UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026

OR

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 001-34095

FIRST BUSINESS FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Wisconsin	39-1576570
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 Charmany Drive		53719
Madison	Wisconsin
(Address of Principal Executive Offices)		(Zip Code)

(608) 238-8008

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	FBIZ	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer þ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares outstanding of the registrant’s sole class of common stock, par value $0.01 per share, on July 27, 2026 was 8,368,320 shares.

FIRST BUSINESS FINANCIAL SERVICES, INC.

INDEX — FORM 10-Q

PART I. Financial Information	1
Item 1. Financial Statements	1
Consolidated Balance Sheets (Unaudited)	1
Consolidated Statements of Income (Unaudited)	2
Consolidated Statements of Comprehensive Income (Unaudited)	3
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Notes to Unaudited Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures about Market Risk	58
Item 4. Controls and Procedures	58
PART II. Other Information	59
Item 1. Legal Proceedings	59
Item 1A. Risk Factors	59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 5. Other Information	59
Item 6. Exhibits	60
Signatures	61

PART I. Financial Information

Item 1. Financial Statements

First Business Financial Services, Inc.

Consolidated Balance Sheets (Unaudited)

	June 30, 2026			December 31, 2025
	(Unaudited)
	(In Thousands, Except Share Data)
Assets
Cash and due from banks	$	32,064		$	30,771
Short-term investments		131,294			8,714
Cash and cash equivalents		163,358			39,485
Securities available-for-sale, at fair value		409,692			422,087
Securities held-to-maturity, at amortized cost		4,674			5,210
Loans held for sale		—			18,849
Loans and leases receivable, net of allowance for credit losses of $37,393    and $35,877, respectively		3,548,222			3,337,364
Premises and equipment, net		4,328			4,669
Right-of-use assets, net		4,787			5,317
Bank-owned life insurance		85,533			83,994
Federal Home Loan Bank stock, at cost		13,173			8,940
Goodwill and other intangible assets		11,933			11,985
Derivatives		45,827			36,515
Accrued interest receivable and other assets		118,477			107,472
Total assets	$	4,410,004		$	4,081,887
Liabilities and Stockholders’ Equity
Deposits	$	3,592,165		$	3,380,415
Federal Home Loan Bank advances and other borrowings		346,794			252,051
Lease liabilities		6,698			7,361
Derivatives		39,733			36,926
Accrued interest payable and other liabilities		29,307			33,549
Total liabilities		4,014,697			3,710,302
Stockholders’ equity:
Preferred stock, $0.01 par value, 2,500,000 shares authorized, 12,500 shares of 7%    non-cumulative perpetual preferred stock, Series A, outstanding at    June 30, 2026 and December 31, 2025		11,992			11,992
Common stock, $0.01 par value, 25,000,000 shares authorized, 9,565,153 and 9,493,274    shares issued, 8,368,320 and 8,325,376 shares outstanding at June 30, 2026    and December 31, 2025, respectively		97			96
Additional paid-in capital		98,111			96,487
Retained earnings		327,028			305,536
Accumulated other comprehensive loss		(7,446	)		(9,740	)
Treasury stock, 1,196,833 and 1,167,898 shares at June 30, 2026    and December 31, 2025, respectively, at cost		(34,475	)		(32,786	)
Total stockholders’ equity		395,307			371,585
Total liabilities and stockholders’ equity	$	4,410,004		$	4,081,887

See accompanying Notes to Unaudited Consolidated Financial Statements.

1

First Business Financial Services, Inc.

Consolidated Statements of Income (Unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
	(In Thousands, Except Per Share Data)
Interest income
Loans and leases	$	60,010	$	56,621	$	116,317	$	111,895
Securities		4,220		3,783		8,465		7,187
Short-term investments		791		878		2,134		1,730
Total interest income		65,021		61,282		126,916		120,812
Interest expense
Deposits		23,105		24,257		47,033		47,273
Federal Home Loan Bank advances and other borrowings		3,774		3,241		6,224		6,497
Total interest expense		26,879		27,498		53,257		53,770
Net interest income		38,142		33,784		73,659		67,042
Provision for credit losses		2,066		2,701		5,027		5,360
Net interest income after provision for credit losses		36,076		31,083		68,632		61,682
Non-interest income
Private wealth management service fees		4,257		3,748		8,134		7,240
Gain on sale of Small Business Administration loans		—		397		592		1,360
Service charges on deposits		1,336		1,103		2,653		2,152
Loan fees		528		424		964		812
Bank-owned life insurance policy income		757		615		1,514		1,051
Swap fees		162		170		790		283
Other non-interest income		1,529		798		2,698		1,936
Total non-interest income		8,569		7,255		17,345		14,834
Non-interest expense
Compensation		18,462		16,534		37,003		33,281
Occupancy		638		564		1,226		1,155
Professional fees		1,493		1,487		2,938		2,946
Data processing		1,482		1,368		2,752		2,450
Marketing		840		1,062		1,551		2,030
Equipment		351		335		758		711
Computer software		1,958		1,656		3,879		3,259
FDIC insurance		819		834		1,729		1,614
Other non-interest expense		1,806		1,128		2,966		2,241
Total non-interest expense		27,849		24,968		54,802		49,687
Income before income tax expense		16,796		13,370		31,175		26,829
Income tax expense		1,216		1,948		3,395		4,236
Net income		15,580		11,422		27,780		22,593
Preferred stock dividend		219		219		438		438
Net income available to common shareholders	$	15,361	$	11,203	$	27,342	$	22,155
Earnings per common share
Basic	$	1.84	$	1.35	$	3.28	$	2.66
Diluted		1.84		1.35		3.28		2.66
Dividends declared per share		0.34		0.29		0.68		0.58

See accompanying Notes to Unaudited Consolidated Financial Statements.

2

First Business Financial Services, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2026			2025			2026			2025
	(In Thousands)
Net income	$	15,580		$	11,422		$	27,780		$	22,593
Other comprehensive income (loss)
Securities available-for-sale:
Unrealized securities (losses) gains arising during the period		(855	)		2,534			(4,036	)		7,219
Securities held-to-maturity:
Amortization of net unrealized losses transferred from available-for-sale		—			1			—			1
Interest rate swaps:
Unrealized gains (losses) on interest rate swaps arising during the period		3,754			(3,206	)		6,505			(9,108	)
Income tax (expense) benefit		(149	)		238			(175	)		509
Total other comprehensive income (loss)		2,750			(433	)		2,294			(1,379	)
Comprehensive income	$	18,330		$	10,989		$	30,074		$	21,214

See accompanying Notes to Unaudited Consolidated Financial Statements.

3

First Business Financial Services, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

	Common Shares Outstanding			Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
	(In Thousands, Except Share Data)
Balance at December 31, 2024		8,293,928		$	11,992	$	95	$	93,545	$	265,778		$	(11,425	)	$	(31,396	)	$	328,589
Net income		—			—		—		—		11,171			—			—			11,171
Other comprehensive loss		—			—		—		—		—			(946	)		—			(946	)
Share-based compensation -     restricted shares and employee    stock purchase plan		21,914			—		1		650		—			—			—			651
Issuance of common stock    under the employee stock    purchase plan		841			—		—		36		—			—			—			36
Preferred stock dividends		—			—		—		—		(219	)		—			—			(219	)
Cash dividends ($0.29    per share)		—			—		—		—		(2,442	)		—			—			(2,442	)
Treasury stock purchased		(14,716	)		—		—		—		—			—			(777	)		(777	)
Balance at March 31, 2025		8,301,967		$	11,992	$	96	$	94,231	$	274,288		$	(12,371	)	$	(32,173	)	$	336,063
Net income		—			—		—		—		11,422			—			—			11,422
Other comprehensive loss		—			—		—		—		—			(433	)		—			(433	)
Share-based compensation -     restricted shares and employee    stock purchase plan		33,654			—		—		926		—			—			—			926
Issuance of common stock    under the employee stock    purchase plan		791			—		—		36		—			—			—			36
Preferred stock dividends		—			—		—		—		(219	)		—			—			(219	)
Cash dividends ($0.29    per share)		—			—		—		—		(2,414	)		—			—			(2,414	)
Treasury stock purchased		(12,942	)		—		—		—		—			—			(586	)		(586	)
Balance at June 30, 2025		8,323,470		$	11,992	$	96	$	95,193	$	283,077		$	(12,804	)	$	(32,759	)	$	344,795

	Common Shares Outstanding			Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
	(In Thousands, Except Share Data)
Balance at December 31, 2025		8,325,376		$	11,992	$	96	$	96,487	$	305,536		$	(9,740	)	$	(32,786	)	$	371,585
Net income		—			—		—		—		12,200			—			—			12,200
Other comprehensive loss		—			—		—		—		—			(456	)		—			(456	)
Share-based compensation -    restricted shares and employee    stock purchase plan		31,357			—		—		647		—			—			—			647
Issuance of common stock    under the employee stock    purchase plan		692			—		—		33		—			—			—			33
Preferred stock dividends		—			—		—		—		(219	)		—			—			(219	)
Cash dividends ($0.34    per share)		—			—		—		—		(2,899	)		—			—			(2,899	)
Treasury stock purchased		(13,906	)		—		—		—		—			—			(811	)		(811	)
Balance at March 31, 2026		8,343,519		$	11,992	$	96	$	97,167	$	314,618		$	(10,196	)	$	(33,597	)	$	380,080
Net income		—			—		—		—		15,580			—			—			15,580
Other comprehensive income		—			—		—		—		—			2,750			—			2,750
Share-based compensation -     restricted shares and employee    stock purchase plan		39,253			—		1		911		—			—			—			912
Issuance of common stock    under the employee stock    purchase plan		577			—		—		33		—			—			—			33
Preferred stock dividends		—			—		—		—		(219	)		—			—			(219	)
Cash dividends ($0.34    per share)		—			—		—		—		(2,951	)		—			—			(2,951	)
Treasury stock purchased		(15,029	)		—		—		—		—			—			(878	)		(878	)
Balance at June 30, 2026		8,368,320		$	11,992	$	97	$	98,111	$	327,028		$	(7,446	)	$	(34,475	)	$	395,307

See accompanying Notes to Unaudited Consolidated Financial Statements.

4

First Business Financial Services, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	For the Six Months Ended June 30,
	2026			2025
	(In Thousands)
Operating activities
Net income	$	27,780		$	22,593
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes, net		(553	)		735
Provision for credit losses		5,027			5,360
Depreciation, amortization and accretion, net		1,897			1,821
Share-based compensation		1,559			1,577
Net loss on sale of tax credit investments		545			60
Amortization of tax credit investments		3,782			3,057
Bank-owned life insurance policy income		(1,514	)		(1,051	)
Origination of loans for sale		(76,589	)		(88,044	)
Sale of loans originated for sale		96,030			90,487
Gain on sale of loans originated for sale		(592	)		(1,360	)
Net gain on repossessed assets		—			(4	)
Return on investment in limited partnerships		295			834
Excess tax benefit from share-based compensation		366			229
Net payments on operating lease liabilities		(805	)		(784	)
Net (decrease) increase in accrued interest receivable and other assets		(11,019	)		14,494
Net decrease (increase) in accrued interest payable and other liabilities		636			(22,858	)
Net cash provided by operating activities		46,845			27,146
Investing activities
Proceeds from maturities, redemptions, and paydowns of available-for-sale securities		39,875			26,885
Proceeds from maturities, redemptions, and paydowns of held-to-maturity securities		533			1,022
Purchases of available-for-sale securities		(31,249	)		(60,690	)
Proceeds from sale of repossessed assets		—			24
Net increase in loans and leases		(215,575	)		(142,215	)
Investments in limited partnerships		(1,548	)		(1,472	)
Returns of investments in limited partnerships		8			712
Investment in tax credit investments		(9,292	)		(12,673	)
Distributions from tax credit investments		140			26
Proceeds from sale of tax credit investments		69			2,483
Investment in Federal Home Loan Bank stock		(17,123	)		(19,910	)
Proceeds from the sale of Federal Home Loan Bank stock		12,890			21,499
Purchases of leasehold improvements and equipment, net		(299	)		(410	)
Proceeds from sale of leasehold improvements and equipment		42			—
Purchases of bank owned life insurance policies		(25	)		(24,500	)
Net cash used in investing activities		(221,554	)		(209,219	)
Financing activities
Net increase in deposits		211,750			198,082
Repayment of Federal Home Loan Bank advances		(576,328	)		(966,377	)
Proceeds from Federal Home Loan Bank advances		671,011			922,412
Net increase in long-term borrowed funds		60			47
Cash dividends paid		(5,850	)		(4,856	)
Preferred stock dividends paid		(438	)		(438	)
Proceeds from issuance of common stock under ESPP		66			72
Purchase of treasury stock		(1,689	)		(1,363	)
Net cash provided by financing activities		298,582			147,579
Net increase (decrease) in cash and cash equivalents		123,873			(34,494	)
Cash and cash equivalents at the beginning of the period		39,485			157,702
Cash and cash equivalents at the end of the period	$	163,358		$	123,208
Supplementary cash flow information
Cash paid during the period for:
Interest paid on deposits and borrowings	$	53,676		$	53,908
Net income taxes paid		3,551			381

See accompanying Notes to Unaudited Consolidated Financial Statements

5

Notes to Unaudited Consolidated Financial Statements

Note 1 — Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

The accounting and reporting practices of First Business Financial Services, Inc. (“FBFS” or the “Corporation”), through our wholly-owned subsidiary, First Business Bank (“FBB” or the “Bank”), have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). FBB operates as a commercial banking institution primarily in Wisconsin and the greater Kansas City metropolitan area. The Bank provides a full range of financial services to businesses, business owners, executives, professionals, and high net worth individuals. FBB also offers bank consulting services to community financial institutions. The Bank is subject to competition from other financial institutions and service providers and is also subject to state and federal regulations.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements were prepared in accordance with GAAP and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s Consolidated Financial Statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025. The unaudited Consolidated Financial Statements include the accounts of the Corporation and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Management of the Corporation is required to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates that could significantly change in the near-term include the value of securities and interest rate swaps, level of the allowance for credit losses, lease residuals, property under operating leases, goodwill, and income taxes. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results that may be expected for any other interim period or the entire fiscal year ending December 31, 2026. Certain amounts in prior periods may have been reclassified to conform to the current presentation. Subsequent events have been evaluated through the date of the issuance of the unaudited Consolidated Financial Statements. No significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures.

The Corporation has not changed its significant accounting and reporting policies from those disclosed in the Corporation’s Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40).” This update improves the transparency and usefulness of financial statements by requiring companies to break down certain expense line items. This update is effective for fiscal years beginning after December 15, 2026. The Corporation will implement this standard when it becomes effective. The adoption of the standard only requires additional disclosures and therefore will not affect net income, stockholders' equity or cash flows.

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This update modernizes the accounting for internal-use software. This update is effective for fiscal years beginning after December 15, 2027. The Corporation is assessing the impact of this standard.

In November 2025, the FASB issued ASU No. 2025-09, "Derivatives and Hedging (Subtopic 815): Hedge Accounting Improvements." This update clarifies and improves hedge accounting requirements. This update is effective for fiscal years beginning after December 15, 2026. The Corporation is assessing the impact of this standard.

6

Note 2 — Earnings per Common Share

Earnings per common share are computed using the two-class method. Basic earnings per common share are computed by dividing net income allocated to common shares by the weighted-average number of shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends, or dividend equivalents, at the same rate as holders of the Corporation’s common stock. Diluted earnings per share are computed by dividing net income allocated to common shares adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effect of common stock equivalents using the treasury stock method.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
	(Dollars in Thousands, Except Share Data)
Basic earnings per common share
Net income	$	15,580	$	11,422	$	27,780	$	22,593
Less: preferred stock dividends		219		219		438		438
Less: earnings allocated to participating securities		233		207		462		443
Basic earnings allocated to common shareholders	$	15,128	$	10,996	$	26,880	$	21,712
Weighted-average common shares outstanding, excluding participating securities		8,208,002		8,141,159		8,201,585		8,149,600
Basic earnings per common share	$	1.84	$	1.35	$	3.28	$	2.66
Diluted earnings per common share
Earnings allocated to common shareholders, diluted	$	15,128	$	10,996	$	26,880	$	21,712
Weighted-average diluted common shares outstanding, excluding participating securities		8,208,002		8,141,159		8,201,585		8,149,600
Diluted earnings per common share	$	1.84	$	1.35	$	3.28	$	2.66

Note 3 — Share-Based Compensation

The Corporation adopted the 2026 Equity Incentive Plan (the “Plan”) during the quarter ended June 30, 2026. The Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) of the Corporation and provides for the grant of equity ownership opportunities through incentive stock options and nonqualified stock options, restricted stock, restricted stock units, dividend equivalent units, and any other type of award permitted by the Plan. As of June 30, 2026, 295,507 shares were available for future grants under the Plan, as amended. Shares covered by awards that are canceled, forfeited or expire will again be available for the grant of awards under the Plan.

Restricted Stock

Under the Plan, the Corporation may grant restricted stock awards (“RSA”), restricted stock units (“RSU”), and other stock-based awards to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. While restricted stock is subject to forfeiture, RSA participants may exercise full voting rights and will receive all dividends and other distributions paid with respect to the restricted shares. RSUs do not have voting rights. RSUs granted prior to 2023 are provided dividend equivalents concurrent with dividends paid to shareholders while RSUs granted in 2023 and after will accrue dividend equivalents payable upon vesting. The restricted stock granted under the Plan is typically subject to a vesting period. Compensation expense for restricted stock is recognized over the requisite service period of generally three to five years for the entire award on a straight-line basis. Upon vesting of restricted stock, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the unaudited Consolidated Statements of Income.

The Corporation may also issue performance-based restricted stock units (“PRSU”). Vesting of the PRSU will be measured on the relative Total Shareholder Return (“TSR”) and relative Return on Average Tangible Common Equity ("ROATCE"), and will cliff-vest after a three-year measurement period based on the Corporation’s TSR performance and ROATCE performance compared to a broad peer group of over 100 banks. At the end of the performance period, the number of actual shares to be awarded varies between 0% and 200% of target amounts. The restricted stock awards and units issued to executive officers will vest ratably over a three-year period.

7

Compensation expense is recognized for PRSU over the requisite service and performance period of generally three years for the entire expected award on a straight-line basis. The compensation expense for the awards expected to vest for the percentage of performance-based restricted stock units subject to the ROATCE metric will be adjusted if there is a change in the expectation of ROATCE. The compensation expense for the awards expected to vest for the percentage of PRSU subject to the TSR metric are never adjusted and are amortized utilizing the fair value provided using a Monte Carlo pricing model.

Restricted stock activity for the year ended December 31, 2025 and the six months ended June 30, 2026 was as follows:

	RSA	Weighted Average Grant Price	PRSU	Weighted Average Grant Price	RSU	Weighted Average Grant Price	Total	Weighted Average Grant Price
Nonvested balance as of December 31, 2024	28,896	$30.09	49,630	$42.24	80,161	$36.04	158,687	$36.77
Granted (1)	—	—	12,195	63.61	45,789	51.39	57,984	53.92
Vested	(20,280)	28.74	(15,825)	42.70	(32,376)	37.56	(68,481)	37.21
Forfeited	(976)	33.60	—	—	(2,468)	41.48	(3,444)	40.79
Nonvested balance as of December 31, 2025	7,640	33.76	46,000	47.31	91,106	43.03	144,746	43.87
Granted (1)	—	—	9,575	63.60	46,729	56.75	56,304	57.91
Vested	(7,362)	33.59	(16,780)	40.26	(37,660)	42.48	(61,802)	40.70
Forfeited	—	—	—	—	(8,236)	46.47	(8,236)	46.47
Nonvested balance as of June 30, 2026	278	$38.24	38,795	$54.38	91,939	$50.00	131,012	$51.27
Unrecognized compensation cost (in thousands)	$3		$1,134		$3,944		$5,081
Weighted average remaining recognition period (in years)	0.32		1.97		2.30		2.28

(1)The number of restricted shares/units shown includes the shares that would be granted if the target level of performance is achieved related to the PRSU. The number of shares actually issued may vary.

Employee Stock Purchase Plan

The Corporation is authorized to issue up to 250,000 shares of common stock under the employee stock purchase plan ("ESPP"). The plan qualifies as an employee stock purchase plan under section 423 of the Internal Revenue Code of 1986. Under the ESPP, eligible employees may enroll in a three month offer period that begins January, April, July, and October of each year. Employees may elect to purchase a limited number of shares of the Corporation's common stock at 90% of the fair market value on the last day of the offering period. The ESPP is treated as a compensatory item for purposes of share-based compensation expense.

The Corporation issued 1,269 and 1,632 shares of common stock under the ESPP during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and 2025, 222,998 and 225,174, respectively, shares remained available for issuance under the ESPP.

Share-based compensation expense related to restricted stock and ESPP included in the unaudited Consolidated Statements of Income was as follows:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
	(In Thousands)
Share-based compensation expense	$	912	$	926	$	1,559	$	1,577

8

Note 4 — Securities

The amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

	As of June 30, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In Thousands)
Available-for-sale:
U.S. treasuries	$	4,998	$	—	$	(34	)	$	4,964
U.S. government agency securities - government-sponsored    enterprises		2,500		—		(191	)		2,309
Municipal securities		46,156		255		(3,570	)		42,841
Residential mortgage-backed securities - government issued		166,903		225		(2,711	)		164,417
Residential mortgage-backed securities - government-sponsored    enterprises		161,607		382		(7,966	)		154,023
Commercial mortgage-backed securities - government issued		2,309		—		(315	)		1,994
Commercial mortgage-backed securities - government-sponsored    enterprises		41,875		32		(2,763	)		39,144
	$	426,348	$	894	$	(17,550	)	$	409,692

	As of December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In Thousands)
Available-for-sale:
U.S. treasuries	$	4,995	$	—	$	(94	)	$	4,901
U.S. government agency securities - government-sponsored    enterprises		2,500		—		(186	)		2,314
Municipal securities		46,993		328		(3,429	)		43,892
Residential mortgage-backed securities - government issued		166,933		1,279		(1,577	)		166,635
Residential mortgage-backed securities - government-sponsored    enterprises		168,544		929		(6,930	)		162,543
Commercial mortgage-backed securities - government issued		2,416		—		(302	)		2,114
Commercial mortgage-backed securities - government-sponsored    enterprises		42,326		71		(2,709	)		39,688
	$	434,707	$	2,607	$	(15,227	)	$	422,087

The amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrecognized gains and losses were as follows:

	As of June 30, 2026
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
	(In Thousands)
Held-to-maturity:
Municipal securities	$	1,857	$	—	$	(2	)	$	1,855
Residential mortgage-backed securities - government issued		414		—		(25	)		389
Residential mortgage-backed securities - government-sponsored    enterprises		405		—		(19	)		386
Commercial mortgage-backed securities - government-sponsored    enterprises		1,998		—		(34	)		1,964
	$	4,674	$	—	$	(80	)	$	4,594

9

	As of December 31, 2025
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
	(In Thousands)
Held-to-maturity:
Municipal securities	$	2,144	$	—	$	(3	)	$	2,141
Residential mortgage-backed securities - government issued		546		—		(26	)		520
Residential mortgage-backed securities - government-sponsored    enterprises		518		—		(18	)		500
Commercial mortgage-backed securities - government-sponsored    enterprises		2,002		—		(22	)		1,980
	$	5,210	$	—	$	(69	)	$	5,141

U.S. Treasuries contain treasury bonds issued by the United States Treasury. U.S. government agency securities - government-sponsored enterprises represent securities issued by Federal National Mortgage Association (“FNMA”) and the Small Business Administration ("SBA"). Municipal securities include securities issued by various municipalities and are primarily general obligation bonds that are primarily tax-exempt. Residential and commercial mortgage-backed securities - government issued represent securities guaranteed by the Government National Mortgage Association. Residential and commercial mortgage-backed securities - government-sponsored enterprises include securities guaranteed by the Federal Home Loan Mortgage Corporation, FNMA, and the Federal Home Loan Bank ("FHLB"). The Corporation sold no available-for-sale securities during the three and six months ended June 30, 2026 and 2025.

At June 30, 2026 and December 31, 2025, securities with a fair value of $35.9 million and $38.8 million, respectively, were pledged to secure various obligations, including interest rate swap contracts and municipal deposits.

The amortized cost and fair value of securities by contractual maturity at June 30, 2026 are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay certain obligations with or without call or prepayment penalties.

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)
Due in one year or less	$	7,795	$	7,714	$	460	$	459
Due in one year through five years		11,587		10,984		1,397		1,396
Due in five through ten years		9,843		9,289		—		—
Due in over ten years		24,429		22,127		—		—
		53,654		50,114		1,857		1,855
Residential mortgage-backed securities		328,510		318,440		819		775
Commercial mortgage-backed securities		44,184		41,138		1,998		1,964
	$	426,348	$	409,692	$	4,674	$	4,594

The tables below show the Corporation’s gross unrealized losses and fair value of available-for-sale investments aggregated by investment category and length of time that individual investments were in a continuous loss position at June 30, 2026 and December 31, 2025. At June 30, 2026, the Corporation held 204 available-for-sale securities that were in an unrealized loss position, 147 of which have been in a continuous unrealized loss position for twelve months or greater.

The Corporation has not specifically identified available-for-sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. The Corporation reviews its securities on a quarterly basis to assess declines in fair value for credit losses. Consideration is given to such factors as the credit rating of the borrower, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. For the three and six months ended June 30, 2026 and 2025, management concluded that in all instances securities with fair value less than carrying value was due to market factors; thus, no credit loss provision was required.

10

A summary of unrealized loss information for securities available-for-sale, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:

	As of June 30, 2026
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)
Available-for-sale:
U.S. treasuries	$	—	$	—	$	4,964	$	34	$	4,964	$	34
U.S. government agency securities - government-    sponsored enterprises		—		—		2,309		191		2,309		191
Municipal securities		—		—		33,689		3,570		33,689		3,570
Residential mortgage-backed securities -    government issued		101,590		1,156		12,556		1,555		114,146		2,711
Residential mortgage-backed securities -    government-sponsored enterprises		62,089		828		61,368		7,138		123,457		7,966
Commercial mortgage-backed securities -    government issued		—		—		1,994		315		1,994		315
Commercial mortgage-backed securities -    government-sponsored enterprises		10,979		133		27,164		2,630		38,143		2,763
	$	174,658	$	2,117	$	144,044	$	15,433	$	318,702	$	17,550

	As of December 31, 2025
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)
Available-for-sale:
U.S. treasuries	$	—	$	—	$	4,901	$	94	$	4,901	$	94
U.S. government agency securities - government-    sponsored enterprises		—		—		2,314		186		2,314		186
Municipal securities		—		—		34,660		3,429		34,660		3,429
Residential mortgage-backed securities -    government issued		25,970		85		17,454		1,492		43,424		1,577
Residential mortgage-backed securities -    government-sponsored enterprises		14,002		73		72,481		6,857		86,483		6,930
Commercial mortgage-backed securities -    government issued		—		—		2,114		302		2,114		302
Commercial mortgage-backed securities -    government-sponsored enterprises		5,971		44		27,575		2,665		33,546		2,709
	$	45,943	$	202	$	161,499	$	15,025	$	207,442	$	15,227

The tables below show the Corporation’s gross unrealized losses and fair value of held-to-maturity investments, aggregated by investment category and length of time that individual investments were in a continuous loss position at June 30, 2026 and December 31, 2025. At June 30, 2026, the Corporation held 18 held-to-maturity securities that were in an unrealized loss position, 15 of which have been in a continuous loss position for twelve months or greater. Management assesses held-to-maturity securities for credit losses on a quarterly basis. The assessment includes review of credit ratings, identification of delinquency and evaluation of market factors. Based on this analysis, management concludes the decline in fair value is due to market factors, specifically changes in interest rates. Accordingly, no credit loss provision was recorded in the unaudited Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025.

11

A summary of unrecognized loss information for securities held-to-maturity, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:

	As of June 30, 2026
	Less than 12 Months		12 Months or Longer		Total
	Fair Value	Unrecognized Losses	Fair Value	Unrecognized Losses	Fair Value	Unrecognized Losses
	(In Thousands)
Held-to-maturity:
Municipal securities	$1,355	$2	$—	$—	$1,355	$2
Residential mortgage-backed securities -    government issued	—	—	389	25	389	25
Residential mortgage-backed securities -    government-sponsored enterprises	—	—	385	19	385	19
Commercial mortgage-backed securities -    government-sponsored enterprises	—	—	1,964	34	1,964	34
	$1,355	$2	$2,738	$78	$4,093	$80

	As of December 31, 2025
	Less than 12 Months		12 Months or Longer		Total
	Fair Value	Unrecognized Losses	Fair Value	Unrecognized Losses	Fair Value	Unrecognized Losses
	(In Thousands)
Held-to-maturity:
Municipal securities	$959	$1	$680	$2	$1,639	$3
Residential mortgage-backed securities -    government issued	—	—	520	26	520	26
Residential mortgage-backed securities -    government-sponsored enterprises	—	—	500	18	500	18
Commercial mortgage-backed securities -    government-sponsored enterprises	—	—	1,980	22	1,980	22
	$959	$1	$3,680	$68	$4,639	$69

Note 5 — Loans, Lease Receivables, and Allowance for Credit Losses

Loan and lease receivables consist of the following:

	June 30, 2026		December 31, 2025
	(In Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	345,984	$	293,706
Commercial real estate — non-owner occupied		874,669		885,870
Construction and land development		227,782		248,560
Multi-family		654,405		571,468
1-4 family		58,981		60,661
Total commercial real estate		2,161,821		2,060,265
Commercial and industrial		1,380,476		1,273,997
Consumer and other		46,027		40,965
Total gross loans and leases receivable		3,588,324		3,375,227
Less:
Allowance for credit losses		37,393		35,877
Deferred loan fees and costs, net		2,709		1,986
Loans and leases receivable, net	$	3,548,222	$	3,337,364

In June 2026, the Corporation transferred its loans held for sale portfolio of $23.7 million to loans held for investment at lower of cost or fair value. As a result, during the second quarter of 2026, the Corporation recognized no change in its loan loss reserves and no gain or loss.

12

Loans transferred to third parties consist of the guaranteed portions of SBA loans which the Corporation sold in the secondary market and participation interests in other, non-SBA originated loans.

June 30, 2026
(In Thousands)	Owner Occupied		Non-Owner Occupied		Construction and Land Development		Multi- Family		1-4 Family		Commercial and Industrial		Consumer and Other		Total
SBA
Loans transferred to third parties	$	—	$	—	$	—	$	—	$	—	$	7,111	$	—	$	7,111
Outstanding balance of loans serviced		—		—		—		—		—		80,591		—		80,591
Ownership of transferred loans		—		—		—		—		—		23,835		—		23,835
Non-SBA
Loans transferred to third parties	$	—	$	—	$	18,373	$	635	$	—	$	46,689	$	—	$	65,697
Outstanding balance of loans serviced		11,783		147,470		52,502		151,447		—		42,553		—		405,755
Ownership of transferred loans		6,733		194,316		76,805		137,650		—		42,321		—		457,825
Loan participations purchased		—		—		—		—		—		6,395		—		6,395

June 30, 2025
(In Thousands)	Owner Occupied		Non-Owner Occupied		Construction and Land Development		Multi- Family		1-4 Family		Commercial and Industrial		Consumer and Other		Total
SBA
Loans transferred to third parties	$	—	$	—	$	—	$	—	$	—	$	12,210	$	—	$	12,210
Outstanding balance of loans serviced		—		—		—		—		—		82,296		—		82,296
Ownership of transferred loans		—		—		—		—		—		24,815		—		24,815
Non-SBA
Loans transferred to third parties	$	—	$	22,146	$	41,469	$	1,820	$	—	$	11,482	$	—	$	76,917
Outstanding balance of loans serviced		12,483		167,100		39,081		155,198		—		18,810		—		392,672
Ownership of transferred loans		7,133		235,794		52,691		136,272		—		24,982		—		456,872
Loan participations purchased		—		—		8,738		—		—		—		—		8,738

13

The following table illustrates ending balances of the Corporation’s loan and lease portfolio, including non-accrual loans by class of receivable, and considering certain credit quality indicators:

June 30, 2026	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2026	2025	2024	2023	2022	Prior	Revolving Loans Amortized Cost Basis	Total	Category as a % of total portfolio
Commercial real estate —    owner occupied
Category
I	$53,479	$70,282	$16,216	$32,646	$33,656	$112,531	$5,295	324,105	93.7%
II	—	—	—	6,903	—	—	—	6,903	2.0%
III	—	—	2,164	—	—	12,812	—	14,976	4.3%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$53,479	$70,282	$18,380	$39,549	$33,656	$125,343	$5,295	$345,984	100.0%
Commercial real estate —    non-owner occupied
Category
I	$65,313	$96,274	$73,670	$65,472	$93,731	$429,580	$22,714	$846,754	96.8%
II	—	—	—	8,751	—	6,863	—	15,614	1.8%
III	—	—	—	—	—	12,301	—	12,301	1.4%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$65,313	$96,274	$73,670	$74,223	$93,731	$448,744	$22,714	$874,669	100.0%
Construction and land    development
Category
I	$15,404	$43,927	$59,888	$54,257	$9,713	$4,993	$21,469	$209,651	92.1%
II	—	—	—	—	992	—	—	992	0.4%
III	—	—	—	5,715	—	—	—	5,715	2.5%
IV	—	—	—	—	454	10,970	—	11,424	5.0%
Total	$15,404	$43,927	$59,888	$59,972	$11,159	$15,963	$21,469	$227,782	100.0%
Multi-family
Category
I	$76,002	$56,714	$18,420	$116,887	$80,391	$278,326	$2,632	$629,372	96.2%
II	—	—	—	1,525	12,077	6,314	—	19,916	3.0%
III	—	—	—	—	—	1,006	—	1,006	0.2%
IV	—	—	—	1,641	—	2,470	—	4,111	0.6%
Total	$76,002	$56,714	$18,420	$120,053	$92,468	$288,116	$2,632	$654,405	100.0%
1-4 family
Category
I	$5,164	$17,880	$6,998	$—	$3,299	$3,547	$22,093	$58,981	100.0%
II	—	—	—	—	—	—	—	—	0.0%
III	—	—	—	—	—	—	—	—	0.0%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$5,164	$17,880	$6,998	$—	$3,299	$3,547	$22,093	$58,981	100.0%
Commercial and industrial
Category
I	$167,729	$228,978	$134,278	$102,824	$44,223	$58,744	$519,479	$1,256,255	91.0%
II	1,200	615	11,736	1,858	3,612	1,188	4,656	24,865	1.8%
III	277	558	8,476	16,281	3,722	1,876	45,639	76,829	5.6%
IV	—	914	1,997	2,598	6,617	2,720	7,681	22,527	1.6%
Total	$169,206	$231,065	$156,487	$123,561	$58,174	$64,528	$577,455	$1,380,476	100.0%
Consumer and other
Category
I	$11,548	$7,284	$4,755	$2,355	$4,061	$8,786	$7,238	$46,027	100.0%
II	—	—	—	—	—	—	—	—	0.0%
III	—	—	—	—	—	—	—	—	0.0%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$11,548	$7,284	$4,755	$2,355	$4,061	$8,786	$7,238	$46,027	100.0%
Total Loans
Category
I	$394,639	$521,339	$314,225	$374,441	$269,074	$896,507	$600,920	$3,371,145	93.9%
II	1,200	615	11,736	19,037	16,681	14,365	4,656	68,290	1.9%
III	277	558	10,640	21,996	3,722	27,995	45,639	110,827	3.1%
IV	—	914	1,997	4,239	7,071	16,160	7,681	38,062	1.1%
Total	$396,116	$523,426	$338,598	$419,713	$296,548	$955,027	$658,896	$3,588,324	100.0%

14

December 31, 2025	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2025	2024	2023	2022	2021	Prior	Revolving Loans Amortized Cost Basis	Total	Category as a % of total portfolio
Commercial real estate —    owner occupied
Category
I	$65,752	$20,422	$39,698	$32,186	$30,251	$92,981	$295	$281,585	95.9%
II	—	—	2,011	—	—	—	—	2,011	0.7%
III	—	2,197	—	—	—	7,913	—	10,110	3.4%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$65,752	$22,619	$41,709	$32,186	$30,251	$100,894	$295	$293,706	100.0%
Commercial real estate —    non-owner occupied
Category
I	$85,103	$81,087	$108,308	$89,226	$63,803	$392,720	$34,236	$854,483	96.4%
II	—	—	—	—	—	6,863	—	6,863	0.8%
III	—	—	—	—	716	23,808	—	24,524	2.8%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$85,103	$81,087	$108,308	$89,226	$64,519	$423,391	$34,236	$885,870	100.0%
Construction and land    development
Category
I	$35,887	$73,179	$78,264	$10,278	$91	$5,043	$25,482	$228,224	91.8%
II	—	—	—	—	—	—	—	—	0.0%
III	—	—	5,755	—	—	—	—	5,755	2.3%
IV	—	—	—	454	8,155	5,972	—	14,581	5.9%
Total	$35,887	$73,179	$84,019	$10,732	$8,246	$11,015	$25,482	$248,560	100.0%
Multi-family
Category
I	$57,113	$18,231	$103,795	$93,280	$61,620	$211,473	$2,644	$548,156	95.9%
II	—	—	1,530	7,309	—	782	—	9,621	1.7%
III	—	—	—	—	8,380	1,019	—	9,399	1.6%
IV	—	—	1,714	—	2,578	—	—	4,292	0.8%
Total	$57,113	$18,231	$107,039	$100,589	$72,578	$213,274	$2,644	$571,468	100.0%
1-4 family
Category
I	$18,249	$7,043	$1,416	$4,432	$2,036	$3,470	$24,015	$60,661	100.0%
II	—	—	—	—	—	—	—	—	0.0%
III	—	—	—	—	—	—	—	—	0.0%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$18,249	$7,043	$1,416	$4,432	$2,036	$3,470	$24,015	$60,661	100.0%
Commercial and industrial
Category
I	$240,914	$178,507	$138,504	$52,149	$35,514	$31,754	$452,160	$1,129,502	88.6%
II	568	14,119	10,997	5,948	25	2,797	24,140	58,594	4.6%
III	499	8,617	10,409	4,656	787	1,745	34,206	60,919	4.8%
IV	447	1,845	3,384	7,644	302	4,083	7,277	24,982	2.0%
Total	$242,428	$203,088	$163,294	$70,397	$36,628	$40,379	$517,783	$1,273,997	100.0%
Consumer and other
Category
I	$7,790	$5,715	$4,167	$4,926	$1,717	$10,423	$6,227	$40,965	100.0%
II	—	—	—	—	—	—	—	—	0.0%
III	—	—	—	—	—	—	—	—	0.0%
IV	—	—	—	—	—	—	—	—	0.0%
Total	$7,790	$5,715	$4,167	$4,926	$1,717	$10,423	$6,227	$40,965	100.0%
Total Loans
Category
I	$510,808	$384,184	$474,152	$286,477	$195,032	$747,864	$545,059	$3,143,576	93.1%
II	568	14,119	14,538	13,257	25	10,442	24,140	77,089	2.3%
III	499	10,814	16,164	4,656	9,883	34,485	34,206	110,707	3.3%
IV	447	1,845	5,098	8,098	11,035	10,055	7,277	43,855	1.3%
Total	$512,322	$410,962	$509,952	$312,488	$215,975	$802,846	$610,682	$3,375,227	100.0%

Each credit is evaluated for proper risk rating upon origination, at the time of each subsequent renewal, upon receipt and evaluation of updated financial information from the Corporation’s borrowers, or as other circumstances dictate. The Corporation primarily uses a

15

nine grade risk rating system to monitor the ongoing credit quality of its loans and leases. The risk rating grades follow a consistent definition and are then applied to specific loan types based on the nature of the loan. Each risk rating is determined based on various quantitative and qualitative factors and is subject to various levels of review and concurrence on the stated risk rating. In addition to its nine grade risk rating system, the Corporation groups loans into four loan and related risk categories which determine the level and nature of review by management.

Category I — Loans and leases in this category are performing in accordance with the terms of the contract and generally exhibit no immediate concerns regarding the security and viability of the underlying collateral, financial stability of the borrower, integrity or strength of the borrowers’ management team, or the industry in which the borrower operates.

Category II — Loans and leases in this category are beginning to show signs of deterioration in one or more of the Corporation’s core underwriting criteria such as financial stability, management strength, industry trends, or collateral values. Management will place credits in this category to allow for proactive monitoring and resolution with the borrower to possibly mitigate the area of concern and prevent further deterioration or risk of loss to the Corporation.

Category III — Loans and leases in this category are identified by management as warranting special attention. However, the balance in this category is not intended to represent the amount of adversely classified assets held by the Bank. Category III loans and leases generally exhibit undesirable characteristics, such as evidence of adverse financial trends and conditions, managerial problems, deteriorating economic conditions within the related industry, or evidence of adverse public filings and may exhibit collateral shortfall positions. Management continues to believe that it will collect all contractual principal and interest in accordance with the original terms of the contracts relating to the loans and leases in this category, and therefore Category III loans are considered performing with no specific reserves established for this category.

Category IV — Loans and leases in this category are non-accrual loans. Management has determined that it is unlikely that the Bank will receive the contractual principal and interest in accordance with the original terms of the agreement. Non-accrual loans are individually evaluated to assess the need for the establishment of specific reserves or charge-offs. When analyzing the adequacy of collateral, the Corporation obtains external appraisals at least annually. External appraisals are obtained from the Corporation’s approved appraiser listing and are independently reviewed to monitor the quality of such appraisals. To the extent a collateral shortfall position is present, a specific reserve or charge-off will be recorded.

The delinquency aging of the loan and lease portfolio by class of receivable was as follows:

	June 30, 2026
	30-59 Days Past Due			60-89 Days Past Due			Greater Than 90 Days Past Due			Total Past Due			Current			Total Loans and Leases
	(Dollars in Thousands)
Total loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	345,984		$	345,984
Non-owner occupied		—			—			—			—			874,669			874,669
Construction and land development		—			—			11,424			11,424			216,358			227,782
Multi-family		—			—			—			—			654,405			654,405
1-4 family		—			—			—			—			58,981			58,981
Commercial and industrial		2,510			813			15,317			18,640			1,361,836			1,380,476
Consumer and other		—			—			—			—			46,027			46,027
Total	$	2,510		$	813		$	26,741		$	30,064		$	3,558,260		$	3,588,324
Percent of portfolio		0.07	%		0.02	%		0.75	%		0.84	%		99.16	%		100.00	%

16

	December 31, 2025
	30-59 Days Past Due			60-89 Days Past Due			Greater Than 90 Days Past Due			Total Past Due			Current			Total Loans and Leases
	(Dollars in Thousands)
Total loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	293,706		$	293,706
Non-owner occupied		—			—			—			—			885,870			885,870
Construction and land development		14,581			—			—			14,581			233,979			248,560
Multi-family		—			—			—			—			571,468			571,468
1-4 family		—			—			—			—			60,661			60,661
Commercial and industrial		3,116			963			15,229			19,308			1,254,689			1,273,997
Consumer and other		50			—			—			50			40,915			40,965
Total	$	17,747		$	963		$	15,229		$	33,939		$	3,341,288		$	3,375,227
Percent of portfolio		0.53	%		0.03	%		0.45	%		1.01	%		98.99	%		100.00	%

The following tables provide additional detail on loans on non-accrual status and loans past due over 89 days still accruing as of:

	June 30, 2026
	Non-accrual With No Allowance for Credit Loss		Non-accrual With Allowance for Credit Loss		Loans Past Due Over 89 Days Still Accruing
	(In Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	—	$	—	$	—
Commercial real estate — non-owner occupied		—		—		—
Construction and land development		11,424		—		—
Multi-family		4,111		—		—
1-4 family		—		—		—
Total commercial real estate		15,535		—		—
Commercial and industrial		9,189		13,338		—
Consumer and other		—		—		—
Total non-accrual loans and leases	$	24,724	$	13,338	$	—

	December 31, 2025
	Non-accrual With No Allowance for Credit Loss		Non-accrual With Allowance for Credit Loss		Loans Past Due Over 89 Days Still Accruing
	(In Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	—	$	—	$	—
Commercial real estate — non-owner occupied		—		—		—
Construction and land development		14,581		—		—
Multi-family		4,292		—		—
1-4 family		—		—		—
Total commercial real estate		18,873		—		—
Commercial and industrial		10,652		14,330		—
Consumer and other		—		—		—
Total non-accrual loans and leases	$	29,525	$	14,330	$	—

	June 30, 2026			December 31, 2025
Total non-accrual loans and leases to gross loans and leases		1.06	%		1.30	%
Allowance for credit losses to gross loans and leases		1.10			1.12
Allowance for credit losses to non-accrual loans and leases		103.82			85.95

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The following table presents the amortized cost basis of the non-accrual, collateral-dependent loans as of:

	June 30, 2026		December 31, 2025
	(In Thousands)
Equipment	$	14,413	$	14,615
Real Estate		17,607		21,595
Accounts Receivable		6,057		7,277
Other		65		473
Total	$	38,142	$	43,960

Occasionally, the Corporation modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

The following table presents the amortized cost basis of loans at June 30, 2026 that were both experiencing financial difficulty and modified during the six months ended June 30, 2026 and 2025, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized costs basis of each class of financing receivable is also presented below.

	For the Six Months Ended June 30, 2026
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Payment Delay and Term Extension		Total		Total Class of Financing Receivable
	(In Thousands)
Commercial real estate	$	—	$	—	$	—	$	—	$	—	$	—		0.00	%
Commercial and industrial		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—		0.00	%

	For the Six Months Ended June 30, 2025
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Payment Delay and Term Extension		Total		Total Class of Financing Receivable
	(In Thousands)
Commercial real estate	$	—	$	—	$	—	$	—	$	—	$	—		0.00	%
Commercial and industrial		—		—		—		311		6,195		6,506		0.52
Total	$	—	$	—	$	—	$	311	$	6,195	$	6,506		0.20	%

The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months:

	For the Six Months Ended June 30, 2026
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due
	(Dollars in Thousands)
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Total	$	—	$	—	$	—	$	—

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	For the Six Months Ended June 30, 2025
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due
	(Dollars in Thousands)
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Total	$	—	$	—	$	—	$	—

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2026 and 2025:

	For the Six Months Ended June 30, 2026
(Dollars in Thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction			Weighted Average Term Extension (years)		Weighted Average Payment Delay (years)
Commercial real estate	$	—		0.00	%		0.00		0.00
Commercial and industrial		—		0.00			0.00		0.00
Total	$	—		0.00	%		0.00		0.00

	For the Six Months Ended June 30, 2025
(Dollars in Thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction			Weighted Average Term Extension (years)		Weighted Average Payment Delay (years)
Commercial real estate	$	—		0.00	%		0.00		0.00
Commercial and industrial		—		2.25			0.50		0.50
Total	$	—		2.25	%		0.50		0.50

The following table presents the amortized cost basis of loans that had a payment default during the six months ended June 30, 2026 and 2025 and were modified in the 12 months prior to that default to borrowers experience financial difficulty:

	For the Six Months Ended June 30, 2026
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction
	(In Thousands)
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Total	$	—	$	—	$	—	$	—

	For the Six Months Ended June 30, 2025
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction
	(In Thousands)
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		397		—
Total	$	—	$	—	$	397	$	—

Allowance for Credit Losses

The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. A provision for credit losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors as discussed within Note 1 – Nature of Operations and Summary of Significant Accounting Policies included in the Corporation’s Form 10-K for the year ended December 31, 2025.

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Quantitative Considerations

The ACL is primarily calculated utilizing a Discounted Cash Flow (“DCF”) model. Key inputs and assumptions used in this model are discussed below:

•Forecast model - For each portfolio segment, a Loss Driver Analysis (“LDA”) was performed in order to identify appropriate loss drivers and create a regression model for use in forecasting cash flows. The LDA analysis utilized peer Federal Financial Institutions Examination Council ("FFIEC") Call Report data for all DCF pools. The Corporation updates the LDA annually.

•Probability of Default ("PD") – PD is the probability that an asset will be in default within a given time frame. The Corporation has defined default as when a charge-off has occurred, a loan goes to non-accrual status, or a loan is greater than 90 days past due. The forecast model is utilized to estimate PDs.

•Loss Given Default ("LGD") – LGD is the percentage of the asset not expected to be collected due to default. The LGD is derived from using a method referred to as Frye Jacobs which uses industry data.

•Prepayments and curtailments – Prepayments and curtailments are calculated based on the Corporation’s own data. This analysis is updated semi-annually.

•Forecast and reversion – The Corporation has established a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average.

•Economic forecast – The Corporation utilizes a third party to provide economic forecasts under various scenarios, which are assessed against economic indicators and management’s observations in the market. As of December 31, 2025, the Corporation selected a forecast which estimates unemployment between 4.48% and 4.78% and GDP year-over-year percentage change between 1.75% and 2.42% over the next four quarters. As of June 30, 2026, the Corporation selected a forecast which estimates unemployment between 4.37% and 4.60% and GDP year-over-year percentage change between 1.60% and 1.99% over the next four quarters. Following the forecast period, the model reverts to long-term averages over four quarters. Management believes that the resulting quantitative reserve appropriately balances economic indicators with identified risks.

Qualitative Considerations

In addition to the quantitative model, management considers the need for qualitative adjustment for risks not considered in the DCF. Factors that are considered by management in determining loan collectability and the appropriate level of the ACL are listed below:

•The Corporation’s lending policies and procedures, including changes in lending strategies, underwriting standards and practices for collections, write-offs, and recoveries;

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the Corporation operates that affect the collectability of financial assets;

•The experience, ability, and depth of the Corporation’s lending, investment, collection, and other relevant management and staff;

•The volume of past due financial assets, the volume of non-accrual loans and leases, and the volume and severity of adversely classified or graded assets;

•The existence and effect of industry concentrations of credit;

•The nature and volume of the portfolio segment or class;

•The quality of the Corporation’s credit function; and

•The effect of other external factors such as the regulatory, legal and technological environments, competition, and events such as natural disasters or pandemics.

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ACL Activity

A summary of the activity in the allowance for credit losses by portfolio segment is as follows:

	As of and for the Three Months Ended June 30, 2026
	Owner Occupied		Non-Owner Occupied			Construction and Land Development		Multi- Family		1-4 Family			Commercial and Industrial			Consumer and Other			Total
	(In Thousands)
Beginning balance	$	1,970	$	6,699		$	2,704	$	4,394	$	602		$	21,585		$	535		$	38,489
Charge-offs		—		—			—		—		—			(1,524	)		—			(1,524	)
Recoveries		—		—			—		—		5			481			—			486
Net recoveries (charge-offs)		—		—			—		—		5			(1,043	)		—			(1,038	)
Provision (credit) for credit losses		566		(254	)		275		527		(34	)		1,004			(18	)		2,066
Ending balance	$	2,536	$	6,445		$	2,979	$	4,921	$	573		$	21,546		$	517		$	39,517
Components:
Allowance for credit losses on loans	$	2,520	$	6,371		$	1,740	$	4,901	$	535		$	20,856		$	470		$	37,393
Allowance for credit losses on    unfunded credit commitments		16		74			1,239		20		38			690			47			2,124
Total ACL	$	2,536	$	6,445		$	2,979	$	4,921	$	573		$	21,546		$	517		$	39,517

	As of and for the Three Months Ended June 30, 2025
	Owner Occupied		Non-Owner Occupied		Construction and Land Development			Multi- Family		1-4 Family			Commercial and Industrial			Consumer and Other			Total
	(In Thousands)
Beginning balance	$	1,682	$	6,017	$	2,491		$	5,473	$	494		$	19,946		$	412		$	36,515
Charge-offs		—		—		—			—		—			(1,338	)		—			(1,338	)
Recoveries		—		—		—			—		7			325			—			332
Net recoveries (charge-offs)		—		—		—			—		7			(1,013	)		—			(1,006	)
Provision (credit) for credit losses		3		313		(24	)		586		(72	)		1,903			(8	)		2,701
Ending balance	$	1,685	$	6,330	$	2,467		$	6,059	$	429		$	20,836		$	404		$	38,210
Components:
Allowance for credit losses on loans	$	1,675	$	6,281	$	1,882		$	6,037	$	401		$	20,222		$	363		$	36,861
Allowance for credit losses on    unfunded credit commitments		10		49		585			22		28			614			41			1,349
Total ACL	$	1,685	$	6,330	$	2,467		$	6,059	$	429		$	20,836		$	404		$	38,210

	As of and for the Six Months Ended June 30, 2026
	Owner Occupied		Non-Owner Occupied		Construction and Land Development		Multi- Family			1-4 Family		Commercial and Industrial			Consumer and Other		Total
	(In Thousands)
Beginning balance	$	1,908	$	6,381	$	2,752	$	4,926		$	557	$	20,754		$	414	$	37,692
Charge-offs		—		—		—		—			—		(3,856	)		—		(3,856	)
Recoveries		—		—		—		—			12		642			—		654
Net recoveries (charge-offs)		—		—		—		—			12		(3,214	)		—		(3,202	)
Provision for credit losses		628		64		227		(5	)		4		4,006			103		5,027
Ending balance	$	2,536	$	6,445	$	2,979	$	4,921		$	573	$	21,546		$	517	$	39,517
Components:
Allowance for credit losses on loans	$	2,520	$	6,371	$	1,740	$	4,901		$	535	$	20,856		$	470	$	37,393
Allowance for credit losses on    unfunded credit commitments		16		74		1,239		20			38		690			47		2,124
Total ACL	$	2,536	$	6,445	$	2,979	$	4,921		$	573	$	21,546		$	517	$	39,517

	As of and for the Six Months Ended June 30, 2025
	Owner Occupied		Non-Owner Occupied		Construction and Land Development			Multi- Family		1-4 Family			Commercial and Industrial			Consumer and Other			Total
	(In Thousands)
Beginning balance	$	1,629	$	5,892	$	2,826		$	4,613	$	523		$	21,470		$	315		$	37,268
Charge-offs		—		—		—			—		—			(5,138	)		(10	)		(5,148	)
Recoveries		2		—		—			—		13			715			—			730
Net recoveries (charge-offs)		2		—		—			—		13			(4,423	)		(10	)		(4,418	)
Provision for credit losses		54		438		(359	)		1,446		(107	)		3,789			99			5,360
Ending balance	$	1,685	$	6,330	$	2,467		$	6,059	$	429		$	20,836		$	404		$	38,210
Components:
Allowance for credit losses on loans	$	1,675	$	6,281	$	1,882		$	6,037	$	401		$	20,222		$	363		$	36,861
Allowance for credit losses on    unfunded credit commitments		10		49		585			22		28			614			41			1,349
Total ACL	$	1,685	$	6,330	$	2,467		$	6,059	$	429		$	20,836		$	404		$	38,210

21

ACL Summary

Loans collectively evaluated for credit losses in the following tables include all performing loans at June 30, 2026 and December 31, 2025. Loans individually evaluated for credit losses include all non-accrual loans.

The following tables provide information regarding the allowance for credit losses and balances by type of allowance methodology.

	As of June 30, 2026
	Owner Occupied	Non-Owner Occupied	Construction and Land Development	Multi- Family	1-4 Family	Commercial and Industrial	Consumer and Other	Total
	(In Thousands)
Allowance for credit losses: