Sierra Bancorp Reports Financial Results for Second Quarter and First Six Months of 2026

About this update from Sierra Bancorp

[{"type":"text","content":" \nSierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra, today announced its unaudited financial results for the three- and six-month periods ended June 30, 2026. Sierra Bancorp reported consolidated net income of $9.9 million, or $0.77 per diluted share, for the second quarter of 2026, compared to $10.6 million, or $0.78 per diluted share, in the second quarter of 2025. Return on average assets was 1.09% and return on average equity was 10.90% for the second quarter of 2026.\n\n \nFor the first six months of 2026, the Company recognized net income of $22.4 million, or $1.72 per diluted share, as compared to $19.7 million, or $1.43 per diluted share, for the same period in 2025. The Company's improved financial performance metrics for the first half of 2026 include a net interest margin of 3.75% and an efficiency ratio of 57.70%, as compared to a net interest margin of 3.71% and efficiency ratio of 60.00% for the same period in 2025.\n\n \nHighlights for the second quarter and first half of 2026:\n\n Strong YTD Earnings and Profitability (first half compared to same period last year) \nDiluted earnings per share increased by $0.29, or 20%, to $1.72 per diluted share.\n\n \n\nReturn on average assets rose to 1.24%, as compared to 1.09%.\n\n \n\nReturn on average equity expanded to 12.38%, as compared to 11.26%.\n\n \n\nNet interest margin remained strong at 3.75%, increasing four basis points from 3.71%.\n\n \n\nEfficiency ratio (1) improved to 57.70%, as compared to 60.00%.\n\n Deposit Franchise Strength and Low Cost of Funds \nTotal deposits increased $54.6 million, or 2%, from December 31, 2025.\n\n \n\nNoninterest-bearing deposits of $1.03 billion at June 30, 2026, represent 35.0% of total deposits.\n\n \n\nCost of total deposits declined to 1.11% compared to 1.30% in the second quarter of 2025, while cost of funds decreased to 1.31% from 1.49%.\n\n \n\nCore non-maturity deposits increased $67.8 million, or 3%, from December 31, 2025.\n\n \n\nUninsured deposits, exclusive of public funds, are approximately 25% of total deposit balances.\n\n Solid Capital and Liquidity \nTangible book value (1) per share increased to $26.19 at June 30, 2026, compared to $23.42 at December 31, 2025.\n\n \n\nRepurchased 396,429 shares of stock during the first half of 2026.\n\n \n\nDeclared dividend of $0.27 per share, payable on August 10, 2026.\n\n \n\nStrong regulatory Community Bank Leverage Ratio of 12.25%, at June 30, 2026, for our subsidiary Bank.\n\n \n\nTangible common equity ratio (1) of 9.19%, at June 30, 2026, on a consolidated basis.\n\n \n\nOverall primary and secondary liquidity sources of $1.9 billion at June 30, 2026.\n\n \n_______________________________ \n(1) \nSee reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in \"Non-GAAP Financial Measures.\"\n\n \n“Coming together is the beginning. Keeping together is progress. Working together is success.” – Henry Ford\n\n \n“We are proud to serve the Central Valley and Central Coast of California. Our strong commitment to these communities is reflected in our continued solid deposit growth during 2026,” stated Kevin McPhaill, CEO and President. “I am particularly proud of our ability to pivot, as demonstrated by the surge in loan growth in the last couple of months. This shift reflects the team’s laser focus on both loan and deposit growth. In particular, our loan pipeline increased significantly, and we expect this momentum to result in net loan growth in the second half of 2026. Our expense management strategies resulted in a nearly 2% cost reduction in year-to-date expenses compared to the same period last year. We closed the quarter with contagious optimism throughout our Bank, boosting my confidence in what we can accomplish in the next six months and beyond!” concluded Mr. McPhaill.\n\n \nQuarterly Income Changes (comparisons to the second quarter of 2025) \n\nNet income for the second quarter of 2026 decreased $0.7 million, or 7%, to $9.9 million. Net interest income remained stable, decreasing $0.2 million, while noninterest income increased slightly and noninterest expense decreased by $0.3 million. Noninterest expense in the second quarter of 2026 included approximately $0.5 million of severance and recruitment related charges resulting from a restructuring of the executive team. These changes were offset by a $1.1 million increase in credit loss expense on loans, resulting primarily from a $2.5 million specific reserve on a single agricultural production loan to a borrower in the lumber industry.\n\n \n\nNoninterest income and noninterest expense changes included a $0.4 million increase in earnings from separate account life insurance and a $0.1 million increase in deferred compensation expense. Separate account life insurance income and deferred compensation expense are designed to offset each other.\n\n \n\nPre-tax pre-provision income (1) was $15.5 million, a slight increase over the second quarter of 2025.\n\n \nLinked Quarter Income Changes (comparisons to the three months ended March 31, 2026) \n\nNet income decreased $2.6 million, or 21%, from the prior linked quarter. The decrease was driven primarily by a $2.2 million increase in credit loss expense, due to the $2.5 million specific reserve mentioned above, and a $1.7 million increase in noninterest expense. The large increase in noninterest expense was related to deferred compensation market changes that are offset by similar changes to separate account life insurance, recorded in noninterest income. The changes in deferred compensation, including deferred directors’ fees, were $1.7 million. In addition, we had $0.5 million in severance and recruiting costs related to an executive leadership restructuring during the quarter. These unfavorable changes were partially offset by a $0.6 million increase in noninterest income.\n\n \n\nNet interest income remained stable, decreasing $0.2 million from the linked quarter. Average interest-earning assets declined $43.0 million, or 1%, primarily due to lower loan and investment securities balances, while net interest margin remained stable at 3.74% compared to 3.75% in the linked quarter. Overall loan production activity increased throughout the quarter and the pipeline at June 30, 2026, is significantly elevated relative to the prior quarter end.\n\n \n\nNoninterest income changes included a $1.8 million increase in earnings from separate account life insurance associated with deferred compensation arrangements, offset by a $1.7 million increase in related deferred compensation expense, recorded in noninterest expense. Deferred compensation expense increased primarily due to increases in participant account values resulting from favorable market performance during the quarter.\n\n \n\nOther changes to noninterest income outside of the above mentioned included a $0.3 million increase in service charge income, primarily driven by higher deposit account fees, partially offset by several nonrecurring transactions in the first quarter of 2026, including a $0.4 million gain on the sale of fixed assets, a $0.4 million special FHLB dividend, and a $0.6 million increase in the fair value of bank stocks.\n\n \nYear-to-Date Income Changes (comparisons to the first six months of 2025) \n\nNet income increased $2.7 million, or 14%, to $22.4 million for the first six months of 2026. The increase was driven primarily by a $1.3 million increase in noninterest income, a $1.1 million decrease in provision for credit losses, and a $0.9 million decrease in noninterest expense. Diluted earnings per share increased 20% to $1.72 compared to $1.43 in the comparative period.\n\n \n\nNet interest income increased $0.3 million due primarily to a four basis point increase in net interest margin to 3.75%, partially offset by slightly lower average earning assets. Funding costs declined meaningfully during the period, with cost of funds decreasing to 1.32% from 1.48% and cost of deposits declining to 1.14% from 1.31%.\n\n \n\nNoninterest income increased $1.3 million, or 9%, compared to the first six months of 2025. The increase was driven primarily by a $0.5 million increase in earnings on separate account life insurance, a $0.3 million increase in cash surrender value income from life insurance, a $0.2 million increase in service charges and fees, and a $0.4 million gain on sale of fixed assets. These favorable variances were partially offset by lower securities gains.\n\n \n\nNoninterest expense decreased $0.9 million, or 2%, compared to the first six months of 2025. The reduction was driven primarily by lower other operating expenses and deposit service costs, partially offset by increased occupancy expenses and higher professional service costs.\n\n \n\nPre-tax pre-provision income (1) was $32.2 million for the first half of 2026, an increase of $2.4 million, or 8%.\n\n \nBalance Sheet Changes (comparisons to December 31, 2025, unless otherwise noted) \n\nTotal assets decreased $108.7 million, or 3%, to $3.72 billion during the first six months of 2026. The decline was primarily attributable to reductions in mortgage warehouse balances of $60.9 million and investment securities of $21.4 million.\n\n \n\nGross loans decreased $90.8 million, or 4%, due to a $60.9 million decrease in mortgage warehouse balances, a $13.9 million decrease in residential real estate loans, a $13.4 million decrease in other commercial loans, a $1.2 million decrease in commercial real estate, and a $2.5 million decrease in farmland loans. These decreases were partially offset by an increase of $1.4 million in construction loans.\n\n \n\nMortgage warehouse average balances increased $8.0 million during the second quarter of 2026 compared to the linked quarter, while ending balances declined by $21.0 million. Average balances of commercial real estate and commercial and industrial loans decreased during the quarter, and period-end balances remained relatively flat. However, loan production strengthened significantly as the quarter progressed, reflecting a shift in momentum entering the third quarter of 2026 and supporting an increased pipeline of commercial real estate and commercial and industrial lending opportunities.\n\n \n\nTotal deposits increased $54.6 million, or 2%. Growth was concentrated in noninterest-bearing demand deposits and non-maturing interest-bearing deposits. Customer deposits increased $57.5 million, while brokered deposits decreased $2.9 million during the period.\n\n \n\nOther interest-bearing liabilities declined to $155.0 million at June 30, 2026, from $302.7 million at December 31, 2025. The $147.7 million decline was primarily due to a reduction in overnight borrowings used to fund mortgage warehouse lending activity.\n\n \n_______________________________ \n(1) \nSee reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in \"Non-GAAP Financial Measures.\"\n\n \nOther financial highlights are reflected in the following table.\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nFINANCIAL HIGHLIGHTS \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Except Per Share Data, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nAs of or for the \n \n\n \n \n\n \nAs of or for the \n \n\n \n \n\n \n \n\n \nthree months ended \n \n\n \n \n\n \nsix months ended \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n6/30/2025 \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n6/30/2025 \nNet income\n\n \n \n\n \n$\n\n \n9,919\n\n \n \n\n \n \n\n \n$\n\n \n12,520\n\n \n \n\n \n \n\n \n$\n\n \n10,633\n\n \n \n\n \n \n\n \n$\n\n \n22,439\n\n \n \n\n \n \n\n \n$\n\n \n19,734\n\n \n \n\n \nDiluted earnings per share\n\n \n \n\n \n$\n\n \n0.77\n\n \n \n\n \n \n\n \n$\n\n \n0.96\n\n \n \n\n \n \n\n \n$\n\n \n0.78\n\n \n \n\n \n \n\n \n$\n\n \n1.72\n\n \n \n\n \n \n\n \n$\n\n \n1.43\n\n \n \n\n \nReturn on average assets\n\n \n \n\n \n \n\n \n1.09\n\n \n%\n\n \n \n\n \n \n\n \n1.39\n\n \n%\n\n \n \n\n \n \n\n \n1.16\n\n \n%\n\n \n \n\n \n \n\n \n1.24\n\n \n%\n\n \n \n\n \n \n\n \n1.09\n\n \n%\n\n \nReturn on average equity\n\n \n \n\n \n \n\n \n10.90\n\n \n%\n\n \n \n\n \n \n\n \n13.88\n\n \n%\n\n \n \n\n \n \n\n \n12.08\n\n \n%\n\n \n \n\n \n \n\n \n12.38\n\n \n%\n\n \n \n\n \n \n\n \n11.26\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nNet interest margin (tax-equivalent) (1) \n \n\n \n \n\n \n3.74\n\n \n%\n\n \n \n\n \n \n\n \n3.75\n\n \n%\n\n \n \n\n \n \n\n \n3.68\n\n \n%\n\n \n \n\n \n \n\n \n3.75\n\n \n%\n\n \n \n\n \n \n\n \n3.71\n\n \n%\n\n \nYield on average loans\n\n \n \n\n \n \n\n \n5.22\n\n \n%\n\n \n \n\n \n \n\n \n5.26\n\n \n%\n\n \n \n\n \n \n\n \n5.27\n\n \n%\n\n \n \n\n \n \n\n \n5.24\n\n \n%\n\n \n \n\n \n \n\n \n5.27\n\n \n%\n\n \nYield on investments\n\n \n \n\n \n \n\n \n4.48\n\n \n%\n\n \n \n\n \n \n\n \n4.44\n\n \n%\n\n \n \n\n \n \n\n \n4.68\n\n \n%\n\n \n \n\n \n \n\n \n4.46\n\n \n%\n\n \n \n\n \n \n\n \n4.75\n\n \n%\n\n \nCost of average total deposits (3) \n \n\n \n \n\n \n1.11\n\n \n%\n\n \n \n\n \n \n\n \n1.17\n\n \n%\n\n \n \n\n \n \n\n \n1.30\n\n \n%\n\n \n \n\n \n \n\n \n1.14\n\n \n%\n\n \n \n\n \n \n\n \n1.31\n\n \n%\n\n \nCost of funds (3) \n \n\n \n \n\n \n1.31\n\n \n%\n\n \n \n\n \n \n\n \n1.33\n\n \n%\n\n \n \n\n \n \n\n \n1.49\n\n \n%\n\n \n \n\n \n \n\n \n1.32\n\n \n%\n\n \n \n\n \n \n\n \n1.48\n\n \n%\n\n \nEfficiency ratio (tax-equivalent) (1) (2) \n \n\n \n \n\n \n58.91\n\n \n%\n\n \n \n\n \n \n\n \n56.45\n\n \n%\n\n \n \n\n \n \n\n \n59.43\n\n \n%\n\n \n \n\n \n \n\n \n57.70\n\n \n%\n\n \n \n\n \n \n\n \n60.00\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nTotal assets\n\n \n \n\n \n$\n\n \n3,720,611\n\n \n \n\n \n \n\n \n$\n\n \n3,754,462\n\n \n \n\n \n \n\n \n$\n\n \n3,770,302\n\n \n \n\n \n \n\n \n$\n\n \n3,720,611\n\n \n \n\n \n \n\n \n$\n\n \n3,770,302\n\n \n \n\n \nGross loans, amortized cost\n\n \n \n\n \n$\n\n \n2,456,060\n\n \n \n\n \n \n\n \n$\n\n \n2,466,794\n\n \n \n\n \n \n\n \n$\n\n \n2,434,609\n\n \n \n\n \n \n\n \n$\n\n \n2,456,060\n\n \n \n\n \n \n\n \n$\n\n \n2,434,609\n\n \n \n\n \nNoninterest demand deposits\n\n \n \n\n \n$\n\n \n1,026,319\n\n \n \n\n \n \n\n \n$\n\n \n1,028,678\n\n \n \n\n \n \n\n \n$\n\n \n1,065,742\n\n \n \n\n \n \n\n \n$\n\n \n1,026,319\n\n \n \n\n \n \n\n \n$\n\n \n1,065,742\n\n \n \n\n \nTotal deposits\n\n \n \n\n \n$\n\n \n2,930,991\n\n \n \n\n \n \n\n \n$\n\n \n2,925,806\n\n \n \n\n \n \n\n \n$\n\n \n2,974,469\n\n \n \n\n \n \n\n \n$\n\n \n2,930,991\n\n \n \n\n \n \n\n \n$\n\n \n2,974,469\n\n \n \n\n \nNoninterest-bearing deposits over total deposits\n\n \n \n\n \n \n\n \n35.0\n\n \n%\n\n \n \n\n \n \n\n \n35.2\n\n \n%\n\n \n \n\n \n \n\n \n35.8\n\n \n%\n\n \n \n\n \n \n\n \n35.0\n\n \n%\n\n \n \n\n \n \n\n \n35.8\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nShareholders' equity / total assets\n\n \n \n\n \n \n\n \n9.86\n\n \n%\n\n \n \n\n \n \n\n \n9.69\n\n \n%\n\n \n \n\n \n \n\n \n9.43\n\n \n%\n\n \n \n\n \n \n\n \n9.86\n\n \n%\n\n \n \n\n \n \n\n \n9.43\n\n \n%\n\n \nTangible common equity ratio (2) \n \n\n \n \n\n \n9.19\n\n \n%\n\n \n \n\n \n \n\n \n9.02\n\n \n%\n\n \n \n\n \n \n\n \n8.77\n\n \n%\n\n \n \n\n \n \n\n \n9.19\n\n \n%\n\n \n \n\n \n \n\n \n8.77\n\n \n%\n\n \nBook value per share\n\n \n \n\n \n$\n\n \n28.30\n\n \n \n\n \n \n\n \n$\n\n \n27.78\n\n \n \n\n \n \n\n \n$\n\n \n26.00\n\n \n \n\n \n \n\n \n$\n\n \n28.30\n\n \n \n\n \n \n\n \n$\n\n \n26.00\n\n \n \n\n \nTangible book value per share (2) \n \n\n \n$\n\n \n26.19\n\n \n \n\n \n \n\n \n$\n\n \n25.69\n\n \n \n\n \n \n\n \n$\n\n \n23.98\n\n \n \n\n \n \n\n \n$\n\n \n26.19\n\n \n \n\n \n \n\n \n$\n\n \n23.98\n\n \n \n\n \nCommunity bank leverage ratio (subsidiary bank)\n\n \n \n\n \n \n\n \n12.25\n\n \n%\n\n \n \n\n \n \n\n \n12.05\n\n \n%\n\n \n \n\n \n \n\n \n11.75\n\n \n%\n\n \n \n\n \n \n\n \n12.25\n\n \n%\n\n \n \n\n \n \n\n \n11.75\n\n \n%\n\n \nTangible common equity ratio (subsidiary bank) (2) \n \n\n \n \n\n \n11.37\n\n \n%\n\n \n \n\n \n \n\n \n11.07\n\n \n%\n\n \n \n\n \n \n\n \n10.77\n\n \n%\n\n \n \n\n \n \n\n \n11.37\n\n \n%\n\n \n \n\n \n \n\n \n10.77\n\n \n%\n\n (1) \nComputed on a tax equivalent basis utilizing a federal income tax rate of 21%.\n\n (2) \nSee reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in \"Non-GAAP Financial Measures\".\n\n (3) \nIncludes noninterest bearing deposits.\n\n \nINCOME STATEMENT HIGHLIGHTS \nNet Interest Income \nNet interest income was $30.4 million for the second quarter of 2026, a decrease of $0.2 million, or 1%, compared to the second quarter of 2025. The decrease was primarily attributable to lower average interest-earning asset balances and yields, substantially offset by lower funding costs. Interest expense declined $1.5 million, or 13%, from the prior-year quarter, reflecting the benefits of lower deposit and wholesale funding costs.\n\n \nFor the second quarter of 2026, average interest-earning assets decreased $81.2 million, or 2%, from the same period in 2025, while the yield on those assets declined eight basis points to 5.02%. The decline in average earning assets was driven primarily by lower investment securities balances and decreases in real estate loans and agricultural production loans.\n\n \nAverage interest-bearing liabilities decreased $23.7 million in the second quarter of 2026 compared to the same period in 2025, while the cost of those liabilities declined 26 basis points to 1.92%. The quarterly decrease in cost was primarily attributable to a 28 basis point reduction in the cost of interest-bearing deposits and a 23 basis point reduction in the cost of borrowed funds. Average interest-bearing deposit balances declined $42.8 million from the prior-year quarter, comprised primarily of a decline in higher-cost customer time deposits which decreased $62.7 million and brokered deposits which declined $16.2 million. These changes were partially offset by higher average balances of federal funds purchased, which increased to fund mortgage warehouse lending activity.\n\n \nThe reduction in funding costs more than offset the modest decline in earning asset yields, resulting in a six basis point increase in the net interest margin to 3.74% from 3.68% in the second quarter of 2025.\n\n \nCompared to the linked first quarter of 2026, net interest income decreased $0.2 million. Average interest-earning assets declined $43.0 million, or 1%, while yields on earning assets decreased two basis points. Average interest-bearing liabilities declined $16.0 million and the cost of those liabilities decreased two basis points to 1.92%. As a result, interest margin was essentially stable at 3.74% for the second quarter of 2026, compared to 3.75% for the first quarter of 2026.\n\n \nNet interest income for the first six months of 2026 increased $0.3 million to $61.0 million, compared to the same period in 2025. The increase resulted primarily from an improved net interest margin, driven by lower funding costs and partially offset by a modest decline in average earning assets. Average interest-earning assets decreased $19.6 million, or 1%, and the yield on those assets decreased nine basis points to 5.03%.\n\n \nFor the first six months of 2026, interest expense decreased $2.3 million to $21.1 million, compared to $23.4 million during the same period in 2025. The decrease was driven by a 23 basis point reduction in the cost of interest-bearing liabilities to 1.93%, partially offset by a $25.1 million increase in average interest-bearing liabilities. The reduction in funding costs contributed to a four basis point increase in net interest margin to 3.75% for the first six months of 2026, compared to 3.71% for the same period in 2025.\n\n \nAt June 30, 2026, approximately $457.5 million, or 19%, of the Company's loan portfolio consisted of mortgage warehouse facilities, which generally reprice immediately as interest rates change. In addition, approximately $214.4 million of collateralized loan obligations and other floating-rate securities within the available-for-sale portfolio continue to provide asset sensitivity through periodic rate resets.\n\n \nCredit Loss Expense \nThe credit loss expense on loans was $2.3 million for the second quarter of 2026, compared to $1.2 million for the second quarter of 2025. For the first six months of 2026, the provision for credit losses on loans was $2.4 million, compared to $3.2 million for the same period in 2025. A $2.5 million specific reserve established on an agricultural production loan during the second quarter of 2026 was the primary driver of the increase in credit loss expense for the quarterly comparison. Despite this reserve build, year-to-date credit loss expense benefited from a $6.1 million reduction in net charge-offs compared to the first six months of 2025.\n\n \nThe Company recorded a benefit for credit losses on unfunded commitments of $0.1 million during the second quarter of 2026 and a benefit of $0.1 million for the first six months of 2026, compared to a benefit of less than $0.1 million for the second quarter of 2025 and a provision of $0.1 million for the first six months of 2025.\n\n \nThe Company also recorded an immaterial benefit related to credit losses on held-to-maturity debt securities during the first six months of 2026. No provision for credit losses was recorded on available-for-sale debt securities during the periods presented. Although certain debt securities remained in an unrealized loss position, the declines in fair value were primarily attributable to changes in market interest rates and not to expected credit losses.\n\n \nNoninterest Income \nTotal noninterest income increased $0.6 million, or 8%, to $8.6 million in the second quarter of 2026 from $8.0 million in the linked quarter. The increase was driven primarily by a $1.8 million favorable change in earnings on separate account life insurance and an increase of $0.3 million in service charges and fees on deposits. This increase was partially offset by the absence of several non-recurring income items recognized during the first quarter of 2026, including a $0.4 million gain on the sale of fixed assets, a $0.4 million special FHLB dividend, and a $0.6 million increase in the fair value of bank stocks.\n\n \nCompared to the second quarter of 2025, total noninterest income was unchanged at $8.6 million. Favorable variances included a $0.4 million increase in earnings on separate account BOLI, a $0.1 million increase in service charges and fees on deposit accounts, and a modest increase in cash surrender value income from life insurance. These improvements were largely offset by a $0.6 million decrease in other income, mainly due to a decrease in gain on life insurance proceeds.\n\n \nFor the first six months of 2026, noninterest income increased $1.3 million, or 9%, to $16.5 million compared to $15.2 million for the same period in 2025. The increase was driven primarily by a $0.5 million increase in earnings on separate account life insurance, a $0.3 million increase in cash surrender value income from life insurance, a $0.2 million increase in service charges and fees on deposit accounts, and a $0.4 million favorable variance from gains on sales of fixed assets. These favorable changes were partially offset by lower gains on sale of investment securities.\n\n \nThe Company’s non‑qualified deferred compensation plan for officers and directors allows participants to defer a portion of their earnings and select from various hypothetical investment alternatives to determine their individual returns. The Company economically offsets this liability with separate account life insurance policies that are invested in similar underlying fund types within the life insurance policy. Because the deferred compensation liability and the separate account life insurance asset are not contractually linked, differences in balances, fund performance, and insurance costs can result in temporary timing mismatches between changes in separate account life insurance income and the related deferred compensation expense.\n\n \nEarnings on separate account life insurance were $1.4 million for the second quarter of 2026, compared to a loss of $0.4 million in the linked quarter and earnings of $1.0 million in the second quarter of 2025. For the first six months of 2026, earnings on separate account life insurance totaled $1.0 million, compared to $0.5 million for the same period in 2025. These changes reflect market-driven fluctuations in the value of the underlying investment alternatives and do not represent changes in the operating performance or credit quality of the Company.\n\n \nThe majority of the related deferred compensation expense or benefit is reported within professional services expense under deferred directors' fees, as it primarily relates to directors' deferred compensation elections. Deferred directors' fee expense was $1.0 million during the second quarter of 2026, compared to a benefit of $0.6 million in the linked quarter and expense of $0.9 million in the second quarter of 2025. For the first six months of 2026, deferred directors' fee expense totaled $0.5 million, compared to $0.5 million during the same period in 2025.\n\n \nNoninterest Expense \nTotal noninterest expense increased $1.7 million, or 8%, to $23.5 million during the second quarter of 2026 from $21.8 million in the linked first quarter of 2026 primarily due to deferred compensation expense described above.\n\n \nCompared to the second quarter of 2025, total noninterest expense decreased $0.3 million, or 1%. Salaries and benefits expense remained essentially unchanged from the prior year quarter. Other noninterest expense decreased $0.3 million, primarily due to lower deposit service costs and other operating expenses. These favorable variances were partially offset by higher deferred compensation expense, legal and accounting costs, and directors' fees.\n\n \nFor the first six months of 2026, noninterest expense decreased $0.9 million, or 2%, to $45.3 million from $46.2 million for the same period in 2025. Salaries and benefits decreased $0.3 million, while other noninterest expense declined $0.7 million. The improvement was primarily attributable to lower deposit service costs, lower operating expenses, and reduced sundry and teller expenses, partially offset by higher occupancy costs, legal and accounting expenses, and director-related costs. These results reflect management's continued focus on maintaining a relatively flat expense base while selectively investing in strategic growth initiatives, technology enhancements, regulatory compliance, and customer service capabilities.\n\n \nOverall full-time equivalent employees were 452 at June 30, 2026, as compared to 465 at December 31, 2025, and 494 at June 30, 2025.\n\n \nThe Company's effective tax rate was 25.3% for the second quarter of 2026, unchanged from the second quarter of 2025 and as compared to 25.2% in the linked first quarter of 2026. For the first six months of 2026, the effective tax rate was 25.2%, compared to 25.5% for the same period in 2025. The lower year-to-date effective tax rate reflects the continued benefit of tax-exempt income and tax credit investments as a percentage of pre-tax earnings.\n\n \nBalance Sheet Summary \nTotal assets decreased $108.7 million, or 3%, during the first six months of 2026 to $3.72 billion at June 30, 2026. The decline was primarily attributable to a $90.8 million decrease in gross loans and a $21.4 million decrease in investment securities, partially offset by a $7.1 million increase in cash and cash equivalents.\n\n \nThe decrease in gross loan balances compared to December 31, 2025, was primarily driven by a $60.9 million reduction in mortgage warehouse balances, reflecting normal fluctuations in mortgage origination activity and secondary market demand. Other changes in loan balances were primarily attributable to scheduled paydowns, payoffs, and normal customer activity. Despite the decline in period-end balances, mortgage warehouse average balances increased $8.0 million during the second quarter of 2026 compared to the linked quarter. Average balances of commercial real estate and commercial and industrial loans declined modestly during the quarter, while period-end balances remained relatively stable. As the quarter progressed, however, loan production strengthened significantly, reflecting a shift in momentum entering the third quarter of 2026. This improvement was particularly evident within the commercial real estate and commercial and industrial portfolios and resulted in an enhanced pipeline of lending opportunities entering the second half of the year.\n\n \nThe Company's loan portfolio remains diversified, with commercial real estate representing 57% of total loans, mortgage warehouse balances representing 19%, residential real estate comprising 14%, and other commercial loans representing 7% of the portfolio at June 30, 2026. Commercial real estate balances remained relatively stable during the first six months of the year despite elevated payoff activity, reflecting continued success in replacing runoff with new production.\n\n \nAs indicated in the loan rollforward table below, new credit extended for the second quarter of 2026 increased $41.6 million over the linked quarter to $49.4 million and increased $1.2 million over the same period in 2025. The Company also had $59.6 million in loan paydowns and maturities, a $27.4 million decline in line of credit utilization, and a decrease of $60.9 million in mortgage warehouse facility utilization for the first half of 2026.\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nLOAN ROLLFORWARD \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \nFor the six months ended: \n \n\n \n \n\n \n6/30/2026 \n \n\n \n3/31/2026 \n \n\n \n6/30/2025 \n \n\n \n6/30/2026 \n \n\n \n6/30/2025 \nGross loans beginning balance\n\n \n \n\n \n$\n\n \n2,466,891\n\n \n \n\n \n \n\n \n$\n\n \n2,546,880\n\n \n \n\n \n \n\n \n$\n\n \n2,306,762\n\n \n \n\n \n \n\n \n$\n\n \n2,546,880\n\n \n \n\n \n \n\n \n$\n\n \n2,331,341\n\n \n \n\n \nNew credit extended\n\n \n \n\n \n \n\n \n49,370\n\n \n \n\n \n \n\n \n \n\n \n7,811\n\n \n \n\n \n \n\n \n \n\n \n48,147\n\n \n \n\n \n \n\n \n \n\n \n57,181\n\n \n \n\n \n \n\n \n \n\n \n114,517\n\n \n \n\n \nChanges in line of credit utilization (1) \n \n\n \n \n\n \n(4,841\n\n \n)\n\n \n \n\n \n \n\n \n(22,592\n\n \n)\n\n \n \n\n \n \n\n \n2,587\n\n \n \n\n \n \n\n \n \n\n \n(27,433\n\n \n)\n\n \n \n\n \n \n\n \n(9,542\n\n \n)\n\n \nChange in mortgage warehouse\n\n \n \n\n \n \n\n \n(20,997\n\n \n)\n\n \n \n\n \n \n\n \n(39,880\n\n \n)\n\n \n \n\n \n \n\n \n118,665\n\n \n \n\n \n \n\n \n \n\n \n(60,877\n\n \n)\n\n \n \n\n \n \n\n \n75,496\n\n \n \n\n \nPay-downs, maturities, charge-offs and amortization\n\n \n \n\n \n \n\n \n(34,217\n\n \n)\n\n \n \n\n \n \n\n \n(25,328\n\n \n)\n\n \n \n\n \n \n\n \n(41,556\n\n \n)\n\n \n \n\n \n \n\n \n(59,545\n\n \n)\n\n \n \n\n \n \n\n \n(77,207\n\n \n)\n\n \nGross loans ending balance\n\n \n \n\n \n \n\n \n2,456,206\n\n \n \n\n \n \n\n \n \n\n \n2,466,891\n\n \n \n\n \n \n\n \n \n\n \n2,434,605\n\n \n \n\n \n \n\n \n$\n\n \n2,456,206\n\n \n \n\n \n \n\n \n$\n\n \n2,434,605\n\n \n \n\n \nDeferred costs and (fees), net\n\n \n \n\n \n \n\n \n(146\n\n \n)\n\n \n \n\n \n \n\n \n(97\n\n \n)\n\n \n \n\n \n \n\n \n4\n\n \n \n\n \n \n\n \n \n\n \n(146\n\n \n)\n\n \n \n\n \n \n\n \n4\n\n \n \n\n \nGross loans, amortized cost\n\n \n \n\n \n$\n\n \n2,456,060\n\n \n \n\n \n \n\n \n$\n\n \n2,466,794\n\n \n \n\n \n \n\n \n$\n\n \n2,434,609\n\n \n \n\n \n \n\n \n$\n\n \n2,456,060\n\n \n \n\n \n \n\n \n$\n\n \n2,434,609\n\n \n \n\n \n_______________________________ \n(1) \nChange does not include new balances on lines of credit extended during the respective periods as such balances are included as part of “New credit extended” line above.\n\n \nA summary of the Company’s unfunded commitments and utilization is presented below (dollars in thousands, unaudited):\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nJune 30, 2026 \n \n\n \nDecember 31, 2025 \n \n\n \nJune 30, 2025 \n \n\n \n \n\n \nLine\n Available (2) \n \n\n \nUtilization % \n \n\n \nLine\n Available (2) \n \n\n \nUtilization % \n \n\n \nLine\n Available (2) \n \n\n \nUtilization % \nReal estate:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nResidential real estate\n\n \n \n\n \n$\n\n \n12,457\n\n \n \n\n \n \n\n \n48.15\n\n \n%\n\n \n \n\n \n$\n\n \n15,726\n\n \n \n\n \n \n\n \n44.50\n\n \n%\n\n \n \n\n \n$\n\n \n18,792\n\n \n \n\n \n \n\n \n40.69\n\n \n%\n\n \nCommercial real estate\n\n \n \n\n \n \n\n \n20,230\n\n \n \n\n \n \n\n \n87.59\n\n \n%\n\n \n \n\n \n \n\n \n23,203\n\n \n \n\n \n \n\n \n86.93\n\n \n%\n\n \n \n\n \n \n\n \n29,150\n\n \n \n\n \n \n\n \n84.50\n\n \n%\n\n \nOther construction/land\n\n \n \n\n \n \n\n \n985\n\n \n \n\n \n \n\n \n92.15\n\n \n%\n\n \n \n\n \n \n\n \n2,634\n\n \n \n\n \n \n\n \n79.10\n\n \n%\n\n \n \n\n \n \n\n \n5,781\n\n \n \n\n \n \n\n \n54.22\n\n \n%\n\n \nFarmland\n\n \n \n\n \n \n\n \n3,372\n\n \n \n\n \n \n\n \n79.32\n\n \n%\n\n \n \n\n \n \n\n \n3,126\n\n \n \n\n \n \n\n \n80.20\n\n \n%\n\n \n \n\n \n \n\n \n4,968\n\n \n \n\n \n \n\n \n66.73\n\n \n%\n\n \nTotal real estate\n\n \n \n\n \n \n\n \n37,044\n\n \n \n\n \n \n\n \n82.84\n\n \n%\n\n \n \n\n \n \n\n \n44,689\n\n \n \n\n \n \n\n \n80.92\n\n \n%\n\n \n \n\n \n \n\n \n58,691\n\n \n \n\n \n \n\n \n76.27\n\n \n%\n\n \nOther commercial\n\n \n \n\n \n \n\n \n172,504\n\n \n \n\n \n \n\n \n48.94\n\n \n%\n\n \n \n\n \n \n\n \n187,084\n\n \n \n\n \n \n\n \n48.81\n\n \n%\n\n \n \n\n \n \n\n \n202,473\n\n \n \n\n \n \n\n \n44.39\n\n \n%\n\n \nConsumer\n\n \n \n\n \n \n\n \n4,461\n\n \n \n\n \n \n\n \n22.62\n\n \n%\n\n \n \n\n \n \n\n \n4,580\n\n \n \n\n \n \n\n \n24.29\n\n \n%\n\n \n \n\n \n \n\n \n4,789\n\n \n \n\n \n \n\n \n23.81\n\n \n%\n\n \nSubtotal (1) \n \n\n \n \n\n \n214,009\n\n \n \n\n \n \n\n \n61.75\n\n \n%\n\n \n \n\n \n \n\n \n236,353\n\n \n \n\n \n \n\n \n61.00\n\n \n%\n\n \n \n\n \n \n\n \n265,953\n\n \n \n\n \n \n\n \n56.94\n\n \n%\n\n \nMortgage warehouse facilities\n\n \n \n\n \n \n\n \n336,543\n\n \n \n\n \n \n\n \n57.61\n\n \n%\n\n \n \n\n \n \n\n \n247,667\n\n \n \n\n \n \n\n \n67.67\n\n \n%\n\n \n \n\n \n \n\n \n334,604\n\n \n \n\n \n \n\n \n54.57\n\n \n%\n\n \nOverdrafts - Commercial and Consumer\n\n \n \n\n \n \n\n \n66,452\n\n \n \n\n \n \n\n \n1.46\n\n \n%\n\n \n \n\n \n \n\n \n69,112\n\n \n \n\n \n \n\n \n1.40\n\n \n%\n\n \n \n\n \n \n\n \n69,944\n\n \n \n\n \n \n\n \n1.24\n\n \n%\n\n \nTotal\n\n \n \n\n \n$\n\n \n617,004\n\n \n \n\n \n \n\n \n56.58\n\n \n%\n\n \n \n\n \n$\n\n \n553,132\n\n \n \n\n \n \n\n \n61.64\n\n \n%\n\n \n \n\n \n$\n\n \n670,501\n\n \n \n\n \n \n\n \n52.95\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nUnused commitment as a percent of gross loans, amortized cost\n\n \n \n\n \n \n\n \n25.12\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n21.72\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n27.54\n\n \n%\n\n \n \n\n \n \n\n \nUnused mortgage warehouse facilities as percent of gross loans, amortized cost\n\n \n \n\n \n \n\n \n13.70\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n9.72\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n13.74\n\n \n%\n\n \n \n\n \n \n\n \n_______________________________ \n(1) \nExcludes mortgage warehouse facilities and overdraft lines, both of which are unconditionally cancellable.\n\n (2) \nRepresents unfunded loan commitments available to customers.\n\n \nTotal deposits increased $54.6 million, or 2%, during the first six months of 2026. Core non-maturity deposits increased $67.8 million, or 3%, while customer time deposits decreased $10.3 million, or 2%. Wholesale brokered deposits decreased $2.9 million during the period due to growth in core deposits. Noninterest-bearing deposits increased $30.7 million during the first six months of 2026 and represented 35.0% of total deposits at June 30, 2026, compared to 34.6% at December 31, 2025, and 35.8% at June 30, 2025. The Company's strong base of noninterest-bearing deposits continued to support a favorable funding mix and contributed to lower funding costs.\n\n \nTotal borrowed funds totaled $363.0 million at June 30, 2026, consisting of $122.4 million in customer repurchase agreements, $120.0 million in overnight borrowings, $35.0 million in FHLB term advances, $49.5 million in long-term debt, and $36.1 million in subordinated debentures. Compared to December 31, 2025, total borrowed funds decreased $156.1 million, primarily due to a reduction in overnight borrowings and FHLB term advances as mortgage warehouse balances declined.\n\n \nOverall uninsured deposits are estimated to be approximately $734.2 million, or 25% of total deposit balances, excluding public agency deposits that are subject to collateralization through a letter of credit issued by the FHLB. In addition, uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep (ICS) account or a time deposit through the Certificate of Deposit Account Registry System (CDARS). IntraFi allows for up to $285 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such a customer desired to have such pass-through insurance. The Bank maintains a diversified deposit base with no significant customer concentrations and does not bank any cryptocurrency companies. At June 30, 2026, the Company had approximately 114,000 accounts and the 25 largest deposit balance customers had balances of approximately 11% of overall deposits . During the second quarter of 2026, there were seasonality fluctuations in the normal course of business, and one new customer addition to the composition of our 25 largest deposit balance customers.\n\n \nThe Company continues to have substantial liquidity which is managed daily. At June 30, 2026, and December 31, 2025, the Company had the following sources of primary and secondary liquidity (Dollars in Thousands):\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nPrimary and secondary liquidity sources \n \n\n \n \n\n \n6/30/2026 \n \n\n \n12/31/2025 \nCash and cash equivalents\n\n \n \n\n \n$\n\n \n142,695\n\n \n \n\n \n$\n\n \n135,628\n\n \nUnpledged investment securities\n\n \n \n\n \n \n\n \n528,091\n\n \n \n\n \n \n\n \n551,406\n\n \nExcess pledged securities\n\n \n \n\n \n \n\n \n52,540\n\n \n \n\n \n \n\n \n35,620\n\n \nFHLB borrowing availability\n\n \n \n\n \n \n\n \n611,578\n\n \n \n\n \n \n\n \n629,481\n\n \nUnsecured lines of credit\n\n \n \n\n \n \n\n \n366,785\n\n \n \n\n \n \n\n \n250,785\n\n \nFunds available through fed discount window\n\n \n \n\n \n \n\n \n243,782\n\n \n \n\n \n \n\n \n254,908\n\n \nTotals \n \n\n \n$ \n1,945,471 \n \n\n \n$ \n1,857,828 \nTotal capital was $366.9 million at June 30, 2026, reflecting an increase of $2.0 million compared to $364.9 million at December 31, 2025. The increase in equity during the first six months of 2026 was primarily attributable to $22.4 million in net income, partially offset by $14.4 million in share repurchases, $6.8 million in cash dividends declared, and a $1.0 million increase in accumulated other comprehensive loss, primarily related to changes in the fair value of investment securities. The remaining difference was related to activity from stock options and restricted stock during the year.\n\n \nAsset Quality \nTotal nonperforming assets, comprised of nonperforming loans and foreclosed assets, decreased $4.3 million to $10.5 million at June 30, 2026, from $14.8 million at December 31, 2025. The Company's ratio of nonperforming loans to gross loans improved to 0.43% at June 30, 2026, compared to 0.52% at December 31, 2025. The decline in nonperforming assets was primarily attributable to reductions in nonperforming commercial and agricultural credits, as well as the timely resolution and sale of an OREO asset in March 2026. Management individually evaluates all nonperforming loans for expected credit losses on a quarterly basis and believes the allowance for credit losses established for such loans is appropriate.\n\n \nAt June 30, 2026, loans past due 30 to 89 days and still accruing totaled $5.4 million compared to $6.8 million at December 31, 2025. Approximately $4.6 million of this balance related to a single commercial real estate loan that became 30 days past due near the end of the second quarter. Management believes the loan is well secured, with an estimated current loan-to-value ratio of approximately 51%, and therefore does not consider the credit to present a significant loss exposure.\n\n \nThe allowance for credit losses on loans increased $2.1 million to $23.6 million at June 30, 2026, compared to $21.5 million at December 31, 2025. The increase was primarily attributable to a $2.5 million reserve on a single agricultural loan, described earlier. Despite the higher allowance balance, asset quality metrics remained strong, with net charge-offs totaling $0.2 million during the first six months of 2026 compared to $6.3 million during the same period in 2025. The allowance for credit losses represented 0.96% of gross loans at June 30, 2026, compared to 0.84% at December 31, 2025.\n\n \nThe following tables highlight the coverage ratios by loan category at June 30, 2026, March 31, 2026, and December 31, 2025:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nAllowance for Credit Losses on Loans by Category \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \nAs of June 30, 2026 \n \n\n \n \n\n \nBalance \n \n\n \nTotal\n Allowance \n \n\n \nPercent of\n Portfolio \n \n\n \nCoverage Ratio\n (1) \nReal estate:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCommercial real estate\n\n \n \n\n \n$\n\n \n1,389,730\n\n \n \n\n \n$\n\n \n15,913\n\n \n \n\n \n56.58\n\n \n%\n\n \n \n\n \n1.15\n\n \n%\n\n \nOther construction/land\n\n \n \n\n \n \n\n \n15,851\n\n \n \n\n \n \n\n \n307\n\n \n \n\n \n0.65\n\n \n%\n\n \n \n\n \n1.94\n\n \n%\n\n \nFarmland\n\n \n \n\n \n \n\n \n65,759\n\n \n \n\n \n \n\n \n532\n\n \n \n\n \n2.68\n\n \n%\n\n \n \n\n \n0.81\n\n \n%\n\n \nTotal real estate (2) \n \n\n \n \n\n \n1,471,340\n\n \n \n\n \n \n\n \n16,752\n\n \n \n\n \n59.91\n\n \n%\n\n \n \n\n \n1.14\n\n \n%\n\n \nOther Commercial\n\n \n \n\n \n \n\n \n179,164\n\n \n \n\n \n \n\n \n4,895\n\n \n \n\n \n7.29\n\n \n%\n\n \n \n\n \n2.73\n\n \n%\n\n \nConsumer loans (including overdrafts)\n\n \n \n\n \n \n\n \n2,524\n\n \n \n\n \n \n\n \n108\n\n \n \n\n \n0.10\n\n \n%\n\n \n \n\n \n4.28\n\n \n%\n\n \nSubtotal (2) (3) \n \n\n \n \n\n \n1,653,028\n\n \n \n\n \n \n\n \n21,755\n\n \n \n\n \n67.30\n\n \n%\n\n \n \n\n \n1.32\n\n \n%\n\n \nResidential real estate\n\n \n \n\n \n \n\n \n345,575\n\n \n \n\n \n \n\n \n1,320\n\n \n \n\n \n14.07\n\n \n%\n\n \n \n\n \n0.38\n\n \n%\n\n \nMortgage warehouse facilities\n\n \n \n\n \n \n\n \n457,457\n\n \n \n\n \n \n\n \n525\n\n \n \n\n \n18.63\n\n \n%\n\n \n \n\n \n0.11\n\n \n%\n\n \nGross loans, amortized cost \n \n\n \n$\n\n \n2,456,060\n\n \n \n\n \n$\n\n \n23,600\n\n \n \n\n \n100.00\n\n \n%\n\n \n \n\n \n0.96\n\n \n%\n\n \n \n\n \n \n\n \nAs of March 31, 2026 \n \n\n \n \n\n \nBalance \n \n\n \nTotal\n Allowance \n \n\n \nPercent of\n Portfolio \n \n\n \nCoverage Ratio\n (1) \nReal estate:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCommercial real estate\n\n \n \n\n \n$\n\n \n1,381,770\n\n \n \n\n \n$\n\n \n15,977\n\n \n \n\n \n56.01\n\n \n%\n\n \n \n\n \n1.16\n\n \n%\n\n \nOther construction/land\n\n \n \n\n \n \n\n \n15,242\n\n \n \n\n \n \n\n \n299\n\n \n \n\n \n0.62\n\n \n%\n\n \n \n\n \n1.96\n\n \n%\n\n \nFarmland\n\n \n \n\n \n \n\n \n66,218\n\n \n \n\n \n \n\n \n542\n\n \n \n\n \n2.68\n\n \n%\n\n \n \n\n \n0.82\n\n \n%\n\n \nTotal real estate (2) \n \n\n \n \n\n \n1,463,230\n\n \n \n\n \n \n\n \n16,818\n\n \n \n\n \n59.32\n\n \n%\n\n \n \n\n \n1.15\n\n \n%\n\n \nOther Commercial\n\n \n \n\n \n \n\n \n172,653\n\n \n \n\n \n \n\n \n2,351\n\n \n \n\n \n7.00\n\n \n%\n\n \n \n\n \n1.36\n\n \n%\n\n \nConsumer loans (including overdrafts)\n\n \n \n\n \n \n\n \n2,597\n\n \n \n\n \n \n\n \n109\n\n \n \n\n \n0.11\n\n \n%\n\n \n \n\n \n4.20\n\n \n%\n\n \nSubtotal (2) (3) \n \n\n \n \n\n \n1,638,480\n\n \n \n\n \n \n\n \n19,278\n\n \n \n\n \n66.42\n\n \n%\n\n \n \n\n \n1.18\n\n \n%\n\n \nResidential real estate\n\n \n \n\n \n \n\n \n349,860\n\n \n \n\n \n \n\n \n1,368\n\n \n \n\n \n14.18\n\n \n%\n\n \n \n\n \n0.39\n\n \n%\n\n \nMortgage warehouse facilities\n\n \n \n\n \n \n\n \n478,454\n\n \n \n\n \n \n\n \n604\n\n \n \n\n \n19.40\n\n \n%\n\n \n \n\n \n0.13\n\n \n%\n\n \nGross loans, amortized cost \n \n\n \n$\n\n \n2,466,794\n\n \n \n\n \n$\n\n \n21,250\n\n \n \n\n \n100.00\n\n \n%\n\n \n \n\n \n0.86\n\n \n%\n\n \n \n\n \n \n\n \nAs of December 31, 2025 \n \n\n \n \n\n \nBalance \n \n\n \nTotal\n Allowance \n \n\n \nPercent of\n Portfolio \n \n\n \nCoverage Ratio\n (1) \nReal estate:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCommercial real estate\n\n \n \n\n \n$\n\n \n1,390,890\n\n \n \n\n \n$\n\n \n16,354\n\n \n \n\n \n54.61\n\n \n%\n\n \n \n\n \n1.18\n\n \n%\n\n \nOther construction/land\n\n \n \n\n \n \n\n \n14,414\n\n \n \n\n \n \n\n \n296\n\n \n \n\n \n0.57\n\n \n%\n\n \n \n\n \n2.05\n\n \n%\n\n \nFarmland\n\n \n \n\n \n \n\n \n68,307\n\n \n \n\n \n \n\n \n496\n\n \n \n\n \n2.68\n\n \n%\n\n \n \n\n \n0.73\n\n \n%\n\n \nTotal real estate (2) \n \n\n \n \n\n \n1,473,611\n\n \n \n\n \n \n\n \n17,146\n\n \n \n\n \n57.86\n\n \n%\n\n \n \n\n \n1.16\n\n \n%\n\n \nOther Commercial\n\n \n \n\n \n \n\n \n192,577\n\n \n \n\n \n \n\n \n2,146\n\n \n \n\n \n7.56\n\n \n%\n\n \n \n\n \n1.11\n\n \n%\n\n \nConsumer loans (including overdrafts)\n\n \n \n\n \n \n\n \n2,810\n\n \n \n\n \n \n\n \n112\n\n \n \n\n \n0.11\n\n \n%\n\n \n \n\n \n3.99\n\n \n%\n\n \nSubtotal (2) (3) \n \n\n \n \n\n \n1,668,998\n\n \n \n\n \n \n\n \n19,404\n\n \n \n\n \n65.53\n\n \n%\n\n \n \n\n \n1.16\n\n \n%\n\n \nResidential real estate\n\n \n \n\n \n \n\n \n359,514\n\n \n \n\n \n \n\n \n1,411\n\n \n \n\n \n14.12\n\n \n%\n\n \n \n\n \n0.39\n\n \n%\n\n \nMortgage warehouse facilities\n\n \n \n\n \n \n\n \n518,333\n\n \n \n\n \n \n\n \n665\n\n \n \n\n \n20.35\n\n \n%\n\n \n \n\n \n0.13\n\n \n%\n\n \nGross loans, amortized cost \n \n\n \n$\n\n \n2,546,845\n\n \n \n\n \n$\n\n \n21,480\n\n \n \n\n \n100.00\n\n \n%\n\n \n \n\n \n0.84\n\n \n%\n\n \n_______________________________ \n(1) \nCoverage ratio equals allowance for credit losses on loans divided by amortized cost.\n\n (2) \nDoes not include residential real estate.\n\n (3) \nDoes not include mortgage warehouse facilities.\n\n \nMortgage warehouse balances historically have incurred nominal losses and therefore carry a significantly lower reserve than other loan categories. At June 30, 2026, mortgage warehouse balances totaled $457.5 million and represented approximately 19% of the loan portfolio, while the related allowance was $0.5 million, or 0.11% of outstanding balances. Excluding mortgage warehouse balances and residential real estate loans, the allowance for credit losses as a percentage of gross loans was 1.32% at June 30, 2026, compared to 1.18% at March 31, 2026, and 1.16% at December 31, 2025.\n\n \nThe Company's largest loan segment, commercial real estate, continues to maintain a strong reserve coverage ratio of 1.15% at June 30, 2026. The most significant change in reserve levels occurred within the other commercial loan portfolio, where the allowance increased to $4.9 million, or 2.73% of loans, compared to $2.4 million, or 1.36%, at March 31, 2026. The increase primarily reflects an increase in specific reserves discussed above as well as changes in portfolio composition and management's assessment of credit risk within the segment.\n\n \nManagement's detailed analysis indicates that the Company's allowance for credit losses on loans should be sufficient to cover credit losses for the life of the loans outstanding as of June 30, 2026, but no assurance can be given that the Company will not experience substantial future losses relative to the size of the loan and lease loss allowance. The Company calculates the allowance for credit losses using a combination of quantitative and qualitative factors by call report category.\n\n \nAbout Sierra Bancorp\n\n \nSierra Bancorp is the holding Company for Bank of the Sierra ( www.bankofthesierra.com ), which is in its 49 th year of operations and strives to be the preeminent bank headquartered in the South San Joaquin Valley.\n\n \nBank of the Sierra offers a broad range of retail and commercial banking services through its 34 full-service branches located within the counties of Tulare, Kern, Kings, Fresno, Ventura, San Luis Obispo, and Santa Barbara. The Bank also maintains an online branch and provides specialized lending services through its mortgage warehouse division. Bank of the Sierra is recognized as one of the strongest and top-performing community banks in the country, with a 5-star rating from Bauer Financial.\n\n \nForward-Looking Statements\n\n \nThe statements contained in this release that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future de­velopments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and local economies, loan portfolio performance, the Company's ability to attract and retain skilled employees, customers' service expectations, the Company's ability to successfully de­ploy new technology, the success of acquisitions and branch expansion, changes in interest rates, and other factors detailed in the Company's SEC filings, including the \"Risk Factors\" and \"Management's Discussion and Analysis of Financial Condition and Results of Operations\" sections of the Company's most recent Form 10‑K and Form 10‑Q. \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nSTATEMENT OF CONDITION \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nASSETS \n \n\n \n \n\n \n6/30/2026 \n3/31/2026 \n \n\n \n12/31/2025 \n9/30/2025 \n \n\n \n6/30/2025 \nCash and due from banks\n\n \n \n\n \n$\n\n \n142,695\n\n \n \n\n \n \n\n \n$\n\n \n156,372\n\n \n \n\n \n \n\n \n$\n\n \n135,628\n\n \n \n\n \n \n\n \n$\n\n \n95,501\n\n \n \n\n \n \n\n \n$\n\n \n130,012\n\n \n \n\n \nInvestment securities\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nAvailable-for-sale, at fair value\n\n \n \n\n \n \n\n \n611,822\n\n \n \n\n \n \n\n \n \n\n \n615,401\n\n \n \n\n \n \n\n \n \n\n \n625,330\n\n \n \n\n \n \n\n \n \n\n \n596,933\n\n \n \n\n \n \n\n \n \n\n \n668,834\n\n \n \n\n \nHeld-to-maturity, amortized cost, net of allowance for credit losses\n\n \n \n\n \n \n\n \n282,880\n\n \n \n\n \n \n\n \n \n\n \n287,583\n\n \n \n\n \n \n\n \n \n\n \n290,811\n\n \n \n\n \n \n\n \n \n\n \n294,511\n\n \n \n\n \n \n\n \n \n\n \n298,484\n\n \n \n\n \nTotal investment securities\n\n \n \n\n \n \n\n \n894,702\n\n \n \n\n \n \n\n \n \n\n \n902,984\n\n \n \n\n \n \n\n \n \n\n \n916,141\n\n \n \n\n \n \n\n \n \n\n \n891,444\n\n \n \n\n \n \n\n \n \n\n \n967,318\n\n \n \n\n \nReal estate loans\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nResidential real estate\n\n \n \n\n \n \n\n \n345,575\n\n \n \n\n \n \n\n \n \n\n \n349,860\n\n \n \n\n \n \n\n \n \n\n \n359,514\n\n \n \n\n \n \n\n \n \n\n \n364,277\n\n \n \n\n \n \n\n \n \n\n \n371,415\n\n \n \n\n \nCommercial real estate\n\n \n \n\n \n \n\n \n1,389,730\n\n \n \n\n \n \n\n \n \n\n \n1,381,770\n\n \n \n\n \n \n\n \n \n\n \n1,390,890\n\n \n \n\n \n \n\n \n \n\n \n1,404,681\n\n \n \n\n \n \n\n \n \n\n \n1,392,075\n\n \n \n\n \nOther construction/land\n\n \n \n\n \n \n\n \n15,851\n\n \n \n\n \n \n\n \n \n\n \n15,242\n\n \n \n\n \n \n\n \n \n\n \n14,414\n\n \n \n\n \n \n\n \n \n\n \n13,420\n\n \n \n\n \n \n\n \n \n\n \n11,662\n\n \n \n\n \nFarmland\n\n \n \n\n \n \n\n \n65,759\n\n \n \n\n \n \n\n \n \n\n \n66,218\n\n \n \n\n \n \n\n \n \n\n \n68,307\n\n \n \n\n \n \n\n \n \n\n \n67,860\n\n \n \n\n \n \n\n \n \n\n \n67,967\n\n \n \n\n \nTotal real estate loans\n\n \n \n\n \n \n\n \n1,816,915\n\n \n \n\n \n \n\n \n \n\n \n1,813,090\n\n \n \n\n \n \n\n \n \n\n \n1,833,125\n\n \n \n\n \n \n\n \n \n\n \n1,850,238\n\n \n \n\n \n \n\n \n \n\n \n1,843,119\n\n \n \n\n \nOther commercial\n\n \n \n\n \n \n\n \n179,164\n\n \n \n\n \n \n\n \n \n\n \n172,653\n\n \n \n\n \n \n\n \n \n\n \n192,577\n\n \n \n\n \n \n\n \n \n\n \n185,958\n\n \n \n\n \n \n\n \n \n\n \n186,620\n\n \n \n\n \nMortgage warehouse facilities\n\n \n \n\n \n \n\n \n457,457\n\n \n \n\n \n \n\n \n \n\n \n478,454\n\n \n \n\n \n \n\n \n \n\n \n518,333\n\n \n \n\n \n \n\n \n \n\n \n452,683\n\n \n \n\n \n \n\n \n \n\n \n401,896\n\n \n \n\n \nConsumer loans\n\n \n \n\n \n \n\n \n2,524\n\n \n \n\n \n \n\n \n \n\n \n2,597\n\n \n \n\n \n \n\n \n \n\n \n2,810\n\n \n \n\n \n \n\n \n \n\n \n2,909\n\n \n \n\n \n \n\n \n \n\n \n2,974\n\n \n \n\n \nGross loans, amortized cost\n\n \n \n\n \n \n\n \n2,456,060\n\n \n \n\n \n \n\n \n \n\n \n2,466,794\n\n \n \n\n \n \n\n \n \n\n \n2,546,845\n\n \n \n\n \n \n\n \n \n\n \n2,491,788\n\n \n \n\n \n \n\n \n \n\n \n2,434,609\n\n \n \n\n \nAllowance for credit losses on loans\n\n \n \n\n \n \n\n \n(23,600\n\n \n)\n\n \n \n\n \n \n\n \n(21,250\n\n \n)\n\n \n \n\n \n \n\n \n(21,480\n\n \n)\n\n \n \n\n \n \n\n \n(25,180\n\n \n)\n\n \n \n\n \n \n\n \n(21,680\n\n \n)\n\n \nNet loans\n\n \n \n\n \n \n\n \n2,432,460\n\n \n \n\n \n \n\n \n \n\n \n2,445,544\n\n \n \n\n \n \n\n \n \n\n \n2,525,365\n\n \n \n\n \n \n\n \n \n\n \n2,466,608\n\n \n \n\n \n \n\n \n \n\n \n2,412,929\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nBank premises and equipment\n\n \n \n\n \n \n\n \n14,053\n\n \n \n\n \n \n\n \n \n\n \n14,447\n\n \n \n\n \n \n\n \n \n\n \n14,974\n\n \n \n\n \n \n\n \n \n\n \n15,056\n\n \n \n\n \n \n\n \n \n\n \n15,285\n\n \n \n\n \nOther assets\n\n \n \n\n \n \n\n \n236,701\n\n \n \n\n \n \n\n \n \n\n \n235,115\n\n \n \n\n \n \n\n \n \n\n \n237,171\n\n \n \n\n \n \n\n \n \n\n \n240,768\n\n \n \n\n \n \n\n \n \n\n \n244,758\n\n \n \n\n \nTotal assets \n \n\n \n$ \n3,720,611 \n \n\n \n \n\n \n$ \n3,754,462 \n \n\n \n \n\n \n$ \n3,829,279 \n \n\n \n \n\n \n$ \n3,709,377 \n \n\n \n \n\n \n$ \n3,770,302 \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nLIABILITIES AND CAPITAL \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nNoninterest demand deposits\n\n \n \n\n \n$\n\n \n1,026,319\n\n \n \n\n \n \n\n \n$\n\n \n1,028,678\n\n \n \n\n \n \n\n \n$\n\n \n995,623\n\n \n \n\n \n \n\n \n$\n\n \n1,072,927\n\n \n \n\n \n \n\n \n$\n\n \n1,065,742\n\n \n \n\n \nInterest-bearing transaction accounts\n\n \n \n\n \n \n\n \n591,515\n\n \n \n\n \n \n\n \n \n\n \n604,016\n\n \n \n\n \n \n\n \n \n\n \n581,746\n\n \n \n\n \n \n\n \n \n\n \n635,279\n\n \n \n\n \n \n\n \n \n\n \n603,294\n\n \n \n\n \nSavings deposits\n\n \n \n\n \n \n\n \n364,455\n\n \n \n\n \n \n\n \n \n\n \n364,830\n\n \n \n\n \n \n\n \n \n\n \n365,064\n\n \n \n\n \n \n\n \n \n\n \n357,107\n\n \n \n\n \n \n\n \n \n\n \n352,803\n\n \n \n\n \nMoney market deposits\n\n \n \n\n \n \n\n \n179,706\n\n \n \n\n \n \n\n \n \n\n \n153,438\n\n \n \n\n \n \n\n \n \n\n \n151,760\n\n \n \n\n \n \n\n \n \n\n \n156,255\n\n \n \n\n \n \n\n \n \n\n \n148,084\n\n \n \n\n \nCustomer time deposits\n\n \n \n\n \n \n\n \n451,819\n\n \n \n\n \n \n\n \n \n\n \n454,459\n\n \n \n\n \n \n\n \n \n\n \n462,153\n\n \n \n\n \n \n\n \n \n\n \n476,242\n\n \n \n\n \n \n\n \n \n\n \n514,596\n\n \n \n\n \nBrokered deposits\n\n \n \n\n \n \n\n \n317,177\n\n \n \n\n \n \n\n \n \n\n \n320,385\n\n \n \n\n \n \n\n \n \n\n \n320,090\n\n \n \n\n \n \n\n \n \n\n \n234,950\n\n \n \n\n \n \n\n \n \n\n \n289,950\n\n \n \n\n \nTotal deposits\n\n \n \n\n \n \n\n \n2,930,991\n\n \n \n\n \n \n\n \n \n\n \n2,925,806\n\n \n \n\n \n \n\n \n \n\n \n2,876,436\n\n \n \n\n \n \n\n \n \n\n \n2,932,760\n\n \n \n\n \n \n\n \n \n\n \n2,974,469\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nRepurchase agreements\n\n \n \n\n \n \n\n \n122,364\n\n \n \n\n \n \n\n \n \n\n \n127,811\n\n \n \n\n \n \n\n \n \n\n \n130,853\n\n \n \n\n \n \n\n \n \n\n \n125,749\n\n \n \n\n \n \n\n \n \n\n \n126,509\n\n \n \n\n \nLong-term debt\n\n \n \n\n \n \n\n \n49,528\n\n \n \n\n \n \n\n \n \n\n \n49,506\n\n \n \n\n \n \n\n \n \n\n \n49,483\n\n \n \n\n \n \n\n \n \n\n \n49,461\n\n \n \n\n \n \n\n \n \n\n \n49,438\n\n \n \n\n \nSubordinated debentures\n\n \n \n\n \n \n\n \n36,106\n\n \n \n\n \n \n\n \n \n\n \n36,061\n\n \n \n\n \n \n\n \n \n\n \n36,017\n\n \n \n\n \n \n\n \n \n\n \n35,972\n\n \n \n\n \n \n\n \n \n\n \n35,928\n\n \n \n\n \nOther interest-bearing liabilities\n\n \n \n\n \n \n\n \n155,000\n\n \n \n\n \n \n\n \n \n\n \n185,000\n\n \n \n\n \n \n\n \n \n\n \n302,700\n\n \n \n\n \n \n\n \n \n\n \n135,000\n\n \n \n\n \n \n\n \n \n\n \n154,400\n\n \n \n\n \nTotal deposits and interest-bearing liabilities\n\n \n \n\n \n \n\n \n3,293,989\n\n \n \n\n \n \n\n \n \n\n \n3,324,184\n\n \n \n\n \n \n\n \n \n\n \n3,395,489\n\n \n \n\n \n \n\n \n \n\n \n3,278,942\n\n \n \n\n \n \n\n \n \n\n \n3,340,744\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nAllowance for credit losses on unfunded loan commitments\n\n \n \n\n \n \n\n \n570\n\n \n \n\n \n \n\n \n \n\n \n660\n\n \n \n\n \n \n\n \n \n\n \n710\n\n \n \n\n \n \n\n \n \n\n \n790\n\n \n \n\n \n \n\n \n \n\n \n810\n\n \n \n\n \nOther liabilities\n\n \n \n\n \n \n\n \n59,155\n\n \n \n\n \n \n\n \n \n\n \n65,904\n\n \n \n\n \n \n\n \n \n\n \n68,217\n\n \n \n\n \n \n\n \n \n\n \n69,562\n\n \n \n\n \n \n\n \n \n\n \n73,041\n\n \n \n\n \nTotal capital\n\n \n \n\n \n \n\n \n366,897\n\n \n \n\n \n \n\n \n \n\n \n363,714\n\n \n \n\n \n \n\n \n \n\n \n364,863\n\n \n \n\n \n \n\n \n \n\n \n360,083\n\n \n \n\n \n \n\n \n \n\n \n355,707\n\n \n \n\n \nTotal liabilities and capital \n \n\n \n$ \n3,720,611 \n \n\n \n \n\n \n$ \n3,754,462 \n \n\n \n \n\n \n$ \n3,829,279 \n \n\n \n \n\n \n$ \n3,709,377 \n \n\n \n \n\n \n$ \n3,770,302 \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nGOODWILL AND INTANGIBLE ASSETS \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n12/31/2025 \n \n\n \n \n\n \n9/30/2025 \n \n\n \n \n\n \n6/30/2025 \nGoodwill\n\n \n \n\n \n$\n\n \n27,357\n\n \n \n\n \n \n\n \n$\n\n \n27,357\n\n \n \n\n \n \n\n \n$\n\n \n27,357\n\n \n \n\n \n \n\n \n$\n\n \n27,357\n\n \n \n\n \n \n\n \n$\n\n \n27,357\n\n \n \n\n \nCore deposit intangible\n\n \n \n\n \n \n\n \n—\n\n \n \n\n \n \n\n \n \n\n \n13\n\n \n \n\n \n \n\n \n \n\n \n52\n\n \n \n\n \n \n\n \n \n\n \n132\n\n \n \n\n \n \n\n \n \n\n \n294\n\n \n \n\n \nTotal intangible assets \n \n\n \n$ \n27,357 \n \n\n \n \n\n \n$ \n27,370 \n \n\n \n \n\n \n$ \n27,409 \n \n\n \n \n\n \n$ \n27,489 \n \n\n \n \n\n \n$ \n27,651 \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCREDIT QUALITY \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n12/31/2025 \n \n\n \n \n\n \n9/30/2025 \n \n\n \n \n\n \n6/30/2025 \nNonperforming loans\n\n \n \n\n \n$\n\n \n10,544\n\n \n \n\n \n \n\n \n$\n\n \n10,410\n\n \n \n\n \n \n\n \n$\n\n \n13,231\n\n \n \n\n \n \n\n \n$\n\n \n14,006\n\n \n \n\n \n \n\n \n$\n\n \n14,981\n\n \n \n\n \nForeclosed assets\n\n \n \n\n \n \n\n \n—\n\n \n \n\n \n \n\n \n \n\n \n—\n\n \n \n\n \n \n\n \n \n\n \n1,565\n\n \n \n\n \n \n\n \n \n\n \n1,839\n\n \n \n\n \n \n\n \n \n\n \n—\n\n \n \n\n \nTotal nonperforming assets \n \n\n \n$ \n10,544 \n \n\n \n \n\n \n$ \n10,410 \n \n\n \n \n\n \n$ \n14,796 \n \n\n \n \n\n \n$ \n15,845 \n \n\n \n \n\n \n$ \n14,981 \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nQuarterly net (recoveries) charge offs\n\n \n \n\n \n$\n\n \n(67\n\n \n)\n\n \n \n\n \n$\n\n \n307\n\n \n \n\n \n \n\n \n$\n\n \n2,915\n\n \n \n\n \n \n\n \n$\n\n \n209\n\n \n \n\n \n \n\n \n$\n\n \n6,580\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nPast due and still accruing (30-89)\n\n \n \n\n \n$\n\n \n5,424\n\n \n \n\n \n \n\n \n$\n\n \n907\n\n \n \n\n \n \n\n \n$\n\n \n6,835\n\n \n \n\n \n \n\n \n$\n\n \n187\n\n \n \n\n \n \n\n \n$\n\n \n3,033\n\n \n \n\n \nClassified loans\n\n \n \n\n \n$\n\n \n29,304\n\n \n \n\n \n \n\n \n$\n\n \n31,595\n\n \n \n\n \n \n\n \n$\n\n \n31,433\n\n \n \n\n \n \n\n \n$\n\n \n32,111\n\n \n \n\n \n \n\n \n$\n\n \n35,700\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nNonperforming loans / gross loans, amortized cost\n\n \n \n\n \n \n\n \n0.43\n\n \n%\n\n \n \n\n \n \n\n \n0.42\n\n \n%\n\n \n \n\n \n \n\n \n0.52\n\n \n%\n\n \n \n\n \n \n\n \n0.56\n\n \n%\n\n \n \n\n \n \n\n \n0.62\n\n \n%\n\n \nNPA's / loans plus foreclosed assets\n\n \n \n\n \n \n\n \n0.43\n\n \n%\n\n \n \n\n \n \n\n \n0.42\n\n \n%\n\n \n \n\n \n \n\n \n0.58\n\n \n%\n\n \n \n\n \n \n\n \n0.64\n\n \n%\n\n \n \n\n \n \n\n \n0.62\n\n \n%\n\n \nAllowance for credit losses on loans / gross loans, amortized cost\n\n \n \n\n \n \n\n \n0.96\n\n \n%\n\n \n \n\n \n \n\n \n0.86\n\n \n%\n\n \n \n\n \n \n\n \n0.84\n\n \n%\n\n \n \n\n \n \n\n \n1.01\n\n \n%\n\n \n \n\n \n \n\n \n0.89\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nSELECT PERIOD-END STATISTICS \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Unaudited)\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n12/31/2025 \n \n\n \n \n\n \n9/30/2025 \n \n\n \n \n\n \n6/30/2025 \nShareholders' equity / total assets\n\n \n \n\n \n \n\n \n9.86\n\n \n%\n\n \n \n\n \n \n\n \n9.69\n\n \n%\n\n \n \n\n \n \n\n \n9.53\n\n \n%\n\n \n \n\n \n \n\n \n9.71\n\n \n%\n\n \n \n\n \n \n\n \n9.43\n\n \n%\n\n \nGross loans, amortized cost / deposits\n\n \n \n\n \n \n\n \n83.80\n\n \n%\n\n \n \n\n \n \n\n \n84.31\n\n \n%\n\n \n \n\n \n \n\n \n88.54\n\n \n%\n\n \n \n\n \n \n\n \n84.96\n\n \n%\n\n \n \n\n \n \n\n \n81.85\n\n \n%\n\n \nNoninterest-bearing deposits / total deposits\n\n \n \n\n \n \n\n \n35.02\n\n \n%\n\n \n \n\n \n \n\n \n35.16\n\n \n%\n\n \n \n\n \n \n\n \n34.61\n\n \n%\n\n \n \n\n \n \n\n \n36.58\n\n \n%\n\n \n \n\n \n \n\n \n35.83\n\n \n%\n\n \nCore non-maturity deposits\n\n \n \n\n \n$\n\n \n2,161,995\n\n \n \n\n \n \n\n \n$\n\n \n2,150,962\n\n \n \n\n \n \n\n \n$\n\n \n2,094,193\n\n \n \n\n \n \n\n \n$\n\n \n2,221,568\n\n \n \n\n \n \n\n \n$\n\n \n2,169,923\n\n \n \n\n \nDeferred loan (costs)/fees\n\n \n \n\n \n$\n\n \n(146\n\n \n)\n\n \n \n\n \n$\n\n \n(97\n\n \n)\n\n \n \n\n \n$\n\n \n(35\n\n \n)\n\n \n \n\n \n$\n\n \n9\n\n \n \n\n \n \n\n \n$\n\n \n4\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCONSOLIDATED INCOME STATEMENT \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \n \n\n \nFor the six months ended: \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n6/30/2025 \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n6/30/2025 \nInterest income\n\n \n \n\n \n$\n\n \n40,939\n\n \n \n\n \n \n\n \n$\n\n \n41,196\n\n \n \n\n \n \n\n \n$\n\n \n42,717\n\n \n \n\n \n \n\n \n$\n\n \n82,135\n\n \n \n\n \n \n\n \n$\n\n \n84,170\n\n \n \n\n \nInterest expense\n\n \n \n\n \n \n\n \n10,527\n\n \n \n\n \n \n\n \n \n\n \n10,588\n\n \n \n\n \n \n\n \n \n\n \n12,064\n\n \n \n\n \n \n\n \n \n\n \n21,115\n\n \n \n\n \n \n\n \n \n\n \n23,405\n\n \n \n\n \nNet interest income\n\n \n \n\n \n \n\n \n30,412\n\n \n \n\n \n \n\n \n \n\n \n30,608\n\n \n \n\n \n \n\n \n \n\n \n30,653\n\n \n \n\n \n \n\n \n \n\n \n61,020\n\n \n \n\n \n \n\n \n \n\n \n60,765\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCredit loss expense - loans\n\n \n \n\n \n \n\n \n2,283\n\n \n \n\n \n \n\n \n \n\n \n77\n\n \n \n\n \n \n\n \n \n\n \n1,210\n\n \n \n\n \n \n\n \n \n\n \n2,360\n\n \n \n\n \n \n\n \n \n\n \n3,171\n\n \n \n\n \nCredit loss (benefit) expense - unfunded commitments\n\n \n \n\n \n \n\n \n(90\n\n \n)\n\n \n \n\n \n \n\n \n(50\n\n \n)\n\n \n \n\n \n \n\n \n(10\n\n \n)\n\n \n \n\n \n \n\n \n(140\n\n \n)\n\n \n \n\n \n \n\n \n100\n\n \n \n\n \nCredit loss (benefit) - debt securities held-to-maturity\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n(1\n\n \n)\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n(1\n\n \n)\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \nNet interest income after credit loss (benefit)\n\n \n \n\n \n \n\n \n28,219\n\n \n \n\n \n \n\n \n \n\n \n30,582\n\n \n \n\n \n \n\n \n \n\n \n29,453\n\n \n \n\n \n \n\n \n \n\n \n58,801\n\n \n \n\n \n \n\n \n \n\n \n57,494\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nService charges and fees on deposit accounts\n\n \n \n\n \n \n\n \n5,987\n\n \n \n\n \n \n\n \n \n\n \n5,673\n\n \n \n\n \n \n\n \n \n\n \n5,855\n\n \n \n\n \n \n\n \n \n\n \n11,660\n\n \n \n\n \n \n\n \n \n\n \n11,436\n\n \n \n\n \nNet gain on sale of securities available-for-sale\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n1\n\n \n \n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n124\n\n \n \n\n \nNet gain (loss) on sale of fixed assets\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n360\n\n \n \n\n \n \n\n \n \n\n \n(19\n\n \n)\n\n \n \n\n \n \n\n \n360\n\n \n \n\n \n \n\n \n \n\n \n(22\n\n \n)\n\n \nIncrease in cash surrender value of life insurance\n\n \n \n\n \n \n\n \n416\n\n \n \n\n \n \n\n \n \n\n \n419\n\n \n \n\n \n \n\n \n \n\n \n343\n\n \n \n\n \n \n\n \n \n\n \n835\n\n \n \n\n \n \n\n \n \n\n \n581\n\n \n \n\n \nEarnings (loss) on separate account life insurance\n\n \n \n\n \n \n\n \n1,386\n\n \n \n\n \n \n\n \n \n\n \n(379\n\n \n)\n\n \n \n\n \n \n\n \n973\n\n \n \n\n \n \n\n \n \n\n \n1,006\n\n \n \n\n \n \n\n \n \n\n \n470\n\n \n \n\n \nOther income\n\n \n \n\n \n \n\n \n781\n\n \n \n\n \n \n\n \n \n\n \n1,896\n\n \n \n\n \n \n\n \n \n\n \n1,400\n\n \n \n\n \n \n\n \n \n\n \n2,678\n\n \n \n\n \n \n\n \n \n\n \n2,606\n\n \n \n\n \nTotal noninterest income\n\n \n \n\n \n \n\n \n8,570\n\n \n \n\n \n \n\n \n \n\n \n7,969\n\n \n \n\n \n \n\n \n \n\n \n8,553\n\n \n \n\n \n \n\n \n \n\n \n16,539\n\n \n \n\n \n \n\n \n \n\n \n15,195\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nSalaries and benefits\n\n \n \n\n \n \n\n \n12,548\n\n \n \n\n \n \n\n \n \n\n \n12,700\n\n \n \n\n \n \n\n \n \n\n \n12,544\n\n \n \n\n \n \n\n \n \n\n \n25,247\n\n \n \n\n \n \n\n \n \n\n \n25,547\n\n \n \n\n \nOccupancy expense\n\n \n \n\n \n \n\n \n3,204\n\n \n \n\n \n \n\n \n \n\n \n3,085\n\n \n \n\n \n \n\n \n \n\n \n3,142\n\n \n \n\n \n \n\n \n \n\n \n6,289\n\n \n \n\n \n \n\n \n \n\n \n6,120\n\n \n \n\n \nOther noninterest expenses\n\n \n \n\n \n \n\n \n7,758\n\n \n \n\n \n \n\n \n \n\n \n6,039\n\n \n \n\n \n \n\n \n \n\n \n8,081\n\n \n \n\n \n \n\n \n \n\n \n13,798\n\n \n \n\n \n \n\n \n \n\n \n14,517\n\n \n \n\n \nTotal noninterest expense\n\n \n \n\n \n \n\n \n23,510\n\n \n \n\n \n \n\n \n \n\n \n21,824\n\n \n \n\n \n \n\n \n \n\n \n23,767\n\n \n \n\n \n \n\n \n \n\n \n45,334\n\n \n \n\n \n \n\n \n \n\n \n46,184\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nIncome before taxes\n\n \n \n\n \n \n\n \n13,279\n\n \n \n\n \n \n\n \n \n\n \n16,727\n\n \n \n\n \n \n\n \n \n\n \n14,239\n\n \n \n\n \n \n\n \n \n\n \n30,006\n\n \n \n\n \n \n\n \n \n\n \n26,505\n\n \n \n\n \nProvision for income taxes\n\n \n \n\n \n \n\n \n3,360\n\n \n \n\n \n \n\n \n \n\n \n4,207\n\n \n \n\n \n \n\n \n \n\n \n3,606\n\n \n \n\n \n \n\n \n \n\n \n7,567\n\n \n \n\n \n \n\n \n \n\n \n6,771\n\n \n \n\n \nNet income \n \n\n \n$ \n9,919 \n \n\n \n \n\n \n$ \n12,520 \n \n\n \n \n\n \n$ \n10,633 \n \n\n \n \n\n \n$ \n22,439 \n \n\n \n \n\n \n$ \n19,734 \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n TAX DATA \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nTax-exempt muni income\n\n \n \n\n \n$\n\n \n1,678\n\n \n \n\n \n \n\n \n$\n\n \n1,624\n\n \n \n\n \n \n\n \n$\n\n \n1,577\n\n \n \n\n \n \n\n \n$\n\n \n3,302\n\n \n \n\n \n \n\n \n$\n\n \n3,153\n\n \n \n\n \nInterest income - fully tax equivalent\n\n \n \n\n \n$\n\n \n41,385\n\n \n \n\n \n \n\n \n$\n\n \n41,628\n\n \n \n\n \n \n\n \n$\n\n \n43,136\n\n \n \n\n \n \n\n \n$\n\n \n83,013\n\n \n \n\n \n \n\n \n$\n\n \n85,008 \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nPER SHARE DATA \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Unaudited)\n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \n \n\n \nFor the six months ended: \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n6/30/2025 \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n6/30/2025 \nBasic earnings per share\n\n \n \n\n \n$\n\n \n0.77\n\n \n \n\n \n$\n\n \n0.96\n\n \n \n\n \n$\n\n \n0.78\n\n \n \n\n \n$\n\n \n1.74\n\n \n \n\n \n$\n\n \n1.44\n\n \nDiluted earnings per share\n\n \n \n\n \n$\n\n \n0.77\n\n \n \n\n \n$\n\n \n0.96\n\n \n \n\n \n$\n\n \n0.78\n\n \n \n\n \n$\n\n \n1.72\n\n \n \n\n \n$\n\n \n1.43\n\n \nCommon dividends\n\n \n \n\n \n$\n\n \n0.26\n\n \n \n\n \n$\n\n \n0.26\n\n \n \n\n \n$\n\n \n0.25\n\n \n \n\n \n$\n\n \n0.52\n\n \n \n\n \n$\n\n \n0.50\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nWeighted average shares outstanding\n\n \n \n\n \n \n\n \n12,848,133\n\n \n \n\n \n \n\n \n12,988,932\n\n \n \n\n \n \n\n \n13,563,910\n\n \n \n\n \n \n\n \n12,917,542\n\n \n \n\n \n \n\n \n13,692,003\n\n \nWeighted average diluted shares\n\n \n \n\n \n \n\n \n12,959,127\n\n \n \n\n \n \n\n \n13,097,176\n\n \n \n\n \n \n\n \n13,637,252\n\n \n \n\n \n \n\n \n13,027,893\n\n \n \n\n \n \n\n \n13,777,006\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nBook value per basic share (EOP)\n\n \n \n\n \n$\n\n \n28.30\n\n \n \n\n \n$\n\n \n27.78\n\n \n \n\n \n$\n\n \n26.00\n\n \n \n\n \n$\n\n \n28.30\n\n \n \n\n \n$\n\n \n26.00\n\n \nTangible book value per share (EOP) (1) \n \n\n \n$\n\n \n26.19\n\n \n \n\n \n$\n\n \n25.69\n\n \n \n\n \n$\n\n \n23.98\n\n \n \n\n \n$\n\n \n26.19\n\n \n \n\n \n$\n\n \n23.98\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCommon shares outstanding (EOP)\n\n \n \n\n \n \n\n \n12,963,397\n\n \n \n\n \n \n\n \n13,093,184\n\n \n \n\n \n \n\n \n13,681,828\n\n \n \n\n \n \n\n \n12,963,397\n\n \n \n\n \n \n\n \n13,681,828\n\n (1) \nSee reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in \"Non-GAAP Financial Measures\".\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nKEY FINANCIAL RATIOS \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Unaudited)\n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \n \n\n \nFor the six months ended: \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n6/30/2025 \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n6/30/2025 \nReturn on average equity\n\n \n \n\n \n \n\n \n10.90\n\n \n%\n\n \n \n\n \n \n\n \n13.88\n\n \n%\n\n \n \n\n \n \n\n \n12.08\n\n \n%\n\n \n \n\n \n \n\n \n12.38\n\n \n%\n\n \n \n\n \n \n\n \n11.26\n\n \n%\n\n \nReturn on average assets\n\n \n \n\n \n \n\n \n1.09\n\n \n%\n\n \n \n\n \n \n\n \n1.39\n\n \n%\n\n \n \n\n \n \n\n \n1.16\n\n \n%\n\n \n \n\n \n \n\n \n1.24\n\n \n%\n\n \n \n\n \n \n\n \n1.09\n\n \n%\n\n \nNet interest margin (tax-equivalent) (1) \n \n\n \n \n\n \n3.74\n\n \n%\n\n \n \n\n \n \n\n \n3.75\n\n \n%\n\n \n \n\n \n \n\n \n3.68\n\n \n%\n\n \n \n\n \n \n\n \n3.75\n\n \n%\n\n \n \n\n \n \n\n \n3.71\n\n \n%\n\n \nEfficiency ratio (tax-equivalent) (1) (2) \n \n\n \n \n\n \n58.91\n\n \n%\n\n \n \n\n \n \n\n \n56.45\n\n \n%\n\n \n \n\n \n \n\n \n59.43\n\n \n%\n\n \n \n\n \n \n\n \n57.70\n\n \n%\n\n \n \n\n \n \n\n \n60.00\n\n \n%\n\n \nNet charge-offs (recoveries) / average loans (not annualized)\n\n \n \n\n \n \n\n \n0.00\n\n \n%\n\n \n \n\n \n \n\n \n0.01\n\n \n%\n\n \n \n\n \n \n\n \n0.27\n\n \n%\n\n \n \n\n \n \n\n \n0.01\n\n \n%\n\n \n \n\n \n \n\n \n0.27\n\n \n%\n\n (1) \nComputed on a tax equivalent basis utilizing a federal income tax rate of 21%.\n\n (2) \nSee reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in \"Non-GAAP Financial Measures\".\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nNON-GAAP FINANCIAL MEASURES \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n(Dollars in Thousands, Unaudited)\n\n \n \n\n \nAs of: \n \n\n \n \n\n \n \n\n \n6/30/2026 \n \n\n \n \n\n \n3/31/2026 \n \n\n \n \n\n \n6/30/2025 \nTotal stockholders' equity\n\n \n \n\n \n$\n\n \n366,897\n\n \n \n\n \n \n\n \n$\n\n \n363,714\n\n \n \n\n \n \n\n \n$\n\n \n355,707\n\n \n \n\n \nLess: goodwill and other intangible assets\n\n \n \n\n \n \n\n \n27,357\n\n \n \n\n \n \n\n \n \n\n \n27,370\n\n \n \n\n \n \n\n \n \n\n \n27,651\n\n \n \n\n \nTangible common equity\n\n \n \n\n \n$\n\n \n339,540\n\n \n \n\n \n \n\n \n$\n\n \n336,344\n\n \n \n\n \n \n\n \n$\n\n \n328,056\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nTotal assets\n\n \n \n\n \n$\n\n \n3,720,611\n\n \n \n\n \n \n\n \n$\n\n \n3,754,462\n\n \n \n\n \n \n\n \n$\n\n \n3,770,302\n\n \n \n\n \nLess: goodwill and other intangible assets\n\n \n \n\n \n \n\n \n27,357\n\n \n \n\n \n \n\n \n \n\n \n27,370\n\n \n \n\n \n \n\n \n \n\n \n27,651\n\n \n \n\n \nTangible assets\n\n \n \n\n \n$\n\n \n3,693,254\n\n \n \n\n \n \n\n \n$\n\n \n3,727,092\n\n \n \n\n \n \n\n \n$\n\n \n3,742,651\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nTotal stockholders' equity (bank only)\n\n \n \n\n \n$\n\n \n447,070\n\n \n \n\n \n \n\n \n$\n\n \n439,623\n\n \n \n\n \n \n\n \n$\n\n \n430,250\n\n \n \n\n \nLess: goodwill and other intangible assets (bank only)\n\n \n \n\n \n \n\n \n27,357\n\n \n \n\n \n \n\n \n \n\n \n27,370\n\n \n \n\n \n \n\n \n \n\n \n27,651\n\n \n \n\n \nTangible common equity (bank only)\n\n \n \n\n \n$\n\n \n419,713\n\n \n \n\n \n \n\n \n$\n\n \n412,253\n\n \n \n\n \n \n\n \n$\n\n \n402,599\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nTotal assets (bank only)\n\n \n \n\n \n$\n\n \n3,718,414\n\n \n \n\n \n \n\n \n$\n\n \n3,751,904\n\n \n \n\n \n \n\n \n$\n\n \n3,766,071\n\n \n \n\n \nLess: goodwill and other intangible assets (bank only)\n\n \n \n\n \n \n\n \n27,357\n\n \n \n\n \n \n\n \n \n\n \n27,370\n\n \n \n\n \n \n\n \n \n\n \n27,651\n\n \n \n\n \nTangible assets (bank only)\n\n \n \n\n \n$\n\n \n3,691,057\n\n \n \n\n \n \n\n \n$\n\n \n3,724,534\n\n \n \n\n \n \n\n \n$\n\n \n3,738,420\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nCommon shares outstanding\n\n \n \n\n \n \n\n \n12,963,397\n\n \n \n\n \n \n\n \n \n\n \n13,093,184\n\n \n \n\n \n \n\n \n \n\n \n13,681,828\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nBook value per common share (total stockholders' equity / shares outstanding)\n\n \n \n\n \n$\n\n \n28.30\n\n \n \n\n \n \n\n \n$\n\n \n27.78\n\n \n \n\n \n \n\n \n$\n\n \n26.00\n\n \n \n\n \nTangible book value per common share (tangible common equity / shares outstanding)\n\n \n \n\n \n$\n\n \n26.19\n\n \n \n\n \n \n\n \n$\n\n \n25.69\n\n \n \n\n \n \n\n \n$\n\n \n23.98\n\n \n \n\n \nEquity ratio - GAAP (total stockholders' equity / total assets\n\n \n \n\n \n \n\n \n9.86\n\n \n%\n\n \n \n\n \n \n\n \n9.69\n\n \n%\n\n \n \n\n \n \n\n \n9.43\n\n \n%\n\n \nTangible common equity ratio (tangible common equity / tangible assets)\n\n \n \n\n \n \n\n \n9.19\n\n \n%\n\n \n \n\n \n \n\n \n9.02\n\n \n%\n\n \n \n\n \n \n\n \n8.77\n\n \n%\n\n \nTangible common equity ratio (bank only) (tangible common equity / tangible assets)\n\n \n \n\n \n \n\n \n11.37\n\n \n%\n\n \n \n\n \n \n\n \n11.07\n\n \n%\n\n \n \n\n \n \n\n \n10.77\n\n \n%\n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \nFor the six months ended: \nEfficiency Ratio: \n \n\n \n6/30/2026 \n \n\n \n3/31/2026 \n \n\n \n6/30/2025 \n \n\n \n6/30/2026 \n \n\n \n6/30/2025 \nNoninterest expense\n\n \n \n\n \n$\n\n \n23,510\n\n \n \n\n \n \n\n \n$\n\n \n21,824\n\n \n \n\n \n \n\n \n$\n\n \n23,767\n\n \n \n\n \n \n\n \n$\n\n \n45,334\n\n \n \n\n \n \n\n \n \n\n \n46,184\n\n \n \n\n \nDivided by:\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nNet interest income\n\n \n \n\n \n \n\n \n30,412\n\n \n \n\n \n \n\n \n \n\n \n30,608\n\n \n \n\n \n \n\n \n \n\n \n30,653\n\n \n \n\n \n \n\n \n \n\n \n61,020\n\n \n \n\n \n \n\n \n \n\n \n60,765\n\n \n \n\n \nTax-equivalent interest income adjustments\n\n \n \n\n \n \n\n \n446\n\n \n \n\n \n \n\n \n \n\n \n432\n\n \n \n\n \n \n\n \n \n\n \n419\n\n \n \n\n \n \n\n \n \n\n \n878\n\n \n \n\n \n \n\n \n \n\n \n838\n\n \n \n\n \nNet interest income, adjusted\n\n \n \n\n \n \n\n \n30,858\n\n \n \n\n \n \n\n \n \n\n \n31,040\n\n \n \n\n \n \n\n \n \n\n \n31,072\n\n \n \n\n \n \n\n \n \n\n \n61,898\n\n \n \n\n \n \n\n \n \n\n \n61,603\n\n \n \n\n \nNoninterest income\n\n \n \n\n \n \n\n \n8,570\n\n \n \n\n \n \n\n \n \n\n \n7,969\n\n \n \n\n \n \n\n \n \n\n \n8,553\n\n \n \n\n \n \n\n \n \n\n \n16,539\n\n \n \n\n \n \n\n \n \n\n \n15,195\n\n \n \n\n \nLess gain (loss) on sale of securities\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n1\n\n \n \n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n124\n\n \n \n\n \nLess (loss) gain on sale of fixed assets\n\n \n \n\n \n \n\n \n-\n\n \n \n\n \n \n\n \n \n\n \n360\n\n \n \n\n \n \n\n \n \n\n \n(19\n\n \n)\n\n \n \n\n \n \n\n \n360\n\n \n \n\n \n \n\n \n \n\n \n(22\n\n \n)\n\n \nTax-equivalent noninterest income adjustments\n\n \n \n\n \n \n\n \n479\n\n \n \n\n \n \n\n \n \n\n \n11\n\n \n \n\n \n \n\n \n \n\n \n350\n\n \n \n\n \n \n\n \n \n\n \n489\n\n \n \n\n \n \n\n \n \n\n \n279\n\n \n \n\n \nNoninterest income, adjusted\n\n \n \n\n \n \n\n \n9,049\n\n \n \n\n \n \n\n \n \n\n \n7,620\n\n \n \n\n \n \n\n \n \n\n \n8,921\n\n \n \n\n \n \n\n \n \n\n \n16,668\n\n \n \n\n \n \n\n \n \n\n \n15,372\n\n \n \n\n \nNet interest income plus noninterest income, adjusted\n\n \n \n\n \n$\n\n \n39,907\n\n \n \n\n \n \n\n \n$\n\n \n38,660\n\n \n \n\n \n \n\n \n$\n\n \n39,993\n\n \n \n\n \n \n\n \n$\n\n \n78,566\n\n \n \n\n \n \n\n \n$\n\n \n76,975\n\n \n \n\n \nEfficiency Ratio (tax-equivalent)\n\n \n \n\n \n \n\n \n58.91\n\n \n%\n\n \n \n\n \n \n\n \n56.45\n\n \n%\n\n \n \n\n \n \n\n \n59.43\n\n \n%\n\n \n \n\n \n \n\n \n57.70\n\n \n%\n\n \n \n\n \n \n\n \n60.00\n\n \n%\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \nFor the three months ended: \n \n\n \nFor the six months ended: \nPre-tax pre-provision income: \n \n\n \n6/30/2026 \n \n\n \n3/31/2026 \n \n\n \n6/30/2025 \n \n\n \n6/30/2026 \n \n\n \n6/30/2025 \nNet income\n\n \n \n\n \n$\n\n \n9,919\n\n \n \n\n \n \n\n \n$\n\n \n12,520\n\n \n \n\n \n \n\n \n$\n\n \n10,633\n\n \n \n\n \n \n\n \n$\n\n \n22,439\n\n \n \n\n \n \n\n \n$\n\n \n19,734\n\n \n \n\n \nAdd: Provision for income taxes\n\n \n \n\n \n \n\n \n3,360\n\n \n \n\n \n \n\n \n \n\n \n4,207\n\n \n \n\n \n \n\n \n \n\n \n3,606\n\n \n \n\n \n \n\n \n \n\n \n7,567\n\n \n \n\n \n \n\n \n \n\n \n6,771\n\n \n \n\n \nAdd: Provision for credit losses\n\n \n \n\n \n \n\n \n2,193\n\n \n \n\n \n \n\n \n \n\n \n26\n\n \n \n\n \n \n\n \n \n\n \n1,200\n\n \n \n\n \n \n\n \n \n\n \n2,219\n\n \n \n\n \n \n\n \n \n\n \n3,271\n\n \n \n\n \nPre-tax pre-provision income\n\n \n \n\n \n$\n\n \n15,472\n\n \n \n\n \n \n\n \n$\n\n \n16,753\n\n \n \n\n \n \n\n \n$\n\n \n15,439\n\n \n \n\n \n \n\n \n$\n\n \n32,225\n\n \n \n\n \n \n\n \n$\n\n \n29,776 \n\n \n \...

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