Burke & Herbert Financial Services Corp.

Previous wording

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations, or assumptions regarding the future of the business, future plans and strategies, operational results, and other future conditions of the Company. All statements other than statements of historical fact included in this Form 10-Q regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: costs or difficulties associated with newly developed or acquired operations; changes in general economic, political, or market trends (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, including with respect to spending o…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations, or assumptions regarding the future of the business, future plans and strategies, operational results, and other future conditions of the Company. All statements other than statements of historical fact included in this Form 10-Q regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: costs or difficulties associated with newly developed or acquired operations; changes in general economic, political, or market trends (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, including the impact of the federal …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As of June 30, 2025, we had total consolidated assets of $8.1 billion, gross loans of $5.6 billion, total deposits of $6.4 billion, and total shareholders’ equity of $780.0 million. As of June 30, 2025, we had 819 full-time employees. None of our employees are covered by a collective bargaining agreement.

Current wording

As of September 30, 2025, we had total consolidated assets of $7.9 billion, gross loans of $5.6 billion, total deposits of $6.4 billion, and total shareholders’ equity of $822.2 million. As of September 30, 2025, we had 829 full-time employees. None of our employees are covered by a collective bargaining agreement.

Previous wording

The Company currently has set an initial reasonable and supportable period of two years with a subsequent straight-line loss-rate reversion for the following four quarters before then utilizing historical average loss rates in remaining periods of the modeled contractual terms. Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable, reversion and post-reversion period forecasts on collectively evaluated loans. As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers. Qualitative adjustments considered by management include the following: (i) management’s assessment of macroeconomic forecasts used in the model and how those forecasts align with management’s overall evaluation of current expected credit 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) underwriting and delinquency trends. The qualitative factors applied at 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. Management reviews supplemental data sources including historical net charge-off rates and data measuring other specific credit outcomes from its systems of record in supporting qualitative factors. However, qualitative factor evaluations are inherently imprecise and require significant management judgement.

Current wording

The Company currently has set an initial reasonable and supportable period of two years with a subsequent straight-line loss-rate reversion for the following four quarters before then utilizing historical average loss rates in remaining periods of the modeled contractual terms. Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable, reversion and post-reversion period forecasts on collectively evaluated loans. As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers. Qualitative adjustments considered by management include the following: (i) management’s assessment of macroeconomic forecasts used in the model and how those forecasts align with management’s overall evaluation of current expected credit 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) underwriting and delinquency trends. The qualitative factors applied at September 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. Management reviews supplemental data sources including historical net charge-off rates and data measuring other specific credit outcomes from its systems of record in supporting qualitative factors. However, qualitative factor evaluations are inherently imprecise and require significant management judgment.

Previous wording

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The Company is currently evaluating the impact on future periods.

Current wording

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in

Previous wording

The commercial real estate (“CRE”) sector has been impacted significantly by rising interest rates and rising vacancies, increasing the prospect of default that borrowers may face due to the record amount of upcoming maturities. In addition, the office market continues to struggle with fewer employees in the office after the COVID-19 pandemic. The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports. However, in late 2024 interest rates began falling, and in January 2025 the U.S. president signed an executive order requiring all federal employees to return to offices on a five-day-a-week basis. Additionally, several large private-sector employers instituted similar return to office mandates in 2024. We would expect the federal return to office mandate, combined with mandates at private sector employers and decreasing interest rates could help the region’s CRE office market; however, we cannot be certain that this would be the case or the degree to which such mandates may improve the CRE sector in our markets in 2025, if at all. Additionally, recent reductions, and possible further reductions, in the federal workforce, combined with general economic uncertainty as a result of federal trade and other policies could continue to challenge the economy and impact the CRE sector. The Bank’s exposure to CRE at June 30, 2025, was $2.8 billion, or 49.5%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development. Commercial real estate as a percent of total assets at June 30, 2025, was 34.4%, not including owner-occupied commercial real estate and acquisition, construction & development. Including owner-occupied commercial real estate and acquisition, construction & development, total exposure was at $3.7 billion, or 66.8%, of our total gross loans and 46.4% of total assets at June 30, 2025.

Current wording

The commercial real estate (“CRE”) sector has been impacted significantly by rising interest rates and rising vacancies, increasing the prospect of default that borrowers may face due to the record amount of upcoming maturities. In addition, the office market continues to struggle with fewer employees in the office after the COVID-19 pandemic. The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports. However, in late 2024 interest rates began falling, and in January 2025 the U.S. president signed an executive order requiring all federal employees to return to offices on a five-day-a-week basis. Additionally, several large private-sector employers instituted similar return to office mandates in 2024. The start of the U.S. federal government’s new fiscal year began October 1, 2025, without the passage of Appropriation Acts or a Continuing Resolution (“CR”) and the government began its shutdown procedures, which included furloughing government civilian employees. It is unclear at this time when either a CR or Appropriations Act will be enacted. Notwithstanding the government shutdown, we would expect the federal return to office mandate, combined with mandates at private sector employers and decreasing interest rates could help the region’s CRE office market; however, we cannot be certain that this would be the case or the degree to which such mandates may improve the CRE sector in our markets in 2025, if at all. Additionally, recent reductions (including during the government shutdown), and possible further reductions, in the federal workforce, combined with general economic uncertainty as a result of federal trade and other policies could continue to challenge the economy and impact the CRE sector. The Bank’s exposure to CRE at September 30, 2025, was $2.8 billion, or 50.4%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development. Commercial real estate as a percent of total assets at September 30, 2025, was 35.5%, not including owner-occupied commercial real estate and acquisition, construction & development. Including owner-occupied commercial real estate and acquisition, construction & development, total exposure was at $3.8 billion, or 68.1%, of our total gross loans and 48.1% of total assets at September 30, 2025.

Previous wording

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses. The largest concentration of the Bank’s commercial real estate loans are in Virginia (approximately 47.4%), and the Bank does not have significant exposure to any economic areas of the country that are underperforming the national economy. Additionally, the Bank’s overall exposure to the “Office Building / Condo” collateral type is 16.6% of total commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development. The Bank believes that the combined loan portfolio is well-diversified, generally seasoned, manageable, and will outperform the industry in terms of performance through the economic cycle; however, our underwriting, review, and monitoring cannot eliminate all of the risks related to these loans. For further discussion see Part II, Item 1A. “Risk Factors”.

Current wording

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses. The largest concentration of the Bank’s commercial real estate loans are in Virginia (approximately 47.3%), and the Bank does not have significant exposure to any economic areas of the country that are underperforming the national economy. Additionally, the Bank’s overall exposure to the “Office Building / Condo” collateral type is 16.5% of total commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development. The Bank believes that the combined loan portfolio is well-diversified, generally seasoned, manageable, and will outperform the industry in terms of performance through the economic cycle; however, our underwriting, review, and monitoring cannot eliminate all of the risks related to these loans. For further discussion see Part II, Item 1A. “Risk Factors”.

Previous wording

Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth. See Note 6 - Borrowed Funds and Note 10 - Commitments and Contingencies, in Notes to Consolidated Financial Statements for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

Current wording

Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth. See Note 6 - Borrowed Funds and Note 10 - Commitments and Contingencies, in Notes to Consolidated

Previous wording

The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of June 30, 2025, and June 30, 2024, and the selected income statement data for the three and six months ended June 30, 2025, and June 30, 2024, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

Current wording

The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of September 30, 2025, and September 30, 2024, and the selected income statement data for the three and nine months ended September 30, 2025, and September 30, 2024, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

Previous wording

Net income applicable to common shares for the six months ended June 30, 2025, was $56.6 million, compared to a net loss applicable to common shares of $11.9 million during the six months ended June 30, 2024. The $68.6 million increase was due to results that reflect a full six months of combined income after the Merger completion for the six months ended June 30, 2025, and merger related expenses and a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger which were recognized in the six months ended June 30, 2024.

Current wording

Net income applicable to common shares for the nine months ended September 30, 2025, was $86.4 million, compared to net income applicable to common shares of $15.5 million during the nine months ended September 30, 2024. The $70.9 million increase was due to results that reflect a full nine months of combined income after the Merger completion for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Net interest income increased by $65.3 million to $147.2 million for the six months ended June 30, 2025, compared to $81.9 million for the six months ended June 30, 2024. The main driver for this increase was results that reflect a full six months of combined income after the Merger.

Current wording

Net interest income increased by $65.9 million to $221.0 million for the nine months ended September 30, 2025, compared to $155.1 million for the nine months ended September 30, 2024. The main driver for this increase was results that reflect a full nine months of combined income after the Merger.

Previous wording

For the six months ended June 30, 2025, the Company recorded credit provision expense of $1.1 million compared to a provision of $23.2 million for the six months ended June 30, 2024. For the six months ended June 30, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger, which resulted in a higher credit provision expense.

Current wording

For the nine months ended September 30, 2025, the Company recorded credit provision expense of $1.4 million compared to a provision of $23.4 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger, which resulted in a higher credit provision expense when compared to the nine months ended September 30, 2025.

Previous wording

Non-interest expense increased by $13.4 million, or 15.6%, to $99.0 million for the six months ended June 30, 2025, as compared to $85.6 million for the six months ended June 30, 2024. The increase was primarily due to results that reflect a full six months of combined operations after the Merger but reflect some merger cost savings associated with the Merger for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Non-interest expense increased by $10.6 million, or 7.8%, to $147.1 million for the nine months ended September 30, 2025, as compared to $136.4 million for the nine months ended September 30, 2024. The increase was primarily due to results that reflect a full nine months of combined operations after the Merger but reflect some continued operating efficiency gains, as a result of the merger, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Net interest income totaled $147.2 million for the six months ended June 30, 2025, compared to $81.9 million for the six months ended June 30, 2024. The increase in net interest income was primarily driven by results that reflect a full six months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger. Accretion income associated with acquired loans and borrowings totaled $23.0 million for the six months ended June 30, 2025 compared to $13.3 million for the six months ended June 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $3.6 million for the six months ended June 30, 2025 compared to $2.5 million the six months ended June 30, 2024.

Current wording

Net interest income totaled $221.0 million for the nine months ended September 30, 2025, compared to $155.1 million for the nine months ended September 30, 2024. The increase in net interest income was primarily driven by results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger. Accretion income associated with acquired loans totaled $31.2 million for the nine months ended September 30, 2025, compared to $28.8 million for the nine months ended September 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $5.0 million for the nine months ended September 30, 2025, compared to $6.3 million the nine months ended September 30, 2024.

Previous wording

The tax-adjusted net interest margin was 4.17% for the six months ended June 30, 2025, compared to 3.56% for the six months ended June 30, 2024. The increase in tax-adjusted net interest margin was primarily driven by results that reflect a full six months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger.

Current wording

The tax-adjusted net interest margin was 4.13% for the nine months ended September 30, 2025, compared to 3.78% for the nine months ended September 30, 2024. The increase in tax-adjusted net interest margin was primarily driven by results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger.

Previous wording

The yield for the taxable loan portfolio was 6.93% for the six months ended June 30, 2025, compared to 6.72% for the six months ended June 30, 2024. The increase was primarily the result of the acquisition of additional, higher-yielding loans.

Current wording

The yield for the taxable loan portfolio was 6.87% for the nine months ended September 30, 2025, compared to 7.01% for the nine months ended September 30, 2024. The decrease was primarily the result of lower accretion income and an increase in the average balance of non-accrual loans.

Previous wording

The tax-adjusted yield on the total investment securities portfolio was 3.90% for the six months ended June 30, 2025, compared to 3.76% for the six months ended June 30, 2024. The increase was mainly due to higher yields in our investment portfolio.

Current wording

The tax-adjusted yield on the total investment securities portfolio was 3.89% for the nine months ended September 30, 2025, compared to 3.81% for the nine months ended September 30, 2024. The increase was mainly due to higher yields in our investment portfolio.

Previous wording

The yield on interest-bearing deposits decreased to 2.47% during the six months ended June 30, 2025, from 2.73% during the six months ended June 30, 2024. The decrease was primarily due to lower market interest rates on deposit products reflective of decreases in the Federal Funds rate in the second half of 2024.

Current wording

The yield on interest-bearing deposits decreased to 2.44% during the nine months ended September 30, 2025, from 2.86% during the nine months ended September 30, 2024. The decrease was primarily due to lower market interest rates on deposit products reflective of decreases in the Federal Funds Rate and other market rates.

Previous wording

The yield on our short-term borrowings for the six months ended June 30, 2025, was 3.90%, compared to 4.58% for the six months ended June 30, 2024. The decrease was due to decreases in the Federal Funds Rate and other short-term market rates in the second half of 2024. The yield on our subordinated debt assumed in the Merger was 9.73% for the six months ended June 30, 2025, compared to 10.30% for the six months ended June 30, 2024.

Current wording

The yield on our short-term borrowings for the nine months ended September 30, 2025, was 3.88%, compared to 4.42% for the nine months ended September 30, 2024. The decrease was due to decreases in the Federal Funds Rate and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing. The yield on our subordinated debt assumed in the Merger was 9.65% for the nine months ended September 30, 2025, compared to 10.21% for the nine months ended September 30, 2024.

Previous wording

The following table sets forth the major components of net interest income and the related yields and rates for the six months ended June 30, 2025, and June 30, 2024, for comparison (dollars in thousands).

Current wording

The following table sets forth the major components of net interest income and the related yields and rates for the nine months ended September 30, 2025, and September 30, 2024, for comparison (dollars in thousands).

Previous wording

(3)Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

Current wording

(4)Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

Previous wording

(4)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average yield of interest-bearing liabilities for the period.

Current wording

(5)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average yield of interest-bearing liabilities for the period.

Previous wording

(5)The net interest margin represents FTE net interest income as a percent of average interest-earning assets for the period.

Current wording

(6)The net interest margin represents FTE net interest income as a percent of average interest-earning assets for the period.

Previous wording

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates. Interest income and interest expense for the six months ended June 30, 2025, and June 30, 2024, are annualized using actual days over calendar year method. Volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances. Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance. See table below (in thousands).

Current wording

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates. Interest income and interest expense for the nine months ended September 30, 2025, and September 30, 2024, are annualized using actual days over calendar year method. Volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances. Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance. See table below (in thousands).

Previous wording

Total interest income was $222.6 million for the six months ended June 30, 2025, compared to $134.8 million for the six months ended June 30, 2024, an increase of 65.1%. The increase in interest income was due to results that reflect a full six months of combined income after the Merger as well as higher rates on interest-earning assets and higher accretion income, as a result of the Merger. Interest income on loans increased by $84.2 million and interest income on securities increased $2.2 million, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Accretion income associated with acquired loans and borrowings totaled $23.0 million for the six months ended June 30, 2025 compared to $13.4 million for the six months ended June 30, 2024.

Current wording

Total interest income was $333.9 million for the nine months ended September 30, 2025, compared to $253.4 million for the nine months ended September 30, 2024, an increase of 31.8%. The increase in interest income was due to results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets and a full nine months of accretion income, as a result of the Merger. Interest income on loans increased by $75.6 million and interest income on securities increased $2.9 million, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Accretion income associated with acquired loans totaled $31.2 million for the nine months ended September 30, 2025, compared to $28.8 million for the nine months ended September 30, 2024.

Previous wording

Total interest expense was $75.4 million for the six months ended June 30, 2025, compared to $52.9 million for the six months ended June 30, 2024. The increase in interest expense was due to results that reflect a full six months of combined operations after the Merger, partially offset by a decrease in amortization expense associated with fair value marks for liabilities acquired in the Merger, and lower rates on interest-bearing liabilities. Interest expense on interest-bearing deposits increased by $19.0 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Interest on subordinated debt acquired in the Merger was $5.5 million for the six months ended June 30, 2025, compared to $1.9 million for the six months ended June 30, 2024. Interest expense on short-term borrowings amounted to $7.6 million for the six months ended June 30, 2025, compared to $7.7 million for the six months ended June 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $3.6 million for the six months ended June 30, 2025 compared to $2.5 million the six months ended June 30, 2024.

Current wording

Total interest expense was $112.9 million for the nine months ended September 30, 2025, compared to $98.3 million for the nine months ended September 30, 2024. The increase in interest expense was due to results that reflect a full nine months of combined operations after the Merger, partially offset by a decrease in amortization expense associated with fair value marks for liabilities acquired in the Merger, and lower rates on interest-bearing liabilities. Interest expense on interest-bearing deposits increased by $9.8 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Interest on subordinated debt acquired in the Merger was $8.2 million for the nine months ended September 30, 2025, compared to $4.7 million for the nine months ended September 30, 2024. Interest expense on short-term borrowings amounted to $12.0 million for the nine months ended September 30, 2025, compared to $10.8 million for the nine months ended September 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $5.0 million for the nine months ended September 30, 2025, compared to $6.3 million the nine months ended September 30, 2024.

Previous wording

The provision for credit losses was $1.1 million for the six months ended June 30, 2025, compared to a provision of $23.2 million for the six months ended June 30, 2024. For the six months ended June 30, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger, which resulted in a higher credit provision expense. See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

Current wording

The provision for credit losses was $1.4 million for the nine months ended September 30, 2025, compared to a provision of $23.4 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger, which resulted in a higher credit provision expense compared to the nine months ended September 30, 2025. See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

Previous wording

Non-interest income increased 66.4% for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. All categories of non-interest income except net gains on securities increased due to results that reflect a full six months of combined income after the Merger for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The largest dollar increase was a $2.7 million increase in income from company-owned life insurance for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was driven by an increase in the collection of death proceeds from company-owned life insurance for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The second largest dollar increase was a $2.3 million increase in bank debit and other card revenue for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily driven by results that reflect a full six months of combined income after the Merger and increased customer card activity for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. All other categories of non-interest income except net gains on securities also increased, primarily due to results that reflect a full six months of combined income after the Merger for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Non-interest income increased 41.5% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. All categories of non-interest income except net gains on securities increased due to results that reflect a full nine months of combined income after the Merger for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The largest percentage increase included a $2.5 million increase in income from company-owned life insurance for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This increase was driven by an increase in the collection of death proceeds from company-owned life insurance for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The third largest percentage increase included a $2.4 million increase in bank debit and other card revenue for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This increase was primarily driven by results that reflect a full nine months of combined income after the Merger and increased customer card activity and increased card network partnership income for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. All other categories of non-interest income except net gains on securities also increased, primarily due to results that reflect a full nine months of combined income after the Merger for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Non-interest expense increased $13.4 million, or 15.6%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase was primarily due to results that reflect a full six months of combined operations after the Merger but reflect some merger cost savings associated with the Merger for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. In total, all categories of non-interest expense increased except equipment rentals, depreciation and maintenance. See Note 13 — Other Operating Expense in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Current wording

Non-interest expense increased $10.6 million, or 7.8%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily due to results that reflect a full nine months of combined operations after the Merger but reflect some continued operating efficiency gains as a result of the merger, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. In total, all categories of non-interest expense increased except equipment rentals, depreciation and maintenance and other operating expense. See Note 13 — Other Operating Expense in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Previous wording

Income tax expense was $12.9 million for the six months ended June 30, 2025, an increase of $14.4 million from the tax benefit received for the six months ended June 30, 2024. The increase was due to the increase in net income and additional state taxes incurred in the combined market area after the Merger, for the six months ended June 30, 2025, when compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, the effective tax rate was 18.5%, while the effective tax benefit was 11.2% for June 30, 2024.

Current wording

Income tax expense was $20.0 million for the nine months ended September 30, 2025, an increase of $16.2 million from income tax expense for the nine months ended September 30, 2024. The increase was due to the increase in net income and additional state taxes incurred in the combined market area after the Merger, for the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024. For the nine months ended September 30, 2025, the effective tax rate was 18.7%, while the effective tax rate was 19.0% for September 30, 2024.

Previous wording

Net income applicable to common shares for the three months ended June 30, 2025, was $29.7 million, compared to a net loss applicable to common shares of $17.1 million during the three months ended June 30, 2024. The $46.8 million increase was due to results that reflect a full three months of combined income after the Merger completion for the three months ended June 30, 2025, and merger related expenses and a one-time CECL Day 2 provision for non-PCD assets acquired in the merger which were recognized in the three months ended June 30, 2024.

Current wording

Net income applicable to common shares for the three months ended September 30, 2025, was $29.7 million, compared to net income applicable to common shares of $27.4 million during the three months ended September 30, 2024. The $2.3 million increase was due to a decrease in interest expense, partially offset by a decrease in interest income, an increase in non-interest income, and a decrease in non-interest expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

Net interest income increased by $14.5 million to $74.2 million for the three months ended June 30, 2025, compared to $59.8 million for the three months ended June 30, 2024. The main driver for this increase was results that reflect a full three months of combined income after the Merger and lower rates on interest-bearing liabilities.

Current wording

Net interest income increased by $591.0 thousand to $73.8 million for the three months ended September 30, 2025, compared to $73.2 million for the three months ended September 30, 2024. The main driver for this increase was results that reflect lower rates on interest-bearing liabilities which was partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024.

Previous wording

Non-interest expense decreased by $15.1 million, or 23.5%, to $49.3 million for the three months ended June 30, 2025, as compared to $64.4 million for the three months ended June 30, 2024. The decrease was primarily due to the effect of cost savings associated with the Merger that were realized through the end of 2024 and into early 2025.

Current wording

Non-interest expense decreased by $2.7 million, or 5.4%, to $48.1 million for the three months ended September 30, 2025, as compared to $50.8 million for the three months ended September 30, 2024. The decrease was primarily due to continued operating efficiency gains, post-merger, that were realized after the merger and during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

Net interest income totaled $74.2 million for the three months ended June 30, 2025, compared to $59.8 million for the three months ended June 30, 2024. The increase in net interest income was primarily driven by results that reflect a full three months of combined income after the Merger as well as lower rates on interest-bearing liabilities. Accretion income associated with acquired loans and borrowings totaled $11.5 million for the three months ended June 30, 2025, compared to $13.4 million for the three months ended June 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $1.4 million for the three months ended June 30, 2025, compared to $2.5 million for the three months ended June 30, 2024.

Current wording

Net interest income totaled $73.8 million for the three months ended September 30, 2025, compared to $73.2 million for the three months ended September 30, 2024. The increase in net interest income was primarily driven by results that reflect lower rates on interest-bearing liabilities which was partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024. Accretion income associated with acquired loans totaled $8.2 million for the three months ended September 30, 2025, compared to $15.5 million for the three months ended September 30, 2024. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $1.4 million for the three months ended September 30, 2025, compared to $3.8 million for the three months ended September 30, 2024.

Previous wording

The tax-adjusted net interest margin was 4.17% for the three months ended June 30, 2025, compared to 4.06% for the three months ended June 30, 2024. The increase in tax-adjusted net interest margin was primarily driven by results that reflect a full three months of combined income after the Merger as well as lower rates on interest-bearing liabilities.

Current wording

The tax-adjusted net interest margin was 4.08% for the three months ended September 30, 2025, compared to 4.07% for the three months ended September 30, 2024. The increase in tax-adjusted net interest margin was primarily driven by results that reflect lower rates on interest-bearing liabilities, partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024.

Previous wording

The yield for the taxable loan portfolio was 6.90% for the three months ended June 30, 2025, compared to 7.33% for the three months ended June 30, 2024. The decrease was primarily the result of an increase in balance of additional, lower-yielding loans and lower accretion income for three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

The yield for the taxable loan portfolio was 6.76% for the three months ended September 30, 2025, compared to 7.34% for the three months ended September 30, 2024. The decrease was primarily the result of lower accretion income for three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

The tax-adjusted yield on the total investment securities portfolio was 3.95% for the three months ended June 30, 2025, compared to 4.05% for the three months ended June 30, 2024. The decrease was primarily the result of an increase in balance of lower-yielding securities for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

The tax-adjusted yield on the total investment securities portfolio was 3.97% for the three months ended September 30, 2025, compared to 3.91% for the three months ended September 30, 2024. The increase was primarily the result of an increase in balance of higher-yielding securities for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The yield on interest-bearing deposits decreased to 2.41% during the three months ended June 30, 2025, from 2.90% during the three months ended June 30, 2024. The decrease was primarily due to lower market interest rates on deposit products reflecting decreases in the Federal Funds rate in the second half of 2024.

Current wording

The yield on interest-bearing deposits decreased to 2.37% during the three months ended September 30, 2025, from 3.02% during the three months ended September 30, 2024. The decrease was primarily due to lower market interest rates on deposit products reflecting decreases in the Federal Funds Rate and other market rates.

Previous wording

The yield on our short-term borrowings for the three months ended June 30, 2025, was 3.91%, compared to 4.38% for the three months ended June 30, 2024. The decrease was due to decreases in the Federal Funds Rate and other short-term market rates in the second half of 2024. The yield on our subordinated debt assumed in the Merger was 9.62% for the three months ended June 30, 2025, compared to 10.30% for the three months ended June 30, 2024.

Current wording

The yield on our short-term borrowings for the three months ended September 30, 2025, was 3.85%, compared to 4.06% for the three months ended September 30, 2024. The decrease was due to decreases in the Federal Funds Rate and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing. The yield on our subordinated debt assumed in the Merger was 9.49% for the three months ended September 30, 2025, compared to 10.16% for the three months ended September 30, 2024.

Previous wording

(3)Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

Current wording

(4)Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

Previous wording

(4)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average yield of interest-bearing liabilities for the period.

Current wording

(5)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average yield of interest-bearing liabilities for the period.