# EDGAR Filing Document

**Accession Number:** 0000721994
**File Stem:** 0000721994-26-000053
**Filing Date:** 2026-4
**Character Count:** 223338
**Document Hash:** 7a96cf765400e2692f67bb178df00cf8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000721994-26-000053.hdr.sgml**: 20260429

**ACCESSION NUMBER**: 0000721994-26-000053

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 81

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260429

**DATE AS OF CHANGE**: 20260429

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LAKELAND FINANCIAL CORP
- **CENTRAL INDEX KEY:** 0000721994
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 351559596
- **STATE OF INCORPORATION:** IN
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-11487
- **FILM NUMBER:** 26910447

**BUSINESS ADDRESS:**
- **STREET 1:** 202 E CENTER ST
- **STREET 2:** P O BOX 1387
- **CITY:** WARSAW
- **STATE:** IN
- **ZIP:** 46581-1387
- **BUSINESS PHONE:** 5742676144

**MAIL ADDRESS:**
- **STREET 1:** 202 E CENTER ST
- **STREET 2:** PO BOX 1387
- **CITY:** WARSAW
- **STATE:** IN
- **ZIP:** 46581

?xml version='1.0' encoding='ASCII'? lkfn-20260331

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q** 

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended March 31, 2026**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ____________ to _____________**

**Commission File Number: 0-11487** 

**LAKELAND FINANCIAL CORPORATION** 

**(Exact name of registrant as specified in its charter)**

---

| | | | |
|:---|:---|:---|:---|
| **Indiana** | **Indiana** | **Indiana** | **35-1559596** |
| (State or Other Jurisdiction | (State or Other Jurisdiction | (State or Other Jurisdiction | (IRS Employer |
| of Incorporation or Organization) | of Incorporation or Organization) | of Incorporation or Organization) | Identification No.) |
| **202 East Center Street,** | **202 East Center Street,** | **202 East Center Street,** | |
| **Warsaw** | **,** | **Indiana** | **46580** |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | (Zip Code) |

---

**(574) 267-6144** 

**(Registrant's Telephone Number, Including Area Code)**

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

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, No par value | LKFN | The NASDAQ Stock Market LLC |
|  |  | (Nasdaq Global Select Market) |

---

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

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

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

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

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

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

Number of shares of common stock outstanding at April 23, 2026: 24,913,586

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| <u>[PART I. FINANCIAL INFORMATION](#ia9acca0fb6414549a81b165dfc652171_10)</u> | <u>[PART I. FINANCIAL INFORMATION](#ia9acca0fb6414549a81b165dfc652171_10)</u> |  |
| <u>[Item 1.](#ia9acca0fb6414549a81b165dfc652171_13)</u> | <u>[Financial Statements](#ia9acca0fb6414549a81b165dfc652171_13)</u> |  |
|  | <u>[Consolidated Balance Sheets](#ia9acca0fb6414549a81b165dfc652171_16)[—](#ia9acca0fb6414549a81b165dfc652171_19)</u> <u>[March 31, 2026 and December 31, 2025](#ia9acca0fb6414549a81b165dfc652171_16)</u> | [1](#ia9acca0fb6414549a81b165dfc652171_16) |
|  | <u>[Consolidated Statements of Income — three months ended March 31, 2026 and 2025](#ia9acca0fb6414549a81b165dfc652171_19)</u> | [2](#ia9acca0fb6414549a81b165dfc652171_19) |
|  | <u>[Consolidated Statements of Comprehensive Income — three months ended March 31, 2026 and 2025](#ia9acca0fb6414549a81b165dfc652171_22)</u> | [3](#ia9acca0fb6414549a81b165dfc652171_22) |
|  | <u>[Consolidated Statements of Changes in Stockholders' Equity — three months ended March 31, 2026 and 2025](#ia9acca0fb6414549a81b165dfc652171_25)</u> | [4](#ia9acca0fb6414549a81b165dfc652171_25) |
|  | <u>[Consolidated Statements of Cash Flows — three months ended March 31, 2026 and 2025](#ia9acca0fb6414549a81b165dfc652171_34)</u> | [5](#ia9acca0fb6414549a81b165dfc652171_34) |
|  | <u>[Notes to the Consolidated Financial Statements](#ia9acca0fb6414549a81b165dfc652171_37)</u> | [6](#ia9acca0fb6414549a81b165dfc652171_37) |
| <u>[Item 2.](#ia9acca0fb6414549a81b165dfc652171_172)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#ia9acca0fb6414549a81b165dfc652171_172)</u> | [37](#ia9acca0fb6414549a81b165dfc652171_172) |
| <u>[Item 3.](#ia9acca0fb6414549a81b165dfc652171_310)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#ia9acca0fb6414549a81b165dfc652171_310)</u> | [50](#ia9acca0fb6414549a81b165dfc652171_310) |
| <u>[Item 4.](#ia9acca0fb6414549a81b165dfc652171_313)</u> | <u>[Controls and Procedures](#ia9acca0fb6414549a81b165dfc652171_313)</u> | [50](#ia9acca0fb6414549a81b165dfc652171_313) |
| <u>[PART II. OTHER INFORMATION](#ia9acca0fb6414549a81b165dfc652171_316)</u> | <u>[PART II. OTHER INFORMATION](#ia9acca0fb6414549a81b165dfc652171_316)</u> |  |
| <u>[Item 1.](#ia9acca0fb6414549a81b165dfc652171_319)</u> | <u>[Legal Proceedings](#ia9acca0fb6414549a81b165dfc652171_319)</u> | [51](#ia9acca0fb6414549a81b165dfc652171_319) |
| <u>[Item 1A.](#ia9acca0fb6414549a81b165dfc652171_322)</u> | <u>[Risk Factors](#ia9acca0fb6414549a81b165dfc652171_322)</u> | [51](#ia9acca0fb6414549a81b165dfc652171_322) |
| <u>[Item 2.](#ia9acca0fb6414549a81b165dfc652171_325)</u> | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#ia9acca0fb6414549a81b165dfc652171_325)</u> | [51](#ia9acca0fb6414549a81b165dfc652171_325) |
| <u>[Item 3.](#ia9acca0fb6414549a81b165dfc652171_331)</u> | <u>[Defaults Upon Senior Securities](#ia9acca0fb6414549a81b165dfc652171_331)</u> | [51](#ia9acca0fb6414549a81b165dfc652171_331) |
| <u>[Item 4.](#ia9acca0fb6414549a81b165dfc652171_334)</u> | <u>[Mine Safety Disclosures](#ia9acca0fb6414549a81b165dfc652171_334)</u> | [51](#ia9acca0fb6414549a81b165dfc652171_334) |
| <u>[Item 5.](#ia9acca0fb6414549a81b165dfc652171_337)</u> | <u>[Other Information](#ia9acca0fb6414549a81b165dfc652171_337)</u> | [52](#ia9acca0fb6414549a81b165dfc652171_337) |
| <u>[Item 6.](#ia9acca0fb6414549a81b165dfc652171_340)</u> | <u>[Exhibits](#ia9acca0fb6414549a81b165dfc652171_340)</u> | [52](#ia9acca0fb6414549a81b165dfc652171_340) |
| <u>[SIGNATURES](#ia9acca0fb6414549a81b165dfc652171_343)</u> | <u>[SIGNATURES](#ia9acca0fb6414549a81b165dfc652171_343)</u> | [53](#ia9acca0fb6414549a81b165dfc652171_343) |

---

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**ITEM 1. FINANCIAL STATEMENTS**

**CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data)**

---

| | | |
|:---|:---|:---|
| | **March 31,<br>2026** | December 31,<br>2025 |
| | **(unaudited)** | |
| **ASSETS** |  |  |
| Cash and due from banks | $**65698** | $57139 |
| Short-term investments | **85626** | 84179 |
| &nbsp;&nbsp;&nbsp;Total cash and cash equivalents | **151324** | 141318 |
| Securities available-for-sale, at fair value | **1026991** | 1052062 |
| Securities held-to-maturity, at amortized cost (fair value of $114,241 and $117,510, respectively) | **133617** | 133208 |
| Real estate mortgage loans held-for-sale | **1086** | 2707 |
| Loans, net of allowance for credit losses of $68,914 and $68,995 | **5404444** | 5306354 |
| Land, premises and equipment, net | **68761** | 65542 |
| Bank owned life insurance | **130710** | 129978 |
| Federal Reserve and Federal Home Loan Bank stock | **21420** | 21420 |
| Accrued interest receivable | **29703** | 28997 |
| Goodwill | **4970** | 4970 |
| Other assets | **110654** | 103466 |
| &nbsp;&nbsp;&nbsp;Total assets | $**7083680** | $6990022 |
| **LIABILITIES** |  |  |
| Noninterest bearing deposits | $**1301547** | $1221327 |
| Interest bearing deposits | **4888713** | 4752023 |
| &nbsp;&nbsp;&nbsp;Total deposits | **6190260** | 5973350 |
| Borrowings - Federal Home Loan Bank advances: |  |  |
| &nbsp;&nbsp;&nbsp;Short-term advance | **50000** | 170000 |
| &nbsp;&nbsp;&nbsp;Long-term advance | **1200** | 1200 |
| Other borrowings | **17000** | 13000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total borrowings | **68200** | 184200 |
| Accrued interest payable | **8591** | 8868 |
| Other liabilities | **67636** | 61112 |
| &nbsp;&nbsp;&nbsp;Total liabilities | **6334687** | 6227530 |
| **STOCKHOLDERS' EQUITY** |  |  |
| Common stock: 90,000,000 shares authorized, no par value |  |  |
| &nbsp;&nbsp;26,062,063 shares issued and 24,929,650 outstanding as of March 31, 2026 |  |  |
| &nbsp;&nbsp;26,023,644 shares issued and 25,219,634 outstanding as of December 31, 2025 | **137929** | 136965 |
| Retained earnings | **801617** | 788345 |
| Accumulated other comprehensive income (loss) | **(135622)** | (127137) |
| Treasury stock at cost (1,132,413 shares as of March 31, 2026, 804,010 shares as of December 31, 2025) | **(55020)** | (35770) |
| &nbsp;&nbsp;&nbsp;Total stockholders' equity | **748904** | 762403 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest | **89** | 89 |
| &nbsp;&nbsp;&nbsp;Total equity | **748993** | 762492 |
| &nbsp;&nbsp;&nbsp;Total liabilities and equity | $**7083680** | $6990022 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**CONSOLIDATED STATEMENTS OF INCOME (unaudited - dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
| | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
| | **2026** | 2025 |
| **NET INTEREST INCOME** |  |  |
| Interest and fees on loans |  |  |
| &nbsp;&nbsp;&nbsp;Taxable | $**83111** | $81740 |
| &nbsp;&nbsp;&nbsp;Tax exempt | **279** | 292 |
| Interest and dividends on securities |  |  |
| &nbsp;&nbsp;&nbsp;Taxable | **3841** | 3389 |
| &nbsp;&nbsp;&nbsp;Tax exempt | **3907** | 3910 |
| Other interest income | **849** | 1124 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest income | **91987** | 90455 |
| Interest on deposits | **33431** | 36458 |
| Interest on short-term borrowings | **1783** | 1122 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | **35214** | 37580 |
| **NET INTEREST INCOME** | **56773** | 52875 |
| Provision for credit losses | **2000** | 6800 |
| **NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES** | **54773** | 46075 |
| **NONINTEREST INCOME** |  |  |
| Wealth advisory fees | **3063** | 2867 |
| Investment brokerage fees | **524** | 452 |
| Service charges on deposit accounts | **2874** | 2774 |
| Loan and service fees | **3207** | 2884 |
| Merchant and interchange fee income | **777** | 822 |
| Bank owned life insurance income | **976** | 322 |
| Interest rate swap fee income | **701** | 0 |
| Mortgage banking income (loss) | **81** | (51) |
| Other income | **730** | 858 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | **12933** | 10928 |
| **NONINTEREST EXPENSE** |  |  |
| Salaries and employee benefits | **20295** | 17902 |
| Net occupancy expense | **2104** | 1980 |
| Equipment costs | **1464** | 1382 |
| Data processing fees and supplies | **4259** | 4265 |
| Corporate and business development | **1493** | 1406 |
| FDIC insurance and other regulatory fees | **873** | 800 |
| Professional fees | **1937** | 2380 |
| Other expense | **2726** | 2648 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | **35151** | 32763 |
| **INCOME BEFORE INCOME TAX EXPENSE** | **32555** | 24240 |
| Income tax expense | **6077** | 4155 |
| **NET INCOME** | $**26478** | $20085 |
| **BASIC WEIGHTED AVERAGE COMMON SHARES** | **25344757** | 25714818 |
| **BASIC EARNINGS PER COMMON SHARE** | $**1.04** | $0.78 |
| **DILUTED WEIGHTED AVERAGE COMMON SHARES** | **25493920** | 25802865 |
| **DILUTED EARNINGS PER COMMON SHARE** | $**1.04** | $0.78 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

 **CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited - dollars in thousands)**

---

| | | |
|:---|:---|:---|
| | **Three months ended March 31,** | **Three months ended March 31,** |
| | **2026** | 2025 |
| Net income | $**26478** | $20085 |
| Other comprehensive income (loss) |  |  |
| Change in available-for-sale and transferred securities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized holding gain (loss) on securities available-for-sale arising during the period | **(11245)** | 2815 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassification adjustment for amortization of unrealized losses on securities transferred to held-to-maturity | **489** | 490 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net securities gain (loss) activity during the period | **(10756)** | 3305 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect | **2259** | (694) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net of tax amount | **(8497)** | 2611 |
| Defined benefit pension plans: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of net actuarial loss | **16** | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gain activity during the period | **16** | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect | **(4)** | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net of tax amount | **12** | 10 |
| Total other comprehensive income (loss), net of tax | **(8485)** | 2621 |
| Comprehensive income | $**17993** | $22706 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**<u>CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited - dollars in thousands, except share and</u> <u>per share data)</u>**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **Common Stock** | **Common Stock** | **Retained<br>Earnings** | **Accumulated Other Comprehensive<br>Income (Loss)** | **Treasury<br>Stock** | **Total Stockholders'<br>Equity** | **Noncontrolling<br>Interest** | **Total<br>Equity** |
| | **Shares** | **Stock** | **Retained<br>Earnings** | **Accumulated Other Comprehensive<br>Income (Loss)** | **Treasury<br>Stock** | **Total Stockholders'<br>Equity** | **Noncontrolling<br>Interest** | **Total<br>Equity** |
| Balance at January 1, 2025 | 25509592 | $129664 | $736412 | $(166500) | $(15754) | $683822 | $89 | $683911 |
| Comprehensive income: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income |  |  | 20085 |  |  | 20085 |  | 20085 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss), net of tax |  |  |  | 2621 |  | 2621 |  | 2621 |
| &nbsp;&nbsp;Cash dividends declared and paid, $0.50 per share |  |  | (12847) |  |  | (12847) |  | (12847) |
| &nbsp;&nbsp;&nbsp;Treasury shares purchased under deferred directors' plan | (3095) | 215 |  |  | (215) | 0 |  | 0 |
| &nbsp;&nbsp;&nbsp;Treasury shares sold and distributed under deferred directors' plan | 12744 | (375) |  |  | 375 | 0 |  | 0 |
| &nbsp;&nbsp;&nbsp;Stock activity under equity compensation plans | 37663 | (1493) |  |  |  | (1493) |  | (1493) |
| &nbsp;&nbsp;&nbsp;Stock based compensation expense |  | 2232 |  |  |  | 2232 |  | 2232 |
| Balance at March 31, 2025 | 25556904 | $130243 | $743650 | $(163879) | $(15594) | $694420 | $89 | $694509 |
| Balance at January 1, 2026 | **25219634** | $**136965** | $**788345** | $**(127137)** | $**(35770)** | $**762403** | $**89** | $**762492** |
| Comprehensive income: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income |  |  | **26478** |  |  | **26478** |  | **26478** |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss), net of tax |  |  |  | **(8485)** |  | **(8485)** |  | **(8485)** |
| &nbsp;&nbsp;Cash dividends declared and paid, $0.52 per share |  |  | **(13206)** |  |  | **(13206)** |  | **(13206)** |
| &nbsp;&nbsp;&nbsp;Treasury shares purchased under share repurchase plan | **(336853)** |  |  |  | **(19369)** | **(19369)** |  | **(19369)** |
| &nbsp;&nbsp;&nbsp;Treasury shares purchased under deferred directors' plan | **(4090)** | **239** |  |  | **(239)** | **0** |  | **0** |
| &nbsp;&nbsp;&nbsp;Treasury shares sold and distributed under deferred directors' plan | **12540** | **(358)** |  |  | **358** | **0** |  | **0** |
| &nbsp;&nbsp;&nbsp;Stock activity under equity compensation plans | **38419** | **(1292)** |  |  |  | **(1292)** |  | **(1292)** |
| &nbsp;&nbsp;&nbsp;Stock based compensation expense |  | **2375** |  |  |  | **2375** |  | **2375** |
| Balance at March 31, 2026 | **24929650** | $**137929** | $**801617** | $**(135622)** | $**(55020)** | $**748904** | $**89** | $**748993** |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited - dollars in thousands)**

---

| | | |
|:---|:---|:---|
| **Three Months Ended March 31,** | **2026** | 2025 |
| Cash flows from operating activities: |  |  |
| Net income | $**26478** | $20085 |
| Adjustments to reconcile net income to net cash from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | **1496** | 1479 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | **2000** | 6800 |
| &nbsp;&nbsp;&nbsp;Amortization of loan servicing rights | **103** | 106 |
| &nbsp;&nbsp;&nbsp;Loans originated for sale, including participations | **(3083)** | (2533) |
| &nbsp;&nbsp;&nbsp;Net gain on sales of loans | **(155)** | (85) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of loans, including participations | **4822** | 2986 |
| &nbsp;&nbsp;&nbsp;Net securities amortization | **870** | 1000 |
| &nbsp;&nbsp;&nbsp;Stock based compensation expense | **2375** | 2232 |
| &nbsp;&nbsp;&nbsp;Earnings on life insurance | **(976)** | (322) |
| &nbsp;&nbsp;&nbsp;Gain on life insurance | **(171)** | 0 |
| &nbsp;&nbsp;&nbsp;Tax expense of stock award issuances | **71** | 136 |
| &nbsp;&nbsp;&nbsp;Net change: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest receivable and other assets | **(5616)** | (2754) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest payable and other liabilities | **6452** | (206) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments | **8188** | 8839 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from operating activities | **34666** | 28924 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from maturities, calls and principal paydowns of securities available-for-sale | **18120** | 14655 |
| &nbsp;&nbsp;&nbsp;Purchases of securities available-for-sale | **(5084)** | (22210) |
| &nbsp;&nbsp;&nbsp;Purchase of life insurance | **(53)** | (211) |
| &nbsp;&nbsp;&nbsp;Net (increase) decrease in total loans | **(100090)** | (105600) |
| &nbsp;&nbsp;&nbsp;Purchases of land, premises and equipment | **(4715)** | (1787) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from investing activities | **(91822)** | (115153) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in total deposits | **216910** | 59228 |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in other borrowings | **4000** | 0 |
| &nbsp;&nbsp;&nbsp;Net proceeds from (payments on) short-term FHLB borrowings | **(120000)** | 107000 |
| &nbsp;&nbsp;&nbsp;Proceeds from long-term FHLB borrowings | **0** | 1200 |
| &nbsp;&nbsp;&nbsp;Common dividends paid | **(13206)** | (12847) |
| &nbsp;&nbsp;&nbsp;Payments related to equity incentive plans | **(1292)** | (1493) |
| &nbsp;&nbsp;&nbsp;Purchase of treasury stock | **(19608)** | (215) |
| &nbsp;&nbsp;&nbsp;Sale of treasury stock | **358** | 375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash from financing activities | **67162** | 153248 |
| Net change in cash and cash equivalents | **10006** | 67019 |
| Cash and cash equivalents at beginning of the period | **141318** | 168205 |
| Cash and cash equivalents at end of the period | $**151324** | $235224 |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $**35491** | $37998 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes | **97** | 0 |
| Supplemental non-cash disclosures: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets obtained in exchange for lease liabilities | **0** | 20 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**NOTE 1. BASIS OF PRESENTATION**

This report is filed for Lakeland Financial Corporation (the "Company"), which has one wholly owned subsidiary, Lake City Bank (the "Bank"). Also included in this report are results for the Bank's wholly owned subsidiary, LCB Investments II, Inc. ("LCB Investments"), which manages the Bank's investment securities portfolio. LCB Investments II, Inc. owns LCB Funding, Inc. ("LCB Funding"), a real estate investment trust. All significant inter-company balances and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and are unaudited. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2026. The Company's 2025 Annual Report on Form 10-K should be read in conjunction with these statements.

**Operating Segments**

All of the Company's financial results are similar and considered by management to be aggregated into one reportable segment. While the Company has assigned certain management responsibilities by region and business-line, the Company's Chief Operating Decision Maker ("CODM") evaluates financial performance on a Company-wide basis. The majority of the Company's revenue is from the business of banking and the Company's assigned regions have similar economic characteristics, products, services and customers.

Financial performance is reported to the CODM monthly, and the primary measure of performance is consolidated net income. The allocation of resources throughout the Company is determined annually based upon consolidated net income performance. The presentation of financial performance to the CODM is consistent with amounts and financial statement line items shown in the Company's consolidated balance sheets and consolidated statements of income. Additionally, the Company's significant expenses are adequately segmented by category and amount in the consolidated statements of income to include all significant items when considering both qualitative and quantitative factors. Significant expenses of the Company include salaries and employee benefits, net occupancy expense, equipment costs, data processing fees and supplies and professional fees.

**Newly Issued But Not Yet Effective Accounting Standards**

On October 9, 2023, the FASB issued ASU 2023-06, *"Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative"*, which modified the disclosure or presentation requirements of a variety of Topics in the Codification and was intended to both clarify or improve such requirements and align the requirements with the SEC's regulations. The amendments to Topics of Codification provided in this update apply to all reporting entities within the scope of the affected Topics unless otherwise indicated by the update. Given the variety of Topics amended, a broad range of entities may be affected by one or more of the amendments provided in the update. The Company evaluated the amendments provided in the update and believes certain of the disclosure improvements could be applicable to the Company's interim or annual disclosures. Subtopic 230-10, as amended, requires disclosure within the accounting policy in annual periods of where cash flows associated with derivative instruments and their related gains and losses are presented within the statement of cash flows. Subtopic 260-10, as amended, requires disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security and clarifies that certain disclosures should be made during interim periods. Subtopic 470-10, as amended, requires disclosure of amounts and terms of unused lines of credit and unfunded commitments and the weighted-average interest rate on short-term borrowings outstanding as of the date of each balance sheet presented.

The effective date for each amendment for entities subject to the SEC's existing disclosure requirements is the effective date of the removal of the related disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited. The amendments in the update are to be applied prospectively. The Company will apply prospectively the provisions provided in the amendments as such provisions become effective, and does not believe the application of these modified disclosure requirements will have a material impact on the consolidated financial statements. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment in the update will be removed from the Codification and will not become effective.

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On November 8, 2024, the FASB issued ASU 2024-03, *"Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses"*, to improve the disclosures surrounding a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

The amendments in this update require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity (1) Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization and (e) depreciation, depletion and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the following expense categories listed in (a)-(e); (2) Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as other disaggregation requirements; (3) Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) Disclose the total amount of selling expenses, and in annual reporting periods, an entity's definition of selling expenses. An entity is not precluded from providing additional voluntarily disclosures that may provide investors with additional decision-useful information.

On January 6, 2025, the FASB issued ASU 2025-01, *"Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date"*, to clarify the effective date of the ASU 2024-03. The update amends the effective date of Update 2024-03 to annual reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of this update on its disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements.

On September 18, 2025, the FASB issued ASU 2025-06, *"Intangibles—Goodwill and Other—Internal Use-Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"*, to modernize the accounting for software costs to better align the guidance with current software development practices. Specifically, many entities have shifted from using a prescriptive and sequential ("linear") development method to using an incremental and iterative ("agile") development method, the latter of which is not contemplated in the current guidance and presents a challenge to stakeholders in determining when to begin capitalizing internal-use software costs.

The amendments in this update remove all references to linear project stages, and instead require an entity to start capitalizing software costs when both of the following occur: (1) Management has authorized and committed to funding the software project and (2) It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as "significant development uncertainty".) The two factors to consider in determining whether there is significant development uncertainty are whether: (1) The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing and (2) The entity has determined what it needs the software to do, including whether the entity has identified or continues to substantially revise the software's significant performance requirements. The amendments in the update specify that internal-use software costs must be disclosed according to applicable property, plant and equipment guidance, regardless of how such costs are presented in the financial statements. Furthermore, the amendments in the update supersede website development costs guidance and incorporate the recognition requirements for website-specific development costs into Subtopic 350-40.

The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in the update may be applied using a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption or a retrospective transition approach. The Company is currently evaluating the impact of this update on its disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements.

On November 12, 2025, the FASB issued ASU 2025-08, *"Financial Instruments - Credit Losses (Topic 326): Purchased Loans"*, to expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this update, loans (excluding credit cards) acquired without credit deterioration and deemed "seasoned" are *purchased seasoned loans* and are accounted for using the gross-up approach at acquisition. Specifically, after

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an entity determines that a loan is a non-purchased financial asset with credit deterioration ("PCD") asset based on its assessment of credit deterioration experienced since origination, the entity should apply the guidance described in the amendments to determine whether the loan is seasoned and, therefore, should be accounted for using the gross-up approach. All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans.

The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. The amendments in this update should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which the financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Company does not anticipate this standard will have an impact on the Company's financial statements based upon the nature of the Company's current operations.

On December 8, 2025, the FASB issued ASU 2025-11, *"Interim Reporting (Topic 270): Narrow Scope Improvements"*, to improve the guidance in Topic 270, by clarifying interim disclosure requirements and the applicability of Topic 270. The amendments in this update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the FASB board focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The FASB board expects these clarifications will enhance consistency in interim financial reporting in interim for all entities and considers the amendments to be necessary to reflect the development of interim reporting over time.

The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting periods beginning after December 15, 2027, for entities other than public business entities. Early adoption is permitted for all entities, and can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this update on its financial disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements.

On December 17, 2025, the FASB issued ASU 2025-12, *"Codification Improvements"*. The amendments in this update represent changes that (1) clarify, (2) correct errors or (3) make minor improvements to the Codification. The amendments are intended to make the Codification easier to understand and apply. The amendments in this update are varied in nature and may affect the application of guidance in cases in which the original guidance may have been unclear. The amendments in this update are effective for all entities for annual reporting beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes the interim period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity may also elect the transition method on an issue-by-issue basis. For example, it may apply certain amendments prospectively while applying others retrospectively. The Company is currently evaluating the impact of the update on its financial disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements.

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**NOTE 2. SECURITIES**

Debt securities purchased with the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other investment securities are classified as available-for-sale securities.

**Available-for-Sale Securities**

Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Amortized<br>Cost** | **Gross Unrealized Gain** | **Gross Unrealized Losses** | **Allowance for Credit Losses** | **Fair Value** |
| **March 31, 2026** |  |  |  |  |  |
| &nbsp;&nbsp;U.S. Treasury securities | $**15185** | $**0** | $**(81)** | $**0** | $**15104** |
| &nbsp;&nbsp;U.S. government sponsored agencies | **134037** | **75** | **(20630)** | **0** | **113482** |
| &nbsp;&nbsp;Mortgage-backed securities: residential | **493336** | **487** | **(53612)** | **0** | **440211** |
| &nbsp;&nbsp;State and municipal securities | **538933** | **91** | **(80830)** | **0** | **458194** |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $**1181491** | $**653** | $**(155153)** | $**0** | $**1026991** |
| December 31, 2025 |  |  |  |  |  |
| &nbsp;&nbsp;U.S. Treasury securities | $10117 | $2 | $0 | $0 | $10119 |
| &nbsp;&nbsp;U.S. government sponsored agencies | 136772 | 82 | (21164) | 0 | 115690 |
| &nbsp;&nbsp;Mortgage-backed securities: residential | 506734 | 892 | (53463) | 0 | 454163 |
| &nbsp;&nbsp;State and municipal securities | 541694 | 131 | (69735) | 0 | 472090 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1195317 | $1107 | $(144362) | $0 | $1052062 |

---

**Held-to-Maturity Securities**

Information related to the amortized cost, fair value and allowance for credit losses of securities held-to-maturity and the related gross unrealized gains and losses is presented in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Amortized<br>Cost** | **Gross Unrealized Gain** | **Gross Unrealized Losses** | **Allowance for Credit Losses** | **Fair Value** |
| **March 31, 2026** |  |  |  |  |  |
| &nbsp;&nbsp;State and municipal securities | $**133617** | $**0** | $**(19376)** | $**0** | $**114241** |
| December 31, 2025 |  |  |  |  |  |
| &nbsp;&nbsp;State and municipal securities | $133208 | $0 | $(15698) | $0 | $117510 |

---

The Company has the current intent and ability to hold held-to-maturity securities until maturity. All of the Company's securities designated as held-to-maturity were transferred from the available-for-sale classification. The net unrealized gain or loss on the transferred securities was recorded as a component of accumulated other comprehensive income (loss) at the time of the transfer and is amortized over the remaining life of the underlying securities as an adjustment to the yield on those securities. The net amount of the unamortized unrealized loss on the transferred securities included in accumulated other comprehensive income (loss) was $16.5 million ($13.1 million, net of tax) at March 31, 2026.

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Information regarding the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by maturity as of March 31, 2026 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Available-for-Sale** | **Available-for-Sale** | **Held-to-Maturity** | **Held-to-Maturity** |
| <u>(dollars in thousands)</u> | **Amortized Cost** | **Fair<br>Value** | **Amortized Cost** | **Fair<br>Value** |
| Due in one year or less | $**500** | $**501** | $**0** | $**0** |
| Due after one year through five years | **29131** | **28646** | **0** | **0** |
| Due after five years through ten years | **94718** | **86936** | **7391** | **6574** |
| Due after ten years | **563806** | **470697** | **126226** | **107667** |
|  | **688155** | **586780** | **133617** | **114241** |
| Mortgage-backed securities | **493336** | **440211** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Total debt securities | $**1181491** | $**1026991** | $**133617** | $**114241** |

---

There were no sales of available-for-sale securities during the three months ended March 31, 2026 and 2025.

Securities with fair values of $535.2 million and $546.8 million were pledged as of March 31, 2026 and December 31, 2025, respectively, as collateral for borrowings from the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank and for other purposes as permitted or required by law.

**Unrealized Loss Analysis on Available-for-Sale and Held-to-Maturity Securities**

Information regarding available-for-sale securities with unrealized losses as of March 31, 2026 and December 31, 2025 is presented below. The table divides the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
| <u>(dollars in thousands)</u> | **Fair<br>Value** | **Unrealized<br>Losses** | **Fair<br>Value** | **Unrealized<br>Losses** | **Fair<br>Value** | **Unrealized<br>Losses** |
| **March 31, 2026** |  |  |  |  |  |  |
| U.S. Treasury securities | $**15104** | $**81** | $**0** | $**0** | $**15104** | $**81** |
| U.S. government sponsored agencies | **4966** | **29** | **103498** | **20601** | **108464** | **20630** |
| Mortgage-backed securities: residential | **32786** | **385** | **356613** | **53227** | **389399** | **53612** |
| State and municipal securities | **33073** | **643** | **408923** | **80187** | **441996** | **80830** |
| &nbsp;&nbsp;&nbsp;Total available-for-sale | $**85929** | $**1138** | $**869034** | $**154015** | $**954963** | $**155153** |
| December 31, 2025 |  |  |  |  |  |  |
| U.S. Treasury securities | $5107 | $0 | $0 | $0 | $5107 | $0 |
| U.S. government sponsored agencies | 0 | 0 | 105609 | 21164 | 105609 | 21164 |
| Mortgage-backed securities: residential | 14397 | 106 | 374383 | 53357 | 388780 | 53463 |
| State and municipal securities | 13807 | 24 | 440935 | 69711 | 454742 | 69735 |
| &nbsp;&nbsp;&nbsp;Total available-for-sale | $33311 | $130 | $920927 | $144232 | $954238 | $144362 |

---

Information regarding held-to-maturity securities with unrealized losses as of March 31, 2026 and December 31, 2025 is presented on the next page. The table divides the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
| <u>(dollars in thousands)</u> | **Fair<br>Value** | **Unrealized<br>Losses** | **Fair<br>Value** | **Unrealized<br>Losses** | **Fair<br>Value** | **Unrealized<br>Losses** |
| **March 31, 2026** |  |  |  |  |  |  |
| State and municipal securities | $**0** | $**0** | $**114241** | $**19376** | $**114241** | $**19376** |
| December 31, 2025 |  |  |  |  |  |  |
| State and municipal securities | $0 | $0 | $117510 | $15698 | $117510 | $15698 |

---

The total number of securities with unrealized losses as of March 31, 2026 and December 31, 2025 is presented below.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Available-for-Sale** | **Available-for-Sale** | **Available-for-Sale** | **Held-to-Maturity** | **Held-to-Maturity** | **Held-to-Maturity** |
| | **Less than<br>12 months** | **12 months<br>or more** | **Total** | **Less than<br>12 months** | **12 months<br>or more** | **Total** |
| **March 31, 2026** | | | | | | |
| U.S. Treasury securities | **3** | **0** | **3** | **0** | **0** | **0** |
| U.S. government sponsored agencies | **1** | **17** | **18** | **0** | **0** | **0** |
| Mortgage-backed securities: residential | **7** | **116** | **123** | **0** | **0** | **0** |
| State and municipal securities | **45** | **354** | **399** | **0** | **41** | **41** |
| &nbsp;&nbsp;&nbsp;Total temporarily impaired | **56** | **487** | **543** | **0** | **41** | **41** |
| December 31, 2025 |  |  |  |  |  |  |
| U.S. Treasury securities | 1 | 0 | 1 | 0 | 0 | 0 |
| U.S. government sponsored agencies | 0 | 17 | 17 | 0 | 0 | 0 |
| Mortgage-backed securities: residential | 3 | 120 | 123 | 0 | 0 | 0 |
| State and municipal securities | 17 | 378 | 395 | 0 | 41 | 41 |
| &nbsp;&nbsp;&nbsp;Total temporarily impaired | 21 | 515 | 536 | 0 | 41 | 41 |

---

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that the Company will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through the consolidated income statement. For available-for-sale debt securities that do not meet the above criteria and for held-to-maturity securities, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. For available-for-sale debt securities, any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of applicable taxes.

No allowance for credit losses for available-for-sale or held-to-maturity debt securities was recorded at March 31, 2026 or December 31, 2025. Accrued interest receivable on securities totaled $7.1 million and $7.8 million at March 31, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses.

The U.S. Treasury, U.S. government sponsored agencies and mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses. State and municipal securities credit losses are benchmarked against highly rated municipal securities of similar duration, as published by Moody's, resulting in an immaterial allowance for credit losses.

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**NOTE 3. LOANS**

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| | | | | |
|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31,<br>2026** | **March 31,<br>2026** | December 31,<br>2025 | December 31,<br>2025 |
| Commercial and industrial loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $**742655** | **13.6%** | $711742 | 13.2% |
| &nbsp;&nbsp;&nbsp;Non-working capital loans | **836121** | **15.3** | 841947 | 15.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total commercial and industrial loans | $**1578776** | **28.9** | $1553689 | 28.9 |
| Commercial real estate and multi-family residential loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development loans | **509143** | **9.3** | 497239 | 9.2 |
| &nbsp;&nbsp;&nbsp;Owner occupied loans | **807813** | **14.8** | 807335 | 15.0 |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans | **960395** | **17.5** | 923708 | 17.2 |
| &nbsp;&nbsp;&nbsp;Multifamily loans | **462984** | **8.5** | 438233 | 8.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total commercial real estate and multi-family residential loans | $**2740335** | **50.1** | $2666515 | 49.5 |
| Agri-business and agricultural loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland | **177823** | **3.2** | 155073 | 2.9 |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production | **196258** | **3.6** | 251783 | 4.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total agri-business and agricultural loans | $**374081** | **6.8** | $406856 | 7.6 |
| Other commercial loans | **95764** | **1.7** | 97381 | 1.8 |
| &nbsp;&nbsp;&nbsp;Total commercial loans | $**4788956** | **87.5** | $4724441 | 87.8 |
| Consumer 1-4 family mortgage loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans | **292724** | **5.3** | 267134 | 5.0 |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans | **263600** | **4.8** | 251185 | 4.7 |
| &nbsp;&nbsp;&nbsp;Residential construction and land development loans | **14429** | **0.3** | 18873 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total consumer 1-4 family mortgage loans | $**570753** | **10.4** | $537192 | 10.0 |
| Other consumer loans | **116158** | **2.1** | 116224 | 2.2 |
| &nbsp;&nbsp;&nbsp;Total consumer loans | $**686911** | **12.5** | $653416 | 12.2 |
| &nbsp;&nbsp;&nbsp;Subtotal | $**5475867** | **100.0%** | $5377857 | 100.0% |
| Less: Allowance for credit losses | **(68914)** |  | (68995) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred loan fees | **(2509)** |  | (2508) |  |
| Loans, net | $**5404444** |  | $5306354 |  |

---

The recorded investment in loans does not include accrued interest, which totaled $22.1 million and $20.7 million as of March 31, 2026 and December 31, 2025, respectively.

The Company had $1.0 million and $1.5 million in residential real estate loans in the process of foreclosure as of March 31, 2026 and December 31, 2025, respectively.

**NOTE 4. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY**

The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectible. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management's judgment, should be charged against the allowance. A provision for credit losses is taken based on management's ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company's control.

The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management's overall view on credit quality is a factor in the determination of the provision.

The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers' ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default ("PD/LGD") model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, material modification to a borrower experiencing financial difficulty status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a loss rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee's Summary of Economic Projections, as well as portfolio trends based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and pooled. These two components represent the total allowance for credit losses deemed adequate to cover expected losses within the loan portfolio.

Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan officer. Individual allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that indicate it should be analyzed on an individual basis. Considerations with respect to allocations for these individually analyzed credits include, but are not limited to, the following: (a) the sufficiency of the customer's cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring.

Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. Pooled allocations of the allowance are determined by a historical loss rate based on the calculation of each pool's probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool, which is updated at least annually. The historical loss rates are all supplemented with consideration of economic conditions and portfolio trends.

Due to the imprecise nature of estimating the allowance for credit losses, the Company's allowance for credit losses includes an immaterial unallocated component. The unallocated component of the allowance for credit losses incorporates the Company's judgmental determination of potential expected losses that may not be fully reflected in other allocations. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income.

For off balance sheet credit exposures outlined in the ASC at 326-20-30-11, it is the Company's position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability recorded.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following tables present the activity in the allowance for credit losses by portfolio segment for the periods shown:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Commercial and Industrial** | **Commercial Real Estate and Multifamily Residential** | **Agri-business and Agricultural** | **Other Commercial** | **Consumer 1-4 Family Mortgage** | **Other Consumer** | **Unallocated** | **Total** |
| **Three Months Ended March 31, 2026** |  |  |  |  |  |  |  |  |
| Beginning balance, January 1 | $**28436** | $**30163** | $**3315** | $**1041** | $**3996** | $**1719** | $**325** | $**68995** |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | **1587** | **429** | **106** | **(226)** | **247** | **157** | **(300)** | **2000** |
| &nbsp;&nbsp;&nbsp;Loans charged-off | **(1986)** | **0** | **0** | **0** | **(65)** | **(145)** | **0** | **(2196)** |
| &nbsp;&nbsp;&nbsp;Recoveries | **16** | **26** | **0** | **0** | **7** | **66** | **0** | **115** |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans (charged-off) recovered | **(1970)** | **26** | **0** | **0** | **(58)** | **(79)** | **0** | **(2081)** |
| Ending balance | $**28053** | $**30618** | $**3421** | $**815** | $**4185** | $**1797** | $**25** | $**68914** |

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Commercial and Industrial** | **Commercial Real Estate and Multifamily Residential** | **Agri-business and Agricultural** | **Other Commercial** | **Consumer 1-4 Family Mortgage** | **Other Consumer** | **Unallocated** | **Total** |
| Three Months Ended March 31, 2025 |  |  |  |  |  |  |  |  |
| Beginning balance, January 1 | $45539 | $30865 | $3541 | $743 | $3358 | $1531 | $383 | $85960 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | 6741 | (423) | (41) | (20) | 124 | 343 | 76 | 6800 |
| &nbsp;&nbsp;&nbsp;Loans charged-off | (10) | 0 | 0 | 0 | (24) | (474) | 0 | (508) |
| &nbsp;&nbsp;&nbsp;Recoveries | 32 | 26 | 0 | 0 | 6 | 117 | 0 | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans (charged-off) recovered | 22 | 26 | 0 | 0 | (18) | (357) | 0 | (327) |
| Ending balance | $52302 | $30468 | $3500 | $723 | $3464 | $1517 | $459 | $92433 |

---

**Credit Quality Indicators**

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.

The Company uses the following definitions for risk ratings:

**Special Mention.** Loans classified as Special Mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company's credit position at some future date.

**Substandard.** Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

**Doubtful.** Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans, which are evaluated individually and listed with "Not Rated" loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following table summarizes the risk category of loans by loan segment and year of origination as of March 31, 2026:

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Term Total** | **Revolving** | **Total** |
| Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $**0** | $**996** | $**2252** | $**0** | $**55** | $**1290** | $**4593** | $**667590** | $**672183** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **39195** | **39195** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **300** | **97** | **2057** | **922** | **377** | **3753** | **27258** | **31011** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **0** | **1296** | **2349** | **2057** | **977** | **1667** | **8346** | **734043** | **742389** |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **1975** | **0** | **0** | **0** | **0** | **1975** | **0** | **1975** |
| &nbsp;&nbsp;&nbsp;Non-working capital loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **31623** | **222567** | **97357** | **95291** | **109672** | **40386** | **596896** | **194456** | **791352** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **768** | **5391** | **2090** | **139** | **7445** | **10201** | **26034** | **6773** | **32807** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **314** | **647** | **1986** | **1490** | **4011** | **8448** | **387** | **8835** |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | **0** | **0** | **0** | **0** | **0** | **73** | **73** | **0** | **73** |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | **45** | **1038** | **263** | **621** | **471** | **224** | **2662** | **0** | **2662** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **32436** | **229310** | **100357** | **98037** | **119078** | **54895** | **634113** | **201616** | **835729** |
| &nbsp;&nbsp;&nbsp;Non-working capital loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **11** | **11** |
| Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **8069** | **20475** | **29894** | **5263** | **491** | **709** | **64901** | **436730** | **501631** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **5798** | **5798** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **8069** | **20475** | **29894** | **5263** | **491** | **709** | **64901** | **442528** | **507429** |
| &nbsp;&nbsp;&nbsp;Construction and land development loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Owner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **45626** | **147291** | **102710** | **92857** | **116224** | **237806** | **742514** | **28509** | **771023** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **3003** | **695** | **1724** | **14500** | **12877** | **32799** | **0** | **32799** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **0** | **303** | **277** | **0** | **2959** | **3539** | **0** | **3539** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **45626** | **150294** | **103708** | **94858** | **130724** | **253642** | **778852** | **28509** | **807361** |
| &nbsp;&nbsp;&nbsp;Owner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **64830** | **186611** | **110685** | **107868** | **124997** | **227096** | **822087** | **124372** | **946459** |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Term Total** | **Revolving** | **Total** |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans (continued): |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **0** | **0** | **11223** | **58** | **0** | **11281** | **0** | **11281** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **1958** | **1958** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **64830** | **186611** | **110685** | **119091** | **125055** | **227096** | **833368** | **126330** | **959698** |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Multifamily loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **86361** | **151498** | **5419** | **93564** | **19839** | **41044** | **397725** | **64498** | **462223** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **0** | **0** | **0** | **287** | **0** | **287** | **0** | **287** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **86361** | **151498** | **5419** | **93564** | **20126** | **41044** | **398012** | **64498** | **462510** |
| Multifamily loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **32464** | **27911** | **12823** | **14781** | **35519** | **41893** | **165391** | **9972** | **175363** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **1970** | **114** | **189** | **0** | **153** | **2426** | **0** | **2426** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **0** | **0** | **0** | **0** | **44** | **44** | **0** | **44** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **32464** | **29881** | **12937** | **14970** | **35519** | **42090** | **167861** | **9972** | **177833** |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **745** | **5216** | **12421** | **6318** | **18077** | **13436** | **56213** | **132926** | **189139** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **0** | **0** | **643** | **251** | **0** | **894** | **6323** | **7217** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **745** | **5216** | **12421** | **6961** | **18328** | **13436** | **57107** | **139249** | **196356** |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Other commercial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **3091** | **10737** | **1033** | **12968** | **24259** | **14582** | **66670** | **28897** | **95567** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **3091** | **10737** | **1033** | **12968** | **24259** | **14582** | **66670** | **28897** | **95567** |
| &nbsp;&nbsp;&nbsp;Other commercial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **14765** | **14535** | **9890** | **6216** | **6547** | **14605** | **66558** | **4101** | **70659** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **188** | **118** | **212** | **154** | **60** | **732** | **0** | **732** |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Term Total** | **Revolving** | **Total** |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans (continued): |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **24** | **0** | **226** | **429** | **573** | **1252** | **0** | **1252** |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | **14691** | **36025** | **22699** | **48765** | **42307** | **55223** | **219710** | **0** | **219710** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **29456** | **50772** | **32707** | **55419** | **49437** | **70461** | **288252** | **4101** | **292353** |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **0** | **654** | **475** | **670** | **0** | **184** | **1983** | **9243** | **11226** |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | **0** | **279** | **0** | **0** | **0** | **0** | **279** | **0** | **279** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **1711** | **38** | **116** | **73** | **1** | **1939** | **566** | **2505** |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | **12092** | **23539** | **11339** | **8282** | **8823** | **2394** | **66469** | **185372** | **251841** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **12092** | **26183** | **11852** | **9068** | **8896** | **2579** | **70670** | **195181** | **265851** |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **65** | **65** |
| &nbsp;&nbsp;&nbsp;Residential construction loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | **789** | **6785** | **1814** | **557** | **1557** | **2838** | **14340** | **0** | **14340** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **789** | **6785** | **1814** | **557** | **1557** | **2838** | **14340** | **0** | **14340** |
| &nbsp;&nbsp;&nbsp;Residential construction loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** | **0** |
| &nbsp;&nbsp;&nbsp;Other consumer loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | **4** | **373** | **0** | **930** | **104** | **14** | **1425** | **40179** | **41604** |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | **0** | **0** | **28** | **230** | **82** | **61** | **401** | **0** | **401** |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | **3973** | **17487** | **14482** | **12246** | **6759** | **6933** | **61880** | **12057** | **73937** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | **3977** | **17860** | **14510** | **13406** | **6945** | **7008** | **63706** | **52236** | **115942** |
| &nbsp;&nbsp;&nbsp;Other consumer loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | **0** | **9** | **3** | **37** | **12** | **0** | **61** | **84** | **145** |
| Total Loans | $**319936** | $**886918** | $**439686** | $**526219** | $**541392** | $**732047** | $**3446198** | $**2027160** | $**5473358** |
| Total period gross write offs | $**0** | $**1984** | $**3** | $**37** | $**12** | $**0** | $**2036** | $**160** | $**2196** |

---

------

<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following table summarizes the risk category of loans by loan segment and year of origination as of December 31, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Term Total | Revolving | Total |
| Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $5863 | $1405 | $19 | $63 | $1066 | $334 | $8750 | $633270 | $642020 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 38014 | 38014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 300 | 0 | 2057 | 924 | 211 | 230 | 3722 | 27759 | 31481 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 6163 | 1405 | 2076 | 987 | 1277 | 564 | 12472 | 699043 | 711515 |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 28607 | 0 | 12 | 28619 | 45 | 28664 |
| &nbsp;&nbsp;&nbsp;Non-working capital loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 210230 | 109036 | 101984 | 114735 | 32420 | 20755 | 589160 | 204275 | 793435 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 5819 | 2671 | 154 | 8359 | 7024 | 5060 | 29087 | 7493 | 36580 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 314 | 327 | 1998 | 1543 | 105 | 3913 | 8200 | 391 | 8591 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | 0 | 0 | 0 | 0 | 0 | 74 | 74 | 0 | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | 939 | 322 | 767 | 558 | 107 | 173 | 2866 | 0 | 2866 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 217302 | 112356 | 104903 | 125195 | 39656 | 29975 | 629387 | 212159 | 841546 |
| &nbsp;&nbsp;&nbsp;Non-working capital loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 1 | 2 | 0 | 0 | 0 | 0 | 3 | 201 | 204 |
| Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 20946 | 25430 | 11990 | 20692 | 720 | 0 | 79778 | 414386 | 494164 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 1242 | 0 | 0 | 0 | 0 | 0 | 1242 | 0 | 1242 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 22188 | 25430 | 11990 | 20692 | 720 | 0 | 81020 | 414386 | 495406 |
| &nbsp;&nbsp;&nbsp;Construction and land development loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Owner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 151944 | 106040 | 89724 | 118976 | 128712 | 143199 | 738595 | 31378 | 769973 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 3083 | 163 | 1810 | 14683 | 0 | 13069 | 32808 | 550 | 33358 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 0 | 306 | 284 | 0 | 1520 | 1442 | 3552 | 0 | 3552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 155027 | 106509 | 91818 | 133659 | 130232 | 157710 | 774955 | 31928 | 806883 |
| &nbsp;&nbsp;&nbsp;Owner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 184183 | 114323 | 108411 | 128867 | 93880 | 154390 | 784054 | 125655 | 909709 |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Term Total | Revolving | Total |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans (continued): |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 0 | 0 | 11321 | 59 | 0 | 0 | 11380 | 0 | 11380 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1957 | 1957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 184183 | 114323 | 119732 | 128926 | 93880 | 154390 | 795434 | 127612 | 923046 |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Multifamily loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 191399 | 21552 | 63810 | 21472 | 8485 | 32995 | 339713 | 97877 | 437590 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 0 | 0 | 0 | 291 | 0 | 0 | 291 | 0 | 291 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 191399 | 21552 | 63810 | 21763 | 8485 | 32995 | 340004 | 97877 | 437881 |
| &nbsp;&nbsp;&nbsp;Multifamily loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 28600 | 13595 | 15258 | 31324 | 19915 | 30669 | 139361 | 13202 | 152563 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 1987 | 118 | 193 | 0 | 25 | 148 | 2471 | 0 | 2471 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 0 | 0 | 0 | 0 | 0 | 49 | 49 | 0 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 30587 | 13713 | 15451 | 31324 | 19940 | 30866 | 141881 | 13202 | 155083 |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 5560 | 13158 | 21355 | 18848 | 21215 | 12502 | 92638 | 151443 | 244081 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 0 | 0 | 654 | 258 | 0 | 1 | 913 | 6891 | 7804 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 5560 | 13158 | 22009 | 19106 | 21215 | 12503 | 93551 | 158334 | 251885 |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Other commercial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 11178 | 1199 | 13637 | 24506 | 2504 | 11665 | 64689 | 30722 | 95411 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 0 | 0 | 0 | 0 | 0 | 1754 | 1754 | 0 | 1754 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 11178 | 1199 | 13637 | 24506 | 2504 | 13419 | 66443 | 30722 | 97165 |
| &nbsp;&nbsp;&nbsp;Other commercial loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 14058 | 9978 | 6465 | 6793 | 10248 | 5525 | 53067 | 2427 | 55494 |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Term Total | Revolving | Total |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans (continued): |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 189 | 119 | 215 | 156 | 61 | 0 | 740 | 0 | 740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 55 | 305 | 232 | 436 | 0 | 755 | 1783 | 0 | 1783 |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | 36511 | 23578 | 50011 | 42657 | 24998 | 31020 | 208775 | 0 | 208775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 50813 | 33980 | 56923 | 50042 | 35307 | 37300 | 264365 | 2427 | 266792 |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 24 | 24 | 0 | 24 |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 665 | 487 | 684 | 0 | 190 | 4 | 2030 | 8477 | 10507 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 286 | 0 | 0 | 0 | 0 | 0 | 286 | 0 | 286 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 1728 | 38 | 99 | 0 | 3 | 0 | 1868 | 317 | 2185 |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | 28327 | 13016 | 9566 | 10347 | 1849 | 1138 | 64243 | 176160 | 240403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 31006 | 13541 | 10349 | 10347 | 2042 | 1142 | 68427 | 184954 | 253381 |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 29 | 2 | 22 | 53 | 149 | 202 |
| &nbsp;&nbsp;&nbsp;Residential construction loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | 6684 | 6852 | 575 | 1680 | 1189 | 1798 | 18778 | 0 | 18778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 6684 | 6852 | 575 | 1680 | 1189 | 1798 | 18778 | 0 | 18778 |
| &nbsp;&nbsp;&nbsp;Residential construction loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;Other consumer loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | 384 | 0 | 939 | 120 | 22 | 0 | 1465 | 37683 | 39148 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 0 | 35 | 273 | 91 | 6 | 11 | 416 | 0 | 416 |
| &nbsp;&nbsp;&nbsp;&nbsp;Not Rated | 19055 | 15982 | 13837 | 7631 | 4301 | 3349 | 64155 | 12269 | 76424 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 19439 | 16017 | 15049 | 7842 | 4329 | 3360 | 66036 | 49952 | 115988 |
| &nbsp;&nbsp;&nbsp;Other consumer loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross write offs | 4 | 187 | 306 | 161 | 58 | 0 | 716 | 604 | 1320 |
| Total loans | $931529 | $480035 | $528322 | $576069 | $360776 | $476022 | $3352753 | $2022596 | $5375349 |
| Total current period gross write offs | $5 | $189 | $306 | $28797 | $60 | $58 | $29415 | $999 | $30414 |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**Nonaccrual and Past Due Loans:**

The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.

The following table presents the aging of the amortized cost basis in past due loans as of March 31, 2026 by class of loans and loans past due 90 days or more and still accruing by class of loan:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Loans Not Past Due** | **30-89 Days Past Due** | **Greater than 89 Days Past Due and Accruing** | **Total Accruing** | **Total Nonaccrual** | **Nonaccrual With No Allowance For Credit Loss** | **Total** |
| Commercial and industrial loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $**737163** | $**0** | $**0** | $**737163** | $**5226** | $**1433** | $**742389** |
| &nbsp;&nbsp;&nbsp;Non-working capital loans | **828036** | **24** | **0** | **828060** | **7669** | **82** | **835729** |
| Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development loans | **507429** | **0** | **0** | **507429** | **0** | **0** | **507429** |
| &nbsp;&nbsp;&nbsp;Owner occupied loans | **801433** | **4041** | **0** | **805474** | **1887** | **170** | **807361** |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans | **957740** | **0** | **0** | **957740** | **1958** | **0** | **959698** |
| &nbsp;&nbsp;&nbsp;Multifamily loans | **462510** | **0** | **0** | **462510** | **0** | **0** | **462510** |
| Agri-business and agricultural loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland | **177789** | **0** | **0** | **177789** | **44** | **0** | **177833** |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production | **195808** | **548** | **0** | **196356** | **0** | **0** | **196356** |
| Other commercial loans | **95567** | **0** | **0** | **95567** | **0** | **0** | **95567** |
| Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans | **289255** | **1839** | **7** | **291101** | **1252** | **507** | **292353** |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans | **262924** | **422** | **0** | **263346** | **2505** | **403** | **265851** |
| &nbsp;&nbsp;&nbsp;Residential construction loans | **14340** | **0** | **0** | **14340** | **0** | **0** | **14340** |
| Other consumer loans | **115009** | **532** | **0** | **115541** | **401** | **9** | **115942** |
| Total | $**5445003** | $**7406** | $**7** | $**5452416** | $**20942** | $**2604** | $**5473358** |

---

An insignificant amount of interest income was recognized on nonaccrual loans during the three month periods ended March 31, 2026.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2025 by class of loans and loans past due 90 days or more and still accruing by class of loan:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Loans Not Past Due** | **30-89 Days Past Due** | **Greater than 89 Days Past Due and Accruing** | **Total Accruing** | **Total Nonaccrual** | **Nonaccrual With No Allowance For Credit Loss** | **Total** |
| Commercial and industrial loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $706317 | $0 | $0 | $706317 | $5198 | $1434 | $711515 |
| &nbsp;&nbsp;&nbsp;Non-working capital loans | 834134 | 0 | 0 | 834134 | 7412 | 86 | 841546 |
| Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development loans | 495406 | 0 | 0 | 495406 | 0 | 0 | 495406 |
| &nbsp;&nbsp;&nbsp;Owner occupied loans | 804986 | 0 | 0 | 804986 | 1897 | 170 | 806883 |
| &nbsp;&nbsp;&nbsp;Nonowner occupied loans | 921089 | 0 | 0 | 921089 | 1957 | 0 | 923046 |
| &nbsp;&nbsp;&nbsp;Multifamily loans | 437881 | 0 | 0 | 437881 | 0 | 0 | 437881 |
| Agri-business and agricultural loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland | 155035 | 0 | 0 | 155035 | 48 | 0 | 155083 |
| &nbsp;&nbsp;&nbsp;Loans for agricultural production | 251885 | 0 | 0 | 251885 | 0 | 0 | 251885 |
| Other commercial loans | 97165 | 0 | 0 | 97165 | 0 | 0 | 97165 |
| Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans | 263385 | 1617 | 7 | 265009 | 1783 | 690 | 266792 |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans | 251009 | 186 | 0 | 251195 | 2186 | 405 | 253381 |
| &nbsp;&nbsp;&nbsp;Residential construction loans | 18778 | 0 | 0 | 18778 | 0 | 0 | 18778 |
| Other consumer loans | 115046 | 526 | 0 | 115572 | 416 | 6 | 115988 |
| Total | $5352116 | $2329 | $7 | $5354452 | $20897 | $2791 | $5375349 |

---

An insignificant amount of interest income was recognized on nonaccrual loans during the year ended December 31, 2025.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value.

The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**March 31, 2026** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**March 31, 2026** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**March 31, 2026** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**March 31, 2026** |
| <u>(dollars in thousands)</u> | **Real Estate** | **General<br>Business<br> Assets** | **Other** | **Total** |
| Commercial and industrial loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $**2388** | $**23997** | $**570** | $**26955** |
| &nbsp;&nbsp;&nbsp;Non-working capital loans | **25** | **4455** | **43** | **4523** |
| Commercial real estate and multi-family residential loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Owner occupied loans | **473** | **1716** | **0** | **2189** |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonowner occupied loans | **1958** | **0** | **0** | **1958** |
| Agri-business and agricultural loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland | **0** | **44** | **0** | **44** |
| Consumer 1-4 family mortgage loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans | **3100** | **0** | **0** | **3100** |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans | **657** | **0** | **0** | **657** |
| Other consumer loans | **0** | **0** | **401** | **401** |
| Total | $**8601** | $**30212** | $**1014** | $**39827** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2025** |
| <u>(dollars in thousands)</u> | **Real Estate** | **General<br>Business<br> Assets** | **Other** | **Total** |
| Commercial and industrial loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $2388 | $23827 | $673 | $26888 |
| &nbsp;&nbsp;&nbsp;Non-working capital loans | 464 | 3715 | 49 | 4228 |
| Commercial real estate and multi-family residential loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Owner occupied loans | 476 | 1726 | 0 | 2202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonowner occupied loans | 1958 | 0 | 0 | 1958 |
| Agri-business and agricultural loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans secured by farmland | 0 | 49 | 0 | 49 |
| Consumer 1-4 family mortgage loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Closed end first mortgage loans | 1725 | 0 | 0 | 1725 |
| &nbsp;&nbsp;&nbsp;Open end and junior lien loans | 2186 | 0 | 0 | 2186 |
| Other consumer loans | 0 | 0 | 416 | 416 |
| Total | $9197 | $29317 | $1138 | $39652 |

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**Loan Modifications Made to Borrowers Experiencing Financial Difficulty**

The allowance for credit losses incorporates an estimate of lifetime expected credit losses using historical loss information. The Company uses a probability of default/loss given default model to determine an estimate which is recorded for each asset upon origination. Occasionally, the Company has reason to modify certain terms of loans for borrowers experiencing financial distress by providing the following forms of relief: forgiveness of loan principal, extension of repayment terms, interest rate reduction or an other than insignificant payment delay. The Company can make any or all of these types of concessions as part of such modifications. Since an estimate for historical losses is already included as a component of the allowance for credit losses, a change to the allowance for credit losses is generally not recorded at the time of such modifications unless the loan is individually analyzed and the modification changes the specific reserve allocation. In the event forgiveness of principal is provided, the amount of the forgiveness is charged off against the allowance for credit losses.

During the three months ended March 31, 2026 and 2025, there were no material modifications made to borrowers experiencing financial difficulty.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty by reviewing the delinquency and payment default status of such loans to understand the effectiveness of its relief efforts.

At March 31, 2026, no loans receiving a modification due to borrower financial difficulty within the previous twelve months were greater than 30 days or more past due or had experienced a payment default.

Upon the Company's determination that a modified loan (or portion thereof) has subsequently been deemed uncollectible, the loan (or a portion thereof) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

**NOTE 5. BORROWINGS**

For the periods ended below, advances from the Federal Home Loan Bank of Indianapolis ("FHLBI") were as follows:

---

| | | |
|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31, 2026** | December 31, 2025 |
| Short-term advance | $**50000** | $170000 |
| Long-term advance | **1200** | 1200 |
| &nbsp;&nbsp;&nbsp;Total | $**51200** | $171200 |

---

For the period ended March 31, 2026, the Company had advances outstanding from the FHLBI of $51.2 million. The short-term advance of $50.0 million was a floating rate advance due June 1, 2026 and had an interest rate of 3.79%. The long-term advance of $1.2 million was a fixed rate bullet advance due March 12, 2035 and had an interest rate of 0.00%. This advance is a rate-subsidized Community Development Financial Institution ("CDFI") Rate Buydown Advance offered by the FHLBI that funded a low cost loan to a qualifying CDFI. For the period ended December 31, 2025, the Company had advances outstanding with the FHLBI of $171.2 million. The $170.0 million short-term FHLBI advance was repaid on January 8, 2026. There were no Federal Funds purchased outstanding at March 31, 2026 and December 31, 2025.

On October 10, 2025, the Company renewed an unsecured revolving credit agreement with a financial institution allowing the Company to borrow up to $30.0 million. The credit agreement has a one year term which may be amended, extended, modified or renewed. Funds provided under the agreement can be used to repurchase shares of the Company's common stock under the share repurchase program, which was reauthorized by the Company's board of directors on April 8, 2025, amended on March 5, 2026, and expires on April 30, 2027, and for general operations. The credit agreement includes a negative pledge agreement whereby the Company agrees not to pledge or otherwise encumber the stock of the Bank. There was an outstanding balance on the credit agreement of $17.0 million at March 31, 2026 and $13.0 million at December 31, 2025. The outstanding balance of the credit agreement was repaid on April 15, 2026.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

**NOTE 6. FAIR VALUE DISCLOSURES**

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

**Level 1** Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

**Level 2** Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

**Level 3** Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

<u>Securities:</u> Securities available-for-sale are valued primarily by a third party pricing service. The fair values of securities available-for-sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). These models utilize the market approach with standard inputs that include, but are not limited to benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs).

The Company's Finance Department, which is responsible for all accounting and SEC disclosure compliance, and the Company's Treasury Department, which is responsible for investment portfolio management and asset/liability modeling, are the two areas that determine the Company's valuation policies and procedures. Both of these areas report directly to the Executive Vice President and Chief Financial Officer of the Company. For assets or liabilities that may be considered for Level 3 fair value measurement on a recurring basis, these two departments and the Executive Vice President and Chief Financial Officer determine the appropriate level of the assets or liabilities under consideration. If there are new assets or liabilities that are determined to be Level 3 by this group, the Risk Management Committee of the Company and the Audit Committee of the Board are made aware of such assets at their next scheduled meeting.

Securities pricing is obtained from a third party pricing service and all security prices are tested annually against prices from another third party provider and reviewed with a market value price tolerance variance that varies by sector: municipal securities +/-5%, government MBS/CMO +/-3% and U.S. treasuries +/-1%. If any securities fall outside the tolerance threshold and have a variance of $100,000 or more, a determination of materiality is made for the amount over the threshold. Any security that would have a material threshold difference would be further investigated to determine why the variance exists and if any action is needed concerning the security pricing for that individual security. Changes in market value are reviewed monthly in aggregate by security type and any material changes are reviewed to determine why they exist. At least annually, the pricing methodology of the pricing service is received and reviewed to support the fair value levels used by the Company. A detailed pricing evaluation is requested and reviewed on any security determined to be fair valued using unobservable inputs by the pricing service.

<u>Mortgage banking derivative:</u> The fair values of mortgage banking derivatives are based on observable market data as of the measurement date (Level 2).

<u>Interest rate swap derivatives:</u> Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

services. The fair value of interest rate swap derivatives is determined by pricing or valuation models using observable market data as of the measurement date (Level 2).

<u>Collateral dependent loans:</u> Collateral dependent loans with specific allocations of the allowance for credit losses are generally based on the fair value of the underlying collateral when repayment is expected solely from the collateral. Fair value is determined using several methods. Generally, the fair value of real estate is based on appraisals by qualified third party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and result in a Level 3 classification of the inputs for determining fair value. In addition, the Company's management routinely applies internal discount factors to the value of appraisals used in the fair value evaluation of collateral dependent loans. The deductions to the appraisals take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. Commercial real estate is generally discounted from its appraised value by 30-50% with the higher discounts applied to real estate that is determined to have a thin trading market or to be specialized collateral. In addition to real estate, the Company's management evaluates other types of collateral as follows: (a) raw materials inventory is discounted from its cost or book value by 40-60%, depending on the marketability of the goods; (b) finished goods are generally discounted by 40-60%, depending on the ease of marketability, cost of transportation or scope of use of the finished good; (c) work in process inventory is typically discounted by 60%-100%, depending on the length of manufacturing time, types of components used in the completion process, and the breadth of the user base; (d) equipment is valued at a percentage of depreciated book value or recent appraised value, if available, and is typically discounted at 20-50% after various considerations including age and condition of the equipment, marketability, breadth of use, and whether the equipment includes unique components or add-ons; and (e) marketable securities are discounted by 10%-30%, depending on the type of investment, age of valuation report and general market conditions. This methodology is based on a market approach and typically results in a Level 3 classification of the inputs for determining fair value.

<u>Mortgage servicing rights:</u> As of March 31, 2026, the value of the Company's Level 3 servicing assets for residential mortgage loans ("MSRs") was $1.5 million, carried at amortized cost and an immaterial valuation reserve. These residential mortgage loans have a weighted average interest rate of 4.0%, a weighted average maturity of 20 years and are secured by homes generally within the Company's market area of Northern Indiana and Indianapolis. A third-party valuation is used to estimate fair value by stratifying the portfolios on the basis of certain risk characteristics, including loan type and interest rate. Impairment is estimated based on an income approach. The inputs used include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees and float income. The most significant assumption used to value MSRs is prepayment rate. Prepayment rates are estimated based on published industry consensus prepayment rates. The most significant unobservable assumption is the discount rate. At March 31, 2026, the constant prepayment speed ("PSA") used was 188 and used a discount rate of 9.5%. At December 31, 2025, the PSA used was 168 and the discount rate used was 9.5%.

<u>Other real estate owned:</u> Nonrecurring adjustments to certain commercial and residential real estate properties, classified as other real estate owned, are measured at the lower of carrying amount or fair value less costs to sell. Fair values are generally based on third party appraisals of the property and are reviewed by the Company's internal appraisal officer. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable properties used to determine value. Such adjustments are usually significant and result in a Level 3 classification. In addition, the Company's management may apply discount factors to the appraisals to take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

<u>Real estate mortgage loans held-for-sale</u>: Real estate mortgage loans held-for-sale are carried at the lower of cost or fair value, as determined by outstanding commitments, from third party investors, and result in a Level 2 classification.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The tables below present the balances of assets measured at fair value on a recurring basis:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
| | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Assets<br>at Fair Value** |
| <u>(dollars in thousands)</u> | **Level 1** | **Level 2** | **Level 3** | **Assets<br>at Fair Value** |
| Assets: |  |  |  |  |
| U.S. Treasury securities | $**15104** | $**0** | $**0** | $**15104** |
| U.S. government sponsored agency securities | **0** | **113482** | **0** | **113482** |
| Mortgage-backed securities: residential | **0** | **440211** | **0** | **440211** |
| State and municipal securities | **0** | **453613** | **4581** | **458194** |
| &nbsp;&nbsp;Total securities available-for-sale | **15104** | **1007306** | **4581** | **1026991** |
| Mortgage banking derivative | **0** | **136** | **0** | **136** |
| Interest rate swap derivative | **0** | **14272** | **0** | **14272** |
| Total assets | $**15104** | $**1021714** | $**4581** | $**1041399** |
| Liabilities: |  |  |  |  |
| Interest rate swap derivative | $**0** | $**14273** | $**0** | $**14273** |
| Total liabilities | $**0** | $**14273** | $**0** | $**14273** |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 |
| | Fair Value Measurements Using | Fair Value Measurements Using | Fair Value Measurements Using | Assets<br>at Fair Value |
| <u>(dollars in thousands)</u> | Level 1 | Level 2 | Level 3 | Assets<br>at Fair Value |
| Assets: |  |  |  |  |
| U.S. Treasury securities | $10119 | $0 | $0 | $10119 |
| U.S. government sponsored agency securities | 0 | 115690 | 0 | 115690 |
| Mortgage-backed securities: residential | 0 | 454163 | 0 | 454163 |
| State and municipal securities | 0 | 467589 | 4501 | 472090 |
| &nbsp;&nbsp;Total securities available-for-sale | 10119 | 1037442 | 4501 | 1052062 |
| Mortgage banking derivative | 0 | 115 | 0 | 115 |
| Interest rate swap derivative | 0 | 14634 | 0 | 14634 |
| Total assets | $10119 | $1052191 | $4501 | $1066811 |
| Liabilities: |  |  |  |  |
| Mortgage banking derivative | $0 | $8 | $0 | $8 |
| Interest rate swap derivative | 0 | 14634 | 0 | 14634 |
| Total liabilities | $0 | $14642 | $0 | $14642 |

---

The fair value of Level 3 available-for-sale securities was immaterial and thus did not require additional recurring fair value disclosure.

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The tables below present the balances of assets measured at fair value on a nonrecurring basis:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
| | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Assets<br>at Fair Value** |
| <u>(dollars in thousands)</u> | **Level 1** | **Level 2** | **Level 3** | **Assets<br>at Fair Value** |
| Assets |  |  |  |  |
| Collateral dependent loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial and industrial loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $**0** | $**0** | $**1624** | $**1624** |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-working capital loans | **0** | **0** | **1574** | **1574** |
| &nbsp;&nbsp;&nbsp;Commercial real estate and multi-family residential loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Owner occupied loans | **0** | **0** | **777** | **777** |
| &nbsp;&nbsp;&nbsp; Nonowner occupied loans | **0** | **0** | **1515** | **1515** |
| &nbsp;&nbsp;&nbsp;Agri-business and agricultural loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans secured by farmland | **0** | **0** | **16** | **16** |
| &nbsp;&nbsp;&nbsp;Consumer 1-4 family mortgage loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Open end and junior lien loans | **0** | **0** | **1541** | **1541** |
| Total collateral dependent loans | **0** | **0** | **7047** | **7047** |
| Total assets | $**0** | $**0** | $**7047** | $**7047** |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 |
| | Fair Value Measurements Using | Fair Value Measurements Using | Fair Value Measurements Using | Assets<br>at Fair Value |
| <u>(dollars in thousands)</u> | Level 1 | Level 2 | Level 3 | Assets<br>at Fair Value |
| Assets |  |  |  |  |
| Collateral dependent loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial and industrial loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Working capital lines of credit loans | $0 | $0 | $1719 | $1719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-working capital loans | 0 | 0 | 1672 | 1672 |
| &nbsp;&nbsp;&nbsp;Commercial real estate and multi-family residential loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Owner occupied loans | 0 | 0 | 811 | 811 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonowner occupied loans | 0 | 0 | 1543 | 1543 |
| &nbsp;&nbsp;&nbsp;Agri-business and agricultural loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans secured by farmland | 0 | 0 | 18 | 18 |
| &nbsp;&nbsp;&nbsp;Consumer 1-4 family mortgage loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Open end and junior lien loans | 0 | 0 | 1523 | 1523 |
| Total collateral dependent loans | 0 | 0 | 7286 | 7286 |
| Total assets | $0 | $0 | $7286 | $7286 |

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at March 31, 2026:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | Fair Value | Valuation Methodology | Unobservable Inputs | Average | Range of Inputs |
| **Collateral dependent loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Commercial and industrial** | $**3198** | **Collateral based measurements** | **Discount to reflect current market conditions and ultimate collectability** | **52%** | **1%-99%** |
| **Collateral dependent loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Commercial real estate and multi-family residential loans** | **2292** | **Collateral based measurements** | **Discount to reflect current market conditions and ultimate collectability** | **28%** | **1%-65%** |
| **Collateral dependent loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Agri-business and agricultural** | **16** | **Collateral based measurements** | **Discount to reflect current market conditions and ultimate collectability** | **65%** |  |
| **Collateral dependent loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Consumer 1-4 family mortgage** | **1541** | **Collateral based measurements** | **Discount to reflect current market conditions and ultimate collectability** | **10%** |  |

---

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | Fair Value | Valuation Methodology | Unobservable Inputs | Average | Range of Inputs |
| Collateral dependent loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial and industrial | $3391 | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | 52% | 6%-99% |
| Collateral dependent loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate and multi-family residential loans | 2354 | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | 28% | 7%-62% |
| Collateral dependent loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Agri-business and agricultural | 18 | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | 62% |  |
| Collateral dependent loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer 1-4 family mortgage | 1523 | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | 12% |  |

---

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

The following tables contain the estimated fair values and the related carrying values of the Company's financial instruments. Items that are not financial instruments are not included.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
| | **Carrying<br>Value** | **Estimated Fair Value** | **Estimated Fair Value** | **Estimated Fair Value** | **Estimated Fair Value** |
| <u>(dollars in thousands)</u> | **Carrying<br>Value** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Financial Assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**151324** | $**151324** | $**0** | $**0** | $**151324** |
| &nbsp;&nbsp;&nbsp;Securities available-for-sale | **1026991** | **15104** | **1007306** | **4581** | **1026991** |
| &nbsp;&nbsp;&nbsp;Securities held-to-maturity | **133617** | **0** | **114241** | **0** | **114241** |
| &nbsp;&nbsp;&nbsp;Real estate mortgages held-for-sale | **1086** | **0** | **1107** | **0** | **1107** |
| &nbsp;&nbsp;&nbsp;Loans, net | **5404444** | **0** | **0** | **5359405** | **5359405** |
| &nbsp;&nbsp;&nbsp;Mortgage banking derivative | **136** | **0** | **136** | **0** | **136** |
| &nbsp;&nbsp;&nbsp;Interest rate swap derivative | **14272** | **0** | **14272** | **0** | **14272** |
| &nbsp;&nbsp;&nbsp;Federal Reserve and Federal Home Loan Bank Stock | **21420** | **N/A** | **N/A** | **N/A** | **N/A** |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | **29703** | **0** | **7647** | **22056** | **29703** |
| Financial Liabilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Certificates of deposit | $**947949** | $**0** | $**945314** | $**0** | $**945314** |
| &nbsp;&nbsp;&nbsp;All other deposits | **5242311** | **5242311** | **0** | **0** | **5242311** |
| &nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term advance | **50000** | **50000** | **0** | **0** | **50000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term advance | **1200** | **0** | **793** | **0** | **793** |
| &nbsp;&nbsp;&nbsp;Other borrowings | **17000** | **0** | **16998** | **0** | **16998** |
| &nbsp;&nbsp;&nbsp;Interest rate swap derivative | **14273** | **0** | **14273** | **0** | **14273** |
| &nbsp;&nbsp;&nbsp;Standby letters of credit | **251** | **0** | **0** | **251** | **251** |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | **8591** | **398** | **8193** | **0** | **8591** |

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 |
| | Carrying<br>Value | Estimated Fair Value | Estimated Fair Value | Estimated Fair Value | Estimated Fair Value |
| <u>(dollars in thousands)</u> | Carrying<br>Value | Level 1 | Level 2 | Level 3 | Total |
| Financial Assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $141318 | $141318 | $0 | $0 | $141318 |
| &nbsp;&nbsp;&nbsp;Securities available-for-sale | 1052062 | 10119 | 1037442 | 4501 | 1052062 |
| &nbsp;&nbsp;&nbsp;Securities held-to-maturity | 133208 | 0 | 117510 | 0 | 117510 |
| &nbsp;&nbsp;&nbsp;Real estate mortgages held-for-sale | 2707 | 0 | 2753 | 0 | 2753 |
| &nbsp;&nbsp;&nbsp;Loans, net | 5306354 | 0 | 0 | 5257552 | 5257552 |
| &nbsp;&nbsp;&nbsp;Mortgage banking derivative | 115 | 0 | 115 | 0 | 115 |
| &nbsp;&nbsp;&nbsp;Interest rate swap derivative | 14634 | 0 | 14634 | 0 | 14634 |
| &nbsp;&nbsp;&nbsp;Federal Reserve and Federal Home Loan Bank Stock | 21420 | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 28997 | 0 | 8306 | 20691 | 28997 |
| Financial Liabilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Certificates of deposit | $750726 | $0 | $748798 | $0 | $748798 |
| &nbsp;&nbsp;&nbsp;All other deposits | 5222624 | 5222624 | 0 | 0 | 5222624 |
| &nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Short-term advance | 170000 | 169998 | 0 | 0 | 169998 |
| &nbsp;&nbsp;&nbsp; Long-term advance | 1200 | 0 | 792 | 0 | 792 |
| &nbsp;&nbsp;&nbsp;Other borrowings | 13000 | 0 | 12997 | 0 | 12997 |
| &nbsp;&nbsp;&nbsp;Mortgage banking derivative | 8 | 0 | 8 | 0 | 8 |
| &nbsp;&nbsp;&nbsp;Interest rate swap derivative | 14634 | 0 | 14634 | 0 | 14634 |
| &nbsp;&nbsp;&nbsp;Standby letters of credit | 296 | 0 | 0 | 296 | 296 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 8868 | 410 | 8458 | 0 | 8868 |

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**NOTE 7. OFFSETTING ASSETS AND LIABILITIES**

The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at March 31, 2026 and December 31, 2025.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
| | **Gross Amounts of Recognized Assets/Liabilities** | **Gross Amounts Offset in the Statement of Financial Position** | **Net Amounts presented in the Statement of Financial Position** | **Gross Amounts Not Offset in the Statement of Financial Position** | **Gross Amounts Not Offset in the Statement of Financial Position** | **Net Amount** |
| <u>(dollars in thousands)</u> | **Gross Amounts of Recognized Assets/Liabilities** | **Gross Amounts Offset in the Statement of Financial Position** | **Net Amounts presented in the Statement of Financial Position** | **Financial Instruments** | **Cash Collateral Position** | **Net Amount** |
| Assets |  |  |  |  |  |  |
| Interest Rate Swap Derivatives | $**14272** | $**0** | $**14272** | $**0** | $**(11815)** | $**2457** |
| &nbsp;&nbsp;&nbsp;Total Assets | $**14272** | $**0** | $**14272** | $**0** | $**(11815)** | $**2457** |
| Liabilities |  |  |  |  |  |  |
| Interest Rate Swap Derivatives | $**14273** | $**0** | $**14273** | $**0** | $**0** | $**14273** |
| &nbsp;&nbsp;&nbsp;Total Liabilities | $**14273** | $**0** | $**14273** | $**0** | $**0** | $**14273** |

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<u>[**Table of Contents**](#ia9acca0fb6414549a81b165dfc652171_7)</u>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 | December 31, 2025 |
| | Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts presented in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | Net Amount |
| <u>(dollars in thousands)</u> | Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Position | Net Amount |
| Assets |  |  |  |  |  |  |
| Interest Rate Swap Derivatives | $14634 | $0 | $14634 | $0 | $(13075) | $1559 |
| &nbsp;&nbsp;&nbsp;Total Assets | $14634 | $0 | $14634 | $0 | $(13075) | $1559 |
| Liabilities |  |  |  |  |  |  |
| Interest Rate Swap Derivatives | $14634 | $0 | $14634 | $0 | $0 | $14634 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | $14634 | $0 | $14634 | $0 | $0 | $14634 |

---

If an event of default occurs causing an early termination of an interest rate swap derivative, any early termination amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party. If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions.

**NOTE 8. LEASES**

The Company leases certain office facilities under long-term operating lease agreements. The leases expire at various dates through 2044 and some include renewal options. Many of these leases require the payment of property taxes, insurance premiums, maintenance, utilities and other costs. In many cases, rentals are subject to increase in relation to a cost-of-living index. The Company accounts for lease and non-lease components together as a single lease component. The Company determines if an arrangement is a lease at inception. Operating leases are recorded as a right-of-use ("ROU") lease asset and are included in other assets on the consolidated balance sheet. The Company's corresponding lease obligations are included in other liabilities on the consolidated balance sheet. ROU lease assets represent the Company's right to use an underlying asset for the lease term and lease obligations represent the Company's obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset also includes any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases, as allowed as a practical expedient of the standard.

The following is a maturity analysis of the operating lease liabilities as of March 31, 2026:

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| | |
|:---|:---|
| **<u>Years ending December 31, (in thousands)</u>** | **Operating Lease Obligation** |
| 2026 | $**728** |
| 2027 | **919** |
| 2028 | **869** |
| 2029 | **743** |
| 2030 | **661** |
| 2031 and thereafter | **5191** |
| &nbsp;&nbsp;&nbsp;Total undiscounted lease payments | **9111** |
| Less imputed interest | **(2219)** |
| &nbsp;&nbsp;&nbsp;Lease liability | $**6892** |
| &nbsp;&nbsp;&nbsp;Right-of-use asset | $**6892** |

---

The lease liability and right-of-use asset were $7.1 million and $7.1 million, respectively, at December 31, 2025.

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| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <u>(dollars in thousands)</u> | **2026** | 2025 |
| **Lease cost** |  |  |
| Operating lease cost | $**242** | $198 |
| Short-term lease cost | **1** | 1 |
| Total lease cost | $**243** | $199 |
| **Other information** |  |  |
| Operating cash outflows from operating leases | $**242** | $198 |
| Weighted-average remaining lease term - operating leases | **6.3 years** | 7.6 years |
| Weighted average discount rate - operating leases | **3.9%** | 3.7% |

---

**NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)**

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the three months ended March 31, 2026 and 2025, all shown net of tax:

---

| | | | |
|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **Unrealized Gains and Losses on Available-<br>for-Sale Securities** | **Defined Benefit Pension Items** | **Total** |
| Balance at January 1, 2026 | $**(126609)** | $**(528)** | $**(127137)** |
| Other comprehensive income (loss) before reclassification | **(8884)** | **0** | **(8884)** |
| Amounts reclassified from accumulated other comprehensive income (loss) | **387** | **12** | **399** |
| &nbsp;&nbsp;&nbsp;Net current period other comprehensive income (loss) | **(8497)** | **12** | **(8485)** |
| Balance at March 31, 2026 | $**(135106)** | $**(516)** | $**(135622)** |

---

---

| | | | |
|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | Unrealized Gains and Losses on Available-<br>for-Sale Securities | Defined Benefit Pension Items | Total |
| Balance at January 1, 2025 | $(165932) | $(568) | $(166500) |
| Other comprehensive income (loss) before reclassification | 2224 | 0 | 2224 |
| Amounts reclassified from accumulated other comprehensive income (loss) | 387 | 10 | 397 |
| &nbsp;&nbsp;&nbsp;Net current period other comprehensive income (loss) | 2611 | 10 | 2621 |
| Balance at March 31, 2025 | $(163321) | $(558) | $(163879) |

---

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Reclassifications out of accumulated comprehensive income (loss) for the three months ended March 31, 2026 are as follows:

---

| | | |
|:---|:---|:---|
| **Details about <br>Accumulated Other <br>Comprehensive <br>Income (Loss) Components** | **Amount <br>Reclassified From Accumulated Other Comprehensive Income (Loss)** | **Affected Line Item <br>in the Statement Where Net Income is Presented** |
| <u>(dollars in thousands)</u> |  |  |
| Amortization of unrealized losses on held-to-maturity securities | $**(489)** | Interest income |
| Tax effect | **102** | Income tax expense |
|  | **(387)** | Net of tax |
| Amortization of defined benefit pension items | **(16)** | Salaries and employee benefits |
| Tax effect | **4** | Income tax expense |
|  | **(12)** | Net of tax |
| Total reclassifications for the period | $**(399)** | Net income |

---

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2025 are as follows:

---

| | | |
|:---|:---|:---|
| **Details about <br>Accumulated Other <br>Comprehensive <br>Income (Loss) Components** | **Amount <br>Reclassified From Accumulated Other Comprehensive Income (Loss)** | **Affected Line Item <br>in the Statement Where Net Income is Presented** |
| <u>(dollars in thousands)</u> |  |  |
| Amortization of unrealized losses on held-to-maturity securities | $(490) | Interest income |
| Tax effect | 103 | Income tax expense |
|  | (387) | Net of tax |
| Amortization of defined benefit pension items | (13) | Salaries and employee benefits |
| Tax effect | 3 | Income tax expense |
|  | (10) | Net of tax |
| Total reclassifications for the period | $(397) | Net income |

---

**NOTE 10. EARNINGS PER SHARE**

Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period, which includes shares held in treasury on behalf of participants in the Company's Directors Fee Deferral Plan, and share repurchases. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock based awards and warrants, none of which were antidilutive.

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| | **2026** | 2025 |
| Weighted average shares outstanding for basic earnings per common share | **25344757** | 25714818 |
| Dilutive effect of stock based awards | **149163** | 88047 |
| Weighted average shares outstanding for diluted earnings per common share | **25493920** | 25802865 |
| Basic earnings per common share | $**1.04** | $0.78 |
| Diluted earnings per common share | $**1.04** | $0.78 |

---

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**NOTE 11. INCOME TAXES**

Pretax income is entirely related to domestic activities. The Company did not have any foreign operations or foreign tax expense for the periods presented below. Income tax expense for the three months ended March 31, 2026 consisted of the following:

---

| | |
|:---|:---|
| <u>(dollars in thousands)</u> | **2026** |
| Current federal | $**5040** |
| Deferred federal | **842** |
| Current state | **853** |
| Deferred state | **(658)** |
| &nbsp;&nbsp;&nbsp;Total income tax expense | $**6077** |

---

For the year ended December 31, 2025, the Company adopted ASU 2023-09, "*Income Taxes (Topic 740): Improvements to Income Tax Disclosures*" on a prospective basis. Differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 21% to income before income taxes for the three months ended March 31, 2026 were as follows:

---

| | | |
|:---|:---|:---|
| <u>(dollars in thousands)</u> | **2026** | **2026** |
| Federal statutory rate | $**6837** | **21.0%** |
| &nbsp;&nbsp;&nbsp;Effect of: |  |  |
| &nbsp;&nbsp;&nbsp;State and local income taxes, net of federal benefits | **154** | **0.5** |
| &nbsp;&nbsp;&nbsp;Tax credits, net of amortization and losses | **15** | **0.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Nontaxable or nondeductible items: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax exempt income | **(870)** | **(2.7)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance | **(235)** | **(0.1)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term incentive plan and deferred compensation | **0** | **0.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nondeductible compensation expense | **37** | **0.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other nondeductible expenses | **57** | **0.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **82** | **0.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total income tax expense | $**6077** | **18.7%** |

---

During the three months ended March 31, 2026, the Company paid no federal income taxes or state income taxes.

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The net deferred tax asset recorded in the consolidated balance sheet at March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31, 2026** | December 31, 2025 |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Bad debts | $**18326** | $17574 |
| &nbsp;&nbsp;&nbsp;Pension and deferred compensation liability | **2418** | 2430 |
| &nbsp;&nbsp;&nbsp;Nonaccrual loan interest | **521** | 1403 |
| &nbsp;&nbsp;&nbsp;Long-term incentive plan | **2184** | 2685 |
| &nbsp;&nbsp;&nbsp;Lease liability | **2968** | 2370 |
| &nbsp;&nbsp;&nbsp;Deferred loan fees | **530** | 540 |
| &nbsp;&nbsp;&nbsp;Net operating loss carryforward | **1936** | 1900 |
| &nbsp;&nbsp;&nbsp;Other | **787** | 733 |
|  | **29670** | 29635 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | **5081** | 5333 |
| &nbsp;&nbsp;&nbsp;Loan servicing rights | **423** | 433 |
| &nbsp;&nbsp;&nbsp;State taxes | **1070** | 1096 |
| &nbsp;&nbsp;&nbsp;Intangible assets | **1266** | 1266 |
| &nbsp;&nbsp;&nbsp;REIT spillover dividend | **1750** | 1750 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | **1067** | 1155 |
| &nbsp;&nbsp;&nbsp;Lease right of use | **2968** | 2370 |
| &nbsp;&nbsp;&nbsp;Other | **244** | 247 |
|  | **13869** | 13650 |
| Valuation allowance | **0** | 0 |
| Net deferred tax asset | $**15801** | $15985 |

---

The Company has Indiana net operating loss carryforwards of approximately $39.5 million at March 31, 2026 that will expire in 2039 if not used. Management has concluded that the state net operating losses will be fully utilized and therefore no valuation allowance is necessary on the state operating loss.

In addition to the net deferred tax assets included above, the deferred income tax asset (liability) allocated to the unrealized gain (loss) on securities available for sale was $35.9 million and $33.7 million for March 31, 2026 and December 31, 2025, respectively. The deferred income tax asset allocated to the pension plan and SERP included in equity was $171,000 and $175,000 at March 31, 2026 and December 31, 2025, respectively.

The Company evaluated its deferred tax asset at year end 2025 and has concluded that it is more likely than not that it will be realized. The Company expects to have taxable income in the future such that the deferred tax asset will be realized. Therefore, no valuation allowance is required.

**Unrecognized Tax Benefits**

The Company did not have any unrecognized tax benefits at March 31, 2026 and December 31, 2025.

No interest or penalties were recorded in the income statement and no amount was accrued for interest and penalties for the three months ended March 31, 2026. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company's policy to record such accruals in its income taxes accounts.

The Company and its subsidiaries file a consolidated U.S. federal tax return and a combined unitary return in the State of Indiana. These returns are subject to examinations by authorities for all years after 2021.

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**ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**OVERVIEW**

Net income in the first three months of 2026 was $26.5 million, which increased $6.4 million, or 31.8%, from $20.1 million for the comparable period of 2025. Diluted earnings per common share was $1.04 in the first three months of 2026, an increase of 33.3% from $0.78 in the comparable period of 2025. The increase in net income for 2026 was primarily due to an increase to net interest income of $3.9 million, or 7.4%, an increase in noninterest income of $2.0 million, or 18.3%, and a decrease in the provision for credit losses of $4.8 million, or 70.6%. Offsetting these positive contributions was an increase in noninterest expense of $2.4 million, or 7.3%, and an increase to income tax expense of $1.9 million, or 46.3%. Pretax pre-provision earnings, a non-GAAP measure calculated by adding net interest income to noninterest income and subtracting noninterest expense, were $34.6 million in the first three months of 2026, an increase of $3.5 million, or 11.3%, compared to $31.0 million for the comparable period of 2025.

Return on average total equity was 13.89% in the first three months of 2026 versus 11.70% in the comparable period of 2025. Return on average total assets was 1.52% in the first three months of 2026 versus 1.20% for the comparable period of 2025. The Company's average equity to average assets ratio was 10.91% in the first three months of 2026 versus 10.29% in the comparable period of 2025.

The Company's tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, was 10.53% at March 31, 2026, compared to 10.09% at March 31, 2025 and 10.86% at December 31, 2025. Unrealized losses from available-for-sale investment securities were $154.5 million at March 31, 2026, compared to $188.3 million at March 31, 2025 and $143.3 million at December 31, 2025. When excluding the impact of accumulated other comprehensive income (loss) ("AOCI") on tangible common equity and tangible assets, the Company's adjusted tangible common equity to adjusted tangible assets ratio, which is a non-GAAP financial measure, was 12.20% at March 31, 2026, compared to 12.19% at March 31, 2025 and 12.45% at December 31, 2025.

Total assets were $7.084 billion as of March 31, 2026 versus $6.990 billion as of December 31, 2025, an increase of $93.7 million, or 1.3%. Balance sheet expansion was driven by increases to total loans, net of the allowance for credit losses, which increased $98.1 million, or 1.8%, and cash and cash equivalents, which increased $10.0 million, or 7.1%. These increases were offset by a decrease to available-for-sale securities of $25.1 million, or 2.4% The balance sheet expansion from December 31, 2025 to March 31, 2026 was funded by an increase in total deposits of $216.9 million, or 3.6%, and was offset by a decrease in borrowings of $116.0 million, or 63.0%. Total equity decreased $13.5 million, or 1.8%, from $762.5 million at December 31, 2025 to $749.0 million at March 31, 2026. The decrease to total equity was primarily attributable to an increase in treasury stock of $19.3 million, or 53.8%, driven by the Company's utilization of the share repurchase program, and a decrease in accumulated other comprehensive income (loss) of $8.5 million, contributed further to the decline in total equity. Offsetting these reductions to total equity was an increase in retained earnings of $13.3 million, or 1.7%, primarily as a result of net income of $26.5 million less dividends declared and paid of $13.2 million. The combined effect of the repurchase activity under the share repurchase program and dividends paid during the quarter represented a total return of capital to Company shareholders of $32.4 million.

**CRITICAL ACCOUNTING POLICIES**

The Company's accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Certain of the Company's accounting policies are important to the portrayal of the Company's financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Some of the facts and circumstances which could affect these judgments include changes in interest rates, in the performance of the economy or in the financial condition of borrowers. Management believes that its critical accounting policies include determining the allowance for credit losses. See "Note 4 – Allowance for Credit Losses and Credit Quality" for more information on this critical accounting policy.

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**RESULTS OF OPERATIONS**

**Overview**

Selected income statement information for the three months ended March 31, 2026 and 2025 is presented in the following table:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <u>(dollars in thousands)</u> | **2026** | 2025 |
| Income Statement Summary: |  |  |
| &nbsp;&nbsp;Net interest income (A) | $**56773** | $52875 |
| &nbsp;&nbsp;Provision for credit losses | **2000** | 6800 |
| &nbsp;&nbsp;Noninterest income (B) | **12933** | 10928 |
| &nbsp;&nbsp;Noninterest expense (C) | **35151** | 32763 |
| Other Data: |  |  |
| &nbsp;&nbsp;Efficiency ratio (1) | **50.43%** | 51.35% |
| &nbsp;&nbsp;Diluted EPS | $**1.04** | $0.78 |
| &nbsp;&nbsp;Average Equity/Average Assets | **10.91%** | 10.29% |
| &nbsp;&nbsp;Tangible capital ratio (2) | **10.53** | 10.09 |
| &nbsp;&nbsp;Adjusted tangible capital ratio (3) | **12.20** | 12.19 |
| &nbsp;&nbsp;Net charge-offs to average loans | **0.16** | 0.03 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest margin | **3.49** | 3.40 |
| &nbsp;&nbsp;Noninterest income to total revenue | **18.55** | 17.13 |
| &nbsp;&nbsp;Pretax pre-provision earnings (4) | $**34555** | $31040 |

---

(1)Noninterest expense (C) / (Net interest income (A) + Noninterest income (B)) = Efficiency Ratio

(2)Non-GAAP financial measure. Calculated by subtracting intangible assets, net of deferred tax, from total assets and total equity. Management believes this is an important measure because it is useful for planning and forecasting purposes. See reconciliation on the following pages.

(3)Non-GAAP financial measure. Calculated by removing the fair market value adjustment impact of the available-for-sale investment securities portfolio included in accumulated other comprehensive income (loss) ("AOCI") from tangible equity and tangible assets. Management believes this is an important measure because it provides better comparability to periods preceding the cycle of monetary policy tightening from 2022 and 2023 and demonstrates the Company's longer-term trend in capital strength. See reconciliation on the following pages.

(4)Non-GAAP financial measure. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Management believes this is an important measure because it may enable investors to identify the trends in the Company's earnings exclusive of the effects of tax and provision expense, which may vary significantly from period to period. See reconciliation on the following pages.

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The Company believes that providing non-GAAP financial measures provides investors with information useful to understanding the Company's financial performance.

Tangible common equity, adjusted tangible common equity, tangible assets, adjusted tangible assets, tangible book value per common share, tangible common equity to tangible assets, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings are non-GAAP financial measures calculated based on GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio in accumulated other comprehensive income (loss) ("AOCI"). Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the Company's value meaningful to understanding of the Company's financial information and performance.

A reconciliation of these non-GAAP financial measures is provided below.

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| | | |
|:---|:---|:---|
| | **As of and For The** | **As of and For The** |
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <u>(dollars in thousands, except per share data)</u> | **2026** | 2025 |
| Total Equity | $**748993** | $694509 |
| Less: Goodwill | **(4970)** | (4970) |
| Plus: Deferred Tax Assets Related to Goodwill | **1167** | 1167 |
| Tangible Common Equity (A) | **745190** | 690706 |
| Market Value Adjustment in AOCI | **135106** | 163879 |
| Adjusted Tangible Common Equity (C) | **880296** | 854585 |
| Total Assets | $**7083680** | $6851178 |
| Less: Goodwill | **(4970)** | (4970) |
| Plus: Deferred Tax Assets Related to Goodwill | **1167** | 1167 |
| Tangible Assets (B) | **7079877** | 6847375 |
| Market Value Adjustment in AOCI | **135106** | 163879 |
| Adjusted Tangible Assets (D) | **7214983** | 7011254 |
| Ending Common Shares Issued (E) | **25098219** | 25727393 |
| Tangible Book Value per Common Share (A/E) | $**29.69** | $26.85 |
| Tangible Capital Ratio (A/B) | **10.53%** | 10.09% |
| Adjusted Tangible Capital Ratio (C/D) | **12.20%** | 12.19% |
| Net Interest Income | $**56773** | $52875 |
| Plus: Noninterest Income | **12933** | 10928 |
| Minus: Noninterest Expense | **(35151)** | (32763) |
| Pretax Pre-Provision Earnings | $**34555** | $31040 |

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**Net Income**

Net income was $26.5 million in the first three months of 2026, which increased $6.4 million, or 31.8%, from $20.1 million for the comparable period of 2025. Diluted earnings per common share was $1.04 in the first three months of 2026, an increase of 33.3% from $0.78 in the comparable period of 2025. The increase in net income for the first three months of 2026 was primarily due to an increase to net interest income of $3.9 million, or 7.4%, an increase to noninterest income of $2.0 million, or 18.3%, and a decrease in the provision for credit losses of $4.8 million, or 70.6%. Offsetting these positive contributions was an increase in noninterest expense of $2.4 million, or 7.3%, and an increase to income tax expense of $1.9 million, or 46.3%.

**Net Interest Income**

The following tables set forth consolidated information regarding average balances and rates:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| | **2026** | **2026** | **2026** | 2025 | 2025 | 2025 |
| (fully tax equivalent basis, dollars in thousands) | **Average Balance** | **Interest Income** | **Yield (1)/<br>Rate** | Average Balance | Interest Income | **Yield (1)/<br>Rate** |
| Earning Assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable (2)(3) | $**5417380** | $**83111** | **6.22%** | $5160031 | $81740 | 6.42% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax exempt (1) | **23496** | **346** | **5.98** | 25887 | 361 | 5.66 |
| &nbsp;&nbsp;&nbsp;Investments: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities (1) | **1190278** | **8786** | **2.99** | 1136404 | 8338 | 2.98 |
| &nbsp;&nbsp;&nbsp;Short-term investments | **2701** | **21** | **3.15** | 2964 | 28 | 3.83 |
| &nbsp;&nbsp;&nbsp;Interest bearing deposits | **95539** | **828** | **3.51** | 105518 | 1096 | 4.21 |
| Total earning assets | $**6729394** | $**93092** | **5.61%** | $6430804 | $91563 | 5.77% |
| Less: Allowance for credit losses | **(68944)** |  |  | (87477) |  |  |
| Nonearning Assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and due from banks | **67282** |  |  | 71004 |  |  |
| &nbsp;&nbsp;&nbsp;Premises and equipment | **65997** |  |  | 60523 |  |  |
| &nbsp;&nbsp;&nbsp;Other nonearning assets | **288484** |  |  | 288116 |  |  |
| Total assets | $**7082213** |  |  | $6762970 |  |  |
| Interest Bearing Liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Savings deposits | $**287643** | $**41** | **0.06%** | $283888 | $42 | 0.06% |
| &nbsp;&nbsp;&nbsp;Interest bearing checking accounts | **3686666** | **26110** | **2.87** | 3486447 | 28075 | 3.27 |
| &nbsp;&nbsp;&nbsp;Time deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;In denominations under $100,000 | **201974** | **1548** | **3.11** | 212934 | 1832 | 3.49 |
| &nbsp;&nbsp;&nbsp;&nbsp;In denominations over $100,000 | **644717** | **5732** | **3.61** | 633112 | 6509 | 4.17 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | **182423** | **1783** | **3.96** | 99830 | 1122 | 4.56 |
| &nbsp;&nbsp;&nbsp;Long-term borrowings | **1200** | **0** | **0.00** | 254 | 0 | 0.00 |
| Total interest bearing liabilities | $**5004623** | $**35214** | **2.85%** | $4716465 | $37580 | 3.23% |
| Noninterest Bearing Liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Demand deposits | **1234539** |  |  | 1258344 |  |  |
| &nbsp;&nbsp;&nbsp;Other liabilities | **70105** |  |  | 92108 |  |  |
| Stockholders' Equity | **772946** |  |  | 696053 |  |  |
| Total liabilities and stockholders' equity | $**7082213** |  |  | $6762970 |  |  |
| Interest Margin Recap |  |  |  |  |  |  |
| Interest income/average earning assets |  | **93092** | **5.61%** |  | 91563 | 5.77% |
| Interest expense/average earning assets |  | **35214** | **2.12** |  | 37580 | 2.37 |
| Net interest income and margin |  | $**57878** | **3.49%** |  | $53983 | 3.40% |

---

(1)Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 included the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustment was $1.1 million for the three-month periods ended March 31, 2026 and 2025.

(2)Loan fees, which are immaterial in relation to total taxable loan interest income for the three months ended March 31, 2026 and 2025, are included as taxable loan interest income.

(3)Nonaccrual loans are included in the average balance of taxable loans.

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Net interest income, on a fully tax equivalent basis, increased $3.9 million, or 7.2%, to $57.9 million for the three months ended March 31, 2026, compared to $54.0 million for the first three months of 2025. The increase in net interest income on a fully tax equivalent basis was driven by a decrease in deposit interest expense of $3.0 million, or 8.3%, from $36.5 million to $33.4 million. Securities interest income contributed further to the increase in fully tax equivalent net interest income, increasing by $448,000, or 5.4%. Loan interest income increased by $1.4 million, or 1.7%, as an increase in average loans offset decreased average yields. Borrowings expense increased by $661,000, or 58.9%.

Total average earning assets were $6.729 billion for the three months ended March 31, 2026, an increase of $298.6 million, or 4.6%, compared to $6.431 billion for the three months ended March 31, 2025. Average loans outstanding drove the increase to total average earning assets, increasing $255.0 million, or 4.9%, to $5.441 billion from $5.186 billion for the three months ended March 31, 2026 and 2025, respectively. Average investment securities increased $53.9 million, or 4.7%, to $1.190 billion from $1.136 billion between the respective periods. Total average interest bearing liabilities were $5.005 billion for the three months ended March 31, 2026, an increase of $288.2 million, or 6.1%, from $4.716 billion for the three months ended March 31, 2025. This increase was driven by growth in average interest bearing deposits of $204.6 million, or 4.4%, from $4.616 billion for the three months ended March 31, 2025 to $4.821 billion for the three months ended March 31, 2026. Average short-term borrowings increased by $82.6 million, or 82.7% between the respective periods. Noninterest bearing demand deposits decreased $23.8 million, or 1.9%, to $1.235 billion from $1.258 billion between the two periods.

The tax equivalent net interest margin was 3.49% for the three months ended March 31, 2026, compared to 3.40% during the first three months of 2025, representing a 9 basis point expansion between the two periods. The net interest margin increase was primarily driven by a decrease to interest expense as a percentage of average earning assets, which decreased to 2.12% for the three months ended March 31, 2026, down from 2.37% for the comparable period of 2025, or a decrease of 25 basis points. This decline was attributable to a decrease in the rate for total interest bearing liabilities of 38 basis points from 3.23% to 2.85% between the respective periods. These decreases were driven by reduced costs associated with the repricing of the Company's interest bearing deposits and borrowings as a result of monetary policy easing from the Federal Reserve Bank. Contributing further to the reduction in the rate for interest bearing liabilities was a reduction in the average borrowings rate, which declined 60 basis points from 4.54% to 3.94%.

The improvement in interest expense as a percentage of average earning assets was offset by a 16 basis point reduction in interest income as a percentage of average earning assets, which declined from 5.77% to 5.61%. This decrease was primarily attributable to a decline in average loan yields, which decreased 20 basis points to 6.22% for the three months ended March 31, 2026, down from 6.42% for the comparable period of 2025.

**Provision for Credit Losses**

The Company recorded provision for credit losses expense of $2.0 million for the three months ended March 31, 2026, compared to provision expense of $6.8 million during the comparable period of 2025, a decrease of $4.8 million, or 70.6%. Net charge-offs were $2.1 million during the three month period ended March 31, 2026, compared to $327,000 during the comparable period of 2025, an increase of $1.8 million. The decrease in provision expense between the respective periods was attributable to the allocation of reserves to a previously disclosed nonperforming credit during the first quarter of 2025.

Additional factors considered by management in determining provision expense included key loan quality metrics, reserve coverage of nonperforming loans, economic conditions in the Company's markets, and changes in the facts and circumstances of watch list credits, which includes the security position of the borrower. Management's overall view on current credit quality was also a factor in the determination of the provision for credit losses. The Company's management continues to monitor the adequacy of the provision based on loan levels, asset quality, economic conditions and other factors that may influence the assessment of the collectability of loans.

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**Noninterest Income**

Noninterest income categories for the three months ended March 31, 2026 and 2025 are shown in the following tables:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
| <u>(dollars in thousands)</u> | **2026** | 2025 | Dollar Change | Percent Change |
| Wealth advisory fees | $**3063** | $2867 | $196 | 6.8% |
| Investment brokerage fees | **524** | 452 | 72 | 15.9 |
| Service charges on deposit accounts | **2874** | 2774 | 100 | 3.6 |
| Loan and service fees | **3207** | 2884 | 323 | 11.2 |
| Merchant and interchange fee income | **777** | 822 | (45) | (5.5) |
| Bank owned life insurance income | **976** | 322 | 654 | 203.1 |
| Interest rate swap fee income | **701** | 0 | 701 | 100.0 |
| Mortgage banking income (loss) | **81** | (51) | 132 | (258.8) |
| Other income | **730** | 858 | (128) | (14.9) |
| &nbsp;&nbsp;&nbsp;Total noninterest income | $**12933** | $10928 | $2005 | 18.3% |
| Noninterest income to total revenue | **18.55%** | 17.13% |  |  |

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Noninterest income increased $2.0 million, or 18.3%, to $12.9 million for the first quarter of 2026, compared to $10.9 million for the first quarter of 2025. Loan and service fees income increased $323,000, or 11.2%, driven by increased commercial loan fees. Wealth advisory fees increased $196,000, or 6.8%, driven by continued growth in customers and assets under management. Investment brokerage fees increased $72,000, or 15.9%, due to increased volume and commissions on product mix. Bank owned life insurance income increased $654,000, or 203.1%, from improved market performance of the Bank's variable owned life insurance policies, which reflect returns in the equity markets, as well as incremental income from policies purchased in 2025. Interest rate swap fee income was $701,000 for the first quarter of 2026, which is borrower and market driven. Offsetting these increases was a decrease to other income of $128,000, or 14.9%, primarily driven by reduced limited partnership investment income.

**Noninterest Expense**

Noninterest expense categories for the three months ended March 31, 2026 and 2025 are shown in the following tables:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
| <u>(dollars in thousands)</u> | **2026** | 2025 | Dollar Change | Percent Change |
| Salaries and employee benefits | $**20295** | $17902 | $2393 | 13.4% |
| Net occupancy expense | **2104** | 1980 | 124 | 6.3 |
| Equipment costs | **1464** | 1382 | 82 | 5.9 |
| Data processing fees and supplies | **4259** | 4265 | (6) | (0.1) |
| Corporate and business development | **1493** | 1406 | 87 | 6.2 |
| FDIC insurance and other regulatory fees | **873** | 800 | 73 | 9.1 |
| Professional fees | **1937** | 2380 | (443) | (18.6) |
| Other expense | **2726** | 2648 | 78 | 2.9 |
| &nbsp;&nbsp;&nbsp;Total noninterest expense | $**35151** | $32763 | $2388 | 7.3% |
| Efficiency ratio | **50.43%** | 51.35% |  |  |

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Noninterest expense increased $2.4 million, or 7.3%, to $35.2 million for the first quarter of 2026, compared to $32.8 million during the first quarter of 2025. Salaries and employee benefits expense increased by $2.4 million, or 13.4%, primarily the result of increased salaries and wages, performance-based incentive pay, and employee benefits expenses. Net occupancy expense increased $124,000, or 6.3%, and equipment costs increased $82,000, or 5.9%, from the Company's continued expansion and reinvestment into its physical branch network. Corporate and business development expense increased $87,000, or 6.2%, and FDIC insurance and other regulatory fees increased $73,000, or 9.1%. Offsetting these increases was a decrease in professional fees of $443,000, or 18.6%, driven by reduced technology implementation fees incurred during the quarter.

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The Company's income tax expense increased $1.9 million, or 46.3%, to $6.1 million in the three months ended March 31, 2026, compared to $4.2 million for the same period in 2025. The effective tax rate was 18.7% in the three months ended March 31, 2026, compared to 17.1% for the comparable period of 2025, driven by lower tax-free interest income on loans.

**FINANCIAL CONDITION**

**Overview**

Total assets were $7.084 billion as of March 31, 2026 versus $6.990 billion as of December 31, 2025, an increase of $93.7 million, or 1.3%. Balance sheet expansion was driven by increases to total loans, net of the allowance for credit losses, which increased $98.1 million, or 1.8%, and cash and cash equivalents, which increased $10.0 million, or 7.1%. These increases were offset by a decrease to available-for-sale securities of $25.1 million, or 2.4% The balance sheet expansion from December 31, 2025 to March 31, 2026 was funded by an increase in total deposits of $216.9 million, or 3.6%, and was offset by a decrease in borrowings of $116.0 million, or 63.0%. Total equity decreased $13.5 million, or 1.8%, from $762.5 million at December 31, 2025 to $749.0 million at March 31, 2026. The decrease to total equity was primarily attributable to an increase in treasury stock of $19.3 million, or 53.8%, driven by the Company's utilization of the share repurchase program. A decrease in accumulated other comprehensive income (loss) of $8.5 million contributed further to the decline in total equity. Offsetting these reductions to total equity was an increase in retained earnings of $13.3 million, or 1.7%, primarily as a result of net income of $26.5 million less dividends declared and paid of $13.2 million. The combined effect of the repurchase activity under the share repurchase program and dividends paid during the quarter represented a total return of capital to Company shareholders of $32.4 million.

**Uses of Funds**

**Total Cash and Cash Equivalents**

Total cash and cash equivalents increased by $10.0 million, or 7.1%, to $151.3 million at March 31, 2026, from $141.3 million at December 31, 2025. Cash and cash equivalents include short-term investments. The fluctuation in cash and cash equivalents at March 31, 2026 was driven by an increase in cash and due from banks of $8.6 million, or 15.0%, and an increase in interest bearing short-term investment accounts of $1.4 million, or 1.7%, which were deposited primarily at the Federal Reserve Bank of Chicago.

**Investment Portfolio**

The amortized cost and the fair value of securities as of March 31, 2026 and December 31, 2025 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | December 31, 2025 | December 31, 2025 |
| <u>(dollars in thousands)</u> | **Amortized<br>Cost** | **Fair<br>Value** | Amortized<br>Cost | Fair<br>Value |
| **Available-for-Sale** |  |  |  |  |
| &nbsp;&nbsp;U.S Treasury securities | $**15185** | $**15104** | $10117 | $10119 |
| &nbsp;&nbsp;U.S government sponsored agencies | **134037** | **113482** | 136772 | 115690 |
| &nbsp;&nbsp;Mortgage-backed securities: residential | **493336** | **440211** | 506734 | 454163 |
| &nbsp;&nbsp;State and municipal securities | **538933** | **458194** | 541694 | 472090 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total available-for-sale | $**1181491** | $**1026991** | $1195317 | $1052062 |
| **Held-to-Maturity** |  |  |  |  |
| &nbsp;&nbsp;State and municipal securities | $**133617** | $**114241** | $133208 | $117510 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Investment Portfolio | $**1315108** | $**1141232** | $1328525 | $1169572 |

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At March 31, 2026 and December 31, 2025, there were no holdings of securities of any one issuer, other than the U.S. government agencies and government sponsored entities, in an amount greater than 10% of stockholders' equity. Management is aware that the directional change in the fair value of the available-for-sale investment securities portfolio is inversely related to the directional movement of the interest rate environment, with the resulting impact being reflected in the unrealized gain (loss) of the available-for-sale investment securities portfolio. Since the majority of the bonds in the investment portfolio are fixed-rate, with only a few adjustable-rate bonds, we would expect our investment portfolio to follow this market value pattern.

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This is taken into consideration when evaluating the gain or loss of investment securities in the portfolio and the potential for an allowance for credit losses.

Purchases of available-for-sale securities were $5.1 million in the first three months of 2026. Investment securities represented 16.4% of total assets on March 31, 2026, compared to 17.0% of total assets on December 31, 2025. The Company anticipates receiving principal and interest cash flows of approximately $88.2 million during the remainder of 2026 from the investment securities portfolio and plans to use that liquidity to fund loan growth as well as to fund reinvestments to the investment securities portfolio. Tax equivalent adjusted effective duration for the investment securities portfolio was 6.0 years at March 31, 2026 and 5.9 years at December 31, 2025. Paydowns from prepayments and scheduled payments of $18.1 million were received in the first three months of 2026, and the amortization of premiums, net of the accretion of discounts, was $870,000. There were no sales of available-for-sale investment securities in the first three months of 2026. No allowance for credit losses was recognized for available-for-sale or held-to-maturity securities as of March 31, 2026 and December 31, 2025.

The fair value of the available-for-sale investment securities portfolio as of March 31, 2026 included net unrealized losses of $154.5 million, compared to net unrealized losses of $143.3 million as of December 31, 2025. Unrealized losses in the available-for-sale investment securities portfolio are generally attributable to market value declines experienced during the rate tightening cycle of 2022 and 2023. Increases in the 10-year Treasury rate during the first quarter of 2026 increased unrealized losses in the investment securities portfolio.

The investment portfolio is managed by a third-party firm to provide for an appropriate balance between liquidity, credit risk, interest rate risk management and investment return and to limit the Company's exposure to credit risk in the investment securities portfolio. The Company does not trade or invest in or sponsor certain unregistered investment companies defined as hedge funds and private equity funds under what is commonly referred to as the "Volcker Rule" of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

**Real Estate Mortgage Loans Held-for-Sale**

Real estate mortgage loans held-for-sale decreased by $1.6 million, or 59.9%, to $1.1 million at March 31, 2026, from $2.7 million at December 31, 2025. The balance of this asset category is subject to a high degree of variability depending on, among other factors, recent mortgage loan rates and the timing of loan sales into the secondary market. The Company generally sells conforming qualifying mortgage loans it originates on the secondary market. Proceeds from sales of residential mortgages totaled $4.8 million in the first three months of 2026, compared to $3.0 million in the first three months of 2025. Management expects the volume of loans originated for sale in the secondary market to increase if long-term interest rates decline from current levels. Demand for mortgage loans has been impacted by elevated interest rates, limited housing inventory and existing home owners locked in at historically low rates. Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others were $290.4 million and $294.5 million, as of March 31, 2026 and December 31, 2025, respectively.

**Loan Portfolio**

The loan portfolio by portfolio segment as of March 31, 2026 and December 31, 2025 is summarized as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31,<br>2026** | **March 31,<br>2026** | **December 31,<br>2025** | **December 31,<br>2025** | Current Period Change |
| Commercial and industrial loans | $**1578776** | **28.9%** | $1553689 | 28.9% | $25087 |
| Commercial real estate and multi-family residential loans | **2740335** | **50.1** | 2666515 | 49.5 | 73820 |
| Agri-business and agricultural loans | **374081** | **6.8** | 406856 | 7.6 | (32775) |
| Other commercial loans | **95764** | **1.7** | 97381 | 1.8 | (1617) |
| Consumer 1-4 family mortgage loans | **570753** | **10.4** | 537192 | 10.0 | 33561 |
| Other consumer loans | **116158** | **2.1** | 116224 | 2.2 | (66) |
| &nbsp;&nbsp;&nbsp;Subtotal, gross loans | **5475867** | **100.0%** | 5377857 | 100.0% | 98010 |
| Less: Allowance for credit losses | **(68914)** |  | (68995) |  | 81 |
| &nbsp;&nbsp;&nbsp;Net deferred loan fees | **(2509)** |  | (2508) |  | (1) |
| Loans, net | $**5404444** |  | $5306354 |  | $98090 |

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Total net loans, excluding real estate mortgage loans held-for-sale, increased by $98.1 million, or 1.8%, to $5.404 billion at March 31, 2026 from $5.306 billion at December 31, 2025. The increase was primarily driven by originations of loans concentrated in the commercial and industrial loans, commercial real estate and multi-family residential loans and consumer 1-4 family mortgage loans categories and was offset by paydowns in the agri-business and agricultural loans segment, which traditionally experiences seasonal fluctuations in activity.

The following table summarizes the Company's non-performing assets, excluding deferred fees and costs, as of March 31, 2026 and December 31, 2025:

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| | | |
|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31,<br>2026** | December 31,<br>2025 |
| Nonaccrual loans | $**20909** | $20872 |
| Loans past due over 90 days and still accruing | **7** | 7 |
| Total nonperforming loans | **20916** | 20879 |
| Other real estate owned | **0** | 0 |
| Repossessions | **22** | 47 |
| Total nonperforming assets | $**20938** | $20926 |
| Individually analyzed loans | $**43160** | $43024 |
| Nonperforming loans to total loans | **0.38%** | 0.39% |
| Nonperforming assets to total assets | **0.30%** | 0.30% |

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Total nonperforming assets increased by $12,000, or 0.1%, to $20.9 million during the three month period ended March 31, 2026. The ratio of nonperforming assets to total assets remained at 0.30% as of December 31, 2025 and March 31, 2026.

A loan is individually analyzed when full payment under the original loan terms is not expected. The analysis for smaller loans that are similar in nature and which are not in nonaccrual or modified status, such as residential mortgage, consumer, and credit card loans, is determined based on the class of loans. If a loan is individually analyzed, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows or at the fair value of collateral if repayment is expected solely from the collateral. Total individually analyzed loans increased by $136,000, or 0.3%, to $43.2 million at March 31, 2026 from $43.0 million at December 31, 2025.

Loans are charged against the allowance for credit losses when management believes that the principal is uncollectible. Subsequent recoveries, if any, are credited to the allowance. The allowance is an amount that management believes will be adequate to absorb current expected credit losses relating to specifically identified loans based on an evaluation of the loans by management, as well as other current expected losses in the loan portfolio. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans and current economic conditions that may affect the borrower's ability to repay. Management also considers trends in adversely classified loans based upon a monthly review of those credits. General allowance is determined after considering the following factors: application of loss percentages using a probability of default/loss given default approach subject to a floor, emerging market risk, commercial loan focus and large credit concentrations, new industry lending activity and current economic conditions. Federal regulations require insured institutions to classify their own assets on a regular basis. The regulations provide for three categories of classified loans: Substandard, Doubtful and Loss. The regulations also contain a Special Mention category. Special Mention applies to loans that do not currently expose an insured institution to a sufficient degree of risk to warrant classification as Substandard, Doubtful or Loss but do possess credit deficiencies or potential weaknesses deserving management's close attention. The Company's policy is to establish a specific allowance for credit losses for any assets where management has identified conditions or circumstances that indicate an asset is nonperforming. If an asset or portion thereof is classified as a loss, the Company's policy is to either establish specified allowances for credit losses in the amount of 100% of the portion of the asset classified loss or charge-off such amount.

At March 31, 2026, the allowance for credit losses was 1.26% of total loans, a decrease of 2 basis points from 1.28% at December 31, 2025. At March 31, 2026, management believed the allowance for credit losses was at a level commensurate with the overall risk exposure of the loan portfolio. However, if economic conditions deteriorate, certain borrowers may

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experience difficulty and the level of nonperforming loans, charge-offs and delinquencies could rise and require increases in the allowance for credit losses. The process of identifying credit losses is a subjective process.

The Company has a relatively high percentage of commercial and commercial real estate loans, which are extended to businesses with a broad range of revenue and within a wide variety of industries. Traditionally, this type of lending may have more credit risk than other types of lending because of the size and diversity of the credits. The Company manages this risk by utilizing relatively conservative credit structures, by adjusting its pricing to the perceived risk of each individual credit and by diversifying the portfolio by customer, product, industry and market area. The Company has limited exposure to commercial office space borrowers, all of which are located in the Bank's Indiana markets. Loans totaling $103.6 million for this sector represented 1.9% of total loans at March 31, 2026. Additionally, commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 214.9% of the Bank's risk-based capital at March 31, 2026. The Company continues to monitor the impact of tariffs on its borrowers.

As of March 31, 2026, based on management's review of the loan portfolio, the Company had 95 credit relationships with principal balances totaling $182.3 million on the classified loan list versus 96 credit relationships with principal balances totaling $184.0 million as of December 31, 2025. As of March 31, 2026, the Company $132.7 million of assets classified as Special Mention, $49.5 million classified as Substandard, $73,000 classified as Doubtful and $0 classified as Loss as compared to $134.0 million, $50.0 million, $74,000 and $0, respectively, at December 31, 2025. The amounts by grade in "Note 4 - Allowance for Credit Losses and Credit Quality" are reported at amortized cost and include deferred fees and costs. Watch list loans as a percentage of total loans were 3.33% as of March 31, 2026, down 9 basis points from 3.42% at December 31, 2025.

Allowance estimates are developed by management after taking into account actual loss experience adjusted for current economic conditions and a reasonably supportable forecast period. The Company has annual discussions regarding this methodology with regulatory authorities. Allowance estimates are considered a prudent measurement of the risk in the Company's loan portfolio based upon loan segment. In accordance with applicable accounting guidance, the allowance is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. For a more thorough discussion of the allowance for credit losses methodology see the "Critical Accounting Policies" section of this Item 2.

The allowance for credit losses decreased $81,000, or 0.1%, from $69.0 million at December 31, 2025 to $68.9 million at March 31, 2026. The decrease was primarily driven by net charge offs of $2.1 million, offset by provision for credit losses of $2.0 million. Net charge offs for the three months ended March 31, 2026 were primarily driven by a $2.0 million charge off to one commercial credit. As the bulk of the Company's lending activity is concentrated in the commercial loan portfolio, which can result in overall asset quality being influenced by a small number of credits, management has historically considered growth and portfolio composition when determining credit loss allocations.

**Sources of Funds**

The Company's sources of funds include a diversified deposit base gathered throughout the Company's footprint and includes a growing mix of commercial, retail and public funds deposit accounts. While the traditional base of core deposits represents the primary source of funding for the Company, the Company has access to a robust array of other liquidity sources, including secured borrowings available from the Federal Home Loan Bank and the Federal Reserve Bank Discount Window. In addition, the Company has access to unsecured borrowing capacity through long established relationships within the brokered deposit markets, Federal Funds lines from correspondent bank partners and Insured Cash Sweep (ICS) one-way buy funds available from the Intrafi network. As of March 31, 2026, the Company had access to $3.312 billion in unused liquidity available from these aggregate sources as compared to $3.526 billion at December 31, 2025.

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The average daily deposits and borrowings together with average rates paid on those deposits and borrowings for the three months ended March 31, 2026 and 2025 are summarized in the following table:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended March 31,** | **Three months ended March 31,** | **Three months ended March 31,** | **Three months ended March 31,** |
| | **2026** | **2026** | 2025 | 2025 |
| <u>(dollars in thousands)</u> | **Balance** | **Rate** | Balance | Rate |
| Noninterest bearing demand deposits | $**1234539** | **0.00%** | $1258344 | 0.00% |
| Savings and transaction accounts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Savings deposits | **287643** | **0.06** | 283888 | 0.06 |
| &nbsp;&nbsp;&nbsp;Interest bearing demand deposits | **3686666** | **2.87** | 3486447 | 3.27 |
| Time deposits: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits of $100,000 or more | **644717** | **3.61** | 633112 | 4.17 |
| &nbsp;&nbsp;&nbsp;Other time deposits | **201974** | **3.11** | 212934 | 3.49 |
| Total deposits | $**6055539** | **2.24%** | $5874725 | 2.52% |
| FHLB advances and other borrowings | **183623** | **3.94%** | 100084 | 4.54% |
| Total funding sources | $**6239162** | **2.29%** | $5974809 | 2.55% |

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Average total deposits were $6.056 billion for the three months ended March 31, 2026, an increase of $180.8 million, or 3.1%, from the comparable period in 2025. Average total borrowings were $183.6 million for the three months ended March 31, 2026, an increase of $83.5 million, or 83.5%, from the comparable period in 2025. Total average deposit costs decreased 28 basis points from 2.52% for the three months ended March 31, 2025, to 2.24% for the three months ended March 31, 2026. Total average borrowing costs decreased 60 basis points from 4.54% for the three months ended March 31, 2025 to 3.94% for the three months ended March 31, 2026. As a result, the total cost of funding sources decreased by 26 basis points from 2.55% for the three months ended March 31, 2025, to 2.29% for the three months ended March 31, 2026. The decrease in the cost of funding sources between the two periods was attributable to easing of monetary policy by the Federal Reserve Bank which allowed deposit costs to reprice to lower levels and reduced average rates for borrowings.

**Deposits and Borrowings**

As of March 31, 2026, total deposits increased by $216.9 million, or 3.6%, from December 31, 2025. Core deposits, which excludes brokered deposits, decreased by $108.1 million, or 1.8%, to $5.815 billion as of March 31, 2026 from $5.923 billion as of December 31, 2025. Total brokered deposits were $375.6 million at March 31, 2026, compared to $50.6 million at December 31, 2025, an increase of $325.0 million, or 642.7%.

The following table summarizes deposit composition at March 31, 2026 and December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | **March 31,<br>2026** | **Percentage of Total** | December 31,<br>2025 | Percentage of Total | Current <br>Period <br>Change |
| Retail | $**1800420** | **29.1%** | $1763452 | 29.5% | $36968 |
| Commercial | **2136404** | **34.5** | 2179999 | 36.5 | (43595) |
| Public funds | **1877855** | **30.3** | 1979327 | 33.2 | (101472) |
| Core deposits | $**5814679** | **93.9%** | $5922778 | 99.2% | $(108099) |
| Brokered deposits | **375581** | **6.1** | 50572 | 0.8 | 325009 |
| Total deposits | $**6190260** | **100.0%** | $5973350 | 100.0% | $216910 |

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On March 31, 2026, commercial deposits represented 34.5% of total deposits versus 36.5% at December 31, 2025. Retail deposits represented 29.1% at March 31, 2026 versus 29.5% at December 31, 2025. Public Funds deposits represented 30.3% at March 31, 2026 versus 33.2% at December 31, 2025. Brokered deposits represented 6.1% of total deposits at March 31, 2026 versus 0.8% at December 31, 2025. Commercial deposits contracted $43.6 million, or 2.0%, from $2.180 billion at December 31, 2025 to $2.136 billion at March 31, 2026; public funds deposits contracted $101.5 million, or 5.1%, from $1.979 billion at December 31, 2025 to $1.878 billion at March 31, 2026, due to seasonal fluctuations in public funds balances; and retail deposits expanded $37.0 million, or 2.1%, from $1.763 billion at December 31, 2025 to $1.800 billion at March 31, 2026.

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Deposits not covered by FDIC deposit insurance were 55.1% as of March 31, 2026, versus 59.1% at December 31, 2025. Deposits not covered by FDIC deposit insurance or the Indiana Public Deposit Insurance Fund, which insures public fund deposits in Indiana, were 25.0% of total deposits as of March 31, 2026, versus 26.0% as of December 31, 2025. As of March 31, 2026 and December 31, 2025, 97.9% and 97.8% of deposit accounts had deposit balances less than $250,000, respectively.

**Capital**

As of March 31, 2026, total stockholders' equity was $749.0 million, a decrease of $13.5 million, or 1.8%, from $762.5 million at December 31, 2025. The decrease to total stockholders' equity was driven by an increase in treasury stock of $19.3 million, or 53.8%, from utilization of the Company's share repurchase program and a reduction of $8.5 million in accumulated other comprehensive income (loss). Offsetting these decreases was net income of $26.5 million less dividends declared and paid of $13.2 million for a $13.3 million increase to retained earnings. The combined effect of the repurchase activity under the share repurchase program and dividends paid during the quarter represented a total return of capital to Company shareholders of $32.6 million.

The impact on equity for other comprehensive income (loss) is not included in regulatory capital. The banking regulators have established guidelines for leverage capital requirements, expressed in terms of Tier 1, or core capital, as a percentage of average assets, to measure the soundness of a financial institution. In addition, banking regulators have established risk-based capital guidelines for U.S. banking organizations. As of March 31, 2026, the Company's capital levels remained characterized as "well-capitalized".

The actual capital amounts and ratios of the Company and the Bank as of March 31, 2026 and December 31, 2025, are presented in the table below. Capital ratios for March 31, 2026 are preliminary until the Call Report and FR Y-9C are filed.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Actual** | **Actual** | **Minimum Required For Capital Adequacy Purposes** | **Minimum Required For Capital Adequacy Purposes** | **For Capital Adequacy Purposes Plus Capital Conservation Buffer** | **For Capital Adequacy Purposes Plus Capital Conservation Buffer** | **Minimum Required to Be Well Capitalized Under Prompt Corrective Action Regulations** | **Minimum Required to Be Well Capitalized Under Prompt Corrective Action Regulations** |
| <u>(dollars in thousands)</u> | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| As of March 31, 2026: |  |  |  |  |  |  |  |  |
| Total Capital (to Risk Weighted Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $**948558** | **15.58%** | $**487032** | **8.00%** | $**639229** | **N/A** | **N/A** | **N/A** |
| &nbsp;&nbsp;&nbsp;Bank | $**958486** | **15.76%** | $**486535** | **8.00%** | $**638578** | **10.50%** | $**608169** | **10.00%** |
| Tier I Capital (to Risk Weighted Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $**879555** | **14.45%** | $**365274** | **6.00%** | $**517471** | **N/A** | **N/A** | **N/A** |
| &nbsp;&nbsp;&nbsp;Bank | $**889484** | **14.63%** | $**364902** | **6.00%** | $**516944** | **8.50%** | $**486535** | **8.00%** |
| Common Equity Tier 1 (CET1) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $**879555** | **14.45%** | $**273955** | **4.50%** | $**426153** | **N/A** | **N/A** | **N/A** |
| &nbsp;&nbsp;&nbsp;Bank | $**889484** | **14.63%** | $**273676** | **4.50%** | $**425718** | **7.00%** | $**395310** | **6.50%** |
| Tier I Capital (to Average Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $**879555** | **12.20%** | $**288420** | **4.00%** | $**288420** | **N/A** | **N/A** | **N/A** |
| &nbsp;&nbsp;&nbsp;Bank | $**889484** | **12.35%** | $**288160** | **4.00%** | $**288160** | **4.00%** | $**360200** | **5.00%** |
| As of December 31, 2025: |  |  |  |  |  |  |  |  |
| Total Capital (to Risk Weighted Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $953653 | 15.92% | $479188 | 8.00% | $628934 | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $960393 | 16.05% | $478735 | 8.00% | $628339 | 10.50% | $598419 | 10.00% |
| Tier I Capital (to Risk Weighted Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $884569 | 14.77% | $359391 | 6.00% | $509137 | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $891310 | 14.89% | $359051 | 6.00% | $508656 | 8.50% | $478735 | 8.00% |
| Common Equity Tier 1 (CET1) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $884569 | 14.77% | $269543 | 4.50% | $419289 | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $891310 | 14.89% | $269288 | 4.50% | $418893 | 7.00% | $388972 | 6.50% |
| Tier I Capital (to Average Assets) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consolidated | $884569 | 12.39% | $285531 | 4.00% | $285531 | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $891310 | 12.50% | $285290 | 4.00% | $285290 | 4.00% | $356612 | 5.00% |

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**FORWARD-LOOKING STATEMENTS**

This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward-looking statements, within the meaning of such term in the federal securities law. Forward-looking statements are not historical facts and are generally identifiable by the use of words such as "believe," "expect," "anticipate," "project," "possible," "continue," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of future economic, business and market conditions and changes, particularly in but not limited to our Indiana market area, including prevailing interest rates, the rate of inflation, and energy price volatility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental foreign, trade, monetary, tax and fiscal policies, including the policy decisions of the Federal Reserve;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in borrowers' credit risks and payment behaviors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the failure of assumptions and estimates used in our reviews of our loan portfolio, underlying the establishment of reserves for possible credit losses, our analysis of our capital position and other estimates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the performance of our commercial real estate loan portfolio, including the effects of the elevated interest rate environment and the strength of the commercial real estate market in our Indiana markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risk of cybersecurity attacks that could result in damage to the Company's or third-party service providers' networks or data of the Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• technological changes implemented by us and other parties, including our third-party vendors, which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and scope of any legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased competition in the financial services sector, including from non-bank competitors such as credit unions and fintech companies, and the inability to attract new customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of war, geopolitical conflicts, acts of terrorism, or other catastrophic events, including storms, droughts, tornados and flooding, that may affect general economic conditions, including agricultural production and demand and prices for agricultural inputs, goods and land used for agricultural purposes, generally and in our markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of fraud by or affecting employees, customers or third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of disruption and volatility in capital markets on the value of our investment portfolio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the prices, values and sales volumes of residential real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the scope and cost of FDIC insurance, the state of Indiana's Public Deposit Insurance Fund and other coverages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of litigation and other claims we may be subject to from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the availability and cost of credit and capital in the financial markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the loss of key executives and employees, talent shortages and employee turnover;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in technology or products that may be more difficult or costly to implement, or less effective than anticipated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in accounting policies, rules and practices;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risks related to mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risks noted in the Risk Factors discussed under Item 1A of Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as other risks and uncertainties set forth from time to time in the Company's other filings with the Securities and Exchange Commission.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

**ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Interest rate risk represents the Company's primary market risk exposure. The Company does not have a material exposure to foreign currency exchange risk, does not have a material amount of derivative financial instruments and does not maintain a trading portfolio. The use of financial derivatives is limited to the back-to-back swap program for borrowers. The Corporate Risk Committee of the Board of Directors annually reviews and approves the policy used to manage interest rate risk. The policy was last reviewed and approved in July 2025. The policy sets guidelines for balance sheet structure, which are designed to protect the Company from the impact that interest rate changes could have on net income but do not necessarily indicate the effect on future net interest income. The Company, through the Bank's Asset and Liability Committee, manages interest rate risk by monitoring the computer simulated earnings impact of various rate scenarios and general market conditions. The Company then modifies its long-term risk parameters by attempting to generate the types of loans, investments, and deposits that currently fit the Company's needs, as determined by the Asset and Liability Committee. This computer simulation analysis measures the net interest income impact of various interest rate scenario changes during the next twelve months. The Company continually evaluates the assumptions used in the model. The current balance sheet structure is considered to be within acceptable risk levels.

Interest rate scenarios for the base, falling 300 basis points, falling 200 basis points, falling 100 basis points, falling 50 basis points, falling 25 basis points, rising 25 basis points, rising 50 basis points, rising 100 basis points, rising 200 basis points and rising 300 basis points are listed below based upon the Company's rate sensitive assets and liabilities at March 31, 2026. The net interest income shown represents cumulative net interest income over a twelve-month time horizon. Balance sheet assumptions used for the base scenario are the same for the rising and falling simulations.

The base scenario is an annual calculation that is highly dependent on numerous assumptions embedded in the model. While the base sensitivity analysis incorporates management's best estimate of interest rate and balance sheet dynamics under various market rate movements, the actual behavior and resulting earnings impact will likely differ from that projected. For certain assets, the base simulation model captures the expected prepayment behavior under changing interest rate environments. Assumptions and methodologies regarding the interest rate or balance behavior of indeterminate maturity core deposit products, such as savings, money market, NOW and demand deposits reflect management's best estimate of expected future behavior.

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <u>(dollars in thousands)</u> | Base | Falling (300 Basis Points) | Falling (200 Basis Points) | Falling<br>(100 Basis<br>Points) | Falling<br>(50 <br>Basis<br>Points) | Falling (25 <br>Basis<br>Points) | Rising (25 <br>Basis<br>Points) | Rising<br>(50 <br>Basis<br>Points) | Rising (100 Basis Points) | Rising<br>(200 <br>Basis<br>Points) | Rising<br>(300 <br>Basis<br>Points) |
| Net interest income | $240995 | $230913 | $235440 | $239038 | $240362 | $240851 | $241340 | $241613 | $242095 | $242735 | $243279 |
| Variance from Base |  | $(10082) | $(5555) | $(1957) | $(633) | $(144) | $345 | $618 | $1100 | $1740 | $2284 |
| Percent of change from Base |  | (4.18)% | (2.31)% | (0.81)% | (0.26)% | (0.06)% | 0.14% | 0.26% | 0.46% | 0.72% | 0.95% |

---

**ITEM 4 – CONTROLS AND PROCEDURES**

As required by Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, management has evaluated, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of March 31, 2026. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

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During the quarter ended March 31, 2026, there were no changes to the Company's internal control over financial reporting that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

**PART II – OTHER INFORMATION**

Item 1. <u>Legal Proceedings</u>

There are no material pending legal proceedings to which the Company or its subsidiaries is a party other than ordinary, routine litigation incidental to their respective businesses.

Item 1A. <u>Risk Factors</u>

There have been no material changes to the risk factors disclosed in Item 1A of Part I of the Company's Form 10-K for the year ended December 31, 2025. Please refer to that section of the Company's Form 10-K for disclosures regarding the risks and uncertainties related to the Company's business.

Item 2. <u>Unregistered Sales of Equity Securities and Use of Proceeds</u>

**PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PARTIES**

On April 8, 2025, the Company's board of directors reauthorized and extended a share repurchase program through April 30, 2027, under which the Company is authorized to repurchase, from time to time as the Company deems appropriate, shares of the Company's common stock with an aggregate purchase price of up to $30.0 million. On March 5, 2026, the Company's board of directors amended the share repurchase program and increased the Company's authority by $30.0 million, raising the total aggregate purchase price available under the plan to $60.0 million. Repurchases may be made in the open market, through block trades or otherwise, and in privately negotiated transactions. The repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended or discontinued at any time. During the first quarter of 2026, a total of 336,853 shares were repurchased at a weighted average purchase price of $56.99 for an aggregate purchase price of $19.2 million. Under the current program, a total of 674,743 shares have been repurchased at a weighted average purchase price per share of $57.51 as of March 31, 2026.

The following table provides information as of March 31, 2026 with respect to shares of common stock repurchased by the Company during the quarter then ended:

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| | | | | |
|:---|:---|:---|:---|:---|
| <u>Period</u> | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Appropriate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (b) |
| January 1 - 31 | 12691 | $56.63 | 10000 | $9827795 |
| February 1 - 28 | 59710 | 58.50 | 58311 | 6421712 |
| March 1 - 31 | 268542 | 56.70 | 268542 | 21195758 |
| Total | 340943 | $57.01 | 336853 | $21195758 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)A total of 4,090 of the shares purchased during January and February were credited to the deferred share accounts of non-employee directors under the Company's directors' deferred compensation plan. The shares were purchased at a weighted average price per share of $58.54. These shares are held in treasury stock of the Company and were purchased in the ordinary course of business and consistent with past practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The maximum dollar value of remaining aggregate repurchase authority under the current program is $21.2 million. Total repurchases under the current program are $38.8 million.

Item 3. <u>Defaults Upon Senior Securities</u>

None

Item 4. <u>Mine Safety Disclosures</u>

N/A

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Item 5. <u>Other Information</u>

During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. <u>Exhibits</u>

---

| | |
|:---|:---|
| 31.1 | <u>[Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)](exhibit311-q12026.htm)</u> |
| 31.2 | <u>[Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)](exhibit312-q12026.htm)</u> |
| 32.1 | <u>[Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](exhibit321-q12026.htm)</u> |
| 32.2 | <u>[Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](exhibit322-q12026.htm)</u> |
| 101 | Interactive Data File |
|  | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025; (ii) Consolidated Statements of Income for the three months ended March 31, 2026 and March 31, 2025; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and March 31, 2025; (iv) Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2026 and March 31, 2025; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and March 31, 2025; and (vi) Notes to Unaudited Consolidated Financial Statements. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LAKELAND FINANCIAL CORPORATION

(Registrant)

---

| | |
|:---|:---|
| Date: April 29, 2026 | /s/ David M. Findlay |
|  | David M. Findlay – Chairman and Chief Executive Officer |
| Date: April 29, 2026 | /s/ Lisa M. O'Neill |
|  | Lisa M. O'Neill – Executive Vice President and |
|  | Chief Financial Officer |
|  | (principal financial officer) |
| Date: April 29, 2026 | /s/ Brok A. Lahrman |
|  | Brok A. Lahrman – Senior Vice President and Chief Accounting Officer |
|  | (principal accounting officer) |

---

## Exhibit 31.1

<u>Exhibit 31.1</u>

I, David M. Findlay, Chairman and Chief Executive Officer of Lakeland Financial Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lakeland Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: April 29, 2026 | /s/ David M. Findlay |
| | David M. Findlay |
| | Chairman and Chief Executive Officer |

---

## Exhibit 31.2

<u>Exhibit 31.2</u>

I, Lisa M. O'Neill, Chief Financial Officer of Lakeland Financial Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lakeland Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: April 29, 2026 | /s/ Lisa M. O'Neill |
| | Lisa M. O'Neill |
| | Chief Financial Officer |

---

## Exhibit 32.1

<u>Exhibit 32.1</u>

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lakeland Financial Corporation (the "Company") on Form 10-Q for the period ending March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David M. Findlay, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| |
|:---|
| /s/ David M. Findlay |
| David M. Findlay |
| Chairman and Chief Executive Officer |
| April 29, 2026 |

---

A signed original of this written statement required by Section 906 has been provided to Lakeland Financial Corporation and will be retained by Lakeland Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

<u>Exhibit 32.2</u>

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lakeland Financial Corporation (the "Company") on Form 10-Q for the period ending March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lisa M. O'Neill, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Lisa M. O'Neill |
| Lisa M. O'Neill |
| Chief Financial Officer |
| April 29, 2026 |

---

A signed original of this written statement required by Section 906 has been provided to Lakeland Financial Corporation and will be retained by Lakeland Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

<br>