Business First Bancshares, Inc.

Previous wording

The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2025 to June 30, 2026, and its results of operations for the three and six months ended June 30, 2026. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this reportand should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025, including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements.

Current wording

The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2025 to September 30, 2026, and its results of operations for the three and nine months ended September 30, 2026. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this reportand should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025, including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements.

Previous wording

We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. As of June 30, 2026, we had total assets of $8.9 billion, total loans of $6.7 billion, total deposits of $7.2 billion, and total shareholders’ equity of $1.0 billion.

Current wording

We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. As of September 30, 2026, we had total assets of $9.0 billion, total loans of $6.8 billion, total deposits of $7.4 billion, and total shareholders’ equity of $1.0 billion.

Previous wording

On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement. Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive. As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.

Current wording

On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement. Immediately following the consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive. As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.

Previous wording

On June 29, 2026, we consummated the acquisition of APC, a financial consulting firm, for $6.8 million, of which $2.6 million was paid in cash and $4.3 million was paid in the form of subordinated debt. As part of the transaction, we recorded a customer intangible of $4.9 million, to be amortized over a 10-year period and $1.9 million in goodwill. The APC acquisition will expand the advisory platform of b1BANK’s subsidiary, Smith Shellnut Wilson, LLC (“SSW”).

Current wording

On June 29, 2026, we consummated the acquisition of APC, a financial consulting firm, for $6.8 million, of which $2.6 million was paid in cash and $4.3 million was paid in the form of subordinated debt. As part of the transaction, we recorded a customer intangible of $4.8 million, to be amortized over a 10-year period and $1.9 million in goodwill. The APC acquisition will expand the advisory platform of b1BANK’s subsidiary, Smith Shellnut Wilson, LLC (“SSW”).

Previous wording

The financial highlights as of and for the six months ended June 30, 2026, include:

Current wording

The financial highlights as of and for the nine months ended September 30, 2026, include:

Previous wording

•Net income available to common shareholdersof $45.0 million for the six months ended June 30, 2026, a $5.1 million, or 12.7%, increase from the six months ended June 30, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

Current wording

•Net income available to common shareholdersof $68.2 million for the nine months ended September 30, 2026, a $6.8 million, or 11.0%, increase from the nine months ended September 30, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

Previous wording

•Net interest income of $153.0 million for the six months ended June 30, 2026, an increase of $20.0 million, or 15.0%, from the six months ended June 30, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

Current wording

•Net interest income of $233.7 million for the nine months ended September 30, 2026, an increase of $31.4 million, or 15.5%, from the nine months ended September 30, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

Previous wording

•Allowance for credit losses of 1.02% of total loans held for investment, compared to 0.94% as of December 31, 2025, and a ratio of nonperforming loans to total loans held for investment of 1.26%, compared to 1.24% as of December 31, 2025.

Current wording

•Allowance for credit losses of 0.95% of total loans held for investment, compared to 0.94% as of December 31, 2025, and a ratio of nonperforming loans to total loans held for investment of 1.24%, for both September 30, 2026 and December 31, 2025.

Previous wording

•Earnings per common sharefor the first six months of 2026 of $1.38 per basic common share and $1.37 diluted common share, compared to $1.36 per basic common share and $1.35 diluted common share for the first six months of 2025.

Current wording

•Earnings per common sharefor the first nine months of 2026 of $2.10 per basic common share and $2.08 per diluted common share, compared to $2.09 per basic common share and $2.08 per diluted common share for the first nine months of 2025.

Previous wording

•Return on average assetsof 1.02% over the first six months of 2026, compared to 1.04% for the first six months of 2025.

Current wording

•Return on average assetsof 1.03% over the first nine months of 2026, compared to 1.05% for the first nine months of 2025.

Previous wording

•Return on average common equityof 9.80% over the first six months of 2026, compared to 10.68% for the first six months of 2025.

Current wording

•Return on average common equityof 9.78% over the first nine months of 2026, compared to 10.74% for the first nine months of 2025.

Previous wording

•Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.11%, 10.38%, 11.43% and 13.77%, respectively, compared to 10.08%, 9.94%, 11.00% and 12.93% at December 31, 2025.

Current wording

•Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.36%, 10.29%, 11.31% and 13.55%, respectively, compared to 10.08%, 9.94%, 11.00% and 12.93% at December 31, 2025.

Previous wording

•Book value per common share of $28.79, an increase of 3.0% from $27.95 at December 31, 2025.

Current wording

•Book value per common share of $28.77, an increase of 2.9% from $27.95 at December 31, 2025.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2026, and 2025

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2026, and 2025

Previous wording

For the three months ended June 30, 2026, net income available to common shareholders was $22.8 million, or $0.70 per basic and diluted common share, compared to net income available to common shareholders of $20.8 million, or $0.70 per basic and diluted common share, for the three months ended June 30, 2025. Return on average assets, on an annualized basis, decreased to 1.03% for the three months ended June 30, 2026, from 1.07% for the three months ended June 30, 2025. Return on average common equity, on an annualized basis, decreased to 9.83% for the three months ended June 30, 2026, as compared to 10.87% for the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, net income available to common shareholders was $23.2 million, or $0.71 per basic and diluted common share, compared to net income available to common shareholders of $21.5 million, or $0.73 per basic and diluted common share, for the three months ended September 30, 2025. Return on average assets, on an annualized basis, decreased to 1.04% for the three months ended September 30, 2026, from 1.08% for the three months ended September 30, 2025. Return on average common equity, on an annualized basis, decreased to 9.75% for the three months ended September 30, 2026, as compared to 10.80% for the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, net income available to common shareholders was $45.0 million, or $1.38 per basic common share and $1.37 per diluted common share, compared to net income available to common shareholders of $39.9 million, or $1.36 per basic common share and $1.35 per diluted common share, for the six months ended June 30, 2025. Return on average assets, on an annualized basis, decreased to 1.02% for the six months ended June 30, 2026, from 1.04% for the six months ended June 30, 2025. Return on average common equity, on an annualized basis, decreased to 9.80% for the six months ended June 30, 2026, as compared to 10.68% for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, net income available to common shareholders was $68.2 million, or $2.10 per basic common share and $2.08 per diluted common share, compared to net income available to common shareholders of $61.5 million, or $2.09 per basic common share and $2.08 per diluted common share, for the nine months ended September 30, 2025. Return on average assets, on an annualized basis, decreased to 1.03% for the nine months ended September 30, 2026, from 1.05% for the nine months ended September 30, 2025. Return on average common equity, on an annualized basis, decreased to 9.78% for the nine months ended September 30, 2026, as compared to 10.74% for the nine months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026, net interest income totaled $77.8 million, and net interest margin and net interest spread were 3.73% and 2.99%, respectively, compared to $67.0 million, 3.68%, and 2.88%, respectively, for the three months ended June 30, 2025. The average yield on the loan portfolio was 6.63% for the three months ended June 30, 2026, compared to 6.96% for the three months ended June 30, 2025, and the average yield on total interest-earning assets was 6.02% for the three months ended June 30, 2026, compared to 6.31% for the three months ended June 30, 2025. For the three months ended June 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 34 basis points compared to the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, net interest income totaled $80.7 million, and net interest margin and net interest spread were 3.86% and 3.09%, respectively, compared to $69.3 million, 3.68%, and 2.85%, respectively, for the three months ended September 30, 2025. The average yield on the loan portfolio was 6.74% for the three months ended September 30, 2026, compared to 7.01% for the three months ended September 30, 2025, and the average yield on total interest-earning assets was 6.10% for the three months ended September 30, 2026, compared to 6.31% for the three months ended September 30, 2025. For the three months ended September 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 41 basis points compared to the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, net interest income totaled $153.0 million, and net interest margin and net interest spread were 3.69% and 2.95%, respectively, compared to $133.0 million, 3.68%, and 2.90%, respectively, for the six months ended June 30, 2025. The average yield on the loan portfolio was 6.62% for the six months ended June 30, 2026, compared to 6.98% for the six months ended June 30, 2025, and the average yield on total interest-earning assets was 5.99% for the six months ended June 30, 2026, compared to 6.33% for the six months ended June 30, 2025. For the six months ended June 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 35 basis points compared to the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, net interest income totaled $233.7 million, and net interest margin and net interest spread were 3.75% and 3.00%, respectively, compared to $202.3 million, 3.68%, and 2.88%, respectively, for the nine months ended September 30, 2025. The average yield on the loan portfolio was 6.66% for the nine months ended September 30, 2026, compared to 6.99% for the nine months ended September 30, 2025, and the average yield on total interest-earning assets was 6.03% for the nine months ended September 30, 2026, compared to 6.32% for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 37 basis points compared to the nine months ended September 30, 2025.

Previous wording

The following tables present, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three and six months ended June 30, 2026, and 2025, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below are net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. Averages presented in the tables below, and throughout this report, are daily averages.

Current wording

The following tables present, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three and nine months ended September 30, 2026, and 2025, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the tables as loans carrying a zero yield. The average total loans reflected below are net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. Averages presented in the tables below, and throughout this report, are daily averages.

Previous wording

Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $2.0 million for the three months ended June 30, 2026, and $2.2 million for the same period in 2025. For the six months ended June 30, 2026, and 2025, the provision for credit losses was $4.3 million and $5.0 million, respectively. The lower provision for the three and six months ended June 30, 2026, compared to the same period in 2025 is primarily the result of higher specific reserve estimates during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2026.

Current wording

Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $1.9 million for the three months ended September 30, 2026, and $3.2 million for the same period in 2025. For the nine months ended September 30, 2026, and 2025, the provision for credit losses was $6.2 million and $8.2 million, respectively. The lower provision for the three and nine months ended September 30, 2026, compared to the same period in 2025 is primarily the result of lower specific reserve estimates and purchased credit deterioration reserves for the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025.

Previous wording

Total noninterest income increased $376,000, or 1.4%, from the six months ended June 30, 2025, mainly attributable to an increase in service charges on deposit accounts of $846,000, or 15.4%, an increase in the gain on sales of loans of $887,000, or 43.5%, an increase in debit card and ATM fee income of $905,000, or 23.7%, and the acquisition of Progressive. This is offset by the gain on the sale of our Kaplan banking center in 2025 in the quarter ended June 30, 2025.

Current wording

Total noninterest income increased $1.2 million, or 3.1%, from the nine months ended September 30, 2025, mainly attributable to increases in service charges on deposit accounts of $1.6 million, or 20.1%, and debit card and ATM fee income of $1.4 million, or 23.9%, with both increases a result of increased activity from the Progressive acquisition. The increase is also attributable to increases in gain on sales of loans of $1.1 million, or 40.5%, and fees and brokerage commissions of $1.1 million, or 18.3%. This increase is somewhat offset by the gain on the sale of our Kaplan banking center in 2025 with no such sale in 2026.

Previous wording

Total noninterest expense increased $15.2 million, or 14.9%, from the six months ended June 30, 2025, primarily attributed to the increase in salaries and employee benefits of $8.3 million, or 14.4%, an increase in occupancy and equipment of $1.9 million, or 13.0%, an increase in advertising and promotions of $1.7 million, or 72.9%,and an increase in merger and conversion related expenses of $1.2 million, or 265.2%, which were partially offset by a reduction in data processing fees of $1.5 million, or 17.9%. The increases were largely attributable to the acquisition of Progressive.

Current wording

Total noninterest expense increased $26.8 million, or 17.8%, from the nine months ended September 30, 2025, primarily attributed to increases in salaries and employee benefits of $13.3 million, or 15.6%, occupancy and equipment of $4.7 million, or 21.5%, advertising and promotions of $2.6 million, or 72.4%, and merger and conversion related expenses of $2.1 million, or 228.2%, which were partially offset by a decrease in data processing fees of $2.4 million, or 19.3%. The increases in these categories were largely attributable to the acquisition of Progressive and a lease termination fee recorded during 2026.

Previous wording

For the three months ended June 30, 2026, income tax expense totaled $6.1 million, an increase of $197,000, or 3.3%, compared to $5.9 million for the same period in 2025. Our effective tax rates for the three months ended June 30, 2026, and 2025 were 20.2% and 21.1%, respectively.

Current wording

For the three months ended September 30, 2026, income tax expense totaled $6.2 million, an increase of $195,000, or 3.2%, compared to $6.0 million for the same period in 2025. Our effective tax rates for the three months ended September 30, 2026, and 2025 were 20.2% and 20.9%, respectively.

Previous wording

For the six months ended June 30, 2026, income tax expense totaled $12.1 million, an increase of $853,000, or 7.6%, compared to $11.2 million for the same period in 2025. Our effective tax rates for the six months ended June 30, 2026, and 2025 were 20.2% and 20.8%, respectively.

Current wording

For the nine months ended September 30, 2026, income tax expense totaled $18.3 million, an increase of $1.0 million, or 6.1%, compared to $17.2 million for the same period in 2025. Our effective tax rates for the nine months ended September 30, 2026, and 2025 were 20.2% and 20.8%, respectively.

Previous wording

Our total assets increased $688.8 million, or 8.4%, from December 31, 2025, to June 30, 2026, primarily due to the acquisition of Progressive.

Current wording

Our total assets increased $741.2 million, or 9.0%, from December 31, 2025, to September 30, 2026, primarily due to the acquisition of Progressive.

Previous wording

As of June 30, 2026, total loans, excluding mortgage loans held for sale, were $6.7 billion, a $470.0 million increase, or 7.6%, compared to $6.2 billion as of December 31, 2025. Additionally, $2.8 million, and $1.1 million in loans were classified as loans held for sale as of June 30, 2026, and December 31, 2025, respectively.

Current wording

As of September 30, 2026, total loans, excluding mortgage loans held for sale, were $6.8 billion, a $591.4 million increase, or 9.6%, compared to $6.2 billion as of December 31, 2025. Additionally, $254,000 and $1.1 million in loans were classified as loans held for sale as of September 30, 2026, and December 31, 2025, respectively.

Previous wording

In June 2026, we sold $100.3 million in loans that were acquired from Progressive, including $55.3 million of residential mortgages and $45.0 million commercial real estate loans. As part of the sale, we will retain the servicing of these loans.

Current wording

In June 2026, we sold $95.3 million in loans that were acquired from Progressive, including $54.7 million of residential mortgages and $40.6 million commercial real estate loans. As part of the sale, we will retain the servicing of these loans.

Previous wording

Total loans held for investment as a percentage of total deposits were 92.0% and 92.4% as of June 30, 2026, and December 31, 2025, respectively. Total loans held for investment as a percentage of total assets were 74.8% and 75.3% as of June 30, 2026, and December 31, 2025, respectively.

Current wording

Total loans held for investment as a percentage of total deposits were 91.9% and 92.4% as of September 30, 2026, and December 31, 2025, respectively. Total loans held for investment as a percentage of total assets were 75.7% and 75.3% as of September 30, 2026, and December 31, 2025, respectively.

Previous wording

Real Estate: Commercial loans increased $212.7 million, or 8.1%, to $2.8 billion as of June 30, 2026, from $2.6 billion as of December 31, 2025.

Current wording

Real Estate: Commercial loans increased $285.4 million, or 10.9%, to $2.9 billion as of September 30, 2026, from $2.6 billion as of December 31, 2025.

Previous wording

Real Estate: Construction loans increased $54.4 million, or 8.5%, to $693.5 million as of June 30, 2026, from $639.1 million as of December 31, 2025.

Current wording

Real Estate: Construction loans increased $135.1 million, or 21.1%, to $774.2 million as of September 30, 2026, from $639.1 million as of December 31, 2025.

Previous wording

Real Estate: Residential loans increased $135.0 million, or 14.3%, to $1.1 billion as of June 30, 2026, from $944.1 million as of December 31, 2025.

Current wording

Real Estate: Residential loans increased $104.3 million, or 11.1%, to $1.0 billion as of September 30, 2026, from $944.1 million as of December 31, 2025.

Previous wording

Commercial loans increased $66.9 million, or 3.5%, to $2.0 billion as of June 30, 2026, from $1.9 billion as of December 31, 2025.

Current wording

Commercial loans increased $69.2 million, or 3.6%, to $2.0 billion as of September 30, 2026, from $1.9 billion as of December 31, 2025.

Previous wording

Consumer and other loans increased $1.0 million, or 1.4%, to $74.2 million as of June 30, 2026, from $73.2 million as of December 31, 2025.

Current wording

Consumer and other loans decreased $2.6 million, or 3.6%, to $70.6 million as of September 30, 2026, from $73.2 million as of December 31, 2025.

Previous wording

We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $109.2 million and $89.7 million in nonperforming assets as of June 30, 2026, and December 31, 2025, respectively. We had $84.1 million in nonperforming loans as of June 30, 2026, compared to $76.7 million as of December 31, 2025. The increase in nonperforming assets from December 31, 2025, to June 30, 2026, is primarily due to two commercial lending relationships. There was also a property in Texas we foreclosed on during the quarter ended March 31, 2026.

Current wording

We believe our conservative lending approach and focused management of nonperforming assets have resulted in sound asset quality and the timely resolution of problem assets. We had $108.8 million and $89.7 million in nonperforming assets as of September 30, 2026, and December 31, 2025, respectively. We had $84.1 million in nonperforming loans as of September 30, 2026, compared to $76.7 million as of December 31, 2025. The increase in nonperforming assets from December 31, 2025 to September 30, 2026 is primarily due to adding three commercial lending relationships to nonaccrual status coupled with the addition of a Texas other real estate owned property.

Previous wording

As of June 30, 2026, the allowance for credit losses totaled $67.8 million, or 1.02%, of total loans held for investment. As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment.

Current wording

As of September 30, 2026, the allowance for credit losses totaled $64.3 million, or 0.95%, of total loans held for investment. As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment.

Previous wording

We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of June 30, 2026, the carrying amount of investment securities totaled $1.0 billion, an increase of $51.9 million, or 5.2%, compared to $989.2 million as of December 31, 2025. The increase was primarily due to the acquisition of Progressive. Securities represented 11.7% and 12.0% of total assets as of June 30, 2026, and December 31, 2025, respectively.

Current wording

We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of September 30, 2026, the carrying amount of investment securities totaled $986.7 million, a decrease of $2.5 million, or 0.3%, compared to $989.2 million as of December 31, 2025. The decrease was primarily due to unrealized losses in our investment portfolio, partially offset by securities added through the Progressive acquisition. Securities represented 11.0% and 12.0% of total assets as of September 30, 2026, and December 31, 2025, respectively.

Previous wording

All of our mortgage-backed securities are agency securities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of June 30, 2026.

Current wording

All of our mortgage-backed securities are agency securities. We do not hold any Fannie Mae or Freddie Mac preferred stock, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of September 30, 2026.

Previous wording

As of June 30, 2026, and December 31, 2025, the Company held other equity securities of $51.3 million and $49.3 million, respectively, comprised mainly of FHLB stock, SBICs and Fintech fund investments.

Current wording

As of September 30, 2026, and December 31, 2025, the Company held other equity securities of $40.0 million and $49.3 million, respectively, comprised mainly of FHLB stock, SBICs and Fintech fund investments.

Previous wording

Total deposits as of June 30, 2026, were $7.2 billion, an increase of $537.0 million, or 8.0%, compared to $6.7 billion as of December 31, 2025. Total uninsured deposits were $3.4 billion, or 46.9%, of total deposits as of June 30, 2026 compared to $2.9 billion, or 43.2%, of total deposits as of December 31, 2025. Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.

Current wording

Total deposits as of September 30, 2026, were $7.4 billion, an increase of $678.2 million, or 10.1%, compared to $6.7 billion as of December 31, 2025. Total uninsured deposits were $3.6 billion, or 49.0% of total deposits as of September 30, 2026 compared to $2.9 billion, or 43.2%, of total deposits as of December 31, 2025. Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.

Previous wording

Noninterest-bearing deposits as of June 30, 2026, were $1.6 billion, compared to $1.3 billion as of December 31, 2025, an increase of $261.5 million, or 19.8%.

Current wording

Noninterest-bearing deposits as of September 30, 2026, were $1.6 billion, compared to $1.3 billion as of December 31, 2025, an increase of $283.6 million, or 21.5%.