# Firstsun Capital Bancorp: Form 10-Q for the period ended Jun 30, 2025

- Company: [Firstsun Capital Bancorp](/companies/fsun.md) (CIK 1709442)
- Form: 10-Q
- Filed: 2025-08-08
- Accepted by EDGAR: Aug 8, 2025, 16:13 ET
- Period: 2025-06-30
- Accession: 0001709442-25-000077
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1709442/000170944225000077/fcb-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1709442/000170944225000077/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $6.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $12.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $26.4m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $50.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.93 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.77 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.95 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.80 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 28,232,319 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 28,263,943 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $41.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $4.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $785.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $8.44bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $7.34bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $1.10bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 91,022 characters.

*In this section, unless the context suggests otherwise, references to “we,” “us,” and “our” mean the combined business of FirstSun and its wholly-owned subsidiaries, Sunflower Bank, Sunflower Wealth Advisors, LLC, and FEIF Capital Partners, LLC.*

The following discussion and analysis of FirstSun’s consolidated financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and accompanying footnotes included in Item 1 of this Form 10-Q as well as our audited consolidated financial statements and footnotes for the year ended December 31, 2024 included in our 2024 Annual Report that we filed with the SEC on March 7, 2025. Historical results of operations and the percentage relationships among any amounts included, and any trends that may appear, may not indicate trends in operations or results of operations for any future periods.

Annualized ratios are presented utilizing the Actual/Actual day-count convention. Prior period annualized ratios have been recalculated to conform to the current presentation.

Comments regarding our business that are not historical facts are considered forward-looking statements that involve inherent risks and uncertainties. Actual results may differ materially from those contained in these forward-looking statements. For additional information regarding our cautionary disclosures, see the “Cautionary Note Regarding Forward-Looking Statements” beginning on page 3 of this report.

### General Overview

FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, National Association, which is headquartered in Dallas, Texas and operates as Sunflower Bank and First National 1870. We conduct a full-service community banking and trust business through our wholly-owned subsidiaries—Sunflower Bank, Sunflower Wealth Advisors, LLC, and FEIF Capital Partners, LLC.

We offer a full range of relationship-focused services to meet our clients’ personal, business and wealth management financial objectives throughout Texas, Kansas, Colorado, New Mexico, Arizona, California and Washington and a mortgage lending platform with capabilities in 43 states. Our product line includes commercial and industrial loans, commercial real estate loans, residential mortgage, public finance and other consumer loans, and a variety of commercial and consumer deposit products, including noninterest-bearing accounts, interest-bearing demand products, savings accounts, money market accounts and certificates of deposit. We also offer wealth management and trust products including personal trust and agency accounts, employee benefit and retirement related trust and agency accounts, investment management and advisory agency accounts, and foundation and endowment trust and agency accounts. We also offer online banking and bill payment services, online cash management, safe deposit box rentals, debit card and ATM card services and the availability of a network of ATMs for our customers.

We operate FirstSun through two operating segments: Banking and Mortgage Operations. We also allocate certain expenses to Corporate, which is not an operating segment. The expenses included in Corporate are not deemed to be allocable to our operating segments. The operating segments have been determined based on the products and services we offer and reflect the manner in which our financial information is evaluated by management. Each of the operating segments is complementary to each other and because of the interrelationship of the segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. For additional information on our segments, see Note 13 - Segment Information included in our consolidated financial statements included elsewhere in this report.

### Financial Summary

Second Quarter 2025 Highlights:

- Net income of $26.4 million, $0.93 per diluted share
- Net interest margin of 4.07%
- Return on average total assets of 1.28%
- Return on average stockholders’ equity of 9.74%
- Loan growth of 1.4% annualized
- Deposit growth of 13.2% annualized
- 25.6% noninterest income to total revenue1

Net income totaled $26.4 million for the second quarter of 2025 compared to net income of $24.6 million for the second quarter of 2024. Earnings per diluted share were $0.93 for the second quarter of 2025 compared to $0.88 for the second quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $25.2 million or $0.90 per diluted share for the second quarter of 2024.

Net income totaled $50.0 million for the six months ended June 30, 2025, compared to net income of $36.9 million for the same period in 2024. Earnings per diluted share were $1.77 for the six months ended June 30, 2025 compared to $1.32 for the same period in 2024. Adjusted net income, a non-GAAP financial measure, was $39.8 million or $1.43 per diluted share for the six months ended June 30, 2024. Net income for the six months ended June 30, 2024 was negatively impacted by a $10.6 million provision for credit loss on a specific customer in our C&I loan portfolio, net of tax, or $0.38 per diluted share.

The following table sets forth certain summary financial and other information of FirstSun:

*($ in thousands, except per share amounts)*

| Income Statement: | As of and for the three months ended June 30, 2025 | June 30, 2024 | As of and for the six months ended June 30, 2025 | June 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net interest income | $78,499 | $72,899 | $152,977 | $143,705 |
| Provision for credit losses | 4,500 | 1,200 | 8,300 | 17,700 |
| Noninterest income | 27,073 | 23,274 | 48,802 | 46,082 |
| Noninterest expense | 68,110 | 63,875 | 130,832 | 125,703 |
| Income before income taxes | 32,962 | 31,098 | 62,647 | 46,384 |
| Provision for income taxes | 6,576 | 6,538 | 12,692 | 9,528 |
| Net income | 26,386 | 24,560 | 49,955 | 36,856 |
| Adjusted net income2 | 26,386 | 25,181 | 49,955 | 39,773 |
| **Balance Sheet:** |  |  |  |  |
| Total assets | $8,435,861 | $7,999,295 | $8,435,861 | $7,999,295 |
| Total loans held-for-sale | 90,781 | 66,571 | 90,781 | 66,571 |
| Total loans held-for-investment | 6,507,066 | 6,337,162 | 6,507,066 | 6,337,162 |
| Total deposits | 7,100,164 | 6,619,525 | 7,100,164 | 6,619,525 |
| Total borrowed funds | 76,066 | 220,577 | 76,066 | 220,577 |
| Total stockholders' equity | 1,095,402 | 996,599 | 1,095,402 | 996,599 |
| **Per Common Share Data:** |  |  |  |  |
| Period end common shares outstanding | 27,834,525 | 27,443,246 | 27,834,525 | 27,443,246 |
| Weighted average common shares outstanding, basic | 27,783,710 | 27,430,761 | 27,753,098 | 27,224,968 |
| Basic earnings per share | $0.95 | $0.90 | $1.80 | $1.35 |
| Weighted average common shares outstanding, diluted | 28,232,319 | 28,031,956 | 28,263,943 | 27,825,189 |
| Diluted earnings per share | $0.93 | $0.88 | $1.77 | $1.32 |
| Adjusted diluted earnings per share2 | 0.93 | 0.90 | 1.77 | 1.43 |
| Cash dividends | $— | $— | $— | $— |
| Dividend payout ratio | —% | —% | —% | —% |
| Book value per share | $39.35 | $36.31 | $39.35 | $36.31 |
| Tangible book value per share2 | 35.77 | 32.56 | 35.77 | 32.56 |
| 1 Total revenue is net interest income plus noninterest income. |  |  |  |  |
| 2 See section entitled “Non-GAAP Financial Measures and Reconciliations” for information regarding these non-GAAP financial measures and a reconciliation to the most comparable GAAP equivalent. |  |  |  |  |

1 Total revenue is net interest income plus noninterest income.

*($ in thousands, except per share amounts)*

| Performance Ratios: | As of and for the three months ended June 30, 2025 | June 30, 2024 | As of and for the six months ended June 30, 2025 | June 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Return on average total assets | 1.28% | 1.27% | 1.24% | 0.96% |
| Adjusted return on average total assets2 | 1.28% | 1.30% | 1.24% | 1.04% |
| Return on average stockholders' equity | 9.74% | 10.08% | 9.39% | 7.66% |
| Adjusted return on average stockholders’ equity2 | 9.74% | 10.34% | 9.39% | 8.27% |
| Return on average tangible stockholders' equity2 | 10.91% | 11.51% | 10.55% | 8.85% |
| Adjusted return on average tangible stockholders' equity2 | 10.91% | 11.79% | 10.55% | 9.53% |
| Net interest margin | 4.07% | 4.04% | 4.07% | 4.03% |
| Net interest margin (FTE basis)2 | 4.13% | 4.10% | 4.13% | 4.09% |
| Efficiency ratio | 64.52% | 66.42% | 64.84% | 66.23% |
| Adjusted efficiency ratio2 | 64.52% | 65.33% | 64.84% | 64.37% |
| Noninterest income to total revenue1 | 25.6% | 24.2% | 24.2% | 24.3% |
| **Balance Sheet Ratios:** |  |  |  |  |
| Loan to deposit ratio | 91.6% | 95.7% | 91.6% | 95.7% |
| Net charge-offs (recoveries) to average loans outstanding | 0.83% | 0.13% | 0.44% | 0.62% |
| Allowance for credit losses to loans | 1.28% | 1.25% | 1.28% | 1.25% |
| Nonperforming loans to total loans3 | 0.84% | 0.99% | 0.84% | 0.99% |
| **Capital Ratios:** |  |  |  |  |
| Total risk-based capital to risk-weighted assets | 15.94% | 14.95% | 15.94% | 14.95% |
| Tier 1 risk-based capital to risk-weighted assets | 13.78% | 12.80% | 13.78% | 12.80% |
| Common Equity Tier 1 (CET 1) to risk-weighted assets | 13.78% | 12.80% | 13.78% | 12.80% |
| Tier 1 leverage capital to average assets | 12.39% | 11.83% | 12.39% | 11.83% |
| Average stockholders' equity to average total assets | 13.15% | 12.55% | 13.22% | 12.52% |
| Tangible stockholders' equity to tangible assets2 | 11.94% | 11.32% | 11.94% | 11.32% |
| Tangible stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax2 | 11.90% | 11.27% | 11.90% | 11.27% |
| **Nonfinancial Data:** |  |  |  |  |
| Full-time equivalent employees | 1,168 | 1,176 | 1,168 | 1,176 |
| Banking branches | 71 | 69 | 71 | 69 |
| 1 Total revenue is net interest income plus noninterest income. |  |  |  |  |
| 2 See section entitled “Non-GAAP Financial Measures and Reconciliations” for information regarding these non-GAAP financial measures and a reconciliation to the most comparable GAAP equivalent. |  |  |  |  |
| 3 Nonperforming loans include nonaccrual loans and accrual loans greater than 90 days past due. |  |  |  |  |

51

### Non-GAAP Financial Measures and Reconciliations

The non-GAAP financial measures presented below are used by our management and our Board of Directors on a regular basis in addition to our GAAP results to facilitate the assessment of our financial performance. Management believes these non-GAAP financial measures enhance an investor’s understanding of our financial results by providing a meaningful basis for period-to-period comparisons, assisting in operating results analysis, and predicting future performance. This information supplements our GAAP reported results, and should not be viewed in isolation from, or as a substitute for, our GAAP results. Accordingly, this financial information should be read in conjunction with our consolidated financial statements and notes thereto for the three and six months ended June 30, 2025, included elsewhere in this report. Non-GAAP financial measures exclude certain items that are included in the financial results presented in accordance with GAAP. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These non-GAAP measures are not necessarily comparable to similar measures that may be represented by other companies.

The following table presents GAAP to non-GAAP reconciliations:

*($ in thousands, except share and per share amounts)*

*Tangible stockholders’ equity to tangible assets:*

|  | As of and for the three months ended June 30, 2025 | June 30, 2024 | As of and for the six months ended June 30, 2025 | June 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Total stockholders' equity (GAAP) | $1,095,402 | $996,599 | $1,095,402 | $996,599 |
| Less: Goodwill and other intangible assets |  |  |  |  |
| Goodwill | (93,483) | (93,483) | (93,483) | (93,483) |
| Other intangible assets | (6,228) | (9,517) | (6,228) | (9,517) |
| Tangible stockholders' equity (non-GAAP) | $995,691 | $893,599 | $995,691 | $893,599 |
| Total assets (GAAP) | $8,435,861 | $7,999,295 | $8,435,861 | $7,999,295 |
| Less: Goodwill and other intangible assets |  |  |  |  |
| Goodwill | (93,483) | (93,483) | (93,483) | (93,483) |
| Other intangible assets | (6,228) | (9,517) | (6,228) | (9,517) |
| Tangible assets (non-GAAP) | $8,336,150 | $7,896,295 | $8,336,150 | $7,896,295 |
| Total stockholders' equity to total assets (GAAP) | 12.99% | 12.46% | 12.99% | 12.46% |
| Less: Impact of goodwill and other intangible assets | (1.05)% | (1.14)% | (1.05)% | (1.14)% |
| Tangible stockholders' equity to tangible assets (non-GAAP) | 11.94% | 11.32% | 11.94% | 11.32% |
| Tangible stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax: |  |  |  |  |
| Tangible stockholders' equity (non-GAAP) | $995,691 | $893,599 | $995,691 | $893,599 |
| Less: Net unrealized losses on HTM securities, net of tax | (4,238) | (3,949) | (4,238) | (3,949) |
| Tangible stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP) | $991,453 | $889,650 | $991,453 | $889,650 |
| Tangible assets (non-GAAP) | $8,336,150 | $7,896,295 | $8,336,150 | $7,896,295 |
| Less: Net unrealized losses on HTM securities, net of tax | (4,238) | (3,949) | (4,238) | (3,949) |
| Tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP) | $8,331,912 | $7,892,346 | $8,331,912 | $7,892,346 |
| Tangible stockholders’ equity to tangible assets (non-GAAP) | 11.94% | 11.32% | 11.94% | 11.32% |
| Less: Net unrealized losses on HTM securities, net of tax | (0.04)% | (0.05)% | (0.04)% | (0.05)% |
| Tangible stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP) | 11.90% | 11.27% | 11.90% | 11.27% |
| Tangible book value per share: |  |  |  |  |
| Total stockholders' equity (GAAP) | $1,095,402 | $996,599 | $1,095,402 | $996,599 |
| Tangible stockholders' equity (non-GAAP) | $995,691 | $893,599 | $995,691 | $893,599 |
| Total shares outstanding | 27,834,525 | 27,443,246 | 27,834,525 | 27,443,246 |
| Book value per share (GAAP) | $39.35 | $36.31 | $39.35 | $36.31 |
| Tangible book value per share (non-GAAP) | $35.77 | $32.56 | $35.77 | $32.56 |

52

*($ in thousands, except share and per share amounts)*

*Adjusted net income:*

|  | As of and for the three months ended June 30, 2025 | June 30, 2024 | As of and for the six months ended June 30, 2025 | June 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net income (GAAP) | $26,386 | $24,560 | $49,955 | $36,856 |
| Add: Non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses, net of tax | — | 621 | — | 2,917 |
| Total adjustments, net of tax | — | 621 | — | 2,917 |
| Adjusted net income (non-GAAP) | $26,386 | $25,181 | $49,955 | $39,773 |
| Adjusted diluted earnings per share: |  |  |  |  |
| Diluted earnings per share (GAAP) | $0.93 | $0.88 | $1.77 | $1.32 |
| Add: Impact of non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses, net of tax | — | 0.02 | — | 0.11 |
| Adjusted diluted earnings per share (non-GAAP) | $0.93 | $0.90 | $1.77 | $1.43 |
| Adjusted return on average total assets: |  |  |  |  |
| Return on average total assets (ROAA) (GAAP) | 1.28% | 1.27% | 1.24% | 0.96% |
| Add: Impact of non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses, net of tax | —% | 0.03% | —% | 0.08% |
| Adjusted ROAA (non-GAAP) | 1.28% | 1.30% | 1.24% | 1.04% |
| Adjusted return on average stockholders’ equity: |  |  |  |  |
| Return on average stockholders' equity (ROACE) (GAAP) | 9.74% | 10.08% | 9.39% | 7.66% |
| Add: Impact of non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses, net of tax | —% | 0.26% | —% | 0.61% |
| Adjusted ROACE (non-GAAP) | 9.74% | 10.34% | 9.39% | 8.27% |
| Return on average tangible stockholders’ equity: |  |  |  |  |
| Return on average stockholders’ equity (ROACE) (GAAP) | 9.74% | 10.08% | 9.39% | 7.66% |
| Add: Impact from goodwill and other intangible assets |  |  |  |  |
| Goodwill | 0.98% | 1.19% | 0.97% | 0.92% |
| Other intangible assets | 0.19% | 0.24% | 0.19% | 0.27% |
| Return on average tangible stockholders’ equity (ROATCE) (non-GAAP) | 10.91% | 11.51% | 10.55% | 8.85% |
| Adjusted return on average tangible stockholders’ equity: |  |  |  |  |
| Return on average tangible stockholders' equity (ROATCE) (non-GAAP) | 10.91% | 11.51% | 10.55% | 8.85% |
| Add: Impact of non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses, net of tax | —% | 0.28% | —% | 0.68% |
| Adjusted ROATCE (non-GAAP) | 10.91% | 11.79% | 10.55% | 9.53% |
| Adjusted total noninterest expense: |  |  |  |  |
| Total noninterest expense (GAAP) | $68,110 | $63,875 | $130,832 | $125,703 |
| Less: Non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses | — | (1,046) | — | (3,535) |
| Total non-recurring adjustments | — | (1,046) | — | (3,535) |
| Adjusted total noninterest expense (non-GAAP) | $68,110 | $62,829 | $130,832 | $122,168 |
| Adjusted efficiency ratio: |  |  |  |  |
| Efficiency ratio (GAAP) | 64.52% | 66.42% | 64.84% | 66.23% |
| Less: Impact of non-recurring adjustments |  |  |  |  |
| Terminated merger related expenses | —% | (1.09)% | —% | (1.86)% |
| Adjusted efficiency ratio (non-GAAP) | 64.52% | 65.33% | 64.84% | 64.37% |
| Fully tax equivalent (“FTE”) net interest income and net interest margin: |  |  |  |  |
| Net interest income (GAAP) | $78,499 | $72,899 | $152,977 | $143,705 |
| Gross income effect of tax exempt income | 1,204 | 1,156 | 2,396 | 2,475 |
| FTE net interest income (non-GAAP) | $79,703 | $74,055 | $155,373 | $146,180 |
| Average earning assets | $7,727,556 | $7,256,763 | $7,576,307 | $7,178,543 |
| Net interest margin | 4.07% | 4.04% | 4.07% | 4.03% |
| Net interest margin on FTE basis (non-GAAP) | 4.13% | 4.10% | 4.13% | 4.09% |

53

### Segments

#### Banking

#### Three months ended June 30, 2025 and 2024

Income before income taxes decreased $1.3 million to $30.7 million for the second quarter of 2025, from $32.0 million for the same period in 2024. The period over period decrease was primarily due to an increase in provision for credit losses and an increase in salary and employee benefits, partially offset by an increase in net interest income. Provision for credit losses increased $4.3 million to $4.5 million for the second quarter of 2025, compared to $0.2 million for the same period in 2024, primarily due to deterioration in a couple of commercial and industrial (“C&I”) customer relationships and impacts from net portfolio downgrades, partially offset by impacts from net changes in loan portfolio balances. Salary and employee benefits increased $2.0 million to $33.0 million for the second quarter of 2025, from $31.0 million for the same period in 2024, primarily due to an increase in base pay and an increase in the fair value of investments related to our deferred compensation plan. Net interest income increased $3.8 million to $73.5 million for the second quarter of 2025, compared to $69.7 million for the same period in 2024, primarily due to an increase in average interest earning assets. Identifiable assets for our Banking segment increased $0.2 billion to $7.1 billion at June 30, 2025 from $6.9 billion at June 30, 2024. The growth in identifiable assets was primarily driven by organic growth in our loan portfolio.

#### Six months ended June 30, 2025 and 2024

Income before income taxes increased $12.2 million to $60.4 million for the six months ended June 30, 2025, from $48.1 million for the same period in 2024. The period over period increase was primarily due to a decrease in provision for credit losses and an increase in net interest income, partially offset by an increase in salary and employee benefits. Provision for credit losses decreased $9.5 million to $8.5 million for the six months ended June 30, 2025, compared to $18.0 million for the same period in 2024, primarily due to a $14.1 million provision for credit loss on a specific customer in our C&I loan portfolio during the six months ended June 30, 2024. Net interest income increased $5.6 million to $143.8 million for the six months ended June 30, 2025 compared to $138.2 million for the same period in 2024, primarily due to a decrease in the cost of interest-bearing liabilities, relative to a decrease in the yield on interest earning assets, as a result of a declining interest rate environment and mix shift away from certificates of deposits. Salary and employee benefits increased $3.3 million to $64.0 million for the six months ended June 30, 2025, compared to $60.8 million for the same period in 2024, primarily due to increased headcount, including the hiring of C&I bankers in Southern California.

#### Mortgage Operations

#### Three months ended June 30, 2025 and 2024

Income before income taxes increased $2.9 million to $4.6 million for the second quarter of 2025, compared to $1.7 million for the same period in 2024. The period over period increase was primarily due to an increase in revenue from mortgage banking services and increase in net interest income, partially offset by an increase in salary and employee benefits. Revenue from mortgage banking services increased $2.3 million to $13.9 million for the second quarter of 2025, compared to $11.6 million for the same period in 2024, primarily due to an increase in loan originations sold and an increase in mortgage servicing income. Net interest income increased $1.7 million to $6.2 million for the second quarter of 2025, compared to $4.5 million for the same period in 2024, primarily due to higher average balance and higher average yield on residential real estate loans. Salary and employee benefits increased $1.9 million to $10.3 million for the second quarter of 2025, compared to $8.4 million for the same period in 2024, primarily due to higher levels of variable compensation associated with an increase in mortgage loan originations. Identifiable assets for our Mortgage Operations segment increased $0.2 billion to $1.2 billion at June 30, 2025 from $1.0 billion at June 30, 2024. The growth in identifiable assets was primarily driven by organic growth in our residential mortgage portfolio.

#### Six months ended June 30, 2025 and 2024

Income before income taxes increased $2.1 million to $6.9 million for the six months ended June 30, 2025, compared to $4.8 million for the same period in 2024. The period over period increase was primarily due to an increase in net interest income and increase in revenue from mortgage banking services, partially offset by an increase in salary and employee benefits. Net interest income increased $3.5 million to $11.5 million for the six months ended June 30, 2025, compared to $8.0 million for the same period in 2024, primarily due to higher average balance and higher average yield on residential real estate loans. Revenue from mortgage banking services increased $1.9 million to $23.6 million for the six months ended June 30, 2025, compared to $21.7 million for the same period in 2024, primarily due to an increase in loan originations sold and an increase in mortgage servicing income. Salary and employee benefits increased $2.6 million to $18.1 million for the six months ended June 30, 2025, compared to $15.6 million for the same period in 2024, primarily due to higher levels of variable compensation associated with an increase in mortgage loan originations.

### Critical Accounting Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Our accounting and reporting estimates are in accordance with generally accepted accounting principles, or “U.S. GAAP,” and conform to general practices within the banking industry. Estimates that are susceptible to significant changes include accounting for the allowance for credit losses and fair value measurements of MSRs, both of which require significant judgments by management. Actual results could result in material changes to our consolidated financial condition or consolidated results of operations.

Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of the allowance for credit losses and fair value measurements of MSRs to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change, including overall changes in the economic climate and/or market interest rates. Therefore, we consider the estimates underlying these policies to be critical accounting estimates and we discuss them directly with the Audit Committee of our Board of Directors at least annually.

The following is a description of our critical accounting estimates and an explanation of the methods and assumptions underlying their application.

*Allowance for Credit Losses -* Management maintains an ACL for loans based upon management’s estimate of the lifetime expected credit losses in the loan portfolio as of the balance sheet date, excluding loans held for sale. Additionally, management maintains an ACL for held-to-maturity or available-for-sale debt securities, and other off-balance sheet credit exposures (e.g., unfunded loan commitments). For loans and unfunded loan commitments, the estimate of lifetime credit losses includes the use of quantitative models that incorporate forward-looking macroeconomic scenarios that are applied over the contractual lives of the portfolios, adjusted, as appropriate, for prepayments and permitted extension options using historical experience. For purposes of the ACL for lending commitments, such allowance is determined using the same methodology as the ACL for loans, while also taking into consideration the probability of drawdowns or funding, and whether such commitments are cancellable by us. The ACL for held-to-maturity and available-for-sale debt securities is measured using a risk-adjusted discounted cash flow approach that also considers relevant current and forward-looking economic variables and the ACL is limited to the difference between the fair value of the security and its amortized cost. Judgment is specifically applied in the determination of economic assumptions, length of the initial loss forecast period, the reversion of losses beyond the initial forecast period, usage of macroeconomic scenarios, probabilities of default, losses given default, amortization and prepayment rates, and qualitative factors, which may not be adequately captured in the loss model, as further discussed below.

The macroeconomic scenarios utilized by management include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, housing and commercial real estate prices, gross domestic product levels, corporate bond spreads and changes in equity market prices. Management derives the economic forecasts it uses in its ACL model from Moody’s Analytics. The latter has a large team of economics, database managers and operational engineers with a history of producing monthly economic forecasts for over 25 years.

Management has currently set an initial forecast period (“reasonable and supportable period”) of four years and a reversion period of one year, utilizing a straight-line approach and reverting back to the historical macroeconomic mean. After the reversion period, a historical loss forecast period covering the remaining contractual life, adjusted for prepayments, is used based on changes in key historical economic variables during representative historical expansionary and recessionary periods. Changes in economic forecasts impact the probability of default (“PD”), loss-given default (“LGD”), and exposure at default (“EAD”) for each instrument, and therefore influence the amount of future cash flows for each instrument that management does not expect to collect.

Further, management periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not limited to, factors such as the following: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions; (ii) organization specific risks such as credit concentrations, collateral specific risks, nature, and size of the portfolio and external factors that may ultimately impact credit quality, and (iii) other limitations associated with factors such as changes in underwriting and loan resolution strategies, among others. The qualitative factors applied on June 30, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model. The evaluation of qualitative factors is inherently imprecise and requires significant management judgment.

The ACL can also be impacted by factors outside of management’s control, which include unanticipated changes in asset quality of the portfolio, such as deterioration in borrower delinquencies, or credit scores in our residential real estate and consumer portfolio. Further, the current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent.

Our process for determining the ACL is further discussed in “Note 1 - Basis of Presentation, Description of Business and Summary of Significant Accounting Policies” in our 2024 Annual Report.

*Fair Value Measurement of MSRs -* Our residential mortgage servicing rights are measured at fair value on a recurring basis. We estimate the fair value of our MSRs using a process that utilizes a discounted cash flow model and analysis of current market data to arrive at the estimate. The cash flow assumptions used in the model are based on numerous factors, with the key assumptions being mortgage prepayment speeds, discount rates and cost to service that management believes are consistent with the assumptions that other similar market participants use in valuing MSRs. The change of any of these key assumptions due to market conditions or other factors could materially affect the fair value of our MSRs. We also utilize a third-party consulting firm to assist us with the valuation. Because of the nature of the valuation inputs, we classify the valuation of our MSRs as Level 3 in the fair value hierarchy. See Note 4 - Mortgage Servicing Rights for our assumptions used in valuing the MSRs. For information concerning the hypothetical sensitivity of the key assumptions under adverse changes on our MSRs, see the table under “Noninterest Income” elsewhere in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

### Results of Operations

The following table sets forth components of our results of operations:

*($ in thousands, except per share amounts)*

|  | As of and for the three months ended June 30, 2025 | 2024 | As of and for the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net interest income | $78,499 | $72,899 | $152,977 | $143,705 |
| Provision for credit losses | 4,500 | 1,200 | 8,300 | 17,700 |
| Noninterest income | 27,073 | 23,274 | 48,802 | 46,082 |
| Noninterest expense | 68,110 | 63,875 | 130,832 | 125,703 |
| Income before income taxes | 32,962 | 31,098 | 62,647 | 46,384 |
| Provision for income taxes | 6,576 | 6,538 | 12,692 | 9,528 |
| Net income | 26,386 | 24,560 | 49,955 | 36,856 |
| Diluted earnings per share | $0.93 | $0.88 | $1.77 | $1.32 |
| Return on average total assets | 1.28% | 1.27% | 1.24% | 0.96% |
| Return on average stockholders' equity | 9.74% | 10.08% | 9.39% | 7.66% |
| Net interest margin | 4.07% | 4.04% | 4.07% | 4.03% |
| Net interest margin - FTE basis (non-GAAP)1 | 4.13% | 4.10% | 4.13% | 4.09% |
| Efficiency ratio | 64.52% | 66.42% | 64.84% | 66.23% |
| Noninterest income to total revenue2 | 25.6% | 24.2% | 24.19% | 24.28% |
| 1 See section entitled “Non-GAAP Financial Measures and Reconciliations” for information regarding non-GAAP financial measures and a reconciliation to the most comparable GAAP equivalent. |  |  |  |  |
| 2 Total revenue is net interest income plus noninterest income. |  |  |  |  |

### General

Our results of operations depend significantly on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of interest income on loans and investment securities and interest expense on interest-bearing liabilities, consisting primarily of deposits and borrowings. Our results of operations are also dependent on our generation of noninterest income, consisting primarily of income from mortgage banking services, treasury management service fees, service charges on deposit accounts, trust and investment advisory fees and credit and debit card fees. Other factors contributing to our results of operations include our provisions for credit losses, income taxes, and noninterest expenses, such as salaries and employee benefits, occupancy and equipment, amortization of intangible assets and other operating costs.

### Net Interest Income

Net interest income, representing interest income less interest expense, is a significant contributor to our revenues and earnings. We generate interest income from interest and dividends on interest-earning assets, which are principally comprised of loans and investment securities. We incur interest expense from interest owed or paid on interest-bearing liabilities, including interest-bearing deposits, FHLB advances and other borrowings. Net interest income and margin are shaped by the characteristics of the underlying products, including volume, term and structure of each product. We measure and monitor yields on our loans and other interest-earning assets, the costs of our deposits and other funding sources, our net interest spread and our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets.

Interest earned on our loan portfolio is the largest component of our interest income. Our loan portfolios are presented at the principal amount outstanding net of deferred origination fees and unamortized discounts and premiums. Interest income is recognized based on the principal balance outstanding and the stated rate of the loan. Loan origination fees and certain direct origination costs are capitalized and recognized as an adjustment of the yield on the related loan. Non-PCD loans acquired are initially recorded at fair value and the resulting discount or premium are recognized as an adjustment of the yield on the related loans.

Our net interest income can be significantly influenced by a variety of factors, including overall loan demand, economic conditions, credit risk, the amount of non-earning assets including nonperforming loans and OREO, the amounts of and rates at which assets and liabilities reprice, variances in prepayment of loans and securities, exercise of call options on borrowings or securities, a general rise or decline in interest rates, changes in the slope of the yield-curve, and balance sheet growth or contraction.

#### Three months ended June 30, 2025 and 2024

Our net interest income was $78.5 million for the second quarter of 2025, an increase of $5.6 million, or 7.7%, compared to the same period in 2024. Interest income on loans increased by $0.9 million for the second quarter of 2025, compared to the same period in 2024. Interest income on investment securities decreased by $0.3 million for the second quarter of 2025, compared to the same period in 2024. Interest income on interest-bearing cash and other assets increased by $1.8 million for the second quarter of 2025, compared to the same period in 2024. Interest expense from total interest-bearing liabilities decreased by $3.2 million for the second quarter of 2025, compared to the same period in 2024.

Our net interest margin was 4.07% for the second quarter of 2025, compared to 4.04% for the same period in 2024, an increase of three basis points. We experienced a 28 basis point decrease in yield from earning assets while our total cost of funds decreased by 41 basis points, for the second quarter of 2025 as compared to the same period in 2024.

Total average loans grew to $6.6 billion at June 30, 2025, an increase of $0.2 billion or 3.7%, compared to June 30, 2024, due to organic growth in our loan portfolio. Yield on loans decreased 20 basis points for the second quarter of 2025, compared to the same period in 2024, primarily due to the declining interest rate environment and its impact on variable rate loans in the portfolio. Interest-bearing cash and other assets increased $0.2 billion, or 71.2%, for the second quarter of 2025, compared to the same period in 2024. Yield on interest-bearing cash and other assets decreased 100 basis points for the second quarter of 2025, compared to the same period in 2024, primarily due to the declining interest rate environment.

Average interest-bearing liabilities increased $0.3 billion, or 5.2%, for the second quarter of 2025, compared to the same period in 2024, primarily to support the growth in our loan portfolio. Average interest-bearing deposits increased $0.4 billion, or 8.2%, for the second quarter of 2025, compared to the same period in 2024, which included a decrease of $0.3 billion, or 17.5%, in average certificates of deposit balances. Cost of interest-bearing deposits decreased 35 basis points for the second quarter of 2025, compared to the same period in 2024, primarily due to the declining interest rate environment and change in deposit product mix, particularly the decrease in certificates of deposit balances. Average FHLB borrowings decreased $0.1 billion, or 98.2%, for the second quarter of 2025, compared to the same period in 2024. Cost of FHLB borrowings decreased 98 basis points, for the second quarter of 2025, compared to the same period in 2024.

#### Six months ended June 30, 2025 and 2024

Our net interest income was $153.0 million for the six months ended June 30, 2025, an increase of $9.3 million, or 6.5%, compared to the same period in 2024. Interest income on loans decreased by $0.7 million for the six months ended June 30, 2025, compared to the same period in 2024. Interest income on investment securities decreased by $0.5 million for the six months ended June 30, 2025, compared to the same period in 2024. Interest income on interest-bearing cash and other assets increased by $3.9 million for the six months ended June 30, 2025, compared to the same period in 2024. Interest expense from total interest-bearing liabilities decreased by $6.5 million for the six months ended June 30, 2025, compared to the same period in 2024.

Our net interest margin was 4.07% for the six months ended June 30, 2025, compared to 4.03% for the same period in 2024, an increase of four basis points. We experienced a 24 basis point decrease in yield from earning assets and our total cost of funds decreased by 37 basis points for the six months ended June 30, 2025, compared to the same period in 2024.

Total average loans grew to $6.5 billion at June 30, 2025, an increase of $0.2 billion, compared to June 30, 2024, primarily due to organic growth in our loan portfolio. Yield on loans decreased 18 basis points for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the declining interest rate environment and its impact on variable rate loans in the portfolio. Interest-bearing cash and other assets increased $0.3 billion, or 86.7%, for the six months ended June 30, 2025, compared to the same period in 2024. Yield on interest-bearing cash and other assets decreased 105 basis points for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the declining interest rate environment.

Average interest-bearing liabilities increased $0.2 billion, or 4.3%, for the six months ended June 30, 2025, compared to the same period in 2024. Average interest-bearing deposits increased $0.3 billion, or 6.8%, for the six months ended June 30, 2025, compared to the same period in 2024. Average FHLB borrowings decreased $0.1 billion, or 86.9%, for the six months ended June 30, 2025, compared to the same period in 2024.

The following tables set forth information related to our average balance sheet, average yields on assets, and average costs of liabilities for the periods presented. We derived these yields by dividing income or expense by the average balance of the corresponding assets or liabilities. We derived average balances from the daily balances throughout the periods indicated.

#### As of and for the three months ended June 30,:

*(In thousands)*

| Interest Earning Assets | 2025 Average Balance | Interest | Average Yield/Rate | 2024 Average Balance | Interest | Average Yield/Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans1 | 6,620,493 | 106,117 | 6.43% | 6,384,709 | 105,184 | 6.63% |
| Investment securities | 510,350 | 4,433 | 3.48% | 523,545 | 4,772 | 3.67% |
| Interest-bearing cash and other assets | 596,713 | 6,371 | 4.28% | 348,509 | 4,573 | 5.28% |
| Total earning assets | 7,727,556 | 116,921 | 6.07% | 7,256,763 | 114,529 | 6.35% |
| Other assets | 537,156 |  |  | 548,465 |  |  |
| Total assets | $8,264,712 |  |  | $7,805,228 |  |  |
| **Interest-bearing liabilities** |  |  |  |  |  |  |
| Demand and NOW deposits | $793,461 | $6,445 | 3.26% | $621,343 | $5,896 | 3.82% |
| Savings deposits | 401,093 | 576 | 0.58% | 413,699 | 715 | 0.70% |
| Money market deposits | 2,659,342 | 16,064 | 2.42% | 2,092,449 | 10,498 | 2.02% |
| Certificates of deposits | 1,504,235 | 14,100 | 3.76% | 1,823,522 | 21,375 | 4.71% |
| Total deposits | 5,358,131 | 37,185 | 2.78% | 4,951,013 | 38,484 | 3.13% |
| Repurchase agreements | 9,024 | 36 | 1.61% | 16,553 | 47 | 1.16% |
| Total deposits and repurchase agreements | 5,367,155 | 37,221 | 2.78% | 4,967,566 | 38,531 | 3.12% |
| FHLB borrowings | 2,308 | 27 | 4.72% | 130,871 | 1,855 | 5.70% |
| Other long-term borrowings | 76,025 | 1,174 | 6.19% | 75,522 | 1,244 | 6.62% |
| Total interest-bearing liabilities | 5,445,488 | 38,422 | 2.83% | 5,173,959 | 41,630 | 3.24% |
| Noninterest-bearing deposits | 1,587,302 |  |  | 1,517,560 |  |  |
| Other liabilities | 145,064 |  |  | 133,845 |  |  |
| Stockholders' equity | 1,086,858 |  |  | 979,864 |  |  |
| Total liabilities and stockholders' equity | $8,264,712 |  |  | $7,805,228 |  |  |
| Net interest income |  | $78,499 |  |  | $72,899 |  |
| Net interest spread |  | 3.24% |  |  | 3.11% |  |
| Net interest margin |  | 4.07% |  |  | 4.04% |  |
| Net interest margin - FTE basis (non-GAAP)2 |  | 4.13% |  |  | 4.10% |  |
| 1 Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale. |  |  |  |  |  |  |
| 2 See section entitled “Non-GAAP Financial Measures and Reconciliations” for information regarding non-GAAP financial measures and a reconciliation to the most comparable GAAP equivalent. |  |  |  |  |  |  |

59

#### As of and for the six months ended June 30,:

*(In thousands)*

| Interest Earning Assets | 2025 Average Balance | Interest | Average Yield/Rate | 2024 Average Balance | Interest | Average Yield/Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans1 | 6,521,154 | 206,797 | 6.39% | 6,349,282 | 207,452 | 6.57% |
| Investment securities | 506,103 | 8,803 | 3.51% | 535,252 | 9,259 | 3.48% |
| Interest-bearing cash and other assets | 549,050 | 11,768 | 4.32% | 294,009 | 7,858 | 5.37% |
| Total earning assets | 7,576,307 | 227,368 | 6.05% | 7,178,543 | 224,569 | 6.29% |
| Other assets | 543,032 |  |  | 548,553 |  |  |
| Total assets | $8,119,339 |  |  | $7,727,096 |  |  |
| **Interest-bearing liabilities** |  |  |  |  |  |  |
| Demand and NOW deposits | $757,282 | $12,144 | 3.23% | $585,417 | $10,757 | 3.70% |
| Savings deposits | 400,948 | 1,145 | 0.58% | 417,791 | 1,440 | 0.69% |
| Money market deposits | 2,551,141 | 29,270 | 2.31% | 2,077,885 | 20,444 | 1.98% |
| Certificates of deposits | 1,525,814 | 29,020 | 3.84% | 1,819,075 | 42,233 | 4.67% |
| Total deposits | 5,235,185 | 71,579 | 2.76% | 4,900,168 | 74,874 | 3.07% |
| Repurchase agreements | 9,318 | 73 | 1.59% | 18,904 | 104 | 1.11% |
| Total deposits and repurchase agreements | 5,244,503 | 71,652 | 2.76% | 4,919,072 | 74,978 | 3.07% |
| FHLB borrowings | 15,823 | 362 | 4.61% | 120,824 | 3,396 | 5.65% |
| Other long-term borrowings | 75,966 | 2,377 | 6.31% | 75,456 | 2,490 | 6.64% |
| Total interest-bearing liabilities | 5,336,292 | 74,391 | 2.81% | 5,115,352 | 80,864 | 3.18% |
| Noninterest-bearing deposits | 1,559,878 |  |  | 1,510,134 |  |  |
| Other liabilities | 150,172 |  |  | 134,106 |  |  |
| Stockholders’ equity | 1,072,997 |  |  | 967,504 |  |  |
| Total liabilities and stockholders’ equity | $8,119,339 |  |  | $7,727,096 |  |  |
| Net interest income |  | $152,977 |  |  | $143,705 |  |
| Net interest spread |  | 3.24% |  |  | 3.11% |  |
| Net interest margin |  | 4.07% |  |  | 4.03% |  |
| Net interest margin - FTE basis (non-GAAP)2 |  | 4.13% |  |  | 4.09% |  |
| 1 Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale. |  |  |  |  |  |  |
| 2 See section entitled “Non-GAAP Financial Measures and Reconciliations” for information regarding non-GAAP financial measures and a reconciliation to the most comparable GAAP equivalent. |  |  |  |  |  |  |

60

### Rate-Volume Analysis

The tables below present the effect of volume and rate changes on interest income and expense. Changes due to volume are changes in the average balance multiplied by the previous period’s average rate. Changes due to rate are changes in the average rate multiplied by the average balance from the prior period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate.

*(In thousands)*

| Interest Earning Assets | For the three months ended June 30, 2025 Versus 2024 Increase (Decrease) Due to: Rate | Volume | Total |
| --- | ---: | ---: | ---: |
| Loans1 | $(3,058) | $3,991 | $933 |
| Investment securities | (225) | (114) | (339) |
| Interest-bearing cash | (990) | 2,788 | 1,798 |
| Total earning assets | (4,273) | 6,665 | 2,392 |
| **Interest-bearing liabilities** |  |  |  |
| Demand and NOW deposits | (942) | 1,491 | 549 |
| Savings deposits | (118) | (21) | (139) |
| Money market deposits | 2,369 | 3,197 | 5,566 |
| Certificates of deposits | (3,902) | (3,373) | (7,275) |
| Total deposits | (2,593) | 1,294 | (1,299) |
| Repurchase agreements | 15 | (26) | (11) |
| Total deposits and repurchase agreements | (2,578) | 1,268 | (1,310) |
| FHLB borrowings | (272) | (1,556) | (1,828) |
| Other long-term borrowings | (79) | 9 | (70) |
| Total interest-bearing liabilities | (2,929) | (279) | (3,208) |
| Net interest income | $(1,344) | $6,944 | $5,600 |
| 1 Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale. |  |  |  |

*(In thousands)*

| Interest Earning Assets | For the six months ended June 30, 2025 Versus 2024 Increase (Decrease) Due to: Rate | Volume | Total |
| --- | ---: | ---: | ---: |
| Loans1 | $(5,891) | $5,236 | $(655) |
| Investment securities | 73 | (529) | (456) |
| Interest-bearing cash | (1,784) | 5,694 | 3,910 |
| Total earning assets | (7,602) | 10,401 | 2,799 |
| **Interest-bearing liabilities** |  |  |  |
| Demand and NOW deposits | (1,466) | 2,853 | 1,387 |
| Savings deposits | (238) | (57) | (295) |
| Money market deposits | 3,764 | 5,062 | 8,826 |
| Certificates of deposits | (6,943) | (6,270) | (13,213) |
| Total deposits | (4,883) | 1,588 | (3,295) |
| Repurchase agreements | 34 | (65) | (31) |
| Total deposits and repurchase agreements | (4,849) | 1,523 | (3,326) |
| FHLB borrowings | (533) | (2,501) | (3,034) |
| Other long-term borrowings | (129) | 16 | (113) |
| Total interest-bearing liabilities | (5,511) | (962) | (6,473) |
| Net interest income | $(2,091) | $11,363 | $9,272 |
| 1 Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale. |  |  |  |

61

### Provision for Credit Losses

We established an allowance for credit losses through a provision for credit losses charged as an expense in our consolidated statements of income. The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the allowance for credit losses at an adequate level to absorb expected losses in the loan portfolio at the balance sheet date and that, in management’s judgment, is appropriate under GAAP. Our determination of the amount of the allowance for credit losses and corresponding provision for credit losses considers ongoing evaluations of the credit quality and level of credit risk inherent in our loan portfolio, levels of nonperforming loans and charge-offs, statistical trends and economic and other relevant factors. The allowance for credit losses is increased by the provision for credit losses and is decreased by charge-offs, net of recoveries on prior loan charge-offs.

We recorded a provision for credit losses of $4.5 million for the second quarter of 2025, compared to $1.2 million for the same period in 2024. The provision for credit losses for the second quarter of 2025 was primarily due to deterioration in a couple of C&I customer relationships and impacts from net portfolio downgrades, partially offset by impacts from net changes in loan portfolio balances.

We recorded a provision for credit losses of $8.3 million for the six months ended June 30, 2025, compared to $17.7 million for the same period in 2024. The provision for credit losses for the six months ended June 30, 2025 was primarily due to deterioration in a couple of C&I customer relationships and impacts from net portfolio downgrades, partially offset by impacts from net changes in loan portfolio balances.

### Noninterest Income

The following table presents noninterest income:

*(In thousands)*

|  | For the three months ended June 30, 2025 | June 30, 2024 | For the six months ended June 30, 2025 | June 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Service charges on deposit accounts | $2,016 | $2,372 | $4,043 | $4,716 |
| Treasury management service fees | 4,333 | 3,631 | 8,527 | 7,099 |
| Credit and debit card fees | 2,728 | 2,950 | 5,314 | 5,709 |
| Trust and investment advisory fees | 1,473 | 1,493 | 2,894 | 2,956 |
| Income from mortgage banking services, net | 13,274 | 11,043 | 22,329 | 20,545 |
| Other | 3,249 | 1,785 | 5,695 | 5,057 |
| Total noninterest income | $27,073 | $23,274 | $48,802 | $46,082 |

#### Three months ended June 30, 2025 and 2024

Our noninterest income increased $3.8 million to $27.1 million for the second quarter of 2025 from $23.3 million for the same period in 2024.

Service charges on deposit accounts includes overdraft and non-sufficient funds charges, and other service fees on deposit accounts. Service charges on deposit accounts decreased $0.4 million for the second quarter of 2025, compared to the same period in 2024, primarily due to a decrease in non-sufficient funds and overdraft fees.

Treasury management service fees include financial information management, accounts receivable management, accounts payable services, fraud mitigation services, and cash flow management. Treasury management service fees increased $0.7 million for the second quarter of 2025 compared to the same period in 2024, primarily due to an overall increase in our business customer base as well as an increase in products and services provided to our existing customer base.

Credit and debit card fees represent interchange income from credit and debit card activity and referral fees earned from processing fees on card transactions by our business customers. Credit and debit card fees decreased $0.2 million for the second quarter of 2025 compared to the same period in 2024, as card transaction volumes decreased slightly.

Trust and investment advisory fees represent fees we receive in connection with our investment advisory and custodial management services of investment accounts. Trust and investment advisory fees were largely unchanged for the second quarter of 2025 as compared to the same period in 2024.

The components of income from mortgage banking services were as follows:

*(In thousands)*

|  | For the three months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net sale gains and fees from mortgage loan originations, including loans held-for-sale changes in fair value and hedging | $6,601 | $5,265 |
| Mortgage servicing income | 4,640 | 4,155 |
| Net MSR capitalization and changes in fair value, net of derivative activity | 2,033 | 1,623 |
| Income from mortgage banking services, net | $13,274 | $11,043 |

For the second quarter of 2025, income from mortgage banking services increased $2.2 million, compared to the same period in 2024. Total loan originations for sale were $380.6 million for the second quarter of 2025, an increase of $83.1 million from $297.5 million for the same period in 2024. The increase in loan originations sold, partially offset by slightly lower margins resulted in the increase in revenue related to net sale gains and fees from loan originations, including fair value changes in the held-for-sale portfolio and hedging activity. We retain servicing rights on the majority of mortgage loans that we sell, which drove the increase in servicing income of $0.5 million to $4.6 million for the second quarter of 2025, from $4.2 million for the same period in 2024. Net MSR capitalization and changes in fair value, net of derivative activity, increased $0.4 million in the second quarter of 2025, compared to the same period in 2024. The increase in revenue related to our MSRs was due to higher net MSR capitalization and a slight increase in the fair value of our MSRs, net of hedging.

The following table shows the hypothetical effect on the fair value of our MSRs when applying certain unfavorable variations of key assumptions to these assets as of June 30, 2025.

|  |  |  |
| --- | ---: | ---: |
| (In thousands) | **10%** | **20%** |
| Discount rate | $(4,009) | $(7,005) |
| Total prepayment speeds | (3,679) | (6,343) |
| Cost of servicing each loan | (1,738) | (2,608) |

These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects.

Other noninterest income increased $1.5 million for the second quarter of 2025 compared to the same period in 2024, primarily due to an increase in the fair value of investments related to our deferred compensation plan.

#### Six months ended June 30, 2025 and 2024

Our noninterest income increased $2.7 million to $48.8 million for the six months ended June 30, 2025 from $46.1 million for the same period in 2024.

Service charges on deposit accounts decreased $0.7 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a decrease in non-sufficient funds and overdraft fees.

Credit and debit card fees decreased $0.4 million for the six months ended June 30, 2025 compared to the same period in 2024, as card transaction volumes decreased slightly.

Trust and investment advisory fees were largely unchanged for the six months ended June 30, 2025 as compared to the same period in 2024.

The components of income from mortgage banking services were as follows:

*(In thousands)*

|  | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net sale gains and fees from mortgage loan originations, including loans held-for-sale changes in fair value and hedging | $11,164 | $10,236 |
| Mortgage servicing income | 9,145 | 8,259 |
| Net MSR capitalization and changes in fair value, net of derivative activity | 2,020 | 2,050 |
| Income from mortgage banking services, net | $22,329 | $20,545 |

For the six months ended June 30, 2025, income from mortgage banking services increased $1.8 million, compared to the same period in 2024. Total loan originations for sale were $631.6 million for the six months ended June 30, 2025, an increase of $139.2 million from $492.4 million for the same period in 2024. The increase in loan originations sold, partially offset by slightly lower margins resulted in the increase in revenue related to net sale gains and fees from loan originations, including fair value changes in the held-for-sale portfolio and hedging activity. We retain servicing rights on the majority of mortgage loans that we sell, which drove the increase in servicing income of $0.9 million to $9.1 million for the six months ended June 30, 2025, from $8.3 million for the same period in 2024. Net MSR capitalization and changes in fair value, net of derivative activity was largely unchanged for the six months ended June 30, 2025, compared to the same period in 2024 as an increase in capitalized servicing value was offset by an increase in MSR amortization.

Other noninterest income increased $0.6 million for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to an increase in interest rate swap and loan syndication revenue partially offset by a decrease in income from BOLI.

### Noninterest Expense

The following table presents noninterest expense:

*(In thousands)*

|  | For the three months ended June 30, 2025 | 2024 | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Salary and employee benefits | $43,921 | $39,828 | $83,482 | $77,181 |
| Occupancy and equipment | 9,541 | 8,701 | 19,077 | 17,296 |
| Amortization of intangible assets | 578 | 652 | 1,206 | 1,467 |
| Terminated merger-related expenses | — | 1,046 | — | 3,535 |
| Other | 14,070 | 13,648 | 27,067 | 26,224 |
| Total noninterest expenses | $68,110 | $63,875 | $130,832 | $125,703 |

#### Three months ended June 30, 2025 and 2024

Our noninterest expenses increased $4.2 million to $68.1 million for the second quarter of 2025, from $63.9 million for the same period in 2024.

Salary and employee benefits increased $4.1 million to $43.9 million for the second quarter of 2025, from $39.8 million for the same period in 2024, primarily due to higher levels of variable compensation associated with an increase in residential mortgage loan originations and an increase in the fair value of investments related to our deferred compensation plan.

Occupancy and equipment increased $0.8 million to $9.5 million for the second quarter of 2025, from $8.7 million for the same period in 2024, primarily due to higher software subscriptions and license fees.

Other noninterest expense increased $0.4 million to $14.1 million for the second quarter of 2025, from $13.6 million for the same period in 2024, primarily due to higher legal and professional fees.

#### Six months ended June 30, 2025 and 2024

Our noninterest expenses increased $5.1 million to $130.8 million for the six months ended June 30, 2025, from $125.7 million for the same period in 2024.

Salary and employee benefits increased $6.3 million to $83.5 million for the six months ended June 30, 2025, from $77.2 million for the same period in 2024, primarily due to increased headcount, including the hiring of C&I bankers in Southern California and higher variable compensation due to an increase in mortgage loan originations.

Occupancy and equipment increased $1.8 million to $19.1 million for the six months ended June 30, 2025, from $17.3 million for the same period in 2024, primarily due to higher software subscriptions and license fees.

Other noninterest expense increased $0.8 million to $27.1 million for the six months ended June 30, 2025, from $26.2 million for the same period in 2024, primarily due to higher data processing expenses.

### Income Taxes

#### Three months ended June 30, 2025 and 2024

We recorded income tax expense for the second quarter of 2025 of $6.6 million, compared to income tax expense of $6.5 million for the same period in 2024. The increase in income tax expense was due to an increase in income during the second quarter of 2025, compared to the same period in 2024. Our effective tax rate was 20.0% for the second quarter of 2025, compared to 21.0% for the same period in 2024.

#### Six months ended June 30, 2025 and 2024

We recorded income tax expense for the six months ended June 30, 2025 of $12.7 million, compared to $9.5 million for the same period in 2024. The increase in income tax expense was primarily due to our increased income during the six months ended June 30, 2025. Our effective tax rate was 20.3% for the six months ended June 30, 2025, compared to 20.5% for the same period in 2024.

### Financial Condition

### Balance Sheet

Our total assets were $8.4 billion and $8.1 billion, total liabilities were $7.3 billion and $7.1 billion, and total stockholders’ equity was $1.1 billion and $1.0 billion at June 30, 2025 and December 31, 2024, respectively.

### Investment Securities

Our securities portfolio is used to make various term investments, maintain a source of liquidity and serve as collateral for certain types of deposits and borrowings. We manage our investment portfolio according to written investment policies approved by our board of directors. Investment in our securities portfolio may change over time based on our funding needs and interest rate risk management objectives. Our liquidity levels take into account anticipated future cash flows and other available sources of funds, and are maintained at levels that we believe are appropriate to provide the necessary flexibility to meet our anticipated funding requirements.

Our investment securities portfolio consists of securities classified as available-for-sale and held-to-maturity. There were no trading securities in our investment portfolio as of June 30, 2025 and December 31, 2024. All available-for sale securities are carried at fair value and may be used for liquidity purposes should management consider it to be in our best interest.

Our securities available-for-sale increased by $4.4 million to $473.5 million at June 30, 2025, compared to December 31, 2024. During the period ended June 30, 2025, the securities held-to-maturity decreased $0.7 million to $34.6 million.

The following table is a summary of our investment portfolio as of:

*(In thousands)*

| Available-for-sale: | June 30, 2025 Carrying Amount | % of Portfolio | December 31, 2024 Carrying Amount | % of Portfolio |
| --- | ---: | ---: | ---: | ---: |
| U.S. treasury | $32,605 | 6.9% | $31,730 | 6.8% |
| U.S. agency | 549 | 0.1% | 656 | 0.2% |
| Obligations of states and political subdivisions | 27,079 | 5.7% | 25,699 | 5.5% |
| Mortgage backed - residential | 98,767 | 20.8% | 96,279 | 20.5% |
| Collateralized mortgage obligations | 156,292 | 33.0% | 164,347 | 35.0% |
| Mortgage backed - commercial | 142,309 | 30.1% | 134,827 | 28.7% |
| Other debt | 15,867 | 3.4% | 15,538 | 3.3% |
| Total available-for-sale | $473,468 | 100.0% | $469,076 | 100.0% |
| Held-to-maturity: |  |  |  |  |
| Obligations of states and political subdivisions | $25,801 | 74.6% | $25,713 | 73.0% |
| Mortgage backed - residential | 5,951 | 17.2% | 6,373 | 18.0% |
| Collateralized mortgage obligations | 2,829 | 8.2% | 3,156 | 9.0% |
| Total held-to-maturity | $34,581 | 100.0% | $35,242 | 100.0% |

The following table shows the weighted average yield to average life, which considers expected prepayments, of each category of investment securities as of June 30, 2025:

*(In thousands)*

| Available-for-sale: | One year or less Carrying Amount | Average Yield | One to five years Carrying Amount | Average Yield | Five to ten years Carrying Amount | Average Yield | After ten years Carrying Amount | Average Yield |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. treasury | $— | —% | $32,605 | 1.28% | $— | —% | $— | —% |
| U.S. agency | 47 | 5.25% | — | —% | 502 | 5.59% | — | —% |
| Obligations of states and political subdivisions | — | —% | — | —% | 23,115 | 3.23% | 3,964 | 2.39% |
| Mortgage backed - residential | 1,373 | 2.19% | 24,108 | 3.33% | 33,530 | 2.04% | 39,756 | 3.05% |
| Collateralized mortgage obligations | 147 | 3.07% | 36,805 | 3.60% | 104,285 | 3.22% | 15,055 | 2.31% |
| Mortgage backed - commercial | 1,070 | 2.83% | 74,816 | 3.55% | 66,423 | 2.81% | — | —% |
| Other debt | — | —% | 7,846 | 3.84% | 6,199 | 1.86% | 1,822 | 3.75% |
| Total available-for-sale | $2,637 | 2.55% | $176,180 | 3.12% | $234,054 | 2.91% | $60,597 | 2.85% |
| Held-to-maturity: |  |  |  |  |  |  |  |  |
| Obligations of states and political subdivisions | $— | —% | $992 | 2.06% | $— | —% | $24,809 | 3.52% |
| Mortgage backed - residential | 100 | 3.22% | 3,354 | 2.52% | 19 | 5.73% | 2,478 | 3.24% |
| Collateralized mortgage obligations | 120 | 2.79% | 1,654 | 2.77% | 1,055 | 3.05% | — | —% |
| Total held-to-maturity | $220 | 2.98% | $6,000 | 2.51% | $1,074 | 3.10% | $27,287 | 3.50% |

66

### Loans

Our loan portfolio represents a broad range of borrowers primarily in our markets in Texas, Kansas, Colorado, New Mexico, Arizona, California and Washington primarily comprised of commercial and industrial, commercial real estate, residential real estate, and public finance loans. We have a diversified portfolio across a variety of industries, and the portfolio is generally centered in the states in which we have branch offices. Our lending focus continues to be on operating companies, including commercial and industrial loans and lines-of-credit, as well as owner occupied commercial real estate loans.

Total loans held-for-investment, net of deferred fees, costs, premiums and discounts were $6.5 billion at June 30, 2025 and $6.4 billion at December 31, 2024.

The following table sets forth the composition of our loan portfolio, as of:

*(In thousands)*

|  | June 30, 2025 Amount | % of total loans | December 31, 2024 Amount | % of total loans |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $2,651,646 | 40.8% | $2,497,772 | 39.2% |
| Commercial real estate: |  |  |  |  |
| Non-owner occupied | 705,749 | 10.8% | 752,861 | 11.8% |
| Owner occupied | 662,120 | 10.2% | 702,773 | 11.0% |
| Construction and land | 383,969 | 5.9% | 362,677 | 5.7% |
| Multifamily | 134,520 | 2.1% | 94,355 | 1.5% |
| Total commercial real estate | 1,886,358 | 29.0% | 1,912,666 | 30.0% |
| Residential real estate | 1,226,760 | 18.9% | 1,180,610 | 18.5% |
| Public finance | 524,441 | 8.1% | 554,784 | 8.7% |
| Consumer | 43,080 | 0.6% | 41,345 | 0.6% |
| Other | 174,781 | 2.6% | 189,180 | 3.0% |
| Total loans | $6,507,066 | 100.0% | $6,376,357 | 100.0% |

Commercial and industrial loans include loans to commercial customers for use in normal business operations to finance working capital needs, equipment and inventory purchases, and other expansion projects. These loans are made primarily in our market areas and are underwritten on the basis of the borrower’s ability to service the debt from revenue, and are generally extended under our normal credit standards, controls and monitoring systems.

Commercial real estate (“CRE”) loans include owner occupied and non-owner occupied commercial real estate mortgage loans to operating commercial and agricultural businesses, and include both loans for long-term financing of land and buildings and loans made for the initial development or construction of a commercial real estate project. Non-owner occupied CRE loans were 60.1% of the Company’s risk-based capital, or 10.8% of total loans as of June 30, 2025. Non-owner occupied CRE loans associated with office space were $169.0 million, or 2.6% of total loans as of June 30, 2025. Owner occupied CRE loans associated with office space were $61.6 million, or 0.9% of total loans as of June 30, 2025.

Residential real estate loans represent loans to consumers collateralized by a mortgage on a residence and include purchase money, refinancing, secondary mortgages, and home equity loans and lines of credit.

Public finance loans include loans to our charter school and municipal based customers.

Consumer loans include direct consumer installment loans, credit card accounts, overdrafts and other revolving loans.

Other loans consist of loans to nondepository financial institutions, lease financing receivables and loans for agricultural production.

### Maturities and Sensitivity of Loans to Changes in Interest Rates

The information in the following tables is based on the contractual maturities of individual loans, including loans that may be subject to renewal at their contractual maturity. Renewal of these loans is subject to review and credit approval, as well as modification of terms upon maturity. Actual repayments of loans may differ from the maturities reflected below because borrowers have the right to prepay obligations with or without prepayment penalties. The following tables summarize the loan maturity distribution by type and related interest rate characteristics as of June 30, 2025:

*(In thousands)*

|  | One year or less | After one through five years | After five through 15 years | After 15 years | Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Commercial and industrial | $491,251 | $1,876,212 | $262,098 | $22,085 | $2,651,646 |
| Commercial real estate | 367,030 | 1,148,185 | 319,091 | 52,052 | 1,886,358 |
| Residential real estate | 114,257 | 38,092 | 53,488 | 1,020,923 | 1,226,760 |
| Public finance | 11,390 | 196,579 | 241,719 | 74,753 | 524,441 |
| Consumer | 17,363 | 12,168 | 13,305 | 244 | 43,080 |
| Other | 32,874 | 122,273 | 15,348 | 4,286 | 174,781 |
| Total loans | $1,034,165 | $3,393,509 | $905,049 | $1,174,343 | $6,507,066 |

*(In thousands)*

| Loans maturing with: Fixed interest rates | One year or less | After one through five years | After five through 15 years | After 15 years | Total | Total Loans Maturing After 1 Year |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial and industrial | $105,629 | $199,054 | $156,246 | $519 | $461,448 | $355,819 |
| Commercial real estate | 172,069 | 536,468 | 51,983 | 4,560 | 765,080 | 593,011 |
| Residential real estate | 83,577 | 24,249 | 37,456 | 300,526 | 445,808 | 362,231 |
| Public finance | 7,857 | 196,579 | 238,714 | 74,753 | 517,903 | 510,046 |
| Consumer | 6,446 | 11,440 | 12,932 | — | 30,818 | 24,372 |
| Other | 2,197 | 30,227 | 14,564 | 4,286 | 51,274 | 49,077 |
| Total fixed interest rate loans | $377,775 | $998,017 | $511,895 | $384,644 | $2,272,331 | $1,894,556 |
| Floating or adjustable interest rates |  |  |  |  |  |  |
| Commercial and industrial | $385,622 | $1,677,158 | $105,852 | $21,566 | $2,190,198 | $1,804,576 |
| Commercial real estate | 194,961 | 611,717 | 267,108 | 47,492 | 1,121,278 | 926,317 |
| Residential real estate | 30,680 | 13,843 | 16,032 | 720,397 | 780,952 | 750,272 |
| Public finance | 3,533 | — | 3,005 | — | 6,538 | 3,005 |
| Consumer | 10,917 | 728 | 373 | 244 | 12,262 | 1,345 |
| Other | 30,677 | 92,046 | 784 | — | 123,507 | 92,830 |
| Total floating or adjustable interest rate loans | $656,390 | $2,395,492 | $393,154 | $789,699 | $4,234,735 | $3,578,345 |
| Total loans | $1,034,165 | $3,393,509 | $905,049 | $1,174,343 | $6,507,066 | $5,472,901 |

### Allowance for Credit Losses

We maintain the allowance for credit losses at a level we believe is sufficient to absorb expected losses in our loan portfolio given the conditions at the time and our estimates of future economic conditions. Events that are not within our control, such as changes in economic factors, could change subsequent to the reporting date and could cause increases or decreases to the allowance. The amount of the allowance is affected by loan charge-offs, which decrease the allowance; recoveries on loans previously charged off, which increase the allowance; and the provision for credit losses charged to earnings, which increases the allowance.

In determining the provision for credit losses, management monitors fluctuations in the allowance resulting from actual charge-offs and recoveries and reviews the size and composition of the loan portfolio in light of current and anticipated economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or as events change.

The following table presents, by loan type, the changes in the allowance for credit losses:

*(In thousands)*

|  | For the three months ended June 30, 2025 | 2024 | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| **Balance, beginning of period** | $91,790 | $79,829 | $88,221 | $80,398 |
| **Loan charge-offs:** |  |  |  |  |
| Commercial and industrial | (11,089) | (2,261) | (11,732) | (19,627) |
| Commercial real estate | — | — | — | — |
| Residential real estate | — | (38) | — | (38) |
| Public finance | (1,680) | — | (1,680) | — |
| Consumer | (85) | (161) | (254) | (301) |
| Other | (743) | — | (743) | — |
| Total loan charge-offs | (13,597) | (2,460) | (14,409) | (19,966) |
| **Recoveries of loans previously charged-off:** |  |  |  |  |
| Commercial and industrial | 2 | 414 | 121 | 461 |
| Commercial real estate | — | 5 | — | 5 |
| Residential real estate | — | — | 23 | 8 |
| Public finance | — | — | — | — |
| Consumer | 48 | 32 | 87 | 54 |
| Other | — | — | — | — |
| Total loan recoveries | 50 | 451 | 231 | 528 |
| Net (charge-offs) recoveries | (13,547) | (2,009) | (14,178) | (19,438) |
| Provision for credit losses1 | 4,750 | 1,140 | 8,950 | 18,000 |
| Balance, end of period | $82,993 | $78,960 | $82,993 | $78,960 |
| Allowance for credit losses to total loans | 1.28% | 1.25% | 1.28% | 1.25% |
| Ratio of net charge-offs to average loans outstanding | 0.83% | 0.13% | 0.44% | 0.62% |
| 1 For the three months ended June 30, 2025 and 2024 we recorded a (benefit) provision for credit losses on unfunded commitments of $(250) and $60, respectively. For the six months ended June 30, 2025 and 2024 we recorded a benefit for credit losses on unfunded commitments of $650 and $300, respectively. For further information, see Note 3 - Loans. |  |  |  |  |

The following table presents net charge-offs (recoveries) to average loans outstanding by loan category:

*(In thousands)*

|  | For the three months ended June 30, 2025 | 2024 | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | 1.45% | 1.27% | 0.79% | 1.39% |
| Commercial real estate | —% | —% | —% | —% |
| Residential real estate | —% | 0.02% | —% | 0.01% |
| Public finance | 1.25% | —% | 0.63% | —% |
| Consumer | 0.39% | 1.26% | 0.87% | 1.24% |
| Other | 2.14% | —% | 0.85% | —% |

69

### Allocation of Allowance for Credit Losses

The following table presents the allocation of the allowance for credit losses by category and the percentage of loans by category to total loans as of:

*(In thousands)*

|  | June 30, 2025 Allowance Amount | % of loans in each category to total loans | December 31, 2024 Allowance Amount | % of loans in each category to total loans |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $36,680 | 40.7% | $37,912 | 39.2% |
| Commercial real estate | 25,481 | 29.0% | 28,323 | 30.0% |
| Residential real estate | 15,249 | 18.8% | 15,450 | 18.5% |
| Public finance | 3,203 | 8.1% | 4,750 | 8.7% |
| Consumer | 804 | 0.7% | 750 | 0.6% |
| Other | 1,576 | 2.7% | 1,036 | 3.0% |
| Total | $82,993 | 100.0% | $88,221 | 100.0% |

### Nonperforming Assets

We have established policies and procedures to guide us in originating, monitoring and maintaining the credit quality of our loan portfolio. These policies and procedures are expected to be followed by our bankers and underwriters and exceptions to these policies require elevated levels of approval and are reported to our board of directors.

Nonperforming assets include all loans categorized as nonaccrual, accrual loans greater than 90 days past due, and other real estate owned and other repossessed assets. The accrual of interest on loans is discontinued, or the loan is placed on nonaccrual, when the full collection of principal and interest is in doubt. We do not generally accrue interest on loans that are 90 days or more past due. When a loan is placed on nonaccrual, previously accrued but unpaid interest is reversed and charged against interest income and future accruals of interest are discontinued. Payments by borrowers for loans on nonaccrual are applied to loan principal. Loans are returned to accrual status when, in our judgment, the borrower’s ability to satisfy principal and interest obligations under the loan agreement has improved sufficiently to reasonably assure recovery of principal and the borrower has demonstrated a sustained period of repayment performance. In general, we require a minimum of six consecutive months of timely payments in accordance with the contractual terms before returning a loan to accrual status.

The following table sets forth our nonperforming assets as of:

*(In thousands)*

| Nonaccrual loans: | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Commercial and industrial | $27,911 | $28,314 |
| Commercial real estate | 8,423 | 9,302 |
| Residential real estate | 18,273 | 20,220 |
| Public finance | — | 7,226 |
| Consumer | 40 | 64 |
| Other | — | 2,391 |
| Total nonaccrual loans | 54,647 | 67,517 |
| Accrual loans greater than 90 days past due | 194 | 1,533 |
| Total nonperforming loans | 54,841 | 69,050 |
| Other real estate owned and foreclosed assets, net | 13,052 | 5,138 |
| Total nonperforming assets | $67,893 | $74,188 |
| Nonaccrual loans to total loans | 0.84% | 1.06% |
| Nonperforming loans to total loans | 0.84% | 1.08% |
| Nonperforming assets to total assets | 0.80% | 0.92% |
| Allowance for credit losses to nonaccrual loans | 151.87% | 130.66% |

70

### Deposits

Deposits represent our primary source of funds. Total deposits increased by $0.4 billion to $7.1 billion at June 30, 2025, compared to December 31, 2024.

We are focused on growing our core deposits through relationship-based banking with our business and consumer clients. The following table presents our deposits by customer type as of:

*($ in thousands)*

| Consumer | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Noninterest bearing deposit accounts | $426,909 | $410,303 |
| Interest-bearing deposit accounts: |  |  |
| Demand and NOW deposits | 113,415 | 61,987 |
| Savings deposits | 322,672 | 326,916 |
| Money market deposits | 1,803,348 | 1,516,577 |
| Certificates of deposits | 937,439 | 1,069,704 |
| Total interest-bearing deposit accounts | 3,176,874 | 2,975,184 |
| Total consumer deposits | $3,603,783 | $3,385,487 |
| **Business** |  |  |
| Noninterest bearing deposit accounts | $1,279,769 | $1,130,855 |
| Interest-bearing deposit accounts: |  |  |
| Demand and NOW deposits | 684,340 | 669,417 |
| Savings deposits | 74,448 | 75,422 |
| Money market deposits | 965,998 | 915,208 |
| Certificates of deposits | 56,930 | 51,131 |
| Total interest-bearing deposit accounts | 1,781,716 | 1,711,178 |
| Total business deposits | $3,061,485 | $2,842,033 |
| **Wholesale deposits1** | $434,896 | $444,740 |
| Total deposits | $7,100,164 | $6,672,260 |
| 1 Wholesale deposits primarily consist of brokered deposits included in our consolidated balance sheets within certificate of deposits. |  |  |

The following table sets forth the average balance amounts and the average rates paid on deposits held by us:

*(Dollars in thousands)*

|  | For the three months ended June 30, 2025 Average Balance | Average Rate Paid | 2024 Average Balance | Average Rate Paid | For the six months ended June 30, 2025 Average Balance | Average Rate Paid | 2024 Average Balance | Average Rate Paid |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Noninterest-bearing demand deposit accounts | $1,587,302 | —% | $1,517,560 | —% | $1,559,878 | —% | $1,510,134 | —% |
| Interest-bearing deposit accounts: |  |  |  |  |  |  |  |  |
| Interest-bearing demand accounts | 751,033 | 3.38% | 580,886 | 3.99% | 712,154 | 3.37% | 543,948 | 3.88% |
| Savings accounts and money market accounts | 3,060,435 | 2.18% | 2,506,148 | 1.80% | 2,952,089 | 2.08% | 2,495,676 | 1.76% |
| NOW accounts | 42,428 | 1.21% | 40,457 | 1.35% | 45,128 | 1.03% | 41,469 | 1.35% |
| Certificate of deposit accounts | 1,504,235 | 3.76% | 1,823,522 | 4.71% | 1,525,814 | 3.84% | 1,819,075 | 4.67% |
| Total interest-bearing deposit accounts | 5,358,131 | 2.78% | 4,951,013 | 3.13% | 5,235,185 | 2.76% | 4,900,168 | 3.07% |
| Total deposits | $6,945,433 | 2.15% | $6,468,573 | 2.39% | $6,795,063 | 2.12% | $6,410,302 | 2.35% |

As of June 30, 2025 and December 31, 2024, approximately $2.6 billion or 37.0% and $2.3 billion or 34.8%, respectively, of our deposit portfolio was uninsured. As of June 30, 2025 and December 31, 2024, approximately $2.0 billion or 28.3% and $1.7 billion or 25.2%, respectively, of our deposit portfolio was uninsured and uncollateralized. The uninsured, and uninsured and uncollateralized amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

We actively participate in the IntraFi Cash Service (“ICS”) / Certificate of Deposit Account Registry Service (“CDARS”) program which provides FDIC insurance coverage for clients that maintain larger deposit balances. Deposits in the ICS / CDARS program totaled $0.8 billion, or 11.3% of all deposits as of June 30, 2025, and $0.7 billion, or 11.1% of all deposits as of December 31, 2024.

The following table sets forth the portion of the Bank's time deposits, by account, that are in excess of the FDIC insurance limit, by remaining time until maturity, as of June 30,:

*(In thousands)*

|  | 2025 |
| --- | ---: |
| Three months or less | $65,369 |
| Over three months through six months | 106,277 |
| Over six through twelve months | 37,926 |
| Over twelve months through three years | 2,846 |
| Over three years | 518 |
| Total | $212,936 |

### Liquidity

Liquidity refers to our ability to maintain cash flow that is adequate to fund operations, support asset growth, maintain reserve requirements and meet present and future obligations of deposit withdrawals, lending obligations and other contractual obligations.

#### FirstSun (Parent Company)

FirstSun has routine funding requirements consisting primarily of operating expenses, debt service, and funds used for acquisitions. FirstSun can obtain funding to meet its obligations from dividends collected from its subsidiaries, primarily the Bank, and through the issuance of varying forms of debt. At June 30, 2025, FirstSun had available cash and cash equivalents of $104.4 million and debt outstanding of $78.9 million. Management believes FirstSun has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.

Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries without prior approval. The Bank may declare dividends without prior regulatory approval that do not exceed the total of retained net income for the current year combined with its retained net income for the preceding two years, subject to maintenance of minimum capital requirements. Prior regulatory approval to pay dividends was not required in 2024 and is not currently required. At June 30, 2025, the Bank could pay dividends to FirstSun of approximately $222.3 million without prior regulatory approval. During the three and six months ended June 30, 2025, the Bank did not pay dividends to FirstSun.

#### Bank

As more fully discussed in our 2024 Annual Report, we regularly monitor our liquidity position and make adjustments to the balance between sources and uses of funds as we deem appropriate. At June 30, 2025, our liquid assets, which consist of cash and amounts due from banks and interest-bearing deposits in other financial institutions, amounted to $776.5 million, or 9.2% of total assets, compared to $607.6 million, or 7.5% of total assets, at December 31, 2024. The increase in our liquid assets was primarily due to an increase in cash held at the Federal Reserve. At June 30, 2025, approximately 84% of the investment securities portfolio was pledged as collateral to secure public deposits and repurchase agreements. Our unencumbered available-for-sale securities at June 30, 2025 were $73.0 million, or 0.9% of total assets, compared to $34.5 million, or 0.4% of total assets, at December 31, 2024.

The liability portion of our balance sheet serves as a primary source of liquidity. We plan to meet our future cash needs primarily through the generation of deposits. Customer deposits have historically provided a sizeable source of relatively stable and low-cost funds. At June 30, 2025, loans as a percentage of customer deposits were 91.6%, compared with 95.6% at December 31, 2024. For additional information related to our deposits, see Deposits section above. We are also a member of the FHLB and FRB, from which we can borrow for leverage or liquidity purposes. The FHLB and FRB requires that securities and qualifying loans be pledged to secure any advances. Liquidity sources available to us for immediate funding at June 30, 2025, are as follows:

|  |  |
| --- | ---: |
| FHLB borrowings available | $1,333,895 |
| Fed Funds lines | 2,120,854 |
| Unused lines with other financial institutions | 160,000 |
| Immediate funding availability | $3,614,749 |

Management believes the Bank has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.

### Capital

Stockholders’ equity at June 30, 2025 was $1.1 billion, compared to $1.0 billion at December 31, 2024, an increase of $54.0 million, or 5.2%.

We did not pay a dividend to our common shareholders for the three and six months ended June 30, 2025 and 2024.

### Capital Adequacy

We are subject to various regulatory capital requirements administered by the federal banking agencies. Management routinely analyzes our capital to seek to ensure an optimized capital structure. For further information on capital adequacy see Note 11 - Regulatory Capital Matters to the consolidated financial statements.

### Material Contractual Obligations, Commitments, and Contingent Liabilities

We have entered into contractual obligations in the normal course of business that involve elements of credit risk, interest rate risk and liquidity risk.

The following table summarizes our material contractual obligations as of June 30, 2025. Further discussion of each obligation or commitment is included in the referenced note to the consolidated financial statements.

*(In thousands)*

| Deposits: | Note Reference | Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Deposits without a stated maturity | 6 | $5,670,899 | $5,670,899 | $— | $— | $— |
| Certificates of deposit | 6 | 1,429,265 | 1,371,430 | 49,379 | 6,573 | 1,883 |
| Securities sold under agreements to repurchase |  | 11,173 | 11,173 | — | — | — |
| Short-term debt: |  |  |  |  |  |  |
| FHLB term advances | 7 | — | — | — | — | — |
| Long-term debt: |  |  |  |  |  |  |
| Subordinated debt | 7 | 78,919 | — | — | — | 78,919 |
| Operating leases | 15 | 27,882 | 7,289 | 10,138 | 7,155 | 3,300 |

We are party to various derivative contracts as a means to manage the balance sheet and our related exposure to changes in interest rates, to manage our residential real estate loan origination and sale activity, and to provide derivative contracts to our clients. Since the derivative liabilities recorded on the balance sheet change frequently and do not represent the amounts that may ultimately be paid under these contracts, these liabilities are not included in the table of contractual obligations presented above. Further discussion of derivative instruments is included in Note 5 - Derivative Financial Instruments to the consolidated financial statements.

In the normal course of business, various legal actions and proceedings are pending against us and our affiliates which are incidental to the business in which they are engaged. Further discussion of contingent liabilities is included in Note 14 - Commitments and Contingencies to the consolidated financial statements.

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contractual or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments. Further discussion of contingent liabilities is included in Note 14 - Commitments and Contingencies to the consolidated financial statements.

## Market risk

As filed, 4,185 characters.

Market risk is the risk of reduced earnings and/or declines in the net market value of the balance sheet due to changes in market rates. Our primary market risk is interest rate risk which impacts our net interest income, fee income related to interest sensitive activities such as mortgage origination and servicing income and loan and deposit demand.

We are subject to interest rate risk due to:

- the maturity or repricing of assets and liabilities at different times or for different amounts;
- differences in short-term and long-term market interest rate changes; and
- the remaining maturity of various assets or liabilities may shorten or lengthen as interest rates change.

Our Asset Liability Committee, or ALCO, which is composed of our executive officers and certain other members of management, monitors interest rate risk on an ongoing basis in accordance with policies approved by our board of directors. The ALCO reviews interest rate positions and considers the impact projected interest rate scenarios have on earnings, liquidity, business strategies and other factors. However, management has the latitude to change interest rate positions within certain limits if, in management’s judgment, the change will enhance profitability or minimize risk.

To assess and manage interest rate risk, sensitivity analysis is used to determine the impact on earnings and the net market value of the balance sheet across various interest rate scenarios, balance sheet trends, and strategies.

Management uses a simulation model to analyze the sensitivity of net interest income to changes in interest rates across various interest rate scenarios, which seeks to demonstrate the level of interest rate risk inherent in the existing balance sheet. The analysis holds the current balance sheet values constant and does not take into account management intervention.

Additionally our simulation model incorporates various key assumptions, which we believe are reasonable, but may have an impact on the results such as: (1) we assume certain correlation rates, often referred to as “deposit beta,” for interest-bearing deposits, wherein the rates paid to customers change relative to changes in benchmark interest rates, (2) cash flows and maturities of interest sensitive assets and liabilities, (3) re-pricing characteristics for market rate sensitive instruments, (4) prepayment rates and product mix of assets and liabilities, and (5) simulations do not contemplate any actions management may undertake in response to changes in interest rates. Because of limitations in any approach used to measure interest rate risk, simulation results are not intended to forecast actual results driven by the effect of a change in market rates but to better plan and execute appropriate asset-liability management strategies and manage our interest rate risk.

The primary impact of inflation on operations is reflected in increasing operating costs and non-interest expense. Our interest-bearing assets and liabilities are monetary in nature and changes in interest rates will impact our performance on net interest margin more than changes in the general rate of inflation.

The effect on net interest income over a 12-month time horizon due to hypothetical changes in market interest rates is presented in the table below. In this interest rate shock simulation, as of the periods presented, interest rates have been adjusted by instantaneous parallel changes rather than in a ramp simulation, which applies interest rate changes over time. All rates, short-term and long-term, are changed by the same amount (e.g., plus or minus 100 basis points) resulting in the shape of the yield curve remaining unchanged.

| Changes in Interest Rate (Basis Points) | % Change in Net Interest Income As of June 30, 2025 | 2024 | % Change in Economic Value of Equity As of June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| +300 | 8.0% | 2.7% | (6.0)% | (9.5)% |
| +200 | 5.5% | 1.9% | (3.5)% | (6.2)% |
| +100 | 2.8% | 1.2% | (1.3)% | (2.7)% |
| Base | —% | —% | —% | —% |
| -100 | 1.5% | 1.7% | 1.5% | 2.9% |
| -200 | 1.9% | 2.5% | 1.1% | 4.0% |
| -300 | 0.8% | 2.1% | (1.1)% | 2.7% |

75

## Controls and procedures

As filed, 970 characters.

#### a. Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934 (the “Exchange Act”)) as of June 30, 2025. Based on that evaluation, our principal executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

#### b. Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended June 30, 2025, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Aug 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001709442-25-000077. Last ingested by Listed: Nov 10, 2026, 04:17 ET. No prices; not investment advice.