Financial Analysis

NOTE 15COMMITMENTS AND CONTINGENCIES Financial instruments with off-balance-sheet risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements. The Companys exposure to credit loss in the event of non-performance by the counterparty to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The following off-balance-sheet financial instruments whose contract amounts represent credit risk, are outstanding (in thousands): At December 31, 2025 At December 31, 2024 Fixed Variable Fixed Variable Rate Rate Rate Rate Unused loan commitments $ 113,438 $ 486,517 $ 108,561 $ 586,821 Standby and commercial letters of credit 26,388 31,920 $ 139,826 $ 486,517 $ 140,481 $ 586,821 A commitment to extend credit is a legally binding agreement to lend to a customer as long as there is no violation of any condition established in the contract. These commitments do not necessarily represent future cash requirements and generally expire within two years. At December 31, 2025, the interes …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys revenue from contracts with customers (in thousands): Year ended December 31, 2025 2024 2023 Service charges on deposit accounts $ 8,388 $ 8,269 $ 6,071 Global Payments Group revenue 13,355 19,005 Other service charges and fees 2,665 2,312 2,804 Total $ 11,053 $ 23,936 $ 27,880 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

NOTE 13STOCK COMPENSATION PLAN Equity Incentive Plan At December 31, 2025, the Company maintained two stock compensation plans, the Amended and Restated 2022 Equity Incentive Plan (the 2022 EIP), and the 2019 Equity Incentive Plan (the 2019 EIP). The 2019 EIP expired on May 31, 2022 but had outstanding restricted stock awards subject to vesting schedules. The 2022 EIP was approved on May 31, 2022 by stockholders of the Company and an amendment and restatement of the 2022 EIP was approved by the stockholders of the Company on May 29, 2024 to increase the number of shares of common stock that may be issued under the plan by 358,000. The stockholders of the Company subsequently approved an amendment to the 2022 EIP on May 28, 2025 to increase the number of shares of common stock that may be issued under the plan by an additional 750,000. Under the 2022 EIP at December 31, 2025, the maximum number of shares of stock that may be delivered to participants in the form of restricted stock, restricted stock units and stock options, including ISOs and non-qualified stock options, is 901,312, subject to adjustment as set forth in the 2022 EIP, plus any awards that are made available under the 2019 EIP after March 15, 2022. Restricted Stock Awards and Restricted Stock Units The Company issued restricted stock awards and restricted stock units under the 2022 EIP, and the 2019 EIP (collectively, restricted stock grants) to certain key personnel. Each restricted stock grant vests based on t …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 12FAIR VALUE OF FINANCIAL INSTRUMENTS The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Accounting guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entitys own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis Assets measured on a recurring basis are limited to the Companys AFS securities portfolio, equity investments, and derivative contracts. The AFS portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in shareholders equity. Equity investments are carried at estimated fair …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 10INCOME TAXES Income tax expense consisted of the following (in thousands): Year Ended December 31, 2025 2024 2023 Current Federal $ 25,113 $ 20,729 $ 21,503 State and local 14,562 12,464 10,947 Total current 39,675 33,193 32,450 Deferred Federal (5,539) (1,479) (2,662) State and local (3,725) (1,319) (138) Total deferred (9,264) (2,798) (2,800) Total income tax expense $ 30,411 $ 30,395 $ 29,650 The Company did not have any income tax expense (benefit) in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023. Deferred tax assets and liabilities consist of the following (in thousands): At December 31, 2025 2024 Deferred tax assets: Allowance for credit losses $ 29,093 $ 19,208 Lease liabilities 14,785 15,555 Net unrealized loss on securities available for sale 16,057 23,063 Off balance sheet reserves 641 382 Net unrealized loss on interest rate derivatives 1,201 Restricted stock 1,856 1,822 Other 75 136 Total gross deferred tax assets 63,708 60,166 Deferred tax liabilities: Right of use lease asset 13,484 14,269 Depreciation and amortization 4,258 3,190 Net unrealized gain on interest rate derivatives 147 Prepaid assets 1,762 1,181 Total gross deferred tax liabilities 19,504 18,787 Net deferred tax asset, included in other assets $ 44,204 $ 41,379 The following is a reconciliation of the Companys statutory federal income tax rate to its effective tax rate (in thousands): For the year ended December 31, 2025 2024 2023 Tax expense/ Tax expense/ Tax ex …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 6 LEASES The Company leases its corporate office, banking centers and loan production offices. The following tables present the Companys lease cost and other information related to its operating leases (dollars in thousands): At December 31, 2025 2024 Supplemental balance sheet information: Lease assets (classified in Other assets on the Consolidated Statement of Financial Condition) $ 44,994 $ 47,619 Lease liabilities (classified in Other liabilities on the Consolidated Statement of Financial Condition) $ 49,337 $ 51,910 Weighted average remaining lease term in years 14.4 15.2 Weighted average discount rate 4.77 % 4.73 % At December 31, 2025 2024 2023 Components of lease cost: Operating lease cost (classified in Bank premises & equipment on the Consolidated Statement of Operations) $ 5,334 $ 5,119 $ 5,290 Supplemental cash flow information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 5,283 $ 5,012 $ 5,191 Non-cash activity related to lease assets: Lease assets obtained from new operating lease liabilities $ 388 $ 9,197 $ 2,036 The following table presents the remaining maturity of lease liabilities as well as the reconciliation of undiscounted lease payments to the discounted operating lease liabilities (in thousands): At December 31, 2025 2024 Lease liabilities maturing in: 2026 $ 5,379 $ 5,257 2027 5,003 5,274 2028 4,590 4,899 2029 4,577 4,486 2030 4,768 4,499 Thereafter 45,572 50,340 Tota …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"In June 2016, the FASB issued ASC 326, which requires the measurement of all expected credit losses for financial assets held at amortized cost to be based on historical experience, current condition, and reasonable and supportable forecasts. ASC 326 requires that financial institutions and other organizations will use forward-looking information to better inform their credit loss estimates. This guidance also amends the accounting for credit losses on AFS debt securities and purchased financial assets with credit deterioration. The Company adopted this guidance effective January 1, 2023 using a modified retrospective approach. The Company recorded a cumulative effect adjustment that increased the allowance for credit losses for loans and loan commitments by $3.0 million, increased deferred tax assets by $777,000 and decreased retained earnings by $2.1 million, net of tax. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires annual disclosures which provide qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures. The Company adopted this guidance prospectively in 2025, which did not have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

NOTE 14EMPLOYEE BENEFIT PLAN The Company has a 401(k) plan for eligible employees. The contribution for any participant may not exceed the maximum amount allowable by law. Each year, the Company may elect to match a percentage of participant contributions. The Company may also elect each year to make additional discretionary contributions to the plan. The total contributions were $1.3 million, $1.2 million and $1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 11RELATED PARTY TRANSACTIONS In the ordinary course of business, certain principal officers, directors, and their affiliates have deposits with the Company, which at December 31, 2025 and 2024 were $4.8 million and $471,000, respectively. There were no extensions of credit to the Companys directors, executive officers, principal stockholders and their associates at December 31, 2025 and 2024, respectively. On August 15, 2016, the Company made a loan to an executive officer of the Company, which was subsequently extended on August 15, 2021, in the amount of $780,000 and having an interest rate of 2.1% per annum (the 2021 Loan). On March 6, 2023, the Company purported to make a loan to this executive officer in the amount of $7.5 million with a fixed interest rate of 5.7% per annum (the 2023 Loan), and the executive officer used substantially all of the proceeds of the 2023 Loan to pay the exercise price in connection with the exercise of certain existing stock options (the Option Shares) and satisfy withholding tax obligations in connection with such exercise (the Option Exercise). In connection with the preparation of the proxy statement for the Companys 2023 annual meeting of stockholders, the Companys management and Executive Committee of the Board of Directors, along with outside counsel, reevaluated the 2023 Loan as well as the 2021 Loan. As part of this reevaluation, the Company determined that the 2023 Loan and the 2021 Loan were likely impermissible under applicab …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 19 REVENUE FROM CONTRACTS WITH CUSTOMERS All of the Companys revenue from contracts with customers that are in the scope of ASC 606, Revenue from Contracts with Customers are recognized in non-interest income. The following table presents the Companys revenue from contracts with customers (in thousands): Year ended December 31, 2025 2024 2023 Service charges on deposit accounts $ 8,388 $ 8,269 $ 6,071 Global Payments Group revenue 13,355 19,005 Other service charges and fees 2,665 2,312 2,804 Total $ 11,053 $ 23,936 $ 27,880 A description of the Companys revenue streams accounted for under the accounting guidance follows: Service charges on deposit accounts The Company offers business and personal retail products and services, which include, but are not limited to, online banking, mobile banking, Automated Clearing House (ACH) transactions, and remote deposit capture. A standard deposit contract exists between the Company and all deposit customers. The Company earns fees from its deposit customers for transaction-based services (such as ATM use fees, stop payment charges, statement rendering, and ACH fees), account maintenance, and overdraft services. Transaction-based fees are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customers request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the p …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 12 COMMITMENTS AND CONTINGENCIES Financial instruments with off-balance-sheet risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its clients. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements. The Companys exposure to credit loss in the event of non-performance by the counterparty to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The following off-balance-sheet financial instruments, whose contract amounts represent credit risk, are outstanding (in thousands): At June 30, 2026 At December 31, 2025 Fixed Variable Fixed Variable Rate Rate Rate Rate Unused loan commitments $ 110,475 $ 475,808 $ 113,438 $ 486,517 Standby and commercial letters of credit 34,559 26,388 $ 145,034 $ 475,808 $ 139,826 $ 486,517 A commitment to extend credit is a legally binding agreement to lend to a client as long as there is no violation of any condition established in the contract. These commitments do not necessarily represent future cash requirements and generally expire within two years. At June 30, 2026, the Companys fixed ra …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys revenue from contracts with customers (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Service charges on deposit accounts $ 2,229 $ 2,131 $ 4,503 $ 4,304 Other service charges and fees 357 479 692 1,871 Total $ 2,586 $ 2,610 $ 5,195 $ 6,175 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

NOTE 9 STOCK COMPENSATION PLAN Equity Incentive Plan At June 30, 2026, the Company maintained a stock compensation plan, the Amended and Restated 2022 Equity Incentive Plan, as amended (the 2022 EIP). The 2022 EIP was approved on May 31, 2022 by the stockholders of the Company and an amendment and restatement of the 2022 EIP was approved by the stockholders of the Company on May 29, 2024 to increase the number of shares of common stock that may be issued under the plan by 358,000. The stockholders of the Company subsequently approved an amendment to the 2022 EIP on May 28, 2025 to increase the number of shares of common stock that may be issued under the plan by an additional 750,000. Under the 2022 EIP, the remaining maximum number of shares of stock that may be delivered to participants in the form of restricted stock, restricted stock units and stock options, including ISOs and non-qualified stock options is 676,151 at June 30, 2026, subject to adjustment as set forth in the 2022 EIP. Restricted Stock Awards and Restricted Stock Units The Company grants restricted stock awards and restricted stock units under the 2022 EIP to certain key personnel. Each restricted stock grant vests based on the vesting schedule outlined in the respective grant agreement. Unvested restricted stock units are subject to forfeiture if the holder is not employed by the Company on the applicable vesting date. In the first quarter of 2026 and 2025, 104,755 and 133,359 restricted stock units were g …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 10 FAIR VALUE OF FINANCIAL INSTRUMENTS The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Accounting guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entitys own judgments about the assumptions that market participants would use in pricing an asset or liability. Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis Assets measured on a recurring basis are limited to the Companys AFS securities portfolio, equity investments, and derivative contracts. The AFS portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in shareholders equity. Equity investments are carried at estimated fair v …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU No. 2024-03 does not change the expense captions an entity presents on the face of the income statement. Subsequently issued ASU No. 2025-01 amended the effective date of ASU No. 2024-03 to require all public business entities to adopt the new guidance for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The guidance may be applied on a prospective or retrospective basis. The Company is currently evaluating the impact of ASU No. 2024- 03 on its consolidated financial statements. ASU No. 2025-06, ""Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"" clarifies the accounting for costs related to internal-use software. The new guidance clarifies the threshold entities apply to begin capitalizing costs and removes all references to project stages in ASC Subtopic 350-40. ASU No. 2025-06 is effective for the Company beginning in 2028. The new guidance may be applied using a prospective, retrospective or modified transition approach with early adoption permitted. The Company is currently evaluating th …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

NOTE 13 REVENUE FROM CONTRACTS WITH CUSTOMERS All of the Companys revenue from contracts with customers that are in the scope of ASC 606, Revenue from Contracts with Customers , are recognized in non-interest income. The following table presents the Companys revenue from contracts with customers (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Service charges on deposit accounts $ 2,229 $ 2,131 $ 4,503 $ 4,304 Other service charges and fees 357 479 692 1,871 Total $ 2,586 $ 2,610 $ 5,195 $ 6,175 A description of the Companys revenue streams accounted for under the accounting guidance is as follows: Service charges on deposit accounts The Company offers business and personal retail products and services, which include, but are not limited to, online banking, mobile banking, Automated Clearing House (ACH) transactions, and remote deposit capture. A standard deposit contract exists between the Company and all deposit customers. The Company earns fees from its deposit customers for transaction-based services (such as ATM use fees, stop payment charges, statement rendering, and ACH fees), account maintenance, and overdraft services. Transaction-based fees are recognized at the time the transaction is executed as that is the point in time the Company fulfills the clients request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satis …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 7 STOCKHOLDERS EQUITY The Board of Directors has authorized an aggregate of $150 million of repurchases of the Companys common stock since March 2025. During the three months ended June 30, 2026, the Company repurchased no shares of its common stock. During the six months ended June 30, 2026, the Company repurchased 123,061 shares of the Companys common stock at an average cost of $80.11 per share. At June 30, 2026, treasury stock at cost was $76.1 million. At June 30, 2026, the Company had $50 million of capacity for repurchases of its common stock remaining under the current authorization from the Board of Directors. The Company may repurchase shares of common stock from time to time on the open market or by other means in accordance with applicable securities laws and other restrictions, including, in part, under a Rule 10b5-1 plan. The number of shares to be repurchased and the timing of additional repurchases, if any, will depend on several factors, including market conditions, prevailing share price, corporate and regulatory requirements, and other considerations. The share repurchase plan has no expiration date, may be discontinued or suspended at any time and does not obligate the Company to acquire any amount of its common stock. The Company records common stock that it repurchases as treasury stock at cost. Treasury stock is reissued at average cost. During the first quarter of 2026, the Company completed a follow-on public equity offering of approximately 2.3 …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing