WSFS Financial Corp: Form 10-Q for the period ended Jun 30, 2026

OVERVIEW

WSFS Financial Corporation (WSFS, and together with its subsidiaries, the Company) is a savings and loan holding company headquartered in Wilmington, Delaware. Substantially all of our assets are held by our subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), one of the ten oldest bank and trust companies in the United States (U.S.) continuously operating under the same name. With $22.7 billion in assets and $101.7 billion in assets under management (AUM) and assets under administration (AUA) at June 30, 2026, WSFS Bank is the oldest and largest locally-managed bank and trust company headquartered in the Greater Philadelphia and Delaware region. As a federal savings bank that was formerly chartered as a state mutual savings bank, WSFS Bank enjoys a broader scope of permissible activities than most other financial institutions. A fixture in the community, we have been in operation for more than 194 years. In addition to our focus on stellar client experience, we have continued to fuel growth and remain a leader in our community. We are a relationship-focused, locally-managed, community banking institution. Our mission and strategy is simple: “We Stand for Service®.”

As of June 30, 2026, the Company's consolidated operating subsidiaries included WSFS Bank, The Bryn Mawr Trust Company of Delaware (BMT-DE), Bryn Mawr Trust Advisors (BMTA), and WSFS SPE Services, LLC. The Company also has three unconsolidated subsidiaries: WSFS Capital Trust III, Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II. Operating subsidiaries of WSFS Bank included 1832 Holdings, Inc. and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).

Our WSFS Bank segment had a total loan and lease portfolio of $13.0 billion as of June 30, 2026, which was funded primarily through client-generated deposits. We have built a $10.1 billion commercial loan and lease portfolio by recruiting seasoned commercial lenders in our markets, offering the high level of service and flexibility typically associated with a community bank and through acquisitions. We also offer a broad variety of consumer loan products and retail securities brokerage through our retail branches. The Home Lending division offers mortgage banking and title services through our branches and WSFS Mortgage®, our mortgage banking division specializing in a variety of residential mortgage and refinancing solutions.

Our Wealth and Trust segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional Clients. Combined, these businesses had $101.7 billion of AUM and AUA at June 30, 2026.

Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management serves high-net-worth Clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the Bank’s charter and as a registered investment advisor (RIA). It generates revenue through a percentage fee based on account assets, fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody.

BMT-DE provides personal trust and fiduciary services to families and individuals across the U.S. and internationally. WSFS Institutional Services® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate Clients and special purpose vehicles.

Our leasing business, conducted by NewLane Finance®, originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories including technology, software, office, medical, veterinary and other areas. In addition, NewLane Finance® offers captive insurance through its subsidiary, Prime Protect.

Our Cash Connect® segment is a premier provider of ATM vault cash, smart safe (safes that automatically accept, validate, record and hold cash in a secure environment) and other cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. Cash Connect® services non-bank and WSFS-branded ATMs and smart safes nationwide, and manages approximately $1.3 billion in total cash and services approximately 23,100 non-bank ATMs and 12,100 smart safes nationwide. Cash Connect® provides related services such as online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics.

As of June 30, 2026, we service our Clients primarily from 114 offices located in Pennsylvania (58), Delaware (38), New Jersey (14), Florida (2), Nevada (1) and Virginia (1), our ATM network, our website at www.wsfsbank.com (http://www.wsfsbank.com) and our mobile app.

Highlights and Other Notables Items for Three and Six Months Ended June 30, 2026

• Three Months Ended June 30, 2026
• Diluted EPS was $1.63 and ROA was 1.52%, compared to $1.27 and 1.39%, respectively, for the three months ended June 30, 2025.
• Total deposits increased $535.1 million, or 2.9%, during the quarter, primarily due to growth in Trust and Commercial. Noninterest deposits comprised 37% of total deposits at June 30, 2026.
• Wealth and Trust noninterest income grew 17% compared to the three months ended June 30, 2025.
• WSFS Institutional Services® grew 34% and BMT-DE grew 20%.
• The segment also surpassed $100 billion of fiduciary assets.
• The Company completed the sale of its credit card portfolio and entered into a partnership to issue WSFS-branded credit cards. This portfolio had an outstanding book balance of $36.3 million at time of sale and the transaction resulted in a $1.7 million gain on sale and a $1.3 million release of provision for credit losses.
• WSFS repurchased 923,948 shares of common stock under the Company's share repurchase plans at an average price of $71.69 per share, for an aggregate purchase price of approximately $66.2 million, and paid quarterly dividends of $10.4 million, for a total capital return of $76.6 million.
• The Bank and the Company continue to be above well-capitalized across all measures of regulatory capital, with total common equity Tier 1 capital of 13.77% and 13.76%, respectively, and total risk-based capital of 14.94% and 15.47%, respectively.
• Six Months Ended June 30, 2026
• Diluted EPS was $3.26 and ROA was 1.56%, compared to $2.39 and 1.34% for the six months ended June 30, 2025.
• Total deposits increased $1.4 billion, or 7.7%, compared to December 31, 2025, primarily due to growth in Trust and Commercial.
• The Bank recognized a $15.7 million recovery of previously charged-off loans to a fund invested in office properties.
• The Board of Directors approved an 18% increase in the quarterly cash dividend to $0.20 per share, along with an additional share repurchase authorization of 15% of our outstanding shares as of March 31, 2026.
• WSFS repurchased 2,243,574 shares of common stock under the Company's share repurchase plans at an average price of $67.39 per share, for an aggregate purchase price of approximately $151.2 million, and paid quarterly dividends of $19.4 million, for a total capital return of $170.6 million.

FINANCIAL CONDITION

Total assets increased $1.3 billion to $22.7 billion at June 30, 2026 compared to December 31, 2025. This increase is primarily comprised of the following:

• Total cash and cash equivalents increased $871.5 million, primarily due to increases in deposits.
• Total investment securities increased $273.7 million:
• Investment securities, available-for-sale increased $298.8 million, primarily due to purchases of $533.5 million, partially offset by repayments, maturities and calls of $211.9 million and decreased market values of $22.9 million.
• Investment securities, held-to-maturity decreased $25.0 million, primarily due to repayments, maturities and calls of $31.8 million, partially offset by $6.7 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.
• Loans and leases, net of allowance increased $207.8 million, primarily driven by growth in C&I and residential mortgages, partially offset by a decrease in consumer from the continued runoff of Spring EQ loans and the sale of the credit card portfolio.
• Other real estate owned increased $12.5 million, due to the transfer of an existing nonperforming land development loan.

Total liabilities increased $1.4 billion to $19.9 billion at June 30, 2026 compared to December 31, 2025 due to an increase in Client deposits. This deposit growth was primarily due to an increase in noninterest demand deposits, driven by Institutional Services and Commercial deposits.

For further information, see "Notes to the Consolidated Financial Statements (Unaudited)."

LIQUIDITY AND CAPITAL RESOURCES

Capital Resources

Stockholders’ equity of WSFS decreased $16.7 million to $2.7 billion at June 30, 2026 compared to December 31, 2025. This decrease was primarily due to $151.2 million for the repurchase of shares of common stock under our stock repurchase plan, an increase of $20.7 million in accumulated other comprehensive loss driven by market value decreases on available-for-sale investment securities and our cash flow hedges, and the payment of dividends on our common stock of $19.4 million, partially offset by $171.2 million of net income attributable to WSFS.

During the three months ended June 30, 2026, the Board of Directors approved a quarterly cash dividend of $0.20 per share of common stock. The dividend will be paid on August 21, 2026 to stockholders of record as of August 7, 2026.

Book value per share of common stock was $52.97 at June 30, 2026, an increase of $1.70 from $51.27 at December 31, 2025. Tangible book value per share of common stock (a non-GAAP financial measure) was $34.24 at June 30, 2026, an increase of $1.13 from $33.11 at December 31, 2025. We believe tangible book value per common share helps management and investors better understand and assess changes from period to period in stockholders’ equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP), and is not a substitute for, or superior to, GAAP results. For a reconciliation of tangible book value per common share to book value per share in accordance with GAAP, see "Reconciliation of Non-GAAP Measure to GAAP Measure."

The table below compares the Bank's and the Company’s consolidated capital position to the minimum regulatory requirements as of June 30, 2026:

(Dollars in thousands)

Under the prompt corrective action regime, regulators have established five capital tiers: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized. A depository institution’s capital tier depends on its capital levels in relation to various relevant capital measures, which include leverage and risk-based capital measures and certain other factors. Depository institutions that are not classified as well-capitalized are subject to various restrictions, which may include restrictions on capital distributions, payment of management fees, acceptance of brokered deposits and other operating activities.

Regulatory capital requirements for the Bank and the Company include a minimum common equity Tier 1 capital ratio of 4.50% of risk-weighted assets, a Tier 1 capital ratio of 6.00% of risk-weighted assets, a minimum total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00% of average assets. In order to avoid limits on capital distributions and discretionary bonus payments, the Bank and the Company must maintain a capital conservation buffer of 2.5% of common equity Tier 1 capital over each of the risk-based capital requirements. As of June 30, 2026, the Bank and the Company were in compliance with the regulatory capital requirements and met or exceeded the amounts required to be considered “well-capitalized” as defined in the regulations.

Not included in the Bank’s capital, the Company separately held $272.2 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

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Liquidity

We manage our liquidity and funding needs through our Treasury function and our Asset/Liability Committee. We have a policy that separately addresses liquidity, and management monitors our adherence to policy limits. Also, liquidity risk management is a primary area of examination by the banking regulators.

Funding sources to support growth and meet our liquidity needs include cash from operations, commercial, consumer, wealth and trust deposits, loan repayments, FHLB borrowings, repurchase agreements, access to the Federal Reserve Discount Window, and access to the brokered deposit market as well as other wholesale funding avenues. In addition, we have a large portfolio of high-quality, liquid investments, primarily short-duration mortgage-backed securities, that provide a near-continuous source of cash flow to meet current cash needs, or can be sold to meet larger discrete needs for cash. We believe these sources are sufficient to meet our funding needs as well as maintain required and prudent levels of liquidity over the next twelve months and beyond.

As of June 30, 2026, the Company had $2.6 billion in cash, cash equivalents, and restricted cash. Our estimated uninsured deposits were $8.5 billion, or 45% of total client deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $7.3 billion, or 38% of total client deposits.

As of June 30, 2026, the Company had a readily available, secured borrowing capacity of $6.0 billion from the FHLB and $2.1 billion through the Federal Reserve Discount Window. In addition, the Company had $2.0 billion of cash deposited with the Federal Reserve Bank and $1.1 billion in unpledged securities that could be used to support additional borrowings.

Our primary cash contractual obligations relate to operating leases, long-term debt, credit obligations, and data processing. At June 30, 2026, we had $156.4 million in total contractual payments for ongoing leases that have remaining lease terms of less than one year to 19 years, which includes renewal options that are exercised at our discretion. For additional information on our operating leases, see Note 7 to the unaudited Consolidated Financial Statements. At June 30, 2026, we had obligations for principal payments on long-term debt including $67.0 million for our trust preferred borrowings, due June 1, 2035, $25.0 million for our trust preferred borrowings due December 15, 2034, and $200.0 million for our senior debt due December 15, 2035. We are also contractually obligated to make interest payments on our long-term debt through their respective maturities.

Commitments to extend credit provide for financing on predetermined terms as long as the client continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At June 30, 2026, the Company had total commitments to extend credit, including cancellable commitments, of $4.6 billion, which are generally one-year commitments.

NONPERFORMING ASSETS

Nonperforming assets include nonaccruing loans and OREO. Nonaccruing loans are those on which we no longer accrue interest. Loans are placed on nonaccrual status immediately if, in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more and the value of the collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed and charged against interest income. In addition, the amortization of net deferred loan fees is suspended when a loan is placed on nonaccrual status. Subsequent cash receipts are applied either to the outstanding principal balance or recorded as interest income, depending on management’s assessment of the ultimate collectability of principal and interest. Past due loans shown in the table below are loans that are contractually past due 90 days or more as to principal or interest payments but which remain in accrual status because they are considered well secured and in the process of collection. Troubled loans are loans modified in the form of principal forgiveness, interest rate reduction, an other-than-insignificant payment delay, or a term extension to borrowers experiencing financial difficulty.

The following table shows our nonperforming assets, past due loans, and troubled loans at the dates indicated:

(Dollars in thousands)

(1) Includes nonaccruing troubled loans.

(2) Includes U.S. government guaranteed student loans with little risk of credit loss.

(3) Reflects allowance for credit losses related to loans and leases over the amortized cost of the total portfolio.

(4) Total loans exclude loans held for sale and reverse mortgages.

(5) Excludes acquired purchase credit deteriorated loans.

Nonperforming assets increased $8.9 million between December 31, 2025 and June 30, 2026. This increase was primarily driven by the addition of an $11.2 million owner-occupied loan.

The following table summarizes the changes in nonperforming assets during the periods indicated:

(Dollars in thousands)

The timely identification of problem loans is a key element in our strategy to manage our loan portfolio. Problem loans are all criticized, classified and nonperforming loans and other real estate owned. Timely identification enables us to take appropriate action and accordingly, minimize losses. An asset review system established to monitor the asset quality of our loans and investments in real estate portfolios facilitates the identification of problem assets. In general, this system uses guidelines established by federal regulation.

INTEREST RATE SENSITIVITY

Our primary objective in managing interest rate risk is to minimize the adverse impact of changes in interest rates on net interest income and capital, while maximizing the yield/cost spread on our asset/liability structure. Interest rates are partly a function of decisions by the Federal Open Market Committee (FOMC) on the target range for the federal funds rate, and these decisions are sometimes difficult to anticipate. In 2025, the FOMC lowered the federal funds target rate three times for a total of 75 basis points. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure.

Our primary tool for achieving our asset/liability management strategies is to match maturities or repricing periods of interest rate-sensitive assets and liabilities to promote a favorable interest rate spread and mitigate exposure to fluctuations in interest rates. We regularly review our interest rate sensitivity and adjust the sensitivity within acceptable tolerance ranges. At June 30, 2026, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by $1.5 billion. When including the impact of cash flow hedges, our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 116.81% and the one-year interest-sensitive gap as a percentage of total assets was 6.45% at June 30, 2026 compared with 103.26% and 1.33% at December 31, 2025, respectively.

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk inherent in our lending, investing, and funding activities. To that end, we actively monitor and manage our interest rate risk exposure. One measure evaluates the impact of an immediate change in interest rates in 100 basis point increments on the economic value of equity ratio. The economic value of the equity ratio is defined as the economic value of the estimated cash flows from assets and liabilities as a percentage of economic value of cash flows from total assets.

The following table shows the estimated impact of immediate changes in interest rates on our net interest income and economic value of equity ratio at the specified levels at June 30, 2026 and December 31, 2025:

(1) The percentage difference between net interest margin in a stable interest rate environment and net interest income as projected under the various rate change environments.

(2) The economic value of equity ratio in a stable interest rate environment and the economic value of equity ratio as projected under the various rate change environments.

(3) During the first quarter of 2026, the Company revised its economic value of equity methodology to exclude goodwill and intangible assets to better reflect the Company's underlying interest rate risk profile.

We also engage in other business activities that are sensitive to changes in interest rates. For example, mortgage banking revenues and expenses can fluctuate with changing interest rates. These fluctuations are difficult to model and estimate.

RESULTS OF OPERATIONS

Net Interest Income

The following tables provide information concerning the average balances, yields and rates on interest-earning assets and interest-bearing liabilities during the periods indicated:

(Dollars in thousands)

(1) Weighted average yields for tax-exempt securities and loans have been computed on a tax-equivalent basis.

(2) Average balances are net of unearned income and include nonperforming loans.

(3) Includes commercial mortgage and commercial construction loans.

(4) Includes securities available-for-sale at fair value.

(5) Includes federal funds purchased.

(Dollars in thousands)

(1) Weighted average yields for tax-exempt securities and loans have been computed on a tax-equivalent basis.

(2) Average balances are net of unearned income and include nonperforming loans.

(3) Includes securities available-for-sale at fair value.

(4) Includes federal funds purchased.

Three months ended June 30, 2026: During the three months ended June 30, 2026, net interest income increased $13.0 million from the three months ended June 30, 2025 primarily driven by lower deposit costs, higher cash balances, and higher average loan balances. These increases were partially offset by lower loan yields as a result of three 25bp Federal Funds rate cuts that occurred in 2025. Net interest margin was 3.87% for the second quarter of 2026, a 2 basis point decrease compared to 3.89% for the second quarter of 2025. The decrease was primarily due to the impact of the three interest rate cuts that occurred in 2025, partially offset by higher investment yields and favorable balance sheet mix.

Six months ended June 30, 2026: During the six months ended June 30, 2026, net interest income increased $22.9 million from the six months ended June 30, 2025 due to the reasons noted above. Net interest margin was 3.85% for the six months ended June 30, 2026, a 3 basis point decrease compared to 3.88% for the six months ended June 30, 2025. The decrease was due to the reasons mentioned above.

Allowance for Credit Losses

We maintain the allowance for credit losses at an appropriate level based on our assessment of estimable and expected losses related to various portfolios subject to credit risk. Our allowance for credit losses (ACL) is based on our historical loss experience that includes the inherent risk of our loans and leases, HTM securities, and other account receivables, along with various other factors including but not limited to, collateral values, trends in asset quality, level of delinquent loans and concentrations, consideration of past events, current conditions, and reasonable and supportable forecasts. Further, regional and national economic forecasts are considered in our expected credit losses on loans and leases. Our evaluation is based on a review of the portfolio and requires significant, complex and difficult judgments.

During the three months ended June 30, 2026, we recorded a provision for credit losses of $5.0 million, a decrease of $7.6 million, compared to the provision for credit losses of $12.6 million for the three months ended June 30, 2025. The current quarter provision for credit losses was primarily driven by loan growth, partially offset by the release from the sale of our credit card portfolio. The decrease compared to the prior year was primarily driven by the aforementioned release of ACL on credit cards as well as higher charge-offs during the three months ended June 30, 2025.

During the six months ended June 30, 2026, we recorded a provision for credit losses of $3.0 million, a decrease of $26.9 million, compared to the provision for credit losses of $30.0 million for the six months ended June 30, 2025. The current year-to-date provision was primarily driven by loan growth, partially offset by a $15.7 million recovery of C&I loans to a fund invested in office properties that were charged-off in the first quarter of 2025. The decrease compared to the prior year was primarily driven by the aforementioned recovery as well as impacts to the prior year from specific reserves on two nonperforming loans and an adjustment for the ACL for accounts receivable.

The total allowance for credit losses decreased to $180.0 million at June 30, 2026 from $182.5 million at December 31, 2025. The ratio of allowance for credit losses to total loans and leases was 1.32% at June 30, 2026 and 1.36% at December 31, 2025.

The following tables detail the allocation of the ACL related to loans and leases and show our net charge-offs (recoveries) by portfolio category:

(Dollars in thousands)

(1) Excludes reverse mortgages.

(2) Includes home equity lines of credit, installment loans unsecured lines of credit and education loans.

(Dollars in thousands)

(1) Excludes reverse mortgages.

(2) Includes home equity lines of credit, installment loans unsecured lines of credit and education loans.

See Note 6 to the unaudited Consolidated Financial Statements and "Nonperforming Assets" above for further information.

Noninterest Income

Three months ended June 30, 2026: During the three months ended June 30, 2026, noninterest income was $90.0 million, an increase of $2.0 million from $88.0 million during the three months ended June 30, 2025. The increase was driven by double-digit growth across several of our fee-based businesses, including WSFS Institutional Services®, BMT-DE, and Capital Markets. These increases were partially offset by a $4.1 million impairment of one of our equity investments and a $2.1 million decrease in Cash Connect®, primarily due to the impact of interest rates and lower ATM volumes.

Six months ended June 30, 2026: During the six months ended June 30, 2026, noninterest income was $180.1 million, an increase of $11.2 million from $168.9 million during the six months ended June 30, 2025. This increase was primarily driven by $18.0 million of higher Wealth and Trust fees and a $2.1 million increase in Capital Markets, partially offset by a $4.8 million decrease in Cash Connect® for the reasons mentioned above, the $4.1 million equity investment impairment, and $2.3 million of earnout revenue from Spring EQ recognized in the prior year.

For further information, see Note 2 to the unaudited Consolidated Financial Statements.

Noninterest Expense

Three months ended June 30, 2026: During the three months ended June 30, 2026, noninterest expense was $166.3 million, an increase of $7.0 million from $159.3 million for the three months ended June 30, 2025. The increase was primarily due to an increase of $6.6 million from salaries and benefits from higher performance-based incentives and higher medical costs, as well as higher fraud costs and a $1.6 million one-time insurance recovery in the prior year. These increases were partially offset by a $1.5 million decrease in professional fees.

Six months ended June 30, 2026: During the six months ended June 30, 2026, noninterest expense was $329.1 million, an increase of $17.9 million from $311.1 million for the six months ended June 30, 2025. The increase was primarily due to $16.0 million of higher salaries and benefits due to the reasons mentioned above, $2.5 million related to restructuring costs due to a loss on a property sale and a write-down of held-for-sale real estate, $2.4 million of higher loan workout and other credit costs, partially offset by a $3.3 million decrease in other operating expense driven by lower Cash Connect® external funding costs.

Income Taxes

We and our subsidiaries file a consolidated federal income tax return and separate state income tax returns. Income taxes are accounted for in accordance with ASC 740, Income Taxes, which requires the recording of deferred income taxes for tax consequences of temporary differences. We recorded income tax expense of $26.8 million and $54.4 million during the three and six months ended June 30, 2026, respectively, compared to income tax expense of $23.3 million and $44.4 million for the same periods in 2025. The increase for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily due to higher income before taxes in 2026.

Our effective tax rate was 24.1% for both the three and six months ended June 30, 2026 compared to 24.4% and 24.3% for the three and six months ended June 30, 2025, respectively. The reduction was primarily due to increased federal tax credits.

The effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, solar tax credits, research and development tax credits, historic tax credits and excess tax benefits from recognized stock compensation. These tax benefits are offset by the tax effect of stock-based compensation expense related to incentive stock options, tax deficiencies from recognized stock compensation, and a provision for state income tax expense. We frequently analyze our projections of taxable income and make adjustments to our provision for income taxes accordingly.

RECONCILIATION OF NON-GAAP MEASURE TO GAAP MEASURE

The following table provides a reconciliation of tangible book value per share of common stock to book value per share of common stock, the most directly comparable GAAP financial measure. We believe this measure helps management and investors better understand and assess changes from period to period in stockholders’ equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results.

(Dollars and share amounts in thousands, except per share amounts)

CRITICAL ACCOUNTING ESTIMATES

The preparation of the unaudited Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenue and expenses. We regularly evaluate these estimates and assumptions including those related to the allowance for credit losses, business combinations, deferred taxes, fair value measurements and goodwill and other intangible assets. We base our estimates on historical experience and various other factors and assumptions that are believed to be reasonable under the circumstances. These form the basis for making judgments on the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Although our current estimates contemplate current economic conditions and how we expect them to change in the future, for the remainder of 2026, it is possible that actual conditions may be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting estimates at June 30, 2026 did not significantly change from our critical accounting estimates at December 31, 2025, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

RECENT LEGISLATIVE AND REGULATORY DEVELOPMENTS

Recent legislative and regulatory developments at June 30, 2026 did not significantly change from our recent legislative and regulatory developments at December 31, 2025, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

The information required by this Item is incorporated herein by reference to the information provided in Part I Item 2 (Interest Rate Sensitivity) of this Quarterly Report on Form-10-Q.

(a) Evaluation of disclosure controls and procedures. Based on their evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q such disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during the three months ended June 30, 2026.

There have not been any material changes to the risk factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.