 4.4 years as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of June 30, 2025 and December 31, 2024 was 4.9 years and 5.6 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 4.0 years and 4.4 years as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

Non-marketable securities included FRB stock, FHLB stock, convertible preferred stock and equity method investments. During the three months ended March 31, 2025, purchases of non-marketable securities totaled $15.9 million, and proceeds from redemptions and sales of non-marketable securities totaled $15.7 million. During the three months ended March 31, 2024, purchases of non-marketable securities totaled $10.3 million, and proceeds from redemptions and sales of non-marketable securities totaled $27.1 million. Changes in the Company’s FHLB stock holdings were directly correlated to FHLB line of credit advances and paydowns.

Current wording

Non-marketable securities included FRB stock, FHLB stock, convertible preferred stock and equity method investments. During the six months ended June 30, 2025, purchases of non-marketable securities totaled $37.0 million, and proceeds from redemptions and sales of non-marketable securities totaled $32.4 million. During the six months ended June 30, 2024, purchases of non-marketable securities totaled $16.9 million, and proceeds from non-marketable securities totaled $30.8 million. Purchases consisted primarily of FHLB stock, and proceeds consisted primarily of redemptions of FHLB stock. Changes in the Company’s FHLB stock holdings were directly correlated to FHLB line of credit advances and paydowns.

Previous wording

Non-marketable securities include convertible preferred stock without a readily determinable fair value. During the three months ended March 31, 2025 and 2024, the Company purchased zero and $0.4 million of convertible preferred stock, respectively.

Current wording

Non-marketable securities include convertible preferred stock without a readily determinable fair value. During the three and six months ended June 30, 2025, there were no purchases of convertible preferred stock. The Company purchased zero and $0.4 million of convertible preferred stock during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2024, the Company recorded $3.9 million of impairment on convertible preferred stock related to venture capital investments, included in other non-interest income in the Company’s consolidated statements of operations. The Company also sold convertible preferred stock totaling $1.0 million, during the three and six months ended June 30, 2024, which generated realized gains of $0.1 million recorded in other non-interest income in the Company’s consolidated statements of operations.

Previous wording

Non-marketable securities also include equity method investments totaling $26.2 million at March 31, 2025 and December 31, 2024 and equity method investments without a readily determinable fair value totaling $1.8 million at March 31, 2025 and December 31, 2024. Purchases of equity method investments during the three months ended March 31, 2025 and 2024 totaled $0.5 million and $0.6 million, respectively. During the three months ended March 31, 2025 and 2024, the Company recorded net unrealized losses totaling $0.3 million and $0.1 million, respectively, on equity method investments. These gains and losses were recorded in other non-interest income in the Company’s consolidated statements of operations. Carrying values of equity method investments without a readily determinable fair value are updated periodically and impairments may be taken to reflect a new basis. The Company recorded no impairment related to equity method investments without a readily determinable fair value for the three months ended March 31, 2025 or the year ended December 31, 2024.

Current wording

Non-marketable securities also include equity method investments totaling $26.8 million and $26.2 million at June 30, 2025 and December 31, 2024, respectively, and equity method investments without a readily determinable fair value totaling $1.4 million and $1.8 million at June 30, 2025 and December 31, 2024, respectively. During the three and six months ended June 30, 2025, the Company recorded net unrealized gains on equity method investments totaling $0.3 million and $15.2 thousand, respectively. During the three and six months ended June 30, 2024, the Company recorded net unrealized gains on equity method investments totaling $0.3 million. These gains and losses were recorded in other non-interest income in the Company’s consolidated statements of operations. Carrying values of equity method investments without a readily determinable fair value are updated periodically and impairments may be taken to reflect a new basis. The Company recorded no impairment related to equity method investments without a readily determinable fair value for the six months ended June 30, 2025 or the year ended December 31, 2024.

Previous wording

The Company maintains a granular and well-diversified loan portfolio with self-imposed concentration limits. At March 31, 2025, loans totaled $7.6 billion, compared to $7.8 billion at December 31, 2024.

Current wording

The Company maintains a granular and well-diversified loan portfolio with self-imposed concentration limits. At June 30, 2025, loans totaled $7.5 billion, compared to $7.8 billion at December 31, 2024.

Previous wording

Our commercial and industrial loan portfolio is highly diversified across industry sectors and geography. At March 31, 2025, there were no industry sectors representing more than 15.0% of our total loan portfolio. Key sectors included government/non-profit loans of $827.9 million, or 10.8% of total loans, and health care/hospital loans of $577.5 million, or 7.6% of total loans. The commercial and industrial portfolio also includes loans to companies that operate in the transportation industry. The transportation industry, trucking in particular, has experienced recent economic challenges. As a result of these industry challenges, some of the transportation loans may be subject to higher credit risk. The Company’s exposure to this industry is small, consisting of $186.6 million, or 2.4% of total loans, at March 31, 2025.

Current wording

Our commercial and industrial loan portfolio is highly diversified across industry sectors and geography. At June 30, 2025, there were no industry sectors representing more than 15.0% of our total loan portfolio. Key sectors included government/non-profit loans of $834.3 million, or 11.1% of total loans, and health care/hospital loans of $579.3 million, or 7.7% of total loans. The commercial and industrial portfolio also includes loans to companies that operate in the transportation industry. The transportation industry, trucking in particular, has experienced recent economic challenges. As a result of these industry challenges, some of the transportation loans may be subject to higher credit risk. The Company’s exposure to this industry is small, consisting of $163.6 million, or 2.2% of total loans, at June 30, 2025.

Previous wording

Non-owner occupied CRE loans were 149.7% of the Company’s risk based capital, or 23.5% of total loans, and no specific property type comprised more than 10.0% of total loans. The Company maintains little exposure to non-owner occupied CRE retail properties and office properties, comprising 2.0% and 1.3% of total loans, respectively. Multifamily loans totaled $333.8 million, or 4.4% of total loans, as of March 31, 2025.

Current wording

Non-owner occupied CRE loans were 141.1% of the Company’s risk based capital, or 23.0% of total loans, and no specific property type comprised more than 10.0% of total loans. The Company maintains little exposure to non-owner occupied CRE retail properties and office properties, comprising 2.0% and 1.3% of total loans, respectively. Multifamily loans totaled $321.2 million, or 4.3% of total loans, at June 30, 2025.

Previous wording

The agriculture industry continues to be impacted by volatile commodity prices and generally by higher input costs, combining to stress margins. Our food and agribusiness portfolio is 3.7% of total loans and is well-diversified across food production, crop and livestock types. Crop and livestock loans represent 0.9% of total loans. We have maintained relationships with food and agribusiness clients that generally possess low leverage and, correspondingly, low bank debt to assets, minimizing any potential credit losses in the future.

Current wording

The agriculture industry continues to be impacted by volatile commodity prices and generally by higher input costs, combining to stress margins. Our food and agribusiness portfolio is 3.3% of total loans and is well-diversified across food production, crop and livestock types. Crop and livestock loans represent 1.0% of total loans. We have maintained relationships with food and agribusiness clients that generally possess low leverage and, correspondingly, low bank debt to assets, minimizing any potential credit losses in the future.

Previous wording

New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan fundings totaled $1.6 billion over the trailing 12 months, led by commercial loan

Current wording

New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan fundings totaled $1.4 billion over the trailing 12 months, led by commercial loan

Previous wording

fundings of $1.1 billion. Fundings are defined as closed-end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of fundings to better approximate the impact of fundings on loans outstanding and ultimately net interest income.

Current wording

fundings of $928.3 million. Fundings are defined as closed-end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of fundings to better approximate the impact of fundings on loans outstanding and ultimately net interest income.

Previous wording

Included in fundings are net fundings (paydowns) under revolving lines of credit totaling $21,752, $64,375, $16,302, $19,281 and $(59,523) for the dates noted in the table above, respectively.

Current wording

Included in fundings are net fundings under revolving lines of credit totaling $15,490, $21,752, $64,375, $16,302 and $19,281 for the dates noted in the table above, respectively.

Previous wording

Non-performing assets consist of non-accrual loans and OREO. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during the three months ended March 31, 2025 and 2024 was $0.7 million and $0.6 million, respectively.

Current wording

Non-performing assets consist of non-accrual loans and OREO. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during the three and six months ended June 30, 2025 was $0.6 million and $1.3 million, respectively, and $0.4 million and $1.0 million during the three and six months ended June 30, 2024, respectively.

Previous wording

During the three months ended March 31, 2025, total non-performing loans decreased $1.4 million, or 3.8%, from December 31, 2024. Loans 30-89 days past due and still accruing interest improved eight basis points to 0.22% of total loans at March 31, 2025, compared to December 31, 2024. Loans 90 days or more past due and still accruing interest improved 18 basis points to 0.01% of total loans at March 31, 2025, compared to December 31, 2024.

Current wording

During the six months ended June 30, 2025, total non-performing loans decreased $2.7 million, or 7.4%, from December 31, 2024. Loans 30-89 days past due and still accruing interest improved 11 basis points to 0.19% of total loans at June 30, 2025, compared to December 31, 2024. Loans 90 days or more past due and still accruing interest improved nine basis points to 0.10% of total loans at June 30, 2025, compared to December 31, 2024.

Previous wording

At March 31, 2025 and December 31, 2024, the allowance for credit losses totaled $90.2 million and $94.5 million, respectively. The decrease during the three months ended March 31, 2025 was primarily driven by the resolution of non-performing loans and changes in the CECL model’s underlying macro-economic forecast. Specific reserves on loans totaled $6.0 million at March 31, 2025, compared to $6.4 million at December 31, 2024.

Current wording

At June 30, 2025 and December 31, 2024, the allowance for credit losses totaled $88.9 million and $94.5 million, respectively. The decrease during the six months ended June 30, 2025 was primarily driven by the resolution of non-performing loans and changes in the CECL model’s underlying macro-economic forecast. Specific reserves on loans totaled $6.3 million at June 30, 2025, compared to $6.4 million at December 31, 2024.

Previous wording

Net charge-offs on loans during the three months ended March 31, 2025 totaled $15.1 million and were elevated due to an $8.9 million net charge-off from one credit due to suspected fraud by the borrower, which the Company believes is an isolated circumstance within the loan portfolio. The ratio of annualized net charge-offs to average total loans totaled 0.80%. Net charge-offs on loans during the three months ended March 31, 2024 totaled $0.1 million, and the ratio of annualized net charge-offs to average total loans was minimal.

Current wording

Net charge-offs on loans during the three and six months ended June 30, 2025 totaled $1.0 million and $16.1 million, respectively, and were elevated during the first quarter of 2025 due to an $8.9 million net charge-off from one credit due to suspected fraud by the borrower, which the Company believes is an isolated circumstance within the loan portfolio. The ratio of annualized net charge-offs to average total loans totaled 0.05% and 0.43%, for the three and six months ended June 30, 2025, respectively. Net charge-offs on loans during the three and six months ended June 30, 2024 totaled $4.1 million and $4.2 million, respectively, and the ratio of annualized net charge-offs to average total loans totaled 0.22% and 0.11%, respectively.

Previous wording

The Company has elected to exclude AIR from the ACL calculation. As of March 31, 2025 and December 31, 2024, AIR from loans totaled $44.3 million and $41.5 million, respectively. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income.

Current wording

The Company has elected to exclude AIR from the ACL calculation. As of June 30, 2025 and December 31, 2024, AIR from loans totaled $38.9 million and $41.5 million, respectively. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income.

Previous wording

After considering the above-mentioned factors, we believe that the ACL of $90.2 million is adequate to cover estimated lifetime losses inherent in the loan portfolio at March 31, 2025. However, it is likely that future adjustments to the ACL will be necessary. Any changes to the underlying assumptions, circumstances or estimates, including but not limited to changes in the underlying macro-economic forecast, used in determining the ACL, could negatively or positively affect the Company’s results of operations, liquidity or financial condition.

Current wording

After considering the above-mentioned factors, we believe that the ACL of $88.9 million is adequate to cover estimated lifetime losses inherent in the loan portfolio at June 30, 2025. However, it is likely that future adjustments to the ACL will be necessary. Any changes to the underlying assumptions, circumstances or estimates, including but not limited to changes in the underlying macro-economic forecast, used in determining the ACL, could negatively or positively affect the Company’s results of operations, liquidity or financial condition.

Previous wording

During the three months ended March 31, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $10.2 million, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded zero provision expense for credit losses on funded loans and unfunded loan commitments during the first quarter of 2024.

Current wording

During the three and six months ended June 30, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling zero and $10.2 million, respectively, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $2.8 million during the three and six months ended June 30, 2024.

Previous wording

At March 31, 2025 and December 31, 2024, time deposits that were scheduled to mature within 12 months totaled $814.7 million and $822.6 million, respectively. Of the time deposits scheduled to mature within 12 months at March 31, 2025, $250.8 million were in denominations of $250 thousand or more, and $563.9 million were in denominations less than $250 thousand. Approximately 78% of our total deposits were FDIC insured at March 31, 2025. Additionally, the Company participates in the IntraFi Cash Service program, which allows depositors to receive reciprocal FDIC insurance coverage. The Company had $0.9 billion and $1.0 billion of deposits in the program as of March 31, 2025 and December 31, 2024, respectively.

Current wording

At June 30, 2025 and December 31, 2024, time deposits that were scheduled to mature within 12 months totaled $837.5 million and $822.6 million, respectively. Of the time deposits scheduled to mature within 12 months at June 30, 2025, $254.5 million were in denominations of $250 thousand or more, and $583.0 million were in denominations less than $250 thousand. Approximately 78% of our total deposits were FDIC insured at June 30, 2025. Additionally, the Company participates in the IntraFi Cash Service program,

Previous wording

The Company holds a subordinated note purchase agreement to issue and sell a fixed-to-floating rate note totaling $40.0 million. The balance on the note at March 31, 2025 and December 31, 2024, net of long-term debt issuance costs totaling $0.2 million, totaled $39.8 million. During the three months ended March 31, 2025 and 2024, interest expense totaling $0.3 million was recorded in the consolidated statements of operations.

Current wording

The Company holds a subordinated note purchase agreement to issue and sell a fixed-to-floating rate note totaling $40.0 million. The balance on the note at June 30, 2025, net of long-term debt issuance costs of $0.1 million, totaled $39.9 million. At December 31, 2024, the balance on the note, net of long-term debt issuance costs of $0.2 million, totaled $39.8 million. During the three and six months ended June 30, 2025 and 2024, interest expense totaling $0.3 million and $0.6 million, respectively, was recorded in the consolidated statements of operations.

Previous wording

and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.

Current wording

The note is subordinated, unsecured and matures on November 15, 2031. Payments consist of interest only. Interest expense on the note is payable semi-annually in arrears and will bear interest at 3.00% per annum until November 15, 2026 (or any earlier redemption date). From November 15, 2026 until November 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.

Previous wording

As part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinate note purchase agreements to issue and sell fixed-to-floating rates totaling $15.0 million. The balance on the notes at March 31, 2025 and December 31, 2024, net of a fair value adjustment related to the acquisition totaling $0.3 million, totaled $14.7 million. Interest expense related to the notes totaling $0.1 million was recorded in the consolidated statements of operations during the three months ended March 31, 2025 and 2024.

Current wording

As part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinated note purchase agreements to issue and sell fixed-to-floating rate notes totaling $15.0 million. The balance on the notes at June 30, 2025, net of a fair value adjustment related to the acquisition totaling $0.2 million, totaled $14.8 million. At December 31, 2024, the balance on the notes, net of a fair value adjustment related to the acquisition totaling $0.3 million, totaled $14.7 million. Interest expense related to the notes totaling $0.1 million and $0.3 million was recorded in the consolidated statements of operations during the three and six months ended June 30, 2025 and 2024, respectively.

Previous wording

As of March 31, 2025 and December 31, 2024, the Company sold securities under agreements to repurchase totaling $20.7 million and $18.9 million, respectively. In addition, as a member of the FHLB, the Company has access to a line of credit and term financing from the FHLB with total available credit of $1.7 billion at March 31, 2025. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At March 31, 2025 and December 31, 2024, NBH Bank had $80.0 million and $50.0 million, respectively, of outstanding borrowings with the FHLB. The Company may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged at March 31, 2025 or December 31, 2024. Loans pledged were $2.5 billion and $2.6 billion at March 31, 2025 and December 31, 2024, respectively. The Company incurred $1.1 million and $3.2 million of interest expense related to FHLB advances or other short-term borrowings for the three months ended March 31, 2025 and 2024, respectively.

Current wording

At June 30, 2025 and December 31, 2024, the Company sold securities under agreements to repurchase totaling $18.5 million and $18.9 million, respectively. In addition, as a member of the FHLB, the Company has access to a line of credit and term financing from the FHLB with total available credit of $1.5 billion at June 30, 2025. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At June 30, 2025 and December 31, 2024, NBH Bank had $185.0 million and $50.0 million, respectively, of outstanding borrowings with the FHLB. The Company may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged at June 30, 2025 or December 31, 2024. Loans pledged were $2.4 billion and $2.6 billion at June 30, 2025 and December 31, 2024, respectively. The Company incurred $1.2 million and $2.3 million of interest expense related to FHLB advances or other short-term borrowings for the three and six months ended June 30, 2025, respectively. During the three and six months ended June 30, 2024, the Company incurred $0.1 million and $3.3 million, respectively, of interest expense related to FHLB advances or other short-term borrowings.

Previous wording

Our subsidiary banks and the holding company are subject to the regulatory capital adequacy requirements of the Federal Reserve Board and the FDIC, as applicable. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly further discretionary actions by regulators that could have a material adverse effect on us. At March 31, 2025 and December 31, 2024, our subsidiary banks and the consolidated holding company exceeded all capital ratio requirements under prompt corrective action and other regulatory requirements, as further detailed in note nine of our consolidated financial statements.

Current wording

Our subsidiary banks and the holding company are subject to the regulatory capital adequacy requirements of the Federal Reserve Board and the FDIC, as applicable. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly further discretionary actions by regulators that could have a material adverse effect on us. At June 30, 2025 and December 31, 2024, our subsidiary banks and the consolidated holding company exceeded all capital ratio requirements under prompt corrective action and other regulatory requirements, as further detailed in note 9 of our consolidated financial statements.

Previous wording

Net interest income totaled $86.7 million and $84.0 million during the three months ended March 31, 2025 and 2024, respectively. Net interest income on an FTE basis totaled $88.6 million and $85.7 million during the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, the FTE net interest margin widened 15 basis points to 3.93%, compared to the three months ended March 31, 2024 as a result of our disciplined loan and deposit pricing over the last twelve months as the Fed lowered rates. The yield on earning assets decreased three basis points, driven by a decrease in loan yields. During the three months ended March 31, 2025, the cost of funds improved 18 basis points to 2.07%, compared to the three months ended March 31, 2024.

Current wording

Net interest income increased $3.8 million to $87.4 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. Net interest income on an FTE basis increased $4.0 million to $89.3 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. During the three months ended June 30, 2025, the FTE net interest margin widened 19 basis points to 3.95%, compared to the three months ended June 30, 2024. The yield on earning assets decreased four basis points, driven by a decrease in loan yields during the three months ended June 30, 2025, and the cost of funds decreased 23 basis points to 2.09%, compared to the three months ended June 30, 2024.