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QCR HOLDINGS INC

QCR HOLDINGS INCQCRHEarnings & Financial Report

Nasdaq · Financials · State Commercial Banks

QCR Holdings, Inc., through its subsidiaries, provides commercial and consumer banking, and trust and asset management services for the Quad City and Cedar Rapids communities. QCR Holdings, Inc. was founded in 1993 and is headquartered in Moline, Illinois.

What changed in QCR HOLDINGS INC's 10-K — 2024 vs 2025

Top changes in QCR HOLDINGS INC's 2025 10-K

301 paragraphs added · 305 removed · 266 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

48 edited+5 added−9 removed40 unchanged
For loans greater than $500 thousand, the subsidiary banks sensitize this ratio for deteriorated economic conditions, major changes in interest rates, and/or significant increases in vacancy rates. ** These maximum rates are consistent with, or in some situations, more conservative than those established by regulatory authorities. *** Some real estate transactions may offer a swap option whereby the maximum term is 20 years. **** Generally, the maximum term is 12 months but can be 15 months with credit risk committee monthly review. ​ The Company’s lending policy also includes guidelines for real estate appraisals and evaluations, including minimum appraisal and evaluation standards based on certain transactions.
For loans greater than $500 thousand, the subsidiary banks sensitize this ratio for deteriorated economic conditions, major changes in interest rates, and/or significant increases in vacancy rates. ** These maximum rates are consistent with, or in some situations, more conservative than those established by regulatory authorities. *** Some real estate transactions may offer a swap option whereby the maximum term is generally 20 years. **** Generally, the maximum term is 12 months but can be 15 months with credit risk committee monthly review. ​ The Company’s lending policy also includes guidelines for real estate appraisals and evaluations, including minimum appraisal and evaluation standards based on certain transactions.
These loans have a maximum term of 20 years. Considering the longer duration, the subsidiary banks enter into a back-to-back interest rate swap to provide the borrower a long-term fixed interest rate while the subsidiary banks receive a variable interest rate and an upfront nonrefundable fee dependent on market pricing.
These loans generally have a maximum term of 20 years. Considering the longer duration, the subsidiary banks enter into a back-to-back interest rate swap to provide the borrower a long-term fixed interest rate while the subsidiary banks receive a variable interest rate and an upfront nonrefundable fee dependent on market pricing.
In addition, the financing structure of the LIHTC permanent loans includes tax credit equity investment that strengthens the overall credit profile. Including the value of the real estate and the LIHTCs, the loan-to-values of the LIHTC permanent loans are typically in the range of 25% to 65%.
In addition, the financing structure of the LIHTC permanent loans includes a tax credit equity investment that strengthens the overall credit profile. Including the value of the real estate and the LIHTCs, the loan-to-values of the LIHTC permanent loans are typically in the range of 25% to 65%.
The Company has an established lending/leasing policy which includes a number of underwriting factors to be considered in making a loan/lease, including, but not limited to, location, loan-to-value ratio, cash flow, collateral and the credit history of the borrower.
The Company has an established lending policy which includes a number of underwriting factors to be considered in making a loan, including, but not limited to, location, loan-to-value ratio, cash flow, collateral and the credit history of the borrower.
Segments of the Company have been established by management as defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.
Subsidiary Banks. Segments of the Company have been established by management as defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.
CSB is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. CSB was acquired by the Company in 2016. CSB provides full-service commercial and consumer banking to Des Moines, Iowa and adjacent communities through its headquarters located in Ankeny, Iowa and its eight other branch facilities throughout the 4 Table of Contents greater Des Moines area.
CSB is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. CSB was acquired by the Company in 2016. CSB provides full-service commercial and consumer banking to Des Moines, Iowa and adjacent communities through its headquarters located in Ankeny, Iowa and its eight other branch facilities throughout the greater Des Moines area.
Other Operating Subsidiaries. m2, which is based in Waukesha, Wisconsin, is engaged in the business of lending and leasing machinery and equipment to C&I businesses under direct financing lease contracts and equipment financing agreements. In September 2024, the Company announced the decision to discontinue offering new loans and leases through m2. Trust Preferred Subsidiaries.
Other Operating Subsidiaries. m2, which is based in Waukesha, Wisconsin, is engaged in the business of lending and leasing machinery and equipment to C&I businesses under direct financing lease contracts and equipment financing 4 Table of Contents agreements. In September 2024, the Company announced the decision to discontinue offering new loans and leases through m2. Trust Preferred Subsidiaries.
The banks enter an interest rate swap with the commercial borrower and an equal and offsetting interest rate 7 Table of Contents swap with a larger financial institution counterparty. The Company has increased its focus on this business which has led to significantly increased noninterest income, stronger overall loan growth, and improved management of its interest rate risk.
The banks enter an interest rate swap with the commercial borrower and an equal and offsetting interest rate swap with a larger financial institution counterparty. The Company has an increased focus on this business which has led to significantly increased noninterest income, stronger overall loan growth, and improved management of its interest rate risk.
Loan approval is generally based on the following factors: ● Ability and stability of current management of the borrower; ● Stable earnings with positive financial trends; ● Sufficient cash flow to support debt repayment; ● Earnings projections based on reasonable assumptions; ● Financial strength of the industry and business; and ● Value and marketability of collateral.
Loan approval is generally based on the following factors: ● Ability and stability of current management of the borrower; ● Stable earnings with positive financial trends; ● Sufficient cash flow to support debt repayment; ● Earnings projections based on reasonable assumptions; ● Financial strength of the industry and business; and 7 Table of Contents ● Value and marketability of collateral.
Competitors include not only other commercial banks, credit unions, thrift institutions, and mutual funds, but also insurance companies, financial technology, or fintech companies, finance companies, brokerage firms, investment banking companies, and a variety of other financial services and advisory companies. Many of these competitors are not subject to the same regulatory restrictions as the Company.
Competitors include not only other commercial banks, credit unions, thrift institutions, and mutual funds, but also insurance companies, financial technology, or fintech companies, digital asset service providers, finance companies, brokerage firms, investment banking companies, and a variety of other financial services and advisory companies. Many of these competitors are not subject to the same regulatory restrictions as the Company.
Industries are based on NAICS codes. If a subsidiary bank does not consider an industry a top industry at their charter, it is represented by “n/a.” ​ The following table presents total loans/leases by major loan/lease type and subsidiary as of December 31, 2024 and 2023.
Industries are based on NAICS codes. If a subsidiary bank does not consider an industry a top industry at their charter, it is represented by “n/a.” ​ 6 Table of Contents The following table presents total loans/leases by major loan/lease type and subsidiary as of December 31, 2025 and 2024.
CSB had total segment assets of $1.53 billion and $1.43 billion as of December 31, 2024 and 2023, respectively. GB is a Missouri-chartered commercial bank that is a member of the Federal Reserve System. GB, formerly known as Springfield First Community Bank, was acquired by the Company in 2018.
CSB had total segment assets of $1.72 billion and $1.53 billion as of December 31, 2025 and 2024, respectively. GB is a Missouri-chartered commercial bank that is a member of the Federal Reserve System. GB, formerly known as Springfield First Community Bank, was acquired by the Company in 2018.
See Appendix A “Supervision and Regulation” for more information on the federal and state statutes and regulations that are applicable to the Company and its subsidiaries. 5 Table of Contents Lending/Leasing. The Company and its subsidiaries provide a broad range of commercial and retail lending/leasing and investment services to corporations, partnerships, individuals, and government agencies.
See Appendix A “Supervision and Regulation” for more information on the federal and state statutes and regulations that are applicable to the Company and its subsidiaries. Lending. The Company and its subsidiaries provide a broad range of commercial and retail lending and investment services to corporations, partnerships, individuals, and government agencies.
In addition, the subsidiary banks often take personal guarantees to help assure repayment. Approximately 41% of the CRE portfolio is comprised of LIHTC loans. The Company has experienced no historical losses on the LIHTC portfolio and as of December 31, 2024, all LIHTC loans were performing.
In addition, the subsidiary banks often take personal guarantees to help assure repayment. Approximately 46% of the CRE portfolio is comprised of LIHTC loans. The Company has experienced no historical losses on the LIHTC portfolio and as of December 31, 2025, all LIHTC loans were performing.
The headquarters for CRBT is located in downtown Cedar Rapids with three other branches located in Cedar Rapids, one branch in Marion, two branches located in Waterloo and one branch located in Cedar Falls. CRBT had total segment assets of $2.61 billion and $2.42 billion as of December 31, 2024 and 2023, respectively.
The headquarters for CRBT is located in downtown Cedar Rapids with three other branches located in Cedar Rapids, one branch in Marion, two branches located in Waterloo and one branch located in Cedar Falls. CRBT had total segment assets of $2.86 billion and $2.61 billion as of December 31, 2025 and 2024, respectively.
Operating expenses include employee compensation and benefits, occupancy and equipment expense, professional and data processing fees, advertising and marketing expenses, bank service charges, FDIC and other insurance, loan/lease expenses and other administrative expenses. The Company and its subsidiaries collectively employed 980 and 996 FTEs at December 31, 2024 and 2023, respectively.
Operating expenses include employee compensation and benefits, occupancy and equipment expense, professional and data processing fees, advertising and marketing expenses, bank service charges, FDIC and other insurance, loan/lease expenses and other administrative expenses. The Company and its subsidiaries collectively employed 1,004 and 980 FTEs at December 31, 2025 and 2024, respectively.
Following is a listing of the Company’s non-consolidated subsidiaries formed for the issuance of trust preferred securities, including pertinent information as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount Outstanding Amount Outstanding ​ Interest ​ ​ Interest ​ ​ ​ ​ as of ​ as of ​ ​ ​ Rate as of ​ ​ Rate as of Name ​ Date Issued ​ December 31, 2024 ​ December 31, 2023 ​ Interest Rate ​ December 31, 2024 ​ ​ December 31, 2023 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCR Holdings Statutory Trust II February 2004 ​ $ 10,310 ​ $ 10,310 2.85% over 3-month SOFR 7.72 % ​ ​ 8.44 % QCR Holdings Statutory Trust III February 2004 ​ 8,248 ​ 8,248 2.85% over 3-month SOFR 7.72 % ​ ​ 8.44 % QCR Holdings Statutory Trust V February 2006 ​ 10,310 ​ 10,310 1.55% over 3-month SOFR 6.47 % ​ ​ 7.21 % Community National Statutory Trust II September 2004 ​ 3,093 ​ 3,093 2.17% over 3-month SOFR 6.79 % ​ ​ 7.80 % Community National Statutory Trust III March 2007 ​ 3,609 ​ 3,609 1.75% over 3-month SOFR 6.37 % ​ ​ 7.40 % Guaranty Bankshares Statutory Trust I ​ May 2005 ​ ​ 4,640 ​ ​ 4,640 ​ 1.75% over 3-month SOFR ​ 6.37 % ​ ​ 7.40 % Guaranty Statutory Trust II* December 2005 ​ 10,310 ​ 10,310 1.45% over 3-month SOFR 6.23 % ​ ​ 7.09 % ​ ​ ​ $ 50,520 ​ $ 50,520 Weighted Average Rate 6.88 % ​ ​ 7.70 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Assumed in acquisition of GFED. ​ Securities issued by all of the trusts listed above mature 30 years from the date of issuance, but are all currently callable at par at any time.
Following is a listing of the Company’s non-consolidated subsidiaries formed for the issuance of trust preferred securities, including pertinent information as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount Outstanding ​ ​ ​ Amount Outstanding ​ ​ ​ ​ ​ ​ ​ Interest ​ ​ Interest ​ ​ ​ ​ as of ​ as of ​ ​ ​ Rate as of ​ ​ Rate as of Name ​ Date Issued ​ December 31, 2025 ​ December 31, 2024 ​ Interest Rate ​ December 31, 2025 ​ ​ December 31, 2024 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCR Holdings Statutory Trust II February 2004 ​ $ 10,310 ​ $ 10,310 2.85% over 3-month SOFR 6.78 % ​ ​ 7.72 % QCR Holdings Statutory Trust III February 2004 ​ 8,248 ​ 8,248 2.85% over 3-month SOFR 6.78 % ​ ​ 7.72 % QCR Holdings Statutory Trust V February 2006 ​ 10,310 ​ 10,310 1.55% over 3-month SOFR 5.72 % ​ ​ 6.47 % Community National Statutory Trust II September 2004 ​ 3,093 ​ 3,093 2.17% over 3-month SOFR 6.13 % ​ ​ 6.79 % Community National Statutory Trust III March 2007 ​ 3,609 ​ 3,609 1.75% over 3-month SOFR 5.73 % ​ ​ 6.37 % Guaranty Bankshares Statutory Trust I ​ May 2005 ​ ​ 4,640 ​ ​ 4,640 ​ 1.75% over 3-month SOFR ​ 5.73 % ​ ​ 6.37 % Guaranty Statutory Trust II* December 2005 ​ 10,310 ​ 10,310 1.45% over 3-month SOFR 5.59 % ​ ​ 6.23 % ​ ​ ​ $ 50,520 ​ $ 50,520 Weighted Average Rate 6.11 % ​ ​ 6.88 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Assumed in acquisition of GFED. ​ Securities issued by all of the trusts listed above mature 30 years from the date of issuance, but are all currently callable at par at any time.
The Company is built on relationships and integrity. We adhere to those principles in all areas of our business and in our communities and believe that meaningful environmental, social and governance programs will drive shareholder value and make us a better company. We believe in responsible use of our resources with a focus on sustainability.
We adhere to those principles in all areas of our business and in our communities and believe that meaningful environmental, social and governance programs will drive shareholder value and make us a better company. We believe in responsible use of our resources with a focus on sustainability.
GB provides full-service commercial and consumer banking to the Springfield and Joplin, Missouri area and adjacent communities through its headquarters located in Springfield, Missouri and its 13 other branch facilities throughout the greater Springfield and Joplin area. GB had total segment assets of $2.34 billion and $2.28 billion as of December 31, 2024 and 2023, respectively.
GB provides full-service commercial and consumer banking to the Springfield and Joplin, Missouri area and adjacent communities through its headquarters located in Springfield, Missouri and its thirteen other branch facilities throughout the greater Springfield and Joplin area. GB had total segment assets of $2.41 billion and $2.34 billion as of December 31, 2025 and 2024, respectively.
The Company will continue to review opportunities to execute these swaps at all of its subsidiary banks, as the circumstances are appropriate for the borrower and the Company. An optimal interest rate swap candidate must be of a certain size and sophistication which can lead to volatility in activity from year to year.
The Company executes these swaps at all of its subsidiary banks, as the circumstances are appropriate for the borrower and the Company. An optimal interest rate swap candidate must be of a certain size and sophistication which can lead to volatility in activity from year to year.
The following private and public sector business assets were generally acceptable to consider for lease funding: ● Computer systems; ● Photocopy systems; ● Fire trucks; ● Specialized road maintenance equipment; ● Medical equipment; ● Commercial business furnishings; ● Vehicles classified as heavy equipment; ● Trucks and trailers; ● Equipment classified as plant or office equipment; and ● Marine boat lifts. m2 generally refrained from funding leases of the following type: ● Leases collateralized by non-marketable items; ● Leases collateralized by consumer items, such as vehicles, household goods, recreational vehicles, boats, etc.; 13 Table of Contents ● Leases collateralized by used equipment, unless its remaining useful life can be readily determined; and ● Leases with a repayment schedule exceeding seven years.
In all cases, a formal independent credit analysis of the lessee was performed. 11 Table of Contents The following private and public sector business assets were generally acceptable to consider for lease funding: ● Computer systems; ● Photocopy systems; ● Fire trucks; ● Specialized road maintenance equipment; ● Medical equipment; ● Commercial business furnishings; ● Vehicles classified as heavy equipment; ● Trucks and trailers; ● Equipment classified as plant or office equipment; and ● Marine boat lifts. m2 generally refrained from funding leases of the following type: ● Leases collateralized by non-marketable items; ● Leases collateralized by consumer items, such as vehicles, household goods, recreational vehicles, boats, etc.; ● Leases collateralized by used equipment, unless its remaining useful life can be readily determined; and ● Leases with a repayment schedule exceeding seven years.
In accordance with Missouri regulation, the legal lending limit to one borrower for GB, calculated as 15% of aggregate capital, totaled $40.2 million as of December 31, 2024. The Company recognizes the need to prevent excessive concentrations of credit exposure to any one borrower or group of related borrowers.
In accordance with Missouri regulation, the legal lending limit to one borrower for GB, calculated as 15% of aggregate capital, totaled $46.3 million as of December 31, 2025. The Company recognizes the need to prevent excessive concentrations of credit exposure to any one borrower or group of related borrowers.
In general, exceptions to the lending policy do not significantly deviate from the guidelines and limits established within the lending policy and, if there are exceptions, they are generally noted as such and specifically identified in loan/lease approval documents. Human Capital Resources.
In general, exceptions to the lending policy do not significantly deviate from the guidelines and limits established within the lending policy and, if there are exceptions, they are generally noted as such and specifically identified in loan/lease approval documents. Human Capital Resources. At the Company, people are our greatest strength.
Included in originations is activity related to the refinancing of previously held in-house mortgages. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 2023 2022 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Originations of residential real estate loans ​ $ 113,223 ​ $ 105,785 ​ $ 148,845 ​ Sales of residential real estate loans ​ $ 86,133 ​ $ 68,271 ​ $ 103,705 ​ Percentage of sales to originations ​ 76 % 65 % 70 % ​ Installment and Other Consumer Lending The consumer lending department of each subsidiary bank provides many types of consumer loans, including home improvement, home equity, motor vehicle, signature loans and small personal credit lines.
Included in originations is activity related to the refinancing of previously held in-house mortgages. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2025 2024 2023 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Originations of residential real estate loans ​ $ 124,679 ​ $ 113,223 ​ $ 105,785 ​ Sales of residential real estate loans ​ $ 86,365 ​ $ 86,133 ​ $ 68,271 ​ Percentage of sales to originations ​ 69 % 76 % 65 % ​ Installment and Other Consumer Lending The consumer lending department of each subsidiary bank provides many types of consumer loans, including home improvement, home equity, motor vehicle, signature loans and small personal credit lines.
Approved non-real estate collateral types and corresponding maximum advance percentages for each collateral type are listed below. 8 Table of Contents ​ ​ ​ ​ Approved Collateral Type Maximum Advance % ​ ​ ​ Financial Instruments U.S.
Approved non-real estate collateral types and corresponding maximum advance percentages for each collateral type are listed below. ​ ​ ​ ​ Approved Collateral Type ​ ​ ​ Maximum Advance % ​ ​ ​ Financial Instruments ​ U.S.
In addition, following are established policy limits and the actual allocations for the subsidiary banks as of December 31, 2024 for the loan portfolio organized by top industries, reflected as a percentage of the subsidiary bank’s risk based capital: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCBT ​ CRBT ​ CSB ​ GB ​ ​ Maximum ​ Maximum ​ Maximum ​ Maximum ​ ​ ​ Percentage ​ As of ​ Percentage ​ As of ​ Percentage ​ As of ​ Percentage ​ As of ​ ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ Industry * Policy ​ 2024 ​ Policy ​ 2024 ​ Policy ​ 2024 ​ Policy ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accommodation and Food Service 25 % 3 % n/a ​ — % n/a ​ — % n/a ​ — % ​ Agriculture, Forestry, Fishing and Hunting n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ 50 % 15 % ​ Construction 50 % 21 % 50 % 25 % 50 % 25 % 50 % 12 % ​ Educational Services 25 % 5 % n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ ​ Finance and Insurance 25 % 12 % 50 % 12 % 50 % 7 % n/a ​ n/a ​ ​ Health Care and Social Assistance 50 % 39 % 50 % 5 % 50 % 20 % 50 % 3 % ​ Management of Companies and Enterprises (includes Bank Stock Loans) 100 % 48 % n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ ​ Manufacturing 50 % 17 % 100 % 32 % 100 % 27 % 100 % 9 % ​ Other Services (Except Public Administration) n/a ​ n/a ​ 50 % 12 % 25 % 13 % 50 % 11 % ​ Professional, Scientific, and Technical Services n/a ​ n/a ​ 50 % 9 % 25 % 19 % 50 % 5 % ​ Public Administration 50 % 12 % 50 % 11 % 50 % 16 % n/a ​ n/a ​ ​ Real Estate and Rental Leasing n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ n/a ​ 25 % 8 % ​ Retail Trade 50 % 12 % 25 % 10 % n/a ​ n/a ​ 25 % 14 % ​ Transportation and Warehousing n/a ​ n/a ​ 50 % 10 % 25 % 6 % 40 % 6 % ​ Wholesale Trade 50 % 21 % 100 % 36 % 50 % 40 % 100 % 12 % ​ National Syndicated Loans 25 % — % 25 % — % 25 % 3 % n/a ​ n/a ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans as a percent of total assets 85 % 79 % 85 % 67 % 85 % 76 % 85 % 77 % ​ * Each subsidiary bank defines its top loan industries.
In addition, following are established policy limits and the actual allocations for the subsidiary banks as of December 31, 2025 for the loan portfolio organized by top industries, reflected as a percentage of the subsidiary bank’s risk based capital: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCBT ​ CRBT ​ CSB ​ GB ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ Percentage ​ As of ​ Percentage ​ As of ​ Percentage ​ As of ​ Percentage ​ As of ​ ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ per Loan ​ December 31, ​ Industry * Policy ​ 2025 ​ Policy ​ 2025 ​ Policy ​ 2025 ​ Policy ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accommodation and Food Service 25 % 2 % N/A ​ N/A ​ N/A % N/A ​ N/A ​ N/A ​ ​ Agriculture, Forestry, Fishing and Hunting N/A ​ N/A ​ N/A ​ N/A ​ N/A % N/A ​ 50 % 7 % ​ Construction 50 % 12 % 50 % 29 % 50 % 24 % 50 % 15 % ​ Educational Services 25 % 5 % N/A ​ N/A ​ N/A % N/A ​ N/A ​ N/A ​ ​ Finance and Insurance 25 % 8 % 50 % 27 % 50 % 6 % 50 % — % ​ Health Care and Social Assistance 50 % 22 % 50 % 9 % 50 % 17 % 50 % 3 % ​ Management of Companies and Enterprises (includes Bank Stock Loans) 75 % 68 % N/A ​ N/A ​ N/A % N/A ​ N/A ​ N/A ​ ​ Manufacturing 50 % 20 % 100 % 27 % 100 % 18 % 100 % 15 % ​ Other Services (Except Public Administration) N/A ​ N/A ​ 50 % 11 % 25 % 18 % 50 % 9 % ​ Professional, Scientific, and Technical Services N/A ​ N/A ​ 50 % 10 % 25 % 17 % 50 % 6 % ​ Public Administration 50 % 11 % 50 % 22 % 60 % 14 % 50 % 4 % ​ Real Estate and Rental Leasing N/A ​ N/A ​ N/A ​ N/A ​ 25 % 12 % 25 % — % ​ Retail Trade 50 % 11 % 25 % 12 % N/A % N/A ​ 25 % 11 % ​ Transportation and Warehousing N/A ​ N/A ​ 50 % 20 % 25 % 6 % 40 % 7 % ​ Wholesale Trade 50 % 27 % 100 % 41 % 50 % 27 % 100 % 16 % ​ National Syndicated Loans 25 % — % 25 % 16 % 25 % 5 % 25 % 4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans as a percent of total assets 85 % 68 % 85 % 70 % 85 % 76 % 85 % 77 % ​ * Each subsidiary bank defines its top loan industries.
Most of these will convert to LIHTC permanent loans upon completion of construction. Additionally, the Company had approximately $101.0 million and $82.7 million of residential construction loans outstanding as of December 31, 2024 and 2023, respectively.
Most of these will convert to LIHTC permanent loans upon completion of construction. Additionally, the Company had approximately $112.4 million and $101.0 million of residential construction loans outstanding as of December 31, 2025 and 2024, respectively.
Of this amount, approximately 72% was considered speculative, while 28% was pre-sold at December 31, 2024, and approximately 60% was considered speculative, while 40% was pre-sold at December 31, 2023. Direct Financing Leasing m2 leases machinery and equipment to C&I customers under direct financing leases.
Of this amount, approximately 76% was considered speculative, while 24% was pre-sold at December 31, 2025, and approximately 72% was considered speculative, while 28% was pre-sold at December 31, 2024. Direct Financing Leasing m2 leased machinery and equipment to C&I customers under direct financing leases.
Under the most recent in-house limit, total credit exposure to a single borrowing entity or group of related entities will not exceed the following, subject to certain exceptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ High Quality ​ Medium Quality ​ Low Quality ​ (Risk Ratings 1-3) (Risk Rating 4) (Risk Ratings 5-8) ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCBT ​ $ 21,500 ​ $ 18,000 ​ $ 12,500 CRBT ​ $ 21,500 ​ $ 18,000 ​ $ 12,500 CSB ​ $ 12,000 ​ $ 10,500 ​ $ 7,000 GB ​ $ 21,500 ​ $ 18,000 ​ $ 12,500 QCRH Consolidated ​ $ 32,000 ​ $ 25,500 ​ $ 15,500 ​ The QCRH Consolidated amount represents the maximum amount of credit that all affiliated banks, when combined, will extend to a single borrowing entity or group of related entities, subject to certain exceptions.
Under 5 Table of Contents the most recent in-house limit, total credit exposure to a single borrowing entity or group of related entities will not exceed the following, subject to certain exceptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ High Quality ​ Medium Quality ​ Low Quality ​ ​ ​ ​ (Risk Ratings 1-3) ​ ​ ​ (Risk Rating 4) ​ ​ ​ (Risk Ratings 5-8) ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ QCBT ​ $ 23,000 ​ $ 19,000 ​ $ 13,000 CRBT ​ $ 23,000 ​ $ 19,000 ​ $ 13,000 CSB ​ $ 12,750 ​ $ 11,000 ​ $ 7,250 GB ​ $ 23,000 ​ $ 19,000 ​ $ 13,000 QCRH Consolidated ​ $ 35,000 ​ $ 26,000 ​ $ 16,000 ​ The QCRH Consolidated amount represents the maximum amount of credit that all affiliated banks, when combined, will extend to a single borrowing entity or group of related entities, subject to certain exceptions.
In September 2024, the Company announced the decision to discontinue offering new loans and leases through m2. All lease requests were subject to the credit requirements and criteria as set forth in the lending/leasing policy. In all cases, a formal independent credit analysis of the lessee was performed.
In September 2024, the Company announced the decision to discontinue offering new loans and leases through m2. All lease requests were subject to the credit requirements and criteria as set forth in the lending/leasing policy.
The Company recognizes that a diversified loan/lease portfolio contributes to reducing risk in the overall loan/lease portfolio. The specific loan/lease portfolio mix is subject to change based on loan/lease demand, the business environment and various economic factors.
The Company recognizes that a diversified loan/lease portfolio contributes to reducing risk in the overall loan/lease portfolio. The specific loan/lease portfolio mix is subject to change based on loan/lease demand, the business environment and various economic factors. The Company actively monitors concentrations within the loan/lease portfolio to ensure appropriate diversification and concentration risk is maintained.
These filings are available at http://www.snl.com/IRW/Docs/1024092. Also available are many of the Company’s corporate governance documents, including its Business Code of Conduct and Ethics Policy (https://qcrh.q4ir.com/governance/documents/default.aspx). 15 Table of Contents
These filings are available at https://qcrh.com/financials/sec-filings/default.aspx. Also 13 Table of Contents available are many of the Company’s corporate governance documents, including its Business Code of Conduct and Ethics Policy (https://qcrh.q4ir.com/governance/documents/default.aspx).
Lastly, the Company has policy limits on maximum exposure amounts to single developers. ​ 12 Table of Contents As of December 31, 2024 and 2023, the portion of the Company’s construction portfolio that is considered non-residential construction is summarized by property types as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ Amount % Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family ​ $ 1,006,094 87 % $ 1,013,908 81 % Industrial/warehouse ​ 24,940 2 % 36,676 3 % Office ​ 23,714 2 % 26,414 2 % Hotel/motel ​ 14,387 1 % 23,965 2 % Retail ​ 6,844 1 % 8,990 1 % Other ​ 81,337 7 % 139,144 11 % Total non-residential construction loans ​ $ 1,157,316 100 % $ 1,249,097 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in multi-family non-residential construction is $946.5 million of LIHTC construction loans which provide financing for the construction of both new LIHTC real estate projects and the rehabilitation of existing LIHTC real estate projects.
Lastly, the Company has policy limits on maximum exposure amounts to single developers. ​ As of December 31, 2025 and 2024, the portion of the Company’s construction portfolio that is considered non-residential construction is summarized by property types as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2024 ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ Amount ​ ​ ​ % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family ​ $ 918,137 77 % $ 1,006,094 87 % Office ​ 42,525 4 % 23,714 2 % Industrial/warehouse ​ 36,389 3 % 24,940 2 % Hotel/motel ​ 36,369 3 % 14,387 1 % Retail ​ 21,527 2 % 6,844 1 % Other ​ 130,121 11 % 81,337 7 % Total non-residential construction loans ​ $ 1,185,068 100 % $ 1,157,316 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in multi-family non-residential construction is $789.3 million of LIHTC construction loans which provide financing for the construction of both new LIHTC real estate projects and the rehabilitation of existing LIHTC real estate projects.
The following is a summary of the five largest industry concentrations within the C&I portfolio as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ ​ Amount ​ Amount ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ Lessors of Residential Buildings and Dwellings ​ $ 334,182 ​ $ 235,883 Administration of Urban Planning and Community and Rural Development ​ ​ 108,117 ​ ​ 109,696 Solar Electric Power Generation ​ 108,083 ​ 115,862 Offices of Bank Holding Companies ​ ​ 107,449 ​ ​ 109,966 Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers ​ ​ 68,179 ​ ​ 60,413 ​ These loan categories are defined by industry-standard NAICS codes – refer to NAICS.com for a description of each category. ​ 9 Table of Contents CRE Lending The subsidiary banks also make CRE loans.
Loans may be made on an unsecured basis if warranted by the overall financial condition of the borrower. 8 Table of Contents The following is a summary of the five largest industry concentrations within the C&I portfolio as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ Amount ​ Amount ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ Lessors of Residential Buildings and Dwellings ​ $ 278,656 ​ $ 334,182 Offices of Bank Holding Companies ​ ​ 146,973 ​ ​ 107,449 Solar Electric Power Generation ​ 106,081 ​ 108,083 Administration of Urban Planning and Community and Rural Development ​ ​ 88,263 ​ ​ 108,117 Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers ​ ​ 81,793 ​ ​ 68,179 ​ These loan categories are defined by industry-standard NAICS codes – refer to NAICS.com for a description of each category. ​ CRE Lending The subsidiary banks also make CRE loans.
In accordance with Iowa regulation, the legal lending limit to one borrower for QCBT, CRBT and CSB, calculated as 15% of aggregate capital, was $43.0 million, $55.9 million, and $26.6 million, respectively, as of December 31, 2024.
In accordance with Iowa regulation, the legal lending limit to one borrower for QCBT, CRBT and CSB, calculated as 15% of aggregate capital, was $49.2 million, $72.8 million, and $32.2 million, respectively, as of December 31, 2025.
None of these had concentrations greater than $61.5 million, or 1.4%, of total CRE loans as of December 31, 2024.
None of these had concentrations greater than $64.7 million, or 1.3%, of total CRE loans as of December 31, 2025.
The following table reflects credit quality indicators and performance of the Company’s CRE loan portfolio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ 2024 ​ ​ ​ ​ Delinquency Status* ​ ​ ​ ​ % of ​ ​ ​ ​ Performing ​ Nonperforming ​ Total ​ CRE ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 4,248,186 ​ $ — ​ $ 4,248,186 ​ 98 % ​ Special Mention ​ ​ 34,835 ​ ​ — ​ ​ 34,835 ​ 1 % ​ Substandard ​ ​ 41,955 ​ ​ 16,758 ​ ​ 58,713 ​ 1 % ​ Doubtful ​ — ​ — ​ — ​ 0 % ​ ​ ​ $ 4,324,976 ​ $ 16,758 ​ $ 4,341,734 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As a percentage of total CRE portfolio ​ ​ 99.61 % ​ 0.39 % ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ 2023 ​ ​ ​ ​ Delinquency Status* ​ ​ ​ ​ % of ​ ​ ​ ​ ​ Performing ​ ​ Nonperforming ​ ​ Total ​ CRE ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 4,104,394 ​ $ — ​ $ 4,104,394 ​ 97 % ​ Special Mention ​ ​ 72,517 ​ ​ — ​ ​ 72,517 ​ 2 % ​ Substandard ​ ​ 37,488 ​ ​ 18,476 ​ ​ 55,964 ​ 1 % ​ Doubtful ​ — ​ — ​ — ​ 0 % ​ ​ ​ $ 4,214,399 ​ $ 18,476 ​ $ 4,232,875 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As a percentage of total CRE portfolio ​ ​ 99.56 % ​ 0.44 % ​ 100 % ​ ​ ​ 11 Table of Contents ​ The Company’s construction and land development loan portfolio included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, 2024 ​ ​ December 31, 2023 ​ ​ Amount ​ % ​ ​ Amount ​ % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIHTC construction $ 917,986 70 % ​ $ 943,101 66 % Construction (commercial) ​ 312,288 ​ 23 % ​ ​ 384,875 ​ 27 % Land development ​ 72,644 ​ 6 % ​ ​ 80,443 ​ 6 % Construction (non-commercial residential) ​ 10,625 ​ 1 % ​ ​ 12,106 ​ 1 % Total construction and land development $ 1,313,543 ​ 100 % ​ $ 1,420,525 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Following is a breakdown of non-owner-occupied income-producing CRE by property type as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ Amount % Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family ​ $ 1,877,467 58 % $ 1,743,020 58 % Retail ​ 242,144 7 % 185,394 6 % Industrial/warehouse ​ 207,476 6 % 205,904 7 % Office ​ 183,066 6 % 181,541 6 % Hotel/motel ​ 138,112 4 % 131,138 4 % Other ​ 609,963 19 % 574,736 19 % Total income-producing CRE ​ $ 3,258,228 100 % $ 3,021,732 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in multi-family non-owner-occupied income-producing CRE is $1.5 billion of LIHTC loans which are financing for low-income housing tax credit real estate projects.
The following table reflects credit quality indicators and performance of the Company’s CRE loan portfolio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ As of December 31, ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Delinquency Status* ​ ​ ​ ​ % of ​ ​ ​ Delinquency Status* ​ ​ ​ ​ % of ​ ​ ​ Performing ​ Nonperforming ​ Total ​ CRE ​ ​ ​ Performing ​ ​ Nonperforming ​ Total ​ CRE ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 4,729,162 ​ $ 37 ​ $ 4,729,199 ​ 98 % ​ ​ $ 4,248,186 ​ $ — ​ $ 4,248,186 ​ 98 % Special Mention ​ ​ 34,712 ​ ​ — ​ ​ 34,712 ​ 1 % ​ ​ ​ 34,835 ​ ​ — ​ ​ 34,835 ​ 1 % Substandard ​ ​ 26,923 ​ ​ 9,522 ​ ​ 36,445 ​ 1 % ​ ​ ​ 41,955 ​ ​ 16,758 ​ ​ 58,713 ​ 1 % Doubtful ​ — ​ — ​ — ​ 0 % ​ ​ — ​ — ​ — ​ 0 % ​ ​ $ 4,790,797 ​ $ 9,559 ​ $ 4,800,356 ​ 100 % ​ ​ $ 4,324,976 ​ $ 16,758 ​ $ 4,341,734 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As a percentage of total CRE portfolio ​ ​ 99.80 % ​ 0.20 % ​ 100 % ​ ​ ​ ​ ​ 99.61 % ​ 0.39 % ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company’s construction and land development loan portfolio included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, 2025 ​ ​ December 31, 2024 ​ ​ Amount ​ % ​ ​ Amount ​ % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIHTC construction $ 741,531 56 % ​ $ 917,986 70 % Construction (commercial) ​ 486,156 ​ 37 % ​ ​ 312,288 ​ 23 % Land development ​ 73,732 ​ 6 % ​ ​ 72,644 ​ 6 % Construction (non-commercial residential) ​ 7,003 ​ 1 % ​ ​ 10,625 ​ 1 % Total construction and land development $ 1,308,422 ​ 100 % ​ $ 1,313,543 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 Table of Contents Following is a breakdown of non-owner-occupied income-producing CRE by property type as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2024 ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ Amount ​ ​ ​ % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family ​ $ 2,533,095 64 % $ 1,877,467 58 % Retail ​ 282,921 7 % 242,144 7 % Industrial/warehouse ​ 203,766 5 % 207,476 6 % Office ​ 202,770 5 % 183,066 6 % Hotel/motel ​ 170,886 4 % 138,112 4 % Other ​ 578,024 15 % 609,963 19 % Total income-producing CRE ​ $ 3,971,462 100 % $ 3,258,228 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in multi-family non-owner-occupied income-producing CRE is $1.9 billion of LIHTC loans which are financing for low-income housing tax credit real estate projects.
The Company serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny and Springfield communities through the following four wholly-owned banking subsidiaries (collectively, the “Banks”), which provide full-service commercial and consumer banking and trust and asset management services: ● Quad City Bank & Trust (QCBT), which is based in Bettendorf, Iowa, and commenced operations in 1994; ● Cedar Rapids Bank & Trust (CRBT), which is based in Cedar Rapids, Iowa, and commenced operations in 2001; ● Community State Bank (CSB), which is based in Ankeny, Iowa, and was acquired in 2016; and ● Guaranty Bank (GB), which is based in Springfield, Missouri, and was acquired in 2018. ​ On April 1, 2022, the Company completed its acquisition of GFED and, on April 2, 2022, merged Guaranty Bank into SFCB, the Company’s Springfield-based charter.
The Company serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny and Springfield communities through the following four wholly-owned banking subsidiaries (collectively, the “Banks”), which provide full-service commercial and consumer banking and trust and asset management services: ● Quad City Bank & Trust (“QCBT”), which is based in Bettendorf, Iowa, and commenced operations in 1994; ● Cedar Rapids Bank & Trust (“CRBT”), which is based in Cedar Rapids, Iowa, and commenced operations in 2001; ● Community State Bank (“CSB”), which is based in Ankeny, Iowa, and was acquired in 2016; and ● Guaranty Bank (“GB”), which is based in Springfield, Missouri, and was acquired in 2018. ​ The Company engages in direct financing lease contracts and equipment financing agreements through m2, a wholly-owned subsidiary of QCBT based in Waukesha, Wisconsin.
QCBT provides full service commercial, correspondent, and consumer banking and trust and asset management services in the Quad Cities and adjacent communities through its five offices located in Bettendorf and Davenport, Iowa and in Moline, Illinois.
QCBT provides full-service commercial, correspondent, and consumer banking and trust and asset management services in the Quad Cities and adjacent communities through its five offices located in Bettendorf and Davenport, Iowa and in Moline, Illinois. QCBT, on a consolidated basis with m2, had total segment assets of $2.71 billion and $2.59 billion as of December 31, 2025 and 2024, respectively.
QCBT, on a consolidated basis with m2, had total segment assets of $2.59 billion and $2.45 billion as of December 31, 2024 and 2023, respectively. CRBT is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. CRBT originally commenced operations in Cedar Rapids in June 2001, as a branch of QCBT under QCBT’s banking charter.
CRBT is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. CRBT originally commenced operations in Cedar Rapids in June 2001, as a branch of QCBT under QCBT’s banking charter. In September of 2001, the Cedar Rapids branch obtained its own banking charter and began operating as CRBT.
Residential real estate loans held for sale are included in residential real estate loans below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ QCBT ​ CRBT ​ CSB ​ GB ​ Total ​ $ % $ % $ % $ % $ ​ % ​ ​ (dollars in thousands) As of December 31, 2024 ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 100,344 5 % $ 136,542 8 % $ 68,628 6 % $ 82,477 5 % $ 387,991 6 % C&I - other ​ 651,306 32 % 436,966 24 % 188,185 16 % 238,475 13 % 1,514,932 22 % CRE - owner occupied ​ ​ 161,474 ​ 8 % ​ 135,643 ​ 8 % ​ 91,352 ​ 8 % ​ 217,524 ​ 12 % ​ 605,993 9 % CRE - non-owner occupied ​ ​ 180,253 ​ 9 % ​ 216,188 ​ 12 % ​ 205,531 ​ 18 % ​ 475,880 ​ 26 % ​ 1,077,852 16 % Construction and land development ​ ​ 360,593 ​ 17 % ​ 311,149 ​ 18 % ​ 307,607 ​ 27 % ​ 334,194 ​ 18 % ​ 1,313,543 19 % Multi-family ​ ​ 289,091 ​ 14 % ​ 404,800 ​ 23 % ​ 189,093 ​ 16 % ​ 249,126 ​ 14 % ​ 1,132,110 17 % Direct financing leases ​ 17,076 1 % — — % — — % — — % 17,076 — % 1-4 family real estate ​ 244,783 12 % 100,334 6 % 91,849 8 % 151,213 8 % 588,179 9 % Consumer ​ 44,006 2 % 19,845 1 % 17,144 1 % 65,733 4 % 146,728 2 % ​ ​ $ 2,048,926 100 % $ 1,761,467 100 % $ 1,159,389 100 % $ 1,814,622 % 100 % $ 6,784,404 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 87,872 4 % $ 97,521 6 % $ 66,266 6 % $ 73,584 4 % $ 325,243 5 % C&I - other ​ ​ 642,722 32 % 435,543 25 % 173,912 16 % 229,601 13 % 1,481,778 23 % CRE - owner occupied ​ ​ 150,153 ​ 8 % ​ 147,138 ​ 9 % ​ 81,241 ​ 7 % ​ 228,833 ​ 13 % ​ 607,365 9 % CRE - non-owner occupied ​ 180,415 ​ 9 % ​ 221,333 ​ 13 % ​ 179,411 ​ 16 % ​ 427,733 ​ 24 % ​ 1,008,892 16 % Construction and land development ​ ​ 395,851 ​ 20 % ​ 334,479 ​ 20 % ​ 327,720 ​ 31 % ​ 362,475 ​ 21 % ​ 1,420,525 22 % Multi-family ​ ​ 244,910 ​ 12 % ​ 354,259 ​ 21 % ​ 166,978 ​ 15 % ​ 229,996 ​ 13 % ​ 996,143 15 % Direct financing leases ​ 31,164 2 % — — % — — % — — % 31,164 — % 1-4 family real estate ​ 212,408 11 % 89,980 5 % 87,741 8 % 154,842 9 % 544,971 8 % Consumer ​ 38,184 2 % 18,194 1 % 15,993 1 % 54,964 3 % 127,335 2 % ​ ​ $ 1,983,679 100 % $ 1,698,447 100 % $ 1,099,262 100 % $ 1,762,028 % 100 % $ 6,543,416 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proper pricing of loans is necessary to provide adequate return to the Company’s stockholders.
Residential real estate loans held for sale are included in residential real estate loans below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ QCBT ​ CRBT ​ CSB ​ GB ​ Total ​ ​ ​ ​ $ ​ ​ ​ % ​ ​ ​ $ ​ ​ ​ % ​ ​ ​ $ ​ ​ ​ % ​ ​ ​ $ ​ ​ ​ % ​ ​ ​ $ ​ % ​ ​ (dollars in thousands) As of December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 115,685 6 % $ 131,743 7 % $ 63,316 ​ 5 % $ 73,912 4 % $ 384,656 5 % C&I - other ​ 530,717 26 % 423,161 21 % 175,784 14 % 189,204 10 % 1,318,866 18 % CRE - owner occupied ​ ​ 166,158 ​ 8 % ​ 149,278 ​ 8 % ​ 79,718 6 % ​ 182,198 ​ 10 % ​ 577,352 8 % CRE - non-owner occupied ​ ​ 131,287 ​ 6 % ​ 215,692 ​ 11 % ​ 207,013 ​ 16 % ​ 482,663 ​ 26 % ​ 1,036,655 15 % Construction and land development ​ ​ 342,652 ​ 17 % ​ 303,058 ​ 15 % ​ 318,103 25 % ​ 344,609 ​ 18 % ​ 1,308,422 18 % Multi-family ​ ​ 435,229 ​ 22 % ​ 631,958 ​ 32 % ​ 320,590 ​ 25 % ​ 381,554 ​ 20 % ​ 1,769,331 25 % Direct financing leases ​ 9,533 — % — — % — — % — — % 9,533 — % 1-4 family real estate ​ 252,269 13 % 107,393 5 % 99,854 8 % 144,167 8 % 603,683 9 % Consumer ​ 47,329 2 % 26,587 1 % 16,658 1 % 67,883 4 % 158,457 2 % ​ ​ $ 2,030,859 100 % $ 1,988,870 100 % $ 1,281,036 100 % $ 1,866,190 ​ 100 % $ 7,166,955 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 100,344 5 % $ 136,542 8 % $ 68,628 6 % $ 82,477 5 % $ 387,991 6 % C&I - other ​ ​ 651,306 32 % 436,966 24 % 188,185 16 % 238,475 13 % 1,514,932 22 % CRE - owner occupied ​ ​ 161,474 ​ 8 % ​ 135,643 ​ 8 % ​ 91,352 ​ 8 % ​ 217,524 ​ 12 % ​ 605,993 9 % CRE - non-owner occupied ​ 180,253 ​ 9 % ​ 216,188 ​ 12 % ​ 205,531 ​ 18 % ​ 475,880 ​ 26 % ​ 1,077,852 16 % Construction and land development ​ ​ 360,593 ​ 17 % ​ 311,149 ​ 18 % ​ 307,607 ​ 27 % ​ 334,194 ​ 18 % ​ 1,313,543 19 % Multi-family ​ ​ 289,091 ​ 14 % ​ 404,800 ​ 23 % ​ 189,093 ​ 16 % ​ 249,126 ​ 14 % ​ 1,132,110 17 % Direct financing leases ​ 17,076 1 % — — % — — % — — % 17,076 — % 1-4 family real estate ​ 244,783 12 % 100,334 6 % 91,849 8 % 151,213 8 % 588,179 9 % Consumer ​ 44,006 2 % 19,845 1 % 17,144 1 % 65,733 4 % 146,728 2 % ​ ​ $ 2,048,926 100 % $ 1,761,467 100 % $ 1,159,389 100 % $ 1,814,622 ​ 100 % $ 6,784,404 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proper pricing of loans is necessary to provide adequate return to the Company’s stockholders.
In addition to competitive base wages, additional programs include annual bonus opportunities, an employee stock purchase plan, Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, sabbaticals, flexible work schedules, an employee assistance program, and various wellness programs. ​ The Company is committed to fostering and preserving a culture of inclusion, and believes its differences, of every kind, make the company and its communities better.
In addition to competitive base pay, employees benefit from annual bonus opportunities, an employee stock purchase plan, a Company-matched 401(k) plan, comprehensive healthcare and insurance coverage, health savings and flexible spending accounts, paid time off, floating holidays, family leave, sabbaticals, flexible work schedules, an employee assistance program, an adoption assistance program and a broad suite of wellness programs. ​ The Company fosters a culture where all employees feel welcomed, valued, and recognized.
In accordance with regulatory guidelines, the Company exercises heightened risk management practices when non-owner occupied CRE lending exceeds 300% of total risk-based capital and outstanding balances have increased 50% or more during the prior 36 months or construction, land development and other land loans exceed 100% of total risk-based capital. 10 Table of Contents In addition, the banks have established policy limits around non-owner occupied CRE and total construction, land development and other land loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner CRE Loans/TRBC ​ Total Construction, Land Development and Other Land Loans/TRBC QCBT 300% 100% CRBT 400% 100% CSB 400% 200% GB 450% 100% ​ ​ ​ ​ ​ Although CSB’s loan portfolio has historically been real estate dominated and its total construction, land development and other land loans levels exceed these policy limits, it has established a Credit Risk Committee to routinely monitor its real estate loan portfolio.
As of December 31, 2025 and 2024, approximately 12% and 14% of the CRE loan portfolio was owner-occupied, respectively. 9 Table of Contents In accordance with regulatory guidelines, the Company exercises heightened risk management practices when non-owner occupied CRE lending exceeds 300% of total risk-based capital and outstanding balances have increased 50% or more during the prior 36 months or construction, land development and other land loans exceed 100% of total risk-based capital.
Following is a listing of the significant industries within the Company’s CRE loan portfolio as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ Amount % Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lessors of residential buildings - LIHTC ​ $ 1,778,488 41 % $ 1,650,340 39 % Lessors of nonresidential buildings ​ ​ 679,480 16 % ​ 633,098 15 % Lessors of residential buildings - non LIHTC ​ ​ 535,671 ​ 12 % ​ 442,913 ​ 11 % Hotels ​ 141,005 3 % 135,915 3 % New housing for-sale builders ​ ​ 71,437 ​ 2 % ​ 84,451 ​ 2 % Other * ​ ​ 1,134,201 ​ 26 % ​ 1,268,207 ​ 30 % Other - LIHTC ​ 1,452 - % 17,951 - % Total CRE loans ​ $ 4,341,734 ​ 100 % $ 4,232,875 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * “Other” consists of all other industries.
In addition, the banks have established policy limits around non-owner occupied CRE and total construction, land development and other land loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner CRE Loans/TRBC ​ Total Construction, Land Development and Other Land Loans/TRBC QCBT 300% 100% CRBT 400% 100% CSB 400% 200% GB 450% 100% ​ Following is a listing of the significant industries within the Company’s CRE loan portfolio as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ As of December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lessors of residential buildings - LIHTC ​ $ 2,196,023 46 % ​ $ 1,778,488 41 % Lessors of nonresidential buildings ​ ​ 712,429 15 % ​ ​ 679,480 16 % Lessors of residential buildings - non LIHTC ​ ​ 481,979 ​ 10 % ​ ​ 535,671 ​ 12 % Hotels ​ 182,383 4 % ​ 141,005 3 % New housing for-sale builders ​ ​ 89,011 ​ 2 % ​ ​ 71,437 ​ 2 % Other * ​ 1,129,364 23 % ​ 1,134,201 26 % Other - LIHTC ​ ​ 9,167 ​ - % ​ ​ 1,452 ​ - % Total CRE loans ​ $ 4,800,356 ​ 100 % ​ $ 4,341,734 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * “Other” consists of all other industries.
In addition, m2’s in-house lending limit is $2.5 million to a single lending/leasing entity or group of related entities, subject to certain exceptions. As part of the loan monitoring activity at the four subsidiary banks, credit administration personnel interact closely with senior bank management. For example, the internal loan committee of each subsidiary bank meets weekly.
In 2024, the Company discontinued offering new loans and leases through m2. As part of the loan monitoring activity at the four subsidiary banks, credit administration personnel interact closely with senior bank management. For example, the internal loan committee of each subsidiary bank meets weekly.
The Company actively monitors concentrations within the loan/lease portfolio to ensure appropriate diversification and concentration risk is maintained. ​ ​ ​ ​ 6 Table of Contents Specifically, each subsidiary bank’s total loans as a percentage of total assets may not exceed 85%.
Specifically, each subsidiary bank’s total loans as a percentage of total assets may not exceed 85%.
Educational reimbursement is available to employees enrolled in degree or certification programs and for seminars, conferences, and other training events employees attend in connection with their job duties. ​ 14 Table of Contents As part of its compensation philosophy, the Company believes that it must offer and maintain market competitive total rewards programs for its employees in order to attract and retain exceptional talent.
In coordination with their manager, employees have access to internal training programs, mentorship, professional development, educational reimbursement for degree and certification programs, and opportunities to participate in seminars, conferences, and job-related events. ​ Our compensation philosophy centers on providing a market-competitive total rewards program that attracts and retains exceptional talent.
During recent years, the Company focused on several initiatives to promote inclusion across its organization. A few specific actions included our annual employee survey that included a section specifically on the topic of inclusion, as well as several inclusion sessions and events across our different entities, facilitated by our Inclusion Committee.
We are committed to inclusion and believe that diversity of all kinds strengthens our organization and the communities we serve. Recent initiatives have included a dedicated inclusion section within our annual employee engagement survey and multiple inclusion-focused sessions and events across our entities, led by our Inclusion Committees. We continuously measure engagement to understand employee sentiment and strengthen our culture.
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The combined bank changed its name to Guaranty Bank. The Company engages in direct financing lease contracts and equipment financing agreements through m2, a wholly-owned subsidiary of QCBT based in Waukesha, Wisconsin. Subsidiary Banks.
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When employees are happy, healthy, and engaged, we believe everything else falls into place.
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In September of 2001, the Cedar Rapids branch obtained its own banking charter and began operating as CRBT.
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In 2025, we introduced our Happy, Healthy, Engaged Employees 12 Table of Contents initiative to align and elevate all efforts that support the employee experience to support the recruitment, development and retention of our employees. ​ As of December 31, 2025, the Company employed 967 full-time employees and 72 part-time employees across all locations.
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Loans may be made on an unsecured basis if warranted by the overall financial condition of the borrower.
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None of our employees are represented by a collective bargaining unit. ​ The Company invests heavily in developing talent and preparing the next generation of leadership. We prioritize internal mobility filling roles through promotions and internal transfer whenever possible and supporting continual learning through regular performance and development conversations.
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As of both December 31, 2024 and 2023, approximately 14% of the CRE loan portfolio was owner-occupied.
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In 2025, 91% of employees participated in the annual engagement survey. The Company also achieved an 82% engagement score, outperforming the national benchmark of 73%, the average engagement score of companies in the financial services industry per Culture Amp.
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The Company is a relationship driven company and its ability to attract and retain exceptional employees is key to its success. As of December 31, 2024, the Company employed 941 full-time employees and 72 part-time employees across all locations.
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Culture Amp is a leading employee experience SaaS platform that helps over 6,000 companies measure and improve employee engagement via surveys that offer science-backed survey templates to understand employee sentiment. ​ ESG Commitment. The Company is built on relationships and integrity.
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The employees are not represented by a collective bargaining unit. ​ The Company encourages and supports the growth and development of its employees and, wherever possible, seeks to fill positions by promotion and transfer from within the organization.
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Continual learning and career development is advanced through ongoing performance and development conversations with employees, internally developed training programs and external training opportunities.
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The Company strives to maintain a culture in which employees feel valued and, to that end, regularly solicits feedback from employees to understand their views about their work environment and the Company’s culture. The results from employee engagement surveys are used to implement programs and processes designed to enhance engagement and improve the employee experience.
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In 2024, 95% of employees participated in the annual employee engagement survey, exceeding the Company goal of 80%, and the Company received a strong employee engagement score of 78%, above the national benchmark of 73%. ​ The primary regions in which the subsidiary banks operate – the Quad Cities, Cedar Rapids, Marion, Waterloo/Cedar Falls, Des Moines, Iowa and Springfield/Joplin, Missouri – generally have strong labor markets, with unemployment rates of 3.2% and 3.7% in Iowa and Missouri, respectively as of December 2024. ​ ESG Commitment.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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These changes are beyond our control, can be difficult to predict and could materially impact how we report our financial condition and results of operations. ​ Operational Risks ​ The Company's information systems or those of its third-party partners may experience an interruption, failure or breach in security and cyber-attacks, all of which could have a material adverse effect on the Company's business. ​ The Company relies heavily on internal and outsourced technologies, communications, and information systems to conduct its business, particularly with respect to our core processing provider and our mobile banking provider.
These changes are beyond our control, can be difficult to predict and could materially impact how we report our financial condition and results of operations. ​ Operational Risks ​ The Company's information systems or those of its third-party partners may experience an interruption, failure or breach in security and cyber-attacks, all of which could have a material adverse effect on the Company's business. ​ The Company relies heavily on internal and outsourced technologies, communications, and information systems to conduct its business, particularly with respect to our core processing providers and our mobile banking provider.
Such events may also cause reductions in regional and local economic activity that may have an adverse effect on our customers, which could limit our ability to raise and invest capital in these areas and communities. ​ 23 Table of Contents Legal, regulatory and policy changes may directly affect financial institutions and the global economy. ​ Changes in policy and at banking agencies, including changes in interpretation and prioritization, occur over time through policy and personnel changes following federal- and state-level elections, which lead to changes involving the level of oversight and focus on the financial services industry.
Such events may also cause reductions in regional and local economic activity that may have an adverse effect on our customers, which could limit our ability to raise and invest capital in these areas and communities. ​ Legal, regulatory and policy changes may directly affect financial institutions and the global economy. ​ Changes in policy and at banking agencies, including changes in interpretation and prioritization, occur over time through policy and personnel changes following federal- and state-level elections, which lead to changes involving the level of 20 Table of Contents oversight and focus on the financial services industry.
Acquisitions involve numerous risks, any of which could harm our business, including: ​ ● difficulties in integrating the operations, technologies, products, existing contracts, accounting processes and personnel of the target company and realizing the anticipated synergies of the combined businesses; ● difficulties in supporting and transitioning customers of the target company; 27 Table of Contents ● diversion of financial and management resources from existing operations; ● potential goodwill impairment; ● the price we pay or other resources that we devote may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity; ● risks of entering new markets or areas in which we have limited or no experience or are outside our core competencies; ● potential loss of key employees, customers and strategic alliances from either our current business or the business of the target company; ● risks of acquiring loans with deteriorated credit quality; ● assumption of unanticipated problems or latent liabilities; and ● inability to generate sufficient revenue to offset acquisition costs.
Acquisitions involve numerous risks, any of which could harm our business, including: ​ ● difficulties in integrating the operations, technologies, products, existing contracts, accounting processes and personnel of the target company and realizing the anticipated synergies of the combined businesses; ● difficulties in supporting and transitioning customers of the target company; ● diversion of financial and management resources from existing operations; ● potential goodwill impairment; ● the price we pay or other resources that we devote may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity; ● risks of entering new markets or areas in which we have limited or no experience or are outside our core competencies; ● potential loss of key employees, customers and strategic alliances from either our current business or the business of the target company; ● risks of acquiring loans with deteriorated credit quality; ● assumption of unanticipated problems or latent liabilities; and ● inability to generate sufficient revenue to offset acquisition costs.
When we sell the guaranteed portion of our SBA loans, we incur credit risk on the retained, non-guaranteed portion of the loans. ​ In the event of a loss resulting from default and the SBA determines there is a deficiency in the manner in which the loan was originated, funded or serviced by the us, the SBA may require us to repurchase the loan, deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of 31 Table of Contents the principal loss related to the deficiency from us, any of which could adversely affect our business, results of operations and financial condition. ​ Our community banking strategy relies heavily on our subsidiaries’ independent management teams, and the unexpected loss of key managers may adversely affect our operations. ​ We rely heavily on the success of our bank subsidiaries' independent management teams.
When we sell the guaranteed portion of our SBA loans, we incur credit risk on the retained, non-guaranteed portion of the loans. ​ In the event of a loss resulting from default and the SBA determines there is a deficiency in the manner in which the loan was originated, funded or serviced by the us, the SBA may require us to repurchase the loan, deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of the principal loss related to the deficiency from us, any of which could adversely affect our business, results of operations and financial condition. ​ Our community banking strategy relies heavily on our subsidiaries’ independent management teams, and the unexpected loss of key managers may adversely affect our operations. ​ We rely heavily on the success of our bank subsidiaries' independent management teams.
In addition, increased competition with the largest banks and fintech companies for retail deposits may impact our ability to raise funds through deposits and could have a negative effect on our liquidity. ​ Any decline in available funding could adversely impact our ability to originate loans/leases, invest in securities, meet our expenses, pay dividends to our stockholders, or fulfill our obligations, including repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, results of operations and financial condition. ​ As a bank holding company, our sources of funds are limited. ​ We are a bank holding company, and our operations are primarily conducted by the subsidiary Banks, which are subject to significant federal and state regulation.
In addition, increased competition with the largest banks and fintech companies for retail deposits may impact our ability to raise funds through deposits and could have a negative effect on our liquidity. 22 Table of Contents ​ Any decline in available funding could adversely impact our ability to originate loans/leases, invest in securities, meet our expenses, pay dividends to our stockholders, or fulfill our obligations, including repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, results of operations and financial condition. ​ As a bank holding company, our sources of funds are limited. ​ We are a bank holding company, and our operations are primarily conducted by the subsidiary Banks, which are subject to significant federal and state regulation.
As a result of the recent increase in interest rates and other factors, we have observed a corresponding decline in the value of commercial real estate securing these loans. ​ Our loan/lease portfolio has a significant concentration of CRE loans, which involve risks specific to real estate values. ​ CRE lending comprises a significant portion of our lending business.
As a result of recent elevated interest rates and other factors, we have observed a corresponding decline in the value of commercial real estate securing these loans. ​ Our loan/lease portfolio has a significant concentration of CRE loans, which involve risks specific to real estate values. ​ CRE lending comprises a significant portion of our lending business.
As the Company’s reliance on technology has increased, so have the potential risks of a technology-related operation interruption (such as disruptions in the Company’s customer relationship 29 Table of Contents management, general ledger, deposit, loan, or other systems), intentional or unintentional acts by those having authorized access to the Company’s systems and confidential information, or the occurrence of a cyber-attack (such as unauthorized access to the Company's systems or those of our third-party partners, including as a result of increasingly sophisticated methods of conducting cyber-attacks, including those employing artificial intelligence).
As the Company’s reliance on technology has increased, so have the potential risks of a technology-related operation interruption (such as disruptions in the Company’s customer relationship management, general ledger, deposit, loan, or other systems), intentional or unintentional acts by those having authorized access to the Company’s systems and confidential information, or the occurrence of a cyber-attack (such as unauthorized access to the Company's systems or those of our third-party partners, including as a result of increasingly sophisticated methods of conducting cyber-attacks, including those employing artificial intelligence).
Competitive and Strategic Risks ● Competition from other banks and non-bank financial services providers; ● The Company’s ability to pursue strategic acquisition growth strategies and organic growth; and 16 Table of Contents ● Reputational risks. Accounting and Tax Risks ● Risks associated with the use of estimates in preparing the Company’s Consolidated Financial Statements.
Competitive and Strategic Risks ● Competition from other banks and non-bank financial services providers; ● The Company’s ability to pursue strategic acquisition growth strategies and organic growth; and ● Reputational risks. 14 Table of Contents Accounting and Tax Risks ● Risks associated with the use of estimates in preparing the Company’s Consolidated Financial Statements.
By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results may differ from these estimates and judgments under different assumptions or conditions, which may have a material adverse effect on our financial condition or results of operations in subsequent periods. ​ From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of our external financial statements.
By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results may differ from these estimates and judgments under different assumptions or conditions, which may have a material adverse effect on our financial condition or results of operations in subsequent periods. ​ 25 Table of Contents From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of our external financial statements.
Accordingly, digital asset service providers—which at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions—are becoming active competitors to more traditional financial institutions. ​ The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from deposits.
Accordingly, digital asset service providers—which at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions—are becoming active competitors to more traditional financial institutions. ​ 23 Table of Contents The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from deposits.
Our stock price could fluctuate significantly in response to our quarterly or annual results and the impact of these risk factors on our operating results or financial position. ​ 19 Table of Contents Secondary mortgage, government guaranteed loan and interest rate swap market conditions could have a material impact on our financial condition and results of operations. ​ Currently, we sell a portion of the residential real estate and government guaranteed loans we originate.
Our stock price could fluctuate significantly in response to our quarterly or annual results and the impact of these risk factors on our operating results or financial position. ​ Secondary mortgage, government guaranteed loan and interest rate swap market conditions could have a material impact on our financial condition and results of operations. ​ Currently, we sell a portion of the residential real estate and government guaranteed loans we originate.
The failure to successfully evaluate and execute acquisitions or otherwise adequately address the risks associated with acquisitions could have a material adverse effect on our business, results of operations and financial condition. ​ New lines of business or new products and services may subject us to additional risks. ​ From time to time, we may seek to implement new lines of business or offer new products and services within existing lines of business in our current markets or new markets.
The failure to successfully evaluate and execute acquisitions or otherwise adequately address the risks associated with acquisitions could have a material adverse effect on our business, results of operations and financial condition. ​ 24 Table of Contents New lines of business or new products and services may subject us to additional risks. ​ From time to time, we may seek to implement new lines of business or offer new products and services within existing lines of business in our current markets or new markets.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline. ​ 28 Table of Contents Our reputation could be damaged by negative publicity. ​ Reputational risk, or the risk to our business, financial condition or results of operations from negative publicity, is inherent in our business.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline. ​ Our reputation could be damaged by negative publicity. ​ Reputational risk, or the risk to our business, financial condition or results of operations from negative publicity, is inherent in our business.
Although we 22 Table of Contents have policies and procedures designed to mitigate the risk of any such violations, there can be no assurance that such violations will not occur. ​ Future legislation, regulation, and government policy could affect the banking industry as a whole, including our business and results of operations, in ways that are difficult to predict.
Although we have policies and procedures designed to mitigate the risk of any such violations, there can be no assurance that such violations will not occur. ​ Future legislation, regulation, and government policy could affect the banking industry as a whole, including our business and results of operations, in ways that are difficult to predict.
Our competitors include large regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, fintech companies, money market mutual funds, credit unions, online lenders and other non-bank financial services providers. Many of these competitors are not subject to the same regulatory restrictions as we are.
Our competitors include large regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, fintech companies, digital asset service providers, money market mutual funds, credit unions, online lenders and other non-bank financial services providers. Many of these competitors are not subject to the same regulatory restrictions as we are.
Any changes to the SBA program, including changes to the level of guaranty provided by the federal government on SBA loans or changes to the level of funds appropriated by the federal government to the various SBA programs, may also have an adverse effect on our business, results of operations and financial condition. ​ Historically we have sold the guaranteed portion of our SBA loans in the secondary market.
Any changes to the SBA program, including changes to the level of guaranty provided by the federal government on SBA loans or changes to the level of funds appropriated by the federal government to the various SBA programs, may also have an adverse effect on our business, results of operations and financial condition. 27 Table of Contents ​ Historically we have sold the guaranteed portion of our SBA loans in the secondary market.
Economic events, including decreases in office occupancy following the COVID-19 pandemic as a result of the shift to remote and hybrid work environments, or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties. ​ Included in our CRE lending portfolio are our LIHTC construction, and permanent loans, which have the same inherent risks as our other non-owner occupied CRE loans.
Economic events, including decreases in office occupancy as a result of the shift to remote and hybrid work environments, or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties. ​ Included in our CRE lending portfolio are our LIHTC construction, and permanent loans, which have the same inherent risks as our other non-owner occupied CRE loans.
Our hedging strategies and the derivatives that we use may not adequately offset the risks of interest rate volatility and could result in or magnify losses, which could have an adverse effect on our financial condition and results of operations. Unexpected early termination of interest rate swap agreements may affect earnings.
Our hedging strategies and the derivatives that we use may not adequately offset the risks of interest rate 17 Table of Contents volatility and could result in or magnify losses, which could have an adverse effect on our financial condition and results of operations. Unexpected early termination of interest rate swap agreements may affect earnings.
New or revised laws and regulations, including with the respect to the use of artificial intelligence by financial institutions and service providers, may significantly impact our current and planned privacy, data protection and information security-related practices, the collection, use, retention, and safeguarding of customer and employee information, and current or planned business activities.
New or revised laws and regulations, including with the respect to the use of artificial intelligence by financial institutions and service providers, may significantly impact our current and planned privacy, data protection and information security-related practices, the collection, use, retention, and safeguarding of customer and employee 26 Table of Contents information, and current or planned business activities.
Changes to the LIHTC programs, including 25 Table of Contents changes to the level of tax credits provided by the federal government on low-income housing, may have an adverse effect on our business, results of operations, and financial condition. ​ Capital and Liquidity Risks ​ Liquidity risks could affect operations and jeopardize our business, results of operations and financial condition. ​ Liquidity is essential to our business.
Changes to the LIHTC programs, including changes to the level of tax credits provided by the federal government on low-income housing, may have an adverse effect on our business, results of operations, and financial condition. ​ Capital and Liquidity Risks ​ Liquidity risks could affect operations and jeopardize our business, results of operations and financial condition. ​ Liquidity is essential to our business.
However, these models are inherently limited because they involve techniques, including the use of historical data in some circumstances, and judgments that cannot anticipate every economic and financial outcome in 32 Table of Contents the markets in which we operate, nor can they anticipate the specifics and timing of such outcomes.
However, these models are inherently limited because they involve techniques, including the use of historical data in some circumstances, and judgments that cannot anticipate every economic and financial outcome in the markets in which we operate, nor can they anticipate the specifics and timing of such outcomes.
Such conditions could adversely affect the credit quality of our loans, financial condition and results of operations. ​ 17 Table of Contents Interest rates and other conditions impact our results of operations. ​ Our profitability is in large part a function of the spread between the interest rates earned on investments and loans/leases and the interest rates paid on deposits and other interest-bearing liabilities.
Such conditions could adversely affect the credit quality of our loans, financial condition and results of operations. ​ Interest rates and other conditions impact our results of operations. ​ Our profitability is in large part a function of the spread between the interest rates earned on investments and loans/leases and the interest rates paid on deposits and other interest-bearing liabilities.
As of December 31, 2024, the Banks had deposits, borrowings and other liabilities in the aggregate of approximately $8.0 billion. ​ Our allowance for credit losses may prove to be insufficient to absorb losses in our loan/lease portfolio. ​ We establish our allowance for credit losses in consultation with management of our subsidiaries and maintain it at a level considered adequate by management to absorb loan/lease losses that are inherent in the portfolio.
As of December 31, 2025, the Banks had deposits, borrowings and other liabilities in the aggregate of approximately $8.3 billion. ​ Our allowance for credit losses may prove to be insufficient to absorb losses in our loan/lease portfolio. ​ We establish our allowance for credit losses in consultation with management of our subsidiaries and maintain it at a level considered adequate by management to absorb loan/lease losses that are inherent in the portfolio.
Accordingly, our ultimate losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies, which could adversely affect our financial condition and results of operations. ​ Item 1B. Unresolved Staff Comments There are no unresolved staff comments.
Accordingly, our ultimate losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies, which could adversely affect our financial condition and results of operations. ​ Item 1B. Unresolved Staff Comments There are no unresolved staff comments. 30 Table of Contents
These laws, regulations, rules, standards, policies and interpretations are constantly evolving and may change significantly over time. ​ U.S. financial institutions are also subject to numerous monitoring, recordkeeping, and reporting requirements designed to detect and prevent illegal activities such as money laundering and terrorist financing. These requirements are imposed primarily through the Bank Secrecy Act.
These laws, regulations, rules, standards, policies and interpretations are constantly evolving and may change significantly over time. ​ U.S. financial institutions are also subject to numerous monitoring, recordkeeping, and reporting requirements designed to detect and prevent illegal activities such as money laundering and terrorist financing. These requirements are imposed 19 Table of Contents primarily through the Bank Secrecy Act.
Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through computer systems and network infrastructure, as well as that of our customers engaging in internet banking activities, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. 30 Table of Contents ​ Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage, there can be no assurance that these security measures will be successful.
Computer hacking, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through computer systems and network infrastructure, as well as that of our customers engaging in internet banking activities, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. ​ Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage, there can be no assurance that these security measures will be successful.
In addition, the size of nonrefundable swap fees earned in connection with our LIHTC permanent loans may fluctuate depending on the interest rate environment. We measure interest rate risk under various rate scenarios using specific criteria and assumptions.
In addition, the size of nonrefundable swap fees earned in connection with our LIHTC permanent loans may fluctuate depending on the interest rate environment. 15 Table of Contents We measure interest rate risk under various rate scenarios using specific criteria and assumptions.
However, default risk may arise from events or circumstances that are difficult to detect, such as fraud, or difficult to predict, such as catastrophic events affects on certain industries.
However, default risk may arise from events or circumstances that are difficult to detect, such as fraud, or difficult to predict, such as catastrophic events effects on certain industries.
These effects from interest rate changes or from other sustained economic stress or a recession, among other matters, could have a material adverse effect on our business, financial condition, liquidity, and results of operations. ​ Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments and including conflicts in the Middle East and the Russian invasion of Ukraine, and their resulting disruptions in political systems and the global energy market, and tight labor market conditions and supply chain issues, there is a meaningful risk that the Federal Reserve and other central banks may maintain interest rates at elevated levels, which may limit economic growth and potentially cause an economic recession.
These effects from interest rate changes or from other sustained economic stress or a recession, among other matters, could have a material adverse effect on our business, financial condition, liquidity, and results of operations. ​ Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments including conflicts in the Middle East, the Russian invasion of Ukraine, and the recent military activity in Venezuela, and resulting disruptions in political systems and the global energy market, changes in foreign relations, and tight labor market conditions and supply chain issues, there is a meaningful risk that the Federal Reserve and other central banks may maintain interest rates at levels which may limit economic growth and potentially cause an economic recession.
Although management believes that the allowance as of December 31, 2024 was adequate to absorb losses on any existing loans/leases that may become uncollectible, we cannot predict loan/lease losses with certainty, and we cannot assure you that our allowance will prove sufficient to cover actual 26 Table of Contents loan/lease losses in the future, particularly if economic conditions are more difficult than what management currently expects.
Although management believes that the allowance as of December 31, 2025 was adequate to absorb losses on any existing loans/leases that may become uncollectible, we cannot predict loan/lease losses with certainty, and we cannot assure you that our allowance will prove sufficient to cover actual loan/lease losses in the future, particularly if economic conditions are more difficult than what management currently expects.
Our securities portfolio has an average duration of 5.8 years, so we expect an increase in realized losses if interest rates increase in 2025. ​ The market value of investments may be affected by factors other than the underlying performance of the servicer of the securities or the mortgages underlying the securities, such as changes in the interest rate environment, negative trends in the residential and commercial real estate markets, ratings downgrades, adverse changes in the business climate and a lack of liquidity in the secondary market for certain investment securities.
Our securities portfolio has an average duration of 5.4 years, so we expect an increase in unrealized losses if interest rates increase in 2026. ​ The market value of investments may be affected by factors other than the underlying performance of the servicer of the securities or the mortgages underlying the securities, such as changes in the interest rate environment, negative trends in the residential and commercial real estate markets, ratings downgrades, adverse changes in the business climate and a lack of liquidity in the secondary market for certain investment securities.
A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, decreased labor force size and participation rates. Although we have not experienced any material labor shortage to date, we have recently observed an overall tightening and competitive local labor market.
A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, decreased labor force size and participation rates. Although we have not experienced any material labor shortage to date, we have continued to observe an overall tightening and competitive local labor market.
In the future, it is possible that we may not generate sufficient revenues to service or repay our debt, and have sufficient funds left over to achieve or sustain profitability in our operations, meet our working capital and capital expenditure needs, and to pay dividends to our common stockholders.
In the future, it is possible that we may not generate sufficient revenues to service or repay our debt, and have sufficient funds left over to achieve or sustain profitability in our operations, meet our working capital and capital expenditure needs, and 29 Table of Contents to pay dividends to our common stockholders.
However, as with any risk management framework, there are inherent limitations to our current and future risk management strategies, including risks that we have not appropriately anticipated or identified. In certain instances, we rely on models to measure, monitor and predict risks.
However, as with any risk management framework, there are inherent 28 Table of Contents limitations to our current and future risk management strategies, including risks that we have not appropriately anticipated or identified. In certain instances, we rely on models to measure, monitor and predict risks.
If we are forced to liquidate any of those investments 18 Table of Contents prior to maturity, including because of a lack of liquidity, we would recognize as a charge to earnings the losses attributable to those securities.
If we are forced to liquidate any of those investments prior to maturity, including because of a lack of liquidity, we would recognize as a charge to earnings the losses attributable to those securities.
Based on management’s evaluation, it was determined that the gross unrealized losses at December 31, 2024 were primarily a function of the changes in certain market interest rates. ​ A large percentage of our investment securities has fixed interest rates and are classified as available for sale.
Based on management’s evaluation, it was determined that the gross unrealized losses at December 31, 2025 were primarily a function of the changes in certain market interest rates. 16 Table of Contents ​ A large percentage of our investment securities has fixed interest rates and are classified as available for sale.
In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the 34 Table of Contents ultimate loss to us from the legal proceedings in question.
In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the ultimate loss to us from the legal proceedings in question.
Severe weather, natural disasters, pandemics, acts of terrorism or war or other adverse external events could significantly impact the Company's business. ​ As the Company's operating and market footprint continues to grow, severe weather, natural disasters, pandemics, acts of terrorism or war (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East) and other adverse external events, including the response of the U.S. government to such events, could have a significant impact on the Company’s ability to conduct business.
Severe weather, natural disasters, pandemics, acts of terrorism or war or other adverse external events could significantly impact the Company's business. ​ As the Company's operating and market footprint continues to grow, severe weather, natural disasters, pandemics, acts of terrorism or war (including the Russian invasion of Ukraine, ongoing conflicts in the Middle East and the recent military action in Venezuela), changes in foreign relations, and other adverse external events, including the response of the U.S. government to such events, could have a significant impact on the Company’s ability to conduct business.
Smaller companies tend to be at a competitive disadvantage and 24 Table of Contents generally have limited operating histories, less sophisticated internal record keeping and financial planning capabilities and fewer financial resources than larger companies.
Smaller companies tend to be at a competitive disadvantage and generally have limited operating histories, less sophisticated internal record keeping and financial planning capabilities and fewer financial resources than larger companies.
In addition, we expect that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of our products and services and those developed by our third-party partners. ​ 33 Table of Contents We have a substantial amount of debt outstanding and may incur additional indebtedness in the future, which could restrict our operations. ​ As of December 31, 2024, we had $282.3 million of total indebtedness outstanding at the holding company level.
In addition, we expect that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of our products and services and those developed by our third-party partners. ​ We have a substantial amount of debt outstanding and may incur additional indebtedness in the future, which could restrict our operations. ​ As of December 31, 2025, we had $283.1 million of total indebtedness outstanding at the holding company level.
Our borrowers may experience financial difficulties, and the level of nonperforming loans, charge-offs and delinquencies could rise, which could negatively impact our business through increased provision expense, reduced interest income on loans/leases, and increased expenses incurred to carry and resolve problem loans/leases. ​ C&I loans make up a large portion of our loan/lease portfolio. ​ C&I loans were $1.9 billion, or approximately 28% of our total loan/lease portfolio, as of December 31, 2024.
Our borrowers may experience financial difficulties, and the level of nonperforming loans, charge-offs and delinquencies could rise, which could negatively impact our business through increased provision expense, reduced interest income on loans/leases, and increased expenses incurred to carry and resolve problem loans/leases. ​ 21 Table of Contents C&I loans make up a large portion of our loan/lease portfolio. ​ C&I loans were $1.7 billion, or approximately 24% of our total loan/lease portfolio, as of December 31, 2025.
On a quarterly basis, we formally evaluate investments and other assets for impairment indicators. Reduction in the value, or impairment of our investment securities, can impact our earnings and common stockholders’ equity. We maintained a balance of $1.2 billion, or 13% of our assets, in investment securities at December 31, 2024.
On a quarterly basis, we formally evaluate investments and other assets for impairment indicators. Reduction in the value, or impairment of our investment securities, can impact our earnings and common stockholders’ equity. We maintained a balance of $1.3 billion, or 14% of our assets, in investment securities at December 31, 2025.
In addition, trends in financial and business reporting, including environmental, social and governance (ESG) related disclosures, could require us to incur additional reporting expense.
In addition, trends in financial and business reporting, including ESG related disclosures, could require us to incur additional reporting expense.
If interest rates move, interest rate swap transactions may no longer make sense for the Company and/or its customers. Interest rate swaps are generally appropriate for commercial customers with a certain level of expertise and comfort with derivatives, so our success is dependent upon the ability to make loans to these types of commercial customers.
If the shape of the yield curve shifts significantly, interest rate swap transactions may no longer make sense for the Company and/or its customers. Interest rate swaps are generally appropriate for commercial customers with a certain level of expertise and comfort with derivatives, so our success is dependent upon the ability to make loans to these types of commercial customers.
Any future change in monetary policy by the FOMC, in an effort to stimulate the economy or otherwise, resulting in lower interest rates would likely result in lower revenue through lower net interest income over time, which could adversely affect our results of operations.
Any future changes in monetary policy by the FOMC, in an effort to stimulate the economy or otherwise, resulting in changes to interest rates would likely affect net interest income over time, which could adversely affect our results of operations.
Quantitative and Qualitative Disclosures About Market Risk and Note 7 to the Consolidated Financial Statements. Continued elevated levels of inflation could adversely impact our business and results of operations. ​ The U.S. has recently experienced elevated levels of inflation, with the consumer price index at 2.9% at the end of 2024.
Quantitative and Qualitative Disclosures About Market Risk and Note 7 to the Consolidated Financial Statements. Elevated levels of inflation could adversely impact our business and results of operations. ​ The U.S. has recently experienced elevated levels of inflation, with the consumer price index having stabilized lower at 2.7% at the end of 2025.
This could decrease loan demand, harm the credit characteristics of our existing loan portfolio and decrease the value of collateral securing loans in the portfolio. ​ Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital. ​ The market value of investments in our securities portfolio has become increasingly volatile in recent years, and as of December 31, 2024, we had gross unrealized losses of $113.6 million, or 9.7% of amortized cost, in our investment portfolio (offset by gross unrealized gains of $28.1 million).
This could decrease loan demand, harm the credit characteristics of our existing loan portfolio and decrease the value of collateral securing loans in the portfolio. ​ Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital. ​ The market value of investments in our securities portfolio has become increasingly volatile in recent years, and as of December 31, 2025, we had gross unrealized losses of $164.5 million, or 12.9% of amortized cost, in our investment portfolio (offset by gross unrealized gains of $26.5 million).
Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments such as ongoing conflicts in the Middle East and the Russian invasion of Ukraine, and resulting disruptions in the global energy market, tight labor market conditions domestically, supply chain issues both domestically and internationally and the potential effects of a new presidential administration, including its response to the foregoing, potential imposition of new tariffs, mass deportations and changes to tax or other financial regulations, uncertainty surrounding future changes may adversely affect our operating environment and therefore our business, financial condition, results of operations and growth prospects. ​ Evolving law impacting cannabis-related businesses in Illinois, Missouri and other states may have an impact on the Company's operations and risk profile. ​ The Controlled Substances Act makes it illegal under federal law to manufacture, distribute, or dispense marijuana.
Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, changing foreign relations, geopolitical developments such as ongoing conflicts in the Middle East, the Russian invasion of Ukraine and the recent military activity in Venezuela, and resulting disruptions in the global energy market, tight labor market conditions domestically, supply chain issues both domestically and internationally and potential changes to tariffs, immigration policy and tax or other financial regulations, uncertainty surrounding future changes may adversely affect our operating environment and therefore our business, financial condition, results of operations and growth prospects. ​ Evolving law impacting cannabis-related businesses in Illinois, Missouri and other states may have an impact on the Company's operations and risk profile. ​ The Controlled Substances Act makes it illegal under federal law to manufacture, distribute, or dispense marijuana.
At December 31, 2024, our allowance as a percentage of gross loans/leases held for investment was 1.32%, and as a percentage of total NPLs was 202.6%. ​ In addition, we had net charge-offs as a percentage of gross average loans/leases of 0.05% for the year ended December 31, 2024.
At December 31, 2025, our allowance as a percentage of gross loans/leases held for investment was 1.26%, and as a percentage of total NPLs was 213.08%. ​ In addition, we had net charge-offs as a percentage of gross average loans/leases of 0.27% for the year ended December 31, 2025.
The bilateral collateral agreements reduce the Company’s counterparty risk exposure. There can be no assurance that these arrangements will be effective in reducing the Company’s exposure to changes in interest rates.
There can be no assurance that these arrangements will be effective in reducing the Company’s exposure to changes in interest rates.
Continued elevated levels of inflation could also cause increased volatility and uncertainty in the business environment, which could adversely affect loan demand and our clients’ ability to repay indebtedness.
In addition, if interest rates rise in response to elevated levels of inflation, the value of our securities portfolio could be negatively impacted. Elevated levels of inflation could also cause increased volatility and uncertainty in the business environment, which could adversely affect loan demand and our clients’ ability to repay indebtedness.
Specifically, CRE loans were $4.3 billion, or approximately 64% of our total loan/lease portfolio, as of December 31, 2024. Of this amount, $606.0 million, or approximately 14%, was owner-occupied.
Specifically, CRE loans were $4.8 billion, or approximately 67% of our total loan/lease portfolio, as of December 31, 2025. Of this amount, $577.4 million, or approximately 12%, was owner-occupied and $2.2 billion, or approximately 46%, were LIHTC loans.
These swap agreements involve other risks, such as the risk that the counterparty may fail to honor its obligations under these arrangements, leaving the Company vulnerable to interest rate movements. The Bank’s current interest rate swap agreements include bilateral collateral agreements whereby the net fair value position is collateralized by the party in a net liability position.
These swap agreements involve other risks, such as the risk that the counterparty may fail to honor its obligations under these arrangements, leaving the Company vulnerable to interest rate movements.
As a result, political and social attention to the issue of climate change has increased. In recent years, governments across the world have entered into international agreements to attempt to reduce global temperatures, in part by limiting greenhouse gas emissions. In recent years, the U.S.
In recent years, governments across the world have entered into international agreements to attempt to reduce global temperatures, in part by limiting greenhouse gas emissions. Consumers and businesses may also change their behavior on their own as a result of these concerns.
For example, elevated inflation harms consumer purchasing power, which could negatively affect our retail customers and the economic environment and, ultimately, many of our business customers, and could also negatively affect our levels of non-interest expense. In addition, if interest rates rise in response to elevated levels of inflation, the value of our securities portfolio could be negatively impacted.
Elevated levels of inflation could have complex effects on our business and results of operations, some of which could be materially adverse. For example, elevated inflation harms consumer purchasing power, which could negatively affect our retail customers and the economic environment and, ultimately, many of our business customers, and could also negatively affect our levels of non-interest expense.
To limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk, we may borrow at fixed rates or variable rates depending upon prevailing market conditions. 20 Table of Contents Our interest rate contracts expose us to: ● basis or spread risk, which is the risk of loss associated with variations in the spread between the interest rate contract and the hedged item; ● credit or counter-party risk, which is the risk of the insolvency or other inability of another party to the transaction to perform its obligations; ● interest rate risk; ● volatility risk, which is the risk that the expected uncertainty relating to the price of the underlying asset differs from what is anticipated; and ● liquidity risk.
Our interest rate contracts expose us to, among others: ● basis or spread risk, which is the risk of loss associated with variations in the spread between the interest rate contract and the hedged item; ● credit or counter-party risk, which is the risk of the insolvency or other inability of another party to the transaction to perform its obligations; ● interest rate risk; ● volatility risk, which is the risk that the expected uncertainty relating to the price of the underlying asset differs from what is anticipated; and ● liquidity risk.
As interest rates have increased, our cost of funds has increased more rapidly than the yields on a substantial portion of our interest-earning assets. In addition, the market value of our fixed-rate assets, for example, our investment securities, has declined in recent periods.
As interest rates increased during the most recent Federal Reserve rate increase cycle, our cost of funds increased more rapidly than yields on a substantial portion of our interest-earning assets. The market value of our fixed rate assets, including our investment securities, may continue to be impacted by changes in the interest rate environment.
Industry trends in ransomware, phishing, and other intrusion methods have increased significantly and will continue to pose increased risk while the Company’s operations remain partially remote. ​ In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against financial institutions, retailers and government agencies, as well as the third-party partners that serve them, particularly denial of service attacks that are designed to disrupt key business or government services, such as customer-facing web sites.
The Company and its core processing systems may be more vulnerable to threat actors during these transitions, and may not be able to anticipate matters that could cause delays or interruptions during the consolidations. ​ In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against financial institutions, retailers and government agencies, as well as the third-party partners that serve them, particularly denial of service attacks that are designed to disrupt key business or government services, such as customer-facing web sites.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits. ​ In 2025, the FOMC decreased the target range for the federal funds rate from 4.25% to 4.50% to a range of 3.50% to 3.75%.
In line with the foregoing, we have experienced and may continue to experience an increase in the cost of interest-bearing liabilities primarily due to increasing the rates we pay on some of our deposit products to stay competitive within our market and an increase in borrowing costs from increases in the federal funds rate.
The cost of our interest bearing liabilities may be similarly affected by changes in the rates we pay on our deposit products to stay competitive within our market. In addition, our borrowing costs may be affected by changes in the federal funds rate. Community banks rely more heavily than larger institutions on net interest income as a revenue source.
Removed
Their use also affects interest rates charged on loans or paid on deposits. ​ It is currently expected that during 2025, and perhaps beyond, the Federal Open Market Committee of the Federal Reserve, or FOMC, may decrease interest rates.
Added
To limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk, we may borrow at fixed rates or variable rates depending upon prevailing market conditions.
Removed
In 2024, the FOMC decreased the target range for the federal funds rate from 5.25% to 5.50% to a range of 4.25% to 4.50%. The decrease was expressly made in response to inflation moderating and the labor market weakening.
Added
The Bank’s current interest rate swap agreements include bilateral collateral 18 Table of Contents agreements whereby the net fair value position is collateralized by the party in a net liability position. The bilateral collateral agreements reduce the Company’s counterparty risk exposure.
Removed
Community banks rely more heavily than larger institutions on net interest income as a revenue source.
Added
Industry trends in ransomware, phishing, and other intrusion methods have increased significantly and will continue to pose increased risk while the Company’s operations remain partially remote. ​ Technology-related operation interruptions may also occur in connection with planned system upgrades and vendor transitions.
Removed
Continued elevated levels of inflation could have complex effects on our business and results of operations, 21 Table of Contents some of which could be materially adverse.
Added
The Company completed a core processing provider consolidation at GB in the fourth quarter of 2025 and intends to undertake core processing provider consolidations at its other subsidiary banks in 2026 and 2027.
Removed
Congress, state legislatures and federal and state banking agencies have proposed and advanced numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change. Consumers and businesses may also change their behavior on their own as a result of these concerns.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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This information security program is a key part of our overall risk management system, which is administered by our Chief Risk Officer. The program includes administrative, technical and physical safeguards to help ensure the security and confidentiality of customer records and information. These security and privacy policies and procedures are in effect across all of our businesses and geographic locations.
This information security program is a key part of our overall risk management system, which is administered by our Chief Operating Officer. The program includes administrative, technical and physical safeguards to help ensure the security and confidentiality of customer records and information. These security and privacy policies and procedures are in effect across all of our businesses and geographic locations.
The Chief Operating Officer is an experienced Certified Information Systems Security Professional (CISSP) with more than 10 years of relevant experience in technology, security, and risk management across multiple industries, including finance and banking. 35 Table of Contents In addition, our board of directors, as a whole and through its Risk Oversight Committee (the “Risk Committee”), is responsible for the oversight of risk management.
Our management team is responsible for the day-to-day management of risks we face, including our current Chief Operating Officer and Chief Security Officer. The Chief Operating Officer is an experienced Certified Information Systems Security Professional with more than 10 years of relevant experience in technology, security, and risk management across multiple industries, including finance and banking.
Removed
Our management team is responsible for the day-to-day management of risks we face, including our current Chief Operating Officer and Chief Security Officer.
Added
In addition, our board of directors, as a whole and through its Risk Oversight Committee (the “Risk Committee”), is responsible for the oversight of risk management.

Item 2. Properties

Properties — owned and leased real estate

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Management believes that the facilities are of sound construction, in good operating condition, are appropriately insured, and are adequately equipped for carrying on the business of the Company. No individual real estate property amounts to 10% or more of consolidated assets.
Management believes that the facilities are of sound construction, in good operating condition, are appropriately insured, and are adequately equipped for carrying on the business of the Company. No individual real estate property amounts to 10% or more of the Company’s consolidated assets.
Each such property is leased or owned by the Company or its subsidiaries and no such property is subject to any material encumbrance. ​ The subsidiary banks intend to limit their investment in premises to no more than 50% of their capital.
Each such property is leased or owned by the Company or its subsidiaries and no such property is subject to any material encumbrance. 31 Table of Contents ​ The subsidiary banks intend to limit their investment in premises to no more than 50% of their capital.
Item 2. Properties The Company’s headquarters is located at 3551 7 th Street, Moline, Illinois.
Item 2. Properties The Company’s headquarters are located at 3551 7 th Street, Moline, Illinois.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+5 added−0 removed5 unchanged
See Appendix A 36 Table of Contents “Supervision and Regulation” for additional information regarding regulatory restrictions on the payment of dividends. The Company also has certain contractual restrictions on its ability to pay dividends. The Company has issued debt securities in public offerings and in private placements.
See Appendix A “Supervision and Regulation” for additional information regarding regulatory restrictions on the payment of dividends. The Company also has certain contractual restrictions on its ability to pay dividends. The Company has issued debt securities in public offerings and in private placements.
The following graph indicates, for the period commencing December 31, 2019 and ending December 31, 2024, a comparison of cumulative total returns for the Company, the Nasdaq Composite Index, and the SNL Bank Nasdaq Index prepared by S&P Global, Charlottesville, Virginia. The graph was prepared at the Company’s request by S&P Global.
The following graph indicates, for the period commencing December 31, 2020 and ending December 31, 2025, a comparison of cumulative total returns for the Company, the Nasdaq Composite Index, and the SNL Bank Nasdaq Index prepared by S&P Global, Charlottesville, Virginia. The graph was prepared at the Company’s request by S&P Global.
As of February 12, 2025, there were 16,901,169 shares of common stock outstanding held by 596 holders of record. Additionally, there are an estimated 7,140 beneficial holders whose stock was held in the street name by brokerage houses and other nominees as of that date. Dividends on Common Stock.
As of February 12, 2026, there were 16,730,722 shares of common stock outstanding held by 559 holders of record. Additionally, there are an estimated 12,200 beneficial holders whose stock was held in the street name by brokerage houses and other nominees as of that date. Dividends on Common Stock.
On May 19, 2022, the board of directors of the Company approved a share repurchase program under which the Company is authorized to repurchase, from time to time as the Company deems appropriate, up to an additional 1,500,000 shares of its outstanding common stock, or approximately 10% of the outstanding shares as of December 31, 2021.
There were 1,550,544 shares of common stock remaining for repurchase under new share repurchase program as of December 31, 2025. ​ On May 19, 2022, the board of directors of the Company approved the prior repurchase program under which the Company was authorized to repurchase, from time to time as the Company deemed appropriate, up to 1,500,000 shares of its outstanding common stock, or approximately 8.5% of the outstanding shares as of May 1, 2022.
All shares that were repurchased under the share repurchase program were retired. There were no shares of common stock purchased by the Company during the year ending December 31, 2024.
All shares that were repurchased under the prior repurchase program were retired. There were 129,056, 0 and 175,000 shares of common stock purchased by the Company under the prior repurchase program during the years ending December 31, 2025, 2024 and 2023, respectively.
There were 175,000 and 970,000 shares of common stock purchased by the Company during the years ending December 31, 2023 and 2022, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Maximum number ​ ​ ​ ​ ​ ​ purchased as part of ​ of shares that may yet ​ ​ Total number of ​ Average price ​ publicly announced ​ be purchased under Period ​ shares purchased paid per share plans or programs the plans or programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1-31, 2022 ​ — ​ — ​ 394,085 ​ 405,915 ​ February 1-28, 2022 ​ — ​ — ​ 394,085 ​ 405,915 ​ March 1-31, 2022 ​ 77,500 ​ $ 56.98 ​ 471,585 ​ 328,415 ​ April 1-30, 2022 ​ 200,000 ​ 56.55 ​ 671,585 ​ 128,415 ​ May 1-31, 2022 ​ 192,500 ​ 53.29 ​ 864,085 ​ 1,435,915 ​ June 1-30, 2022 ​ 210,000 ​ 54.40 ​ 1,074,085 ​ 1,225,915 ​ July 1-31, 2022 ​ 190,000 ​ 55.18 ​ 1,264,085 ​ 1,035,915 ​ August 1-31, 2022 ​ — ​ — ​ 1,264,085 ​ 1,035,915 ​ September 1-30, 2022 ​ — ​ — ​ 1,264,085 ​ 1,035,915 ​ October 1-31, 2022 ​ — ​ — ​ 1,264,085 ​ 1,035,915 ​ November 1-30, 2022 ​ 34,506 ​ 51.63 ​ 1,298,591 ​ 1,001,409 ​ December 1-31, 2022 ​ 65,494 ​ 50.20 ​ 1,364,085 ​ 935,915 ​ January 1-31, 2023 ​ — ​ — ​ 1,364,085 ​ 935,915 ​ February 1-28, 2023 ​ 60,000 ​ 53.61 ​ 1,424,085 ​ 875,915 ​ March 1-31, 2023 ​ 92,500 ​ 48.62 ​ 1,516,585 ​ 783,415 ​ April 1-30, 2023 ​ 22,500 ​ 42.97 ​ 1,539,085 ​ 760,915 ​ May 1-31, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ June 1-30, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ July 1-31, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ August 1-31, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ September 1-30, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ October 1-31, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ November 1-30, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ December 1-31, 2023 ​ — ​ — ​ 1,539,085 ​ 760,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 37 Table of Contents ​ Stockholder Return Performance Graph.
The prior repurchase program was terminated on October 20, 2025, and was replaced by the new repurchase program described above. ​ Additional information regarding share repurchases pursuant to the new repurchase program and the prior repurchase program during the years ended December 31, 2025, 2024 and 2023 is presented in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Maximum number ​ ​ ​ ​ ​ ​ ​ purchased as part of ​ of shares that may still ​ ​ ​ ​ ​ Total number of ​ ​ Average price ​ publicly announced ​ be purchased under Period ​ shares purchased ​ paid per share plans or programs the plans or programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prior Share Repurchase Program - May 19, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1-31, 2023 ​ — ​ $ — ​ 1,364,085 ​ 935,915 ​ February 1-28, 2023 ​ 60,000 ​ ​ 53.61 ​ 1,424,085 ​ 875,915 ​ March 1-31, 2023 ​ 92,500 ​ ​ 48.62 ​ 1,516,585 ​ 783,415 ​ April 1-30, 2023 ​ 22,500 ​ ​ 42.97 ​ 1,539,085 ​ 760,915 ​ May 1-31, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ June 1-30, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ July 1-31, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ August 1-31, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ September 1-30, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ October 1-31, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ November 1-30, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ December 1-31, 2023 ​ — ​ ​ — ​ 1,539,085 ​ 760,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July 1-31, 2025 ​ — ​ $ — ​ 1,539,085 ​ 760,915 ​ August 1-31, 2025 ​ 26,200 ​ ​ 77.06 ​ 1,565,285 ​ 734,715 ​ September 1-30, 2025 ​ 89,535 ​ ​ 77.85 ​ 1,654,820 ​ 645,180 ​ October 1-19, 2025 ​ 13,321 ​ ​ 75.60 ​ 1,668,141 ​ 631,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New Share Repurchase Program - October 20, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 20-31, 2025 ​ 39,447 ​ $ 74.31 ​ 39,447 ​ 1,660,553 ​ November 1-30, 2025 ​ 84,668 ​ ​ 77.49 ​ 124,115 ​ 1,575,885 ​ December 1-31, 2025 ​ 25,341 ​ ​ 84.28 ​ 149,456 ​ 1,550,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33 Table of Contents Stockholder Return Performance Graph.
The information assumes that $100 was invested at the closing price on December 31, 2019 in the common stock of the Company and in each index, and that all dividends were reinvested. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 QCR Holdings, Inc. 100.00 90.98 129.30 115.15 136.11 188.66 Nasdaq Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 SNL Bank Nasdaq Index 100.00 89.69 124.06 97.52 96.65 132.60 ​ ​ ​
The information assumes that $100 was invested at the closing price on December 31, 2020 in the common stock of the Company and in each index, and that all dividends were reinvested. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Index ​ ​ ​ 12/31/20 ​ ​ ​ 12/31/21 ​ ​ ​ 12/31/22 ​ ​ ​ 12/31/23 ​ ​ ​ 12/31/24 ​ ​ ​ 12/31/25 QCR Holdings, Inc. 100.00 142.13 126.57 149.61 207.37 214.90 Nasdaq Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 SNL Bank Nasdaq Index 100.00 138.33 108.73 107.76 147.85 196.00 ​
Added
On October 20, 2025, the Company’s board of directors authorized a new share repurchase program (the “new repurchase program”), under which the Company is authorized to repurchase, from time to time as the Company deems appropriate, of up to 1,700,000 shares of its common stock, or approximately 10% of the outstanding shares as of September 30, 2025.
Added
The new repurchase program does not have an expiration date and replaced the prior repurchase program approved in 2022. The new repurchase program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so.
Added
Under the new repurchase program, the Company may repurchase shares of common stock from time to time in open market or privately negotiated transactions. The number, timing and price of shares repurchased will depend on a number of factors, including business and market conditions, regulatory requirements, availability of funds, and other factors, including opportunities to deploy the Company's capital.
Added
The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the new repurchase program’s expiration, without any prior notice. The new repurchase program replaces the Company’s prior share repurchase program announced on May 19, 2022 (the “prior repurchase program”), which was terminated on October 20, 2025.
Added
There were 149,456 shares 32 Table of Contents of common stock repurchased by the Company under the new repurchase program during the year ending December 31, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

138 edited+20 added−24 removed64 unchanged
In addition, the Company calculates NIM without the impact of acquisition accounting net accretion (adjusted NIM), as accretion amounts can fluctuate a great deal, making comparisons difficult. The adjusted efficiency ratio and efficiency ratio are utilized by management to compare the Company to peers.
In addition, the Company calculates NIM without the impact of acquisition accounting net accretion (adjusted NIM), as accretion amounts can fluctuate a great deal, making comparisons difficult. The efficiency ratio and adjusted efficiency ratio are utilized by management to compare the Company to peers.
A detailed review of our fiscal 2023 performance compared to our fiscal 2022 performance can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” This discussion should be read together with our Consolidated Financial Statements and the accompanying notes thereto included or incorporated by reference elsewhere in this document.
A detailed review of our fiscal 2024 performance compared to our fiscal 2023 performance can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” This discussion should be read together with our Consolidated Financial Statements and the accompanying notes thereto included or incorporated by reference elsewhere in this document.
Approximately 43% of the CRE portfolio are LIHTC loans of which all are performing and all are pass rated. ​ Historically, the Company structures most residential real estate loans to conform to the underwriting requirements of Freddie Mac and Fannie Mae to allow the subsidiary banks to resell the loans on the secondary market to avoid the interest rate risk associated with longer term fixed rate loans and recognizing noninterest income from the gain on sale.
Approximately 46% of the CRE portfolio are LIHTC loans of which all are performing and all are pass rated. ​ Historically, the Company structures most residential real estate loans to conform to the underwriting requirements of Freddie Mac and Fannie Mae to allow the subsidiary banks to resell the loans on the secondary market to avoid the interest rate risk associated with longer term fixed rate loans and recognizing noninterest income from the gain on sale.
See discussion 61 Table of Contents regarding policy limits on bank stock loans in the Lending/Leasing section under Item 1. – Business in Part I of this Annual Report on Form 10-K. SHORT-TERM BORROWINGS The subsidiary banks purchase federal funds for short-term funding needs from the FRB or from their correspondent banks.
See discussion regarding policy limits on bank stock loans in the Lending/Leasing section under Item 1. – Business in Part I of this Annual Report on Form 10-K. 54 Table of Contents SHORT-TERM BORROWINGS The subsidiary banks purchase federal funds for short-term funding needs from the FRB or from their correspondent banks.
Additionally, a comprehensive list of the acronyms and abbreviations used throughout this discussion is included in Note 1 to the Consolidated Financial Statements. GENERAL The Company was formed in February 1993 for the purpose of organizing QCBT. Over the past 31 years, the Company has grown to include four banking subsidiaries and a number of nonbanking subsidiaries.
Additionally, a comprehensive list of the acronyms and abbreviations used throughout this discussion is included in Note 1 to the Consolidated Financial Statements. GENERAL The Company was formed in February 1993 for the purpose of organizing QCBT. Over the past 32 years, the Company has grown to include four banking subsidiaries and a number of nonbanking subsidiaries.
The Company had no deposits by foreign depositors in domestic offices as of December 31, 2024 and 2023. Management will continue to focus on growing its core deposit portfolio, including its correspondent banking business at QCBT, as well as shifting the mix from brokered and other higher cost deposits to lower cost core deposits.
The Company had no deposits by foreign depositors in domestic offices as of December 31, 2025 and 2024. Management will continue to focus on growing its core deposit portfolio, including its correspondent banking business at QCBT, as well as shifting the mix from brokered and other higher cost deposits to lower cost core deposits.
The methodologies apply historical loss information adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions that are expected to exist through the contractual lives of the financial assets and that are reasonable and supportable to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed.
The methodologies apply historical loss information adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions that are expected to exist through the contractual lives of the financial assets and that are reasonable and supportable to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed (general reserve).
Under the stock repurchase program, the Company may repurchase shares of common m stock from time to time in open market or privately negotiated transactions. The number, timing and price of shares repurchased will depend on a number of factors, including business and market conditions, regulatory requirements, availability of funds, and other factors, including opportunities to deploy the Company’s capital.
Under the new repurchase program, the Company may repurchase shares of common stock from time to time in open market or privately negotiated transactions. The number, timing and price of shares repurchased will depend on a number of factors, including business and market conditions, regulatory requirements, availability of funds, and other factors, including opportunities to deploy the Company's capital.
See Note 4 to the Consolidated Financial Statements for details on these securitization transactions as well as the related variable interest entities. ​ As of December 31, 2024 and 2023, the subsidiary banks remained “well-capitalized” in accordance with regulatory capital requirements administered by the federal banking authorities.
See Note 4 to the Consolidated Financial Statements for details on these securitization transactions as well as the related variable interest entities. ​ As of December 31, 2025 and 2024, the subsidiary banks remained “well-capitalized” in accordance with regulatory capital requirements administered by the federal banking authorities.
This ratio is a non-GAAP measure. Refer to the “GAAP to Non-GAAP Reconciliations” section of this Annual Report on Form 10-K for more information. As of December 31, 2024 and 2023, no preferred stock was outstanding.
This ratio is a non-GAAP measure. Refer to the “GAAP to Non-GAAP Reconciliations” section of this Annual Report on Form 10-K for more information. As of December 31, 2025 and 2024, no preferred stock was outstanding.
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 Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.
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 Private 59 Table of Contents Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.
The Company will continue to review opportunities to execute these swaps at all of its subsidiary banks, as the circumstances are appropriate for the borrower and the Company. Levels of capital markets revenue from swap fee income are influenced by prevailing interest rates.
The Company will continue to review opportunities to execute these swaps at all of its subsidiary banks, as the circumstances are appropriate for the borrower and the Company. Levels of capital markets revenue 37 Table of Contents from swap fee income are influenced by prevailing interest rates.
Deposits in the ICS/CDARS program (which are included in interest bearing demand deposits and time deposits in the preceding table) totaled $2.4 billion, or 33.8% of all deposits, as of December 31, 2024. ​ The Company’s correspondent bank deposit portfolio and funds managed consists of the following: ​ ● Noninterest-bearing deposits which represent the correspondent banks’ operating cash used for processing transactions with the FRB; ● Money market deposits which represent some excess liquidity; and ● EBA balances of the correspondent banks held at the FRB.
Deposits in the ICS/CDARS program (which are included in interest bearing demand deposits and time deposits in the preceding table) totaled $2.4 billion, or 32.2% of all deposits, as of December 31, 2025. ​ The Company’s correspondent bank deposit portfolio and funds managed consists of the following: ​ ● Noninterest-bearing deposits which represent the correspondent banks’ operating cash used for processing transactions with the FRB; ● Money market deposits which represent some excess liquidity; and ● EBA balances of the correspondent banks held at the FRB.
As of December 31, 2024, the Company had $9.0 billion in consolidated assets, including $6.7 billion in total loans/leases, and $7.1 billion in deposits. The financial results of acquired entities for the periods since their acquisition are included in this Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q.
As of December 31, 2025, the Company had $9.6 billion in consolidated assets, including $7.1 billion in total loans/leases, and $7.4 billion in deposits. The financial results of acquired entities for the periods since their acquisition are included in this Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q.
These derivatives are unhedged and are marked to market, with gains or losses recorded in noninterest income which was a contributing factor in the increase in fair value losses. The Company had fair value gains on trading securities which partially offset the fair value loss on derivatives.
These derivatives are unhedged and are marked to market, with gains or losses recorded in noninterest income which was a contributing factor in the higher fair value losses in 2024. The Company had fair value gains on trading securities which partially offset the fair value loss on derivatives.
The table below represents the time deposits in FDIC uninsured accounts by maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 ​ 2023 ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ U.S.
The table below represents the time deposits in FDIC uninsured accounts by maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ U.S.
In addition, the Company has not originated any subprime, Alt-A, no documentation, or stated income residential real estate loans throughout its history. 56 Table of Contents The following tables set forth the remaining maturities by loan/lease type as of December 31, 2024 and 2023.
In addition, the Company has not originated any subprime, Alt-A, no documentation, or stated income residential real estate loans throughout its history. 49 Table of Contents The following tables set forth the remaining maturities by loan/lease type as of December 31, 2025 and 2024.
The decrease was primarily due to improvements to our data center connectivity channels and a reduction in cell phone and air card expenses as the Company continues to improve operational efficiencies. Supplies expense decreased 15% in 2024 as compared to 2023. The decrease was primarily due to improved management of supply stock and the timing of purchases.
The decrease was primarily due to improvements to our data center connectivity channels and a reduction in cell phone and air card expenses as the Company continues to improve operational efficiencies. Supplies expense decreased 10% in 2025 as compared to 2024. The decrease was primarily due to improved management of supply stock and the timing of purchases.
The following table shows the evaluation of the Company’s strategic financial metrics: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ending Strategic Financial Metric* Key Metric Target December 31, 2024 December 31, 2023 Loan and lease growth organically Loans and leases growth > 9% annually ​ 9.6 % ​ 6.6 % Fee income growth Fee income growth > 6% annually ​ (10.8) % ​ 75.1 % Improve operational efficiencies and hold noninterest expense growth ​ Noninterest expense growth ​ (2.4) % ​ 16.3 % * Ratios and amounts provided for these measurements represent year-to-date actual amounts for the respective period.
The following table shows the evaluation of the Company’s strategic financial metrics: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ending Strategic Financial Metric* ​ ​ ​ Key Metric ​ ​ ​ Target December 31, 2025 December 31, 2024 Loan and lease growth organically** Loans and leases growth > 9% annually ​ 11.7 % ​ 9.6 % Fee income growth Fee income growth > 6% annually ​ (3.7) % ​ (10.8) % Improve operational efficiencies and hold noninterest expense growth ​ Noninterest expense growth ​ 4.1 % ​ (2.4) % * Ratios and amounts provided for these measurements represent year-to-date actual amounts for the respective period.
If a loan is determined 39 Table of Contents to no longer share similar risk characteristics with other assets in the segmented pool, it is evaluated on an individual basis. ​ The Company also estimates expected credit losses over the contractual term of the loan for the unfunded portion of the loan commitment that is not unconditionally cancellable by the Company.
If a loan is determined to no longer share similar risk characteristics with other assets in the segmented pool, it is evaluated on an individual basis (specific reserve). ​ The Company also estimates expected credit losses over the contractual term of the loan for the unfunded portion of the loan commitment that is not unconditionally cancellable by the Company.
Item 6. [Reserved ] ​ 38 Table of Contents ​ ​ ​ I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section generally discusses 2024 and 2023 items and annual comparison between our fiscal 2024 performance compared to our fiscal 2023 performance.
Item 6. [Reserved ] ​ 34 Table of Contents I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section generally discusses 2025 and 2024 items and annual comparison between our fiscal 2025 performance compared to our fiscal 2024 performance.
The majority of the trust fees are determined based on the value of the investments within the fully-managed trusts. Trust fees increased 11% in 2024 as compared to 2023 due to growth in assets under management and market performance.
The majority of the trust fees are determined based on the value of the investments within the fully-managed trusts. Trust fees increased 10% in 2025 as compared to 2024 due to growth in assets under management and market performance.
As of December 31, 2024 and 2023, standby letters of credit aggregated $28.8 million and $23.7 million, respectively. Management does not expect that all of these commitments will be funded. Additional information regarding commitments, contingencies, and off-balance sheet arrangements is described in Note 19 to the Consolidated Financial Statements.
As of December 31, 2025 and 2024, standby letters of credit aggregated $29.1 million and $28.8 million, respectively. Management does not expect that all of these commitments will be funded. Additional information regarding commitments, contingencies, and off-balance sheet arrangements is described in Note 19 to the Consolidated Financial Statements.
The subsidiary banks can utilize FHLB advances for loan matching as a hedge against the possibility of changing interest rates or when these advances provide a less costly or more readily available source of funds than customer deposits. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 ​ 2023 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ FHLB Advances ​ $ 285,383 ​ ​ $ 435,000 ​ Weighted Average Interest Rate at Year-End ​ 4.55 % ​ 5.39 % ​ It is management’s intention to reduce its reliance on wholesale funding, including FHLB advances and brokered deposits.
The subsidiary banks can utilize FHLB advances for loan matching as a hedge against the possibility of changing interest rates or when these advances provide a less costly or more readily available source of funds than customer deposits. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ 2025 ​ 2024 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ FHLB Advances ​ $ 245,383 ​ ​ $ 285,383 ​ Weighted Average Interest Rate at Year-End ​ 3.81 % ​ 4.55 % ​ It is management’s intention to reduce its reliance on wholesale funding, including FHLB advances and brokered deposits.
One source of liquidity is cash and short-term assets, such as interest-bearing deposits in other banks, cash and due from banks and federal funds sold, which averaged $210.7 million and $180.4 million during 2024 and 2023, respectively. The Company’s on balance sheet liquidity position can fluctuate based on short-term activity in deposits and loans.
One source of liquidity is cash and short-term assets, such as interest-bearing deposits in other banks, cash and due from banks and federal funds sold, which averaged $247.2 million and $210.7 million during 2025 and 2024, respectively. The Company’s on balance sheet liquidity position can fluctuate based on short-term activity in deposits and loans.
The Company also manages off-balance sheet liquidity held at the Federal Reserve on behalf of the downstream banks, which totaled $439.0 million as of December 31, 2024 as compared to $214.9 million as of December 31, 2023. ​ ● The Company is focused on executing interest rate swaps on select commercial loans, including LIHTC permanent loans.
The Company also manages off-balance sheet liquidity held at the Federal Reserve on behalf of the downstream banks, which totaled $361.5 million as of December 31, 2025 as compared to $439.0 million as of December 31, 2024. ​ ● The Company is focused on executing interest rate swaps on select commercial loans, including LIHTC permanent loans.
Throughout its history, the Company has secured additional capital through various resources, including common and preferred stock and the issuance of trust preferred securities and subordinated notes. ​ The Company has two LIHTC securitizations that closed in 2024 and two LIHTC securitizations that closed in 2023. LIHTC securitizations may continue to be an ongoing tool in managing liquidity and capital.
Throughout its history, the Company has secured additional capital through various resources, including common and preferred stock and the issuance of trust preferred securities and subordinated notes. ​ The Company completed two LIHTC securitizations in 2024 and none in 2025. LIHTC securitizations may continue to be an ongoing tool in managing liquidity and capital.
A comparison of acquisition accounting net accretion included in NIM is as follows: ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ December 31, ​ 2024 ​ 2023 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ Acquisition Accounting Net Accretion in NIM $ 1,565 ​ $ 2,173 ​ The Company's management closely monitors and manages NIM.
A comparison of acquisition accounting net accretion included in NIM is as follows: ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ December 31, ​ 2025 ​ ​ ​ ​ 2024 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ Acquisition Accounting Net Accretion in NIM $ 514 ​ $ 1,565 ​ The Company's management closely monitors and manages NIM.
The table below presents the composition of the Company’s short-term borrowings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 2023 ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal funds purchased ​ ​ $ 1,800 ​ $ 1,500 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company’s federal funds purchased fluctuates based on the short-term funding needs of the Company’s subsidiary banks.
The table below presents the composition of the Company’s short-term borrowings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal funds purchased ​ ​ $ 2,650 ​ $ 1,800 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company’s federal funds purchased fluctuates based on the short-term funding needs of the Company’s subsidiary banks.
The Company had an ACL on loans/leases of 1.32% of gross loans/leases held for investment at December 31, 2024, compared to 1.33% of gross loans/leases held for investment at December 31, 2023.
The Company had an ACL on loans/leases of 1.26% of gross loans/leases held for investment at December 31, 2025, compared to 1.32% of gross loans/leases held for investment at December 31, 2024.
If the commitment is funded, the banks would be entitled to seek recovery from the customer. At 65 Table of Contents December 31, 2024 and 2023, no amounts had been recorded as liabilities for the banks’ potential obligations under these guarantees. As of December 31, 2024 and 2023, commitments to extend credit aggregated $1.9 billion and $2.0 billion, respectively.
If the commitment is funded, the banks would be entitled to seek recovery from the customer. At December 31, 2025 and 2024, no amounts had been recorded as liabilities for the banks’ potential obligations under these guarantees. As of December 31, 2025 and 2024, commitments to extend credit aggregated $1.7 billion and $1.9 billion, respectively.
However, the Company may choose to utilize advances and/or brokered deposits to supplement funding needs, as this is a way for the Company to effectively and efficiently manage interest rate risk. ​ The Company renewed its revolving credit note in the second quarter of 2024.
However, the Company may choose to utilize advances and/or brokered deposits to supplement funding needs, as this is a way for the Company to effectively and efficiently manage interest rate risk. ​ The Company renewed its revolving credit note with an upstream correspondent bank in the second quarter of 2025.
The Company now serves 189 banks in Iowa, Illinois, Missouri and Wisconsin. Loan related fee income increased 21% in 2024. The increase was primarily due to loan growth. Fair value loss on derivatives and trading securities increased 120% in 2024. During 2024, the Company executed a derivative strategy with a notional value of approximately $409 million.
The Company now serves 190 banks in Iowa, Illinois, Missouri and Wisconsin. Loan related fee income increased 2% in 2025. The increase was primarily due to loan growth. Fair value gain (loss) on derivatives and trading securities increased 113% in 2025. During 2024, the Company executed a derivative strategy with a notional value of approximately $409 million.
The increase in provision for credit losses on loans and leases was driven by the loan growth, increased net charge-offs, and higher criticized loan balances. For the year ended December 31, 2024, the provision for credit losses related to OBS was a negative provision of $1.3 million, compared to a $4.0 million provision for the year ended December 31, 2023.
The increase in provision for credit losses on loans and leases was driven by loan growth and increased net charge-offs. For the year ended December 31, 2025, the provision for credit losses related to OBS was a negative provision of $1.1 million, compared to a negative provision of $1.3 million for the year ended December 31, 2024.
Management evaluates the allowance needed on the loans acquired in previous acquisitions factoring in the remaining discount, which was $2.3 million and $3.9 million at December 31, 2024 and 2023, respectively.
Management evaluates the allowance needed on the loans acquired in previous acquisitions factoring in the remaining discount, which was $1.8 million and $2.3 million at December 31, 2025 and 2024, respectively.
From a profitability standpoint, an important challenge for the Company's subsidiary banks and equipment financing/leasing company is focusing on quality growth in conjunction with the improvement of their NIMs.
From a profitability standpoint, an important challenge for the Company's subsidiary banks is focusing on quality growth in conjunction with the improvement of their NIMs.
The Company has various financial obligations, including contractual obligations and commitments, which may require future cash payments. The significant fixed and determinable contractual obligations to third parties are deposits without a stated maturity, certificates of deposit, short-term borrowings, subordinated notes, and junior subordinated debentures and totaled $7.9 billion as of December 31, 2024.
The Company has various financial obligations, including contractual obligations and commitments, which may require future cash payments. The significant fixed and determinable contractual obligations to third parties are deposits without 58 Table of Contents a stated maturity, certificates of deposit, short-term borrowings, subordinated notes, and junior subordinated debentures and totaled $8.0 billion as of December 31, 2025.
At renewal, the available line amount remained unchanged at $50.0 million for which there was no outstanding balance as of December 31, 2024. Interest on the revolving line of credit is calculated at the greater of: (a) the effective Prime Rate less 0.50% or (b) 3.00% per annum.
At renewal, the available line amount increased from $50.0 million to $60.0 million for which there was no outstanding balance as of December 31, 2025. Interest on the revolving line of credit is calculated at the greater of: (a) the effective Prime Rate less 0.50% or (b) 3.00% per annum.
SUBORDINATED NOTES The Company had subordinated notes totaling $233.5 million and $233.1 million as of December 31, 2024 and 2023, respectively. 62 Table of Contents See Note 12 to the Consolidated Financial Statements for additional information regarding the subordinated notes.
SUBORDINATED NOTES The Company had subordinated notes totaling $234.1 million and $233.5 million as of December 31, 2025 and 2024, respectively. See Note 12 to the Consolidated Financial Statements for additional information regarding the subordinated notes.
The Company’s operating results are also affected by economic and competitive conditions, particularly changes in interest rates, income tax rates, government policies and actions of regulatory authorities. RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 and 2023 INTEREST INCOME For 2024, interest income increased $68.4 million, or 17%, compared to 2023.
The Company’s operating results are also affected by economic and competitive conditions, particularly changes in interest rates, income tax rates, government policies and actions of regulatory authorities. RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 and 2024 INTEREST INCOME For 2025, interest income increased $7.6 million, or 2%, compared to 2024.
Debit card fees are the interchange fees paid on certain debit card customer transactions. Debit card fees remained stable in 2024 as compared to 2023. These fees can vary based on customer debit card usage, so fluctuations from period to period may occur.
Debit card fees are the interchange fees paid on certain debit card customer transactions. Debit card fees increased 4% in 2025 as compared to 2024. These fees can vary based on customer debit card usage, so fluctuations from period to period may occur.
The back-to-back interest rate swaps allow commercial borrowers to pay a fixed interest rate while the Company receives a variable interest rate as well as an upfront nonrefundable fee dependent upon the pricing from an upstream counter party. 50 Table of Contents ​ Capital markets revenue totaled $71.1 million in 2024 as compared to $92.1 million in 2023.
The back-to-back interest rate swaps allow commercial borrowers to pay a fixed interest rate while the Company receives a variable interest rate as well as an upfront nonrefundable fee dependent upon the pricing from an upstream counter- party. ​ Capital markets revenue totaled $64.7 million in 2025 as compared to $71.1 million in 2024.
These additional factors include, but are not limited to, the following: ● The strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and supply chain constraints). ​ ● Effects on the U.S. economy resulting from the implementation of policies proposed by the new presidential administration, including tariffs, mass deportations and tax regulations. ​ ● The economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or threats thereof (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East), or other adverse events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events. ​ ● New or revised accounting policies and practices, as may be adopted by state and federal banking agencies, the FASB, the SEC or the PCAOB. ​ ● Changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the bank failures in 2023. ​ ● The imposition of tariffs or other governmental policies impacting the value of products produced by the Company’s commercial borrowers. ​ 67 Table of Contents ● 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. ​ ● Changes in technology and the ability to develop and maintain secure and reliable electronic systems. ​ ● Unexpected results of acquisitions which may include failure to realize the anticipated benefits of the acquisitions and the possibility that transaction costs may be greater than anticipated. ​ ● The loss of key executives and employees, talent shortages and employee turnover. ​ ● Changes in consumer spending. ​ ● Unexpected outcomes and costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company. ​ ● The economic impact on the Company and its customers of climate change, natural disasters and exceptional weather occurrences such as tornadoes, floods and blizzards. ​ ● Fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates. ● Credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio and large loans to certain borrowers (including CRE loans). ● The overall health of the local and national real estate market. ● The ability to maintain an adequate level of allowance for credit losses on loans. ● The concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure. ● The ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds. ● The level of non-performing assets on our balance sheets. ● Interruptions involving our information technology and communications systems or third-party servicers. ● The occurrence of fraudulent activity, breaches or failures of our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud. ● Changes in the interest rates and repayment rates of the Company’s assets. ● The effectiveness of our risk management framework. ● The ability of the Company to manage the risks associated with the foregoing as well as anticipated. ​ These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. 68 Table of Contents
These additional factors include, but are not limited to, the following: ● The strength of the local, state, national and international economies and financial markets. ● Effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement and changes in foreign policy. ● Changes in, and the interpretation and prioritization of, local, state and federal laws, regulations and governmental policies (including those concerning the Company’s general business). ● The economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war, military conflicts, or threats thereof (including the Russian invasion of Ukraine, ongoing conflicts in the Middle East and recent military actions in Venezuela), changes in foreign relations, or other adverse events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events. ● New or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB, the SEC or the PCAOB. ● The imposition of tariffs or other governmental policies impacting the value of products produced by the Company’s commercial borrowers. ● Increased competition in the financial services sector, including from non-bank competitors such as credit unions, fintech companies, and digital asset service providers, and the inability to attract new customers. ● Rapid technological changes implemented by us and our third-party vendors, including the development and implementation of tools incorporating artificial intelligence. ● Unexpected results of acquisitions, including failure to realize the anticipated benefits of the acquisitions and the possibility that transaction and integration costs may be greater than anticipated. ● The loss of key executives and employees, talent shortages and employee turnover. ● Changes in consumer spending. ● Unexpected outcomes and costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company. ● The economic impact on the Company and its customers of climate change, natural disasters and exceptional weather occurrences such as tornadoes, floods and blizzards. ● Fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates. ● Credit risk and risks from concentrations (including by type of borrower, geographic area, collateral and industry) within our loan portfolio and large loans to certain borrowers (including CRE loans). ● The overall health of the local and national real estate market. 60 Table of Contents ● The ability to maintain an adequate level of allowance for credit losses on loans. ● The concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure. ● The ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds. ● The level of non-performing assets on our balance sheet. ● Interruptions involving our information technology and communications systems or third-party servicers. ● The occurrence of fraudulent activity, breaches or failures of our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud. ● Changes in the interest rates and repayment rates of the Company’s assets. ● The effectiveness of our risk management framework. ● The ability of the Company to manage the risks associated with the foregoing.
The Company had total uninsured deposits of $2.0 billion and $1.8 billion as of December 31, 2024 and 2023 respectively.
The Company had total uninsured deposits of $1.7 billion and $2.0 billion as of December 31, 2025 and 2024 respectively.
Management will continue to focus on minimizing such one-time costs and driving recurring costs down through contract negotiation or managed reduction in activity where costs are determined on a usage basis. Restructuring expenses totaled $2.0 million in 2024 due to the decision to discontinue offering new loans and leases through m2.
Management will continue to focus on minimizing such one-time costs and driving recurring costs down through contract negotiation or managed reduction in activity where costs are determined on a usage basis. There were no restructuring expenses incurred in 2025. Restructuring expenses totaled $2.0 million in 2024 due to the discontinuation of new loans and leases through m2.
As an opportunity to maximize fees, the Company offers deposit products with a higher interest rate that incentivizes debit card activity. Correspondent banking fees increased 26% in 2024 primarily due to a shift of correspondent banking balances from non-interest bearing accounts to interest bearing accounts, in light of increasing rates.
As an opportunity to maximize fees, the Company offers deposit products with a higher interest rate that incentivizes debit card activity. Correspondent banking fees increased 28% in 2025 primarily due to a shift in correspondent banking balances from non-interest bearing accounts to interest bearing accounts.
Although management believes that the ACL for loans/leases at December 31, 2024 is at a level adequate to absorb losses on existing loans/leases, there can be no assurance that such losses will not exceed the estimated amounts or 59 Table of Contents that the Company will not be required to make additional provisions in the future.
Leases represent less than 1% of total loans/leases. Although management believes that the ACL for loans/leases at December 31, 2025 is at a level adequate to absorb losses on existing loans/leases, there can be no assurance that such losses will not exceed the estimated amounts or that the Company will not be required to make additional provisions in the future.
The stock repurchase program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so.
The new repurchase program does not have an expiration date, and replaced the prior repurchase program approved in 2022. The new repurchase program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so.
See Note 4 to the Consolidated Financial Statements for details on these securitization transactions as well as the related variable interest entities. 66 Table of Contents IMPACT OF INFLATION AND CHANGING PRICES The Consolidated Financial Statements of the Company and the accompanying notes have been prepared in accordance with U.S.
See Note 4 to the Consolidated Financial Statements for details on these securitization transactions as well as the related variable interest entities. No LIHTC loan securitizations were completed in 2025. IMPACT OF INFLATION AND CHANGING PRICES The Consolidated Financial Statements of the Company and the accompanying notes have been prepared in accordance with U.S.
The weighted-average yield is calculated by dividing the total interest for each security per maturity range by the total amortized cost within that maturity range. Yields are not computed on a tax equivalent basis.
The weighted-average yield is calculated by dividing the total interest for each security per maturity range by the total amortized cost within that maturity range. Yields are not computed on a tax equivalent basis. There have been no major changes within the tax-exempt portfolio.
Loan/lease expense decreased 43% in 2024 as compared to 2023. The decrease was due primarily to lower legal expense on loan workouts and higher recoveries of legal expenses incurred on loan workouts. Generally, loan/lease expense has a direct relationship with the level of NPLs; however, it may deviate depending upon the individual NPLs.
The decrease was due primarily to lower legal expense on loan workouts and higher recoveries of legal expenses incurred on loan workouts. Generally, loan/lease expense has a direct relationship with the level of NPLs; however, it may deviate depending upon the individual NPLs. NPLs have decreased 5% since December 31, 2024.
The Company is competitively positioned with experienced staff, software systems and processes to continue growing in the four states it currently serves – Iowa, Wisconsin, Missouri and Illinois. The Company acts as the correspondent bank for 189 downstream banks with total noninterest bearing deposits of $76.6 million and total interest-bearing deposits of $611.5 million as of December 31, 2024.
The Company is competitively positioned with experienced staff, software systems and processes to continue growing in the four states it currently serves – Iowa, Wisconsin, Missouri and Illinois. The Company acts as the correspondent bank for 190 downstream banks with total noninterest bearing deposits of $85.1 million and total interest-bearing deposits of $841.3 million as of December 31, 2025.
For the same period in 2023 the Company reported net income of $113.6 million and diluted EPS of $6.73.
For the same period in 2024 the Company reported net income of $113.9 million and diluted EPS of $6.71.
Proceeds from calls, maturities, pay downs and sales of securities were $78.4 million for 2024 compared to $141.9 million for 2023. Purchases of securities used cash of $213.5 million for 2024 compared to $187.6 million for 2023. The net increase in loans/leases used cash of $642.9 million for 2024 compared to $676.7 million for 2023.
Proceeds from calls, maturities, pay downs and sales of securities were $131.6 million for 2025 compared to $78.4 million for 2024. Purchases of securities used cash of $230.3 million for 2025 compared to $213.5 million for 2024. The net increase in loans/leases used cash of $690.5 million for 2025 compared to $642.9 million for 2024.
The following table shows the components for the provision for credit losses for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2024 2023 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for credit losses - loans and leases ​ ​ ​ $ 18,739 ​ $ 11,550 Provision for credit losses - off-balance sheet exposures ​ ​ ​ ​ (1,256) ​ ​ 3,977 Provision for credit losses - held to maturity securities ​ ​ ​ ​ 60 ​ ​ 23 Provision for credit losses - available for sale securities ​ ​ ​ (445) ​ 989 Total provision for credit losses ​ ​ ​ $ 17,098 ​ $ 16,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company’s total provision for credit losses was $17.1 million for 2024, an increase of $559 thousand from 2023.
The following table shows the components for the provision for credit losses for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for credit losses - loans and leases ​ ​ ​ $ 19,197 ​ $ 18,739 Provision for credit losses - off-balance sheet exposures ​ ​ ​ ​ (1,135) ​ ​ (1,256) Provision for credit losses - held to maturity securities ​ ​ ​ ​ 19 ​ ​ 60 Provision for credit losses - available for sale securities ​ ​ ​ — ​ (445) Total provision for credit losses ​ ​ ​ $ 18,081 ​ $ 17,098 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company’s total provision for credit losses was $18.1 million for 2025, an increase of $983 thousand from 2024.
The ability to grow profitably is in part dependent upon the ability to maintain that quality. The Company continually focuses efforts at its subsidiary banks and its leasing company with the intention to improve the overall quality of the Company’s loan/lease portfolio. See Note 3 to the Consolidated Financial Statements for additional information on the Company’s ACL.
The ability to grow profitably is in part dependent upon the ability to maintain that quality. The Company continually focuses efforts at its subsidiary banks and its leasing company with the intention to improve the overall quality of the Company’s loan/lease portfolio.
NPLs have increased 35% since December 31, 2023. Net cost of (income from) and gains/losses on operations of other real estate includes gains/losses on the sale of OREO, write-downs of OREO and all income/expenses associated with OREO. Net income from operations totaled $21 thousand for 2024 as compared to $26 thousand for 2023.
Net cost of (income from) and gains/losses on operations of other real estate includes gains/losses on the sale of OREO, write-downs of OREO and all income/expenses associated with OREO. Net cost of operations totaled $80 thousand for 2025 as compared to net income from operations of $21 thousand for 2024.
The following table summarizes the trend in allowance as a percentage of gross loans/leases and as a percentage of NPLs as of December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 2023 ACL for loans/leases / Total loans/leases held for investment ​ 1.32 % 1.33 % ACL for loans/leases / NPLs ​ 202.57 % 265.54 % ​ The following table presents the allowance by type and the percentage of loan/lease type to total loans/leases. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 ​ ​ 2023 ​ ​ Amount % ​ Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving $ 3,856 6 % ​ $ 4,224 5 % C&I - other* ​ 34,002 22 % ​ ​ 27,460 23 % CRE - owner occupied ​ ​ 7,147 ​ 9 % ​ ​ 8,223 ​ 9 % CRE - non-owner occupied ​ ​ 11,137 ​ 16 % ​ ​ 11,581 ​ 16 % Construction and land development ​ ​ 15,099 ​ 19 % ​ ​ 16,856 ​ 22 % Multi-family ​ ​ 12,173 ​ 17 % ​ ​ 12,463 ​ 15 % 1-4 family real estate ​ 4,934 9 % ​ ​ 4,917 8 % Consumer ​ 1,493 2 % ​ ​ 1,476 2 % ​ ​ $ 89,841 100 % ​ $ 87,200 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Included within the C&I – Other segment is an ACL on leases of $580 thousand and $992 thousand as of December 31, 2024 and 2023, respectively.
The following table summarizes the trend in allowance as a percentage of gross loans/leases and as a percentage of NPLs as of December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ACL for loans/leases / Total loans/leases held for investment ​ 1.26 % 1.32 % ACL for loans/leases / NPLs ​ 213.08 % 202.57 % ​ The following table presents the allowance by type and the percentage of loan/lease type to total loans/leases. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving $ 3,747 5 % ​ $ 3,856 6 % C&I - other* ​ 27,684 18 % ​ ​ 34,002 22 % CRE - owner occupied ​ ​ 6,324 ​ 8 % ​ ​ 7,147 ​ 9 % CRE - non-owner occupied ​ ​ 11,457 ​ 15 % ​ ​ 11,137 ​ 16 % Construction and land development ​ ​ 15,397 ​ 18 % ​ ​ 15,099 ​ 19 % Multi-family ​ ​ 18,860 ​ 25 % ​ ​ 12,173 ​ 17 % 1-4 family real estate ​ 4,986 9 % ​ ​ 4,934 9 % Consumer ​ 1,672 2 % ​ ​ 1,493 2 % ​ ​ $ 90,127 100 % ​ $ 89,841 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Included within the C&I – Other segment is an ACL on leases of $311 thousand and $580 thousand as of December 31, 2025 and 2024, respectively.
The amortization expense is due to prior acquisitions. These expenses will naturally decrease as intangibles become fully amortized unless there is an addition to intangible assets. Goodwill impairment expense totaled $432 thousand in 2024 due to the decision to discontinue offering new loans and leases through m2. There was no goodwill impairment in 2023.
These expenses will naturally decrease as intangibles become fully amortized unless there is an addition to intangible assets. 46 Table of Contents There was no goodwill impairment in 2025. Goodwill impairment expense totaled $432 thousand in 2024 due to the discontinuation of new loans and leases through m2.
Trading securities had a fair value of $83.5 million as of December 31, 2024 and consisted of retained beneficial interests acquired in conjunction with the loan securitizations completed by the Company in 2024 and 2023. ​ 54 Table of Contents Following is a breakdown of the Company’s securities portfolio by type, the percentage of net unrealized gains (losses) to carrying value on the total portfolio, and the portfolio duration as of December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ 2023 ​ ​ ​ Amount % ​ Amount % ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. govt. sponsored agency securities ​ $ 20,591 2 % ​ $ 14,973 1 % ​ Municipal securities ​ 971,313 81 % ​ 853,442 85 % ​ Residential mortgage-backed and related securities ​ 50,042 4 % ​ 59,196 6 % ​ Asset-backed securities ​ ​ 9,224 ​ 1 % ​ ​ 15,423 ​ 2 % ​ Other securities ​ 65,736 5 % ​ 40,125 4 % ​ Trading securities ​ 83,529 7 % ​ 22,369 2 % ​ ​ ​ $ 1,200,435 100 % ​ $ 1,005,528 100 % ​ ​ ​ ​ ​ ​ ​ Securities as a % of total assets ​ 13.30 % ​ ​ 11.78 % ​ ​ Net unrealized losses as a % of Amortized Cost ​ (7.32) % ​ ​ (4.96) % ​ ​ Duration (in years) ​ 5.8 ​ ​ 6.2 ​ ​ Annual yield on investment securities (tax equivalent) ​ ​ 4.55 % ​ ​ ​ ​ 4.30 % ​ ​ ​ ​ Due to increases in intermediate and long-term interest rates during 2024, which directly impact the fair value of the Company’s AFS portfolio, the AFS portfolio declined $18.5 million, or 6.2%, from December 31, 2023 to December 31, 2024.
Trading securities had a fair value of $83.9 million as of December 31, 2025 and consisted of retained beneficial interests acquired in conjunction with the loan securitizations completed by the Company in 2024 and 2023. ​ 47 Table of Contents Following is a breakdown of the Company’s securities portfolio by type, the percentage of net unrealized gains (losses) to carrying value on the total portfolio, and the portfolio duration as of December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ 2024 ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasuries and govt. sponsored agency securities ​ $ 16,024 1 % ​ $ 20,591 2 % ​ Municipal securities ​ 1,081,002 82 % ​ 971,313 81 % ​ Residential mortgage-backed and related securities ​ 68,855 5 % ​ 50,042 4 % ​ Asset-backed securities ​ ​ 4,439 ​ 1 % ​ ​ 9,224 ​ 1 % ​ Other securities ​ 58,133 5 % ​ 65,736 5 % ​ Trading securities ​ 83,857 6 % ​ 83,529 7 % ​ ​ ​ $ 1,312,310 100 % ​ $ 1,200,435 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities as a % of total assets ​ 13.70 % ​ ​ ​ 13.30 % ​ ​ ​ Net unrealized losses as a % of Amortized Cost ​ (10.82) % ​ ​ ​ (7.32) % ​ ​ ​ Duration (in years) ​ 5.4 ​ ​ ​ 5.8 ​ ​ ​ Annual yield on investment securities (tax equivalent) ​ ​ 4.77 % ​ ​ ​ ​ 4.55 % ​ ​ ​ ​ Due to increases in intermediate and long-term interest rates during 2025, which directly impact the fair value of the Company’s AFS portfolio, the AFS portfolio declined $1.3 million, or 0.5%, from December 31, 2024 to December 31, 2025.
The following is a table that reports the criticized and classified loan totals as of December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, Internally Assigned Risk Rating * ​ 2024 ​ 2023 ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Special Mention ​ $ 73,636 $ 125,308 Substandard/Classified loans*** ​ ​ 84,930 ​ 70,425 Doubtful/Classified loans*** ​ ​ — ​ — Criticized Loans ** ​ $ 158,566 $ 195,733 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Criticized Loans as a % of Total Loans/Leases ​ ​ 2.34 % ​ 2.99 % Classified Loans as a % of Total Loans/Leases ​ ​ 1.25 % ​ 1.08 % ​ * Amounts above exclude the government guaranteed portion, if any.
The following is a table that reports the criticized and classified loan totals as of December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, Internally Assigned Risk Rating * ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Special Mention ​ $ 74,765 $ 73,636 Substandard/Classified loans*** ​ ​ 64,142 ​ 84,930 Doubtful/Classified loans*** ​ ​ — ​ — Criticized Loans ** ​ $ 138,907 $ 158,566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Criticized Loans as a % of Total Loans/Leases ​ ​ 1.94 % ​ 2.34 % Classified Loans as a % of Total Loans/Leases ​ ​ 0.89 % ​ 1.25 % ​ * Amounts above exclude the government guaranteed portion, if any.
Seasonality and the liquidity needs of these correspondent banks can impact balances. Management closely monitors these fluctuations and runs stress scenarios to measure the impact on liquidity and interest rate risk with various levels of correspondent deposit run-off. 64 Table of Contents Investing activities used cash of $845.2 million during 2024 compared to $749.3 million during 2023.
Management closely monitors these fluctuations and runs stress scenarios to measure the impact on liquidity and interest rate risk with various levels of correspondent deposit run-off. Investing activities used cash of $831.1 million during 2025 compared to $845.2 million during 2024.
The interest rate swaps help the commercial borrowers obtain a fixed interest rate while the Company receives a variable interest rate as well as an upfront nonrefundable fee dependent on the pricing. Management believes that these swaps help the Company more efficiently manage its interest rate risk.
The interest rate swaps allow commercial borrowers to obtain a fixed interest rate while the Company receives a variable interest rate as well as an upfront nonrefundable fee dependent on the pricing. Management believes that these swaps help position the Company more favorably for various interest rate environments.
The Company also generates liquidity from the regular principal payments and prepayments made on its loan/lease portfolio, and on the regular monthly payments on its securities portfolio. At December 31, 2024, the subsidiary banks had 27 lines of credit totaling $1.2 billion, of which $746.7 million was secured and $450.8 million was unsecured.
The Company also generates liquidity from the regular principal payments and prepayments made on its loan/lease portfolio, and on its securities portfolio. At December 31, 2025, the subsidiary banks had 26 lines of credit totaling $930.7 million, of which $489.9 million was secured and $440.8 million was unsecured.
The adequacy of the allowance is monitored by the credit administration staff and reported to management and the board of directors. ​ ​ 57 Table of Contents Changes in the ACL for loans/leases for the years ended December 31, 2024, 2023 and 2022 are presented as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning ​ $ 87,200 ​ $ 87,706 ​ $ 78,721 Initial ACL recorded for PCD loans ​ ​ — ​ ​ — ​ ​ 5,902 Change in ACL for the transfer of loans to LHFS ​ ​ (4,598) ​ ​ (3,545) ​ ​ — Provision ​ 18,739 ​ 11,550 ​ 9,636 Charge-offs ​ (13,969) ​ (9,392) ​ (7,525) Recoveries ​ 2,469 ​ 881 ​ 972 Balance, ending ​ $ 89,841 ​ $ 87,200 ​ $ 87,706 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company recorded an $11.0 million (pre-tax) provision for credit losses on loans in 2022, for the CECL Day 2 provision as a result of the GFED acquisition. ​ Net charge-offs by segment and their percentage of average loans and leases are as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ Amount % of Average Loans ​ ​ Amount % of Average Loans ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average amount of loans/leases outstanding, before allowance ​ $ 6,764,754 ​ ​ $ 6,337,551 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs: ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ ​ — 0.00 ​ ​ — 0.00 ​ C&I - other ​ ​ (10,227) 0.15 ​ ​ (8,137) 0.13 ​ CRE owner occupied ​ ​ (10) 0.00 ​ ​ (219) 0.00 ​ CRE non-owner occupied ​ ​ — 0.00 ​ ​ 31 (0.00) ​ Construction and land development ​ ​ (1,084) 0.02 ​ ​ (48) 0.00 ​ Multi-family ​ ​ — 0.00 ​ ​ — 0.00 ​ 1-4 family real estate ​ ​ — 0.00 ​ ​ 5 (0.00) ​ Consumer ​ ​ (179) 0.00 ​ ​ (143) 0.00 ​ Total net charge-offs ​ $ (11,500) ​ ​ $ (8,511) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Changes in the ACL for OBS exposures for the years ended December 31, 2024, 2023 and 2022 are as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 December 31, 2022 ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning ​ ​ $ 9,529 ​ $ 5,552 ​ $ 6,886 ​ Provisions (credited) to expense ​ ​ (1,256) ​ 3,977 ​ (1,334) ​ Balance, ending ​ ​ $ 8,273 ​ $ 9,529 ​ $ 5,552 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 58 Table of Contents ​ The Company recorded a negative $1.3 million provision for credit losses related to OBS exposures in 2024.
The adequacy of the allowance is monitored by the credit administration staff and reported to management and the board of directors. 50 Table of Contents Changes in the ACL for loans/leases for the years ended December 31, 2025, 2024 and 2023 are presented as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning ​ $ 89,841 ​ $ 87,200 ​ $ 87,706 Change in ACL for the transfer of loans to LHFS ​ ​ — ​ ​ (4,598) ​ ​ (3,545) Provision ​ 19,197 ​ 18,739 ​ 11,550 Charge-offs ​ (20,649) ​ (13,969) ​ (9,392) Recoveries ​ 1,738 ​ 2,469 ​ 881 Balance, ending ​ $ 90,127 ​ $ 89,841 ​ $ 87,200 ​ Net charge-offs by segment and their percentage of average loans and leases are as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ Amount % of Average Loans ​ ​ Amount % of Average Loans ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average amount of loans/leases outstanding, before allowance ​ $ 7,004,737 ​ ​ $ 6,764,754 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs: ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ ​ (322) 0.00 ​ ​ — 0.00 ​ C&I - other ​ ​ (18,503) 0.26 ​ ​ (10,227) 0.15 ​ CRE owner occupied ​ ​ (86) 0.00 ​ ​ (10) 0.00 ​ CRE non-owner occupied ​ ​ 10 (0.00) ​ ​ — 0.00 ​ Construction and land development ​ ​ 83 (0.00) ​ ​ (1,084) 0.02 ​ Multi-family ​ ​ — 0.00 ​ ​ — 0.00 ​ 1-4 family real estate ​ ​ — 0.00 ​ ​ — 0.00 ​ Consumer ​ ​ (93) 0.00 ​ ​ (179) 0.00 ​ Total net charge-offs ​ $ (18,911) ​ ​ $ (11,500) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Changes in the ACL for OBS exposures for the years ended December 31, 2025, 2024 and 2023 are as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ December 31, 2023 ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning ​ $ 8,273 ​ $ 9,529 ​ $ 5,552 ​ Provisions (credited) to expense ​ (1,135) ​ (1,256) ​ 3,977 ​ Balance, ending ​ $ 7,138 ​ $ 8,273 ​ $ 9,529 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company recorded $1.1 million of negative provision for credit losses related to OBS exposures in 2025.
At December 31, 2024, $1.2 billion was available under these lines of credit. At December 31, 2023, the subsidiary banks had 25 lines of credit totaling $699.3 million, of which $248.5 million was secured and $450.8 million was unsecured. At December 31, 2023, $699.3 million was available under these lines of credit.
At December 31, 2025, $930.7 million was available under these lines of credit. At December 31, 2024, the subsidiary banks had 27 lines of credit totaling $1.2 billion, of which $746.7 million was secured and $450.8 million was unsecured. At December 31, 2024, $1.2 billion was available under these lines of credit.
Following is a table that represents the major income and expense categories for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ ​ ​ (dollars are in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 231,788 ​ $ 221,006 Provision for credit losses ​ ​ 17,098 ​ 16,539 Noninterest income ​ ​ 115,529 ​ 132,684 Noninterest expense ​ ​ 207,642 ​ 210,531 Federal and state income tax expense ​ ​ 8,727 ​ 13,062 Net income ​ ​ $ 113,850 ​ $ 113,558 ​ ​ ​ ​ ​ ​ ​ ​ The following are some noteworthy developments in the Company’s financial results: ● Net interest income increased $10.8 million, or 4.9%, in 2024 compared to the prior year.
Following is a table that represents the major income and expense categories for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ ​ ​ 2024 ​ ​ (dollars are in thousands) ​ ​ ​ ​ ​ ​ ​ Net interest income ​ $ 255,221 ​ $ 231,788 Provision for credit losses ​ 18,081 ​ 17,098 Noninterest income ​ 114,323 ​ 115,529 Noninterest expense ​ 215,561 ​ 207,642 Federal and state income tax expense ​ 8,708 ​ 8,727 Net income ​ $ 127,194 ​ $ 113,850 ​ ​ ​ ​ ​ ​ ​ ​ The following are some noteworthy developments in the Company’s financial results: ● Net interest income increased $23.4 million, or 10.1%, in 2025 compared to the prior year.
Management continually addresses this issue with pricing and other balance sheet management strategies which included better loan pricing, reducing reliance on rate-sensitive funding, closely managing deposit rates and finding additional ways to manage cost of funds through derivatives. 46 Table of Contents The Company’s average balances, interest income/expense, and rates earned/paid on major balance sheet categories are presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ ​ 2023 ​ ​ 2022 ​ ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ Average ​ Earned ​ Yield or ​ ​ Average ​ Earned ​ Yield or ​ ​ Average ​ Earned ​ Yield or ​ ​ ​ Balance or Paid Cost ​ Balance or Paid Cost ​ Balance or Paid Cost ​ ​ (dollars in thousands) ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal funds sold ​ $ 12,788 ​ $ 692 ​ 5.33 % ​ $ 19,110 ​ $ 998 5.22 % ​ $ 14,436 ​ $ 410 2.84 % Interest-bearing deposits at financial institutions ​ 119,255 ​ 6,077 ​ 5.10 ​ ​ 80,924 ​ 4,137 5.11 ​ ​ 63,448 ​ 1,089 1.72 ​ Investment securities - taxable ​ 377,039 ​ 17,216 ​ 4.55 ​ ​ 346,579 ​ 14,927 4.30 ​ ​ 335,255 ​ 12,078 3.59 ​ Investment securities - nontaxable (1) ​ ​ 745,502 ​ ​ 41,843 ​ ​ 5.61 ​ ​ ​ 611,924 ​ ​ 28,272 ​ 4.62 ​ ​ ​ 575,457 ​ ​ 24,281 ​ 4.22 ​ Restricted investment securities ​ 39,293 ​ 2,991 ​ 7.49 ​ ​ 39,273 ​ 2,346 5.89 ​ ​ 35,554 ​ 2,068 5.73 ​ Gross loans/leases receivable (1) (2) (3) ​ 6,764,754 ​ 449,570 ​ 6.65 ​ ​ 6,337,551 ​ 390,967 6.17 ​ ​ 5,604,074 ​ 268,985 4.80 ​ Total interest earning assets ​ $ 8,058,631 ​ 518,389 ​ 6.43 ​ ​ $ 7,435,361 ​ 441,647 5.94 ​ ​ $ 6,628,224 ​ 308,911 4.66 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 78,683 ​ ​ ​ ​ ​ ​ ​ ​ $ 80,386 ​ ​ ​ ​ ​ ​ ​ $ 75,975 ​ ​ ​ ​ ​ ​ Premises and equipment ​ 140,727 ​ ​ ​ ​ ​ ​ ​ ​ 119,177 ​ ​ ​ ​ ​ ​ ​ 106,591 ​ ​ ​ ​ ​ ​ Less allowance ​ (86,265) ​ ​ ​ ​ ​ ​ ​ ​ (86,983) ​ ​ ​ ​ ​ ​ ​ (85,745) ​ ​ ​ ​ ​ ​ Other ​ 645,617 ​ ​ ​ ​ ​ ​ ​ ​ 617,684 ​ ​ ​ ​ ​ ​ ​ 481,135 ​ ​ ​ ​ ​ ​ Total assets ​ $ 8,837,393 ​ ​ ​ ​ ​ ​ ​ ​ $ 8,165,625 ​ ​ ​ ​ ​ ​ ​ $ 7,206,180 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits ​ $ 4,700,762 ​ 161,584 ​ 3.44 % ​ $ 4,191,913 ​ 121,662 ​ 2.90 % ​ $ 3,715,017 ​ 35,359 ​ 0.95 % Time deposits ​ 1,153,407 ​ 51,547 ​ 4.47 ​ ​ 1,010,827 ​ 37,784 ​ 3.74 ​ ​ 568,245 ​ 7,003 ​ 1.23 ​ Short-term borrowings ​ 1,850 ​ 98 ​ 5.24 ​ ​ 2,781 ​ 152 ​ 6.44 ​ ​ 8,637 ​ 299 ​ 3.46 ​ FHLB advances ​ 375,214 ​ 19,751 ​ 5.18 ​ ​ 323,904 ​ 16,740 ​ 5.10 ​ ​ 286,474 ​ 6,954 ​ 2.39 ​ Other borrowings ​ — ​ — ​ — ​ ​ — ​ — ​ — ​ ​ 1,068 ​ 53 ​ 4.96 ​ Subordinated notes ​ ​ 233,260 ​ ​ 14,314 ​ ​ 6.14 ​ ​ ​ 232,837 ​ ​ 13,230 ​ 5.68 ​ ​ ​ 165,685 ​ ​ 9,200 ​ 5.55 ​ Junior subordinated debentures ​ 48,791 ​ 2,775 ​ 5.59 ​ ​ 48,662 ​ 2,836 ​ 5.75 ​ ​ 45,497 ​ 2,583 ​ 5.60 ​ Total interest-bearing liabilities ​ $ 6,513,284 ​ 250,069 ​ 3.83 ​ ​ $ 5,810,924 ​ 192,404 ​ 3.31 ​ ​ $ 4,790,623 ​ 61,451 ​ 1.28 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing demand deposits ​ $ 959,451 ​ ​ ​ ​ ​ ​ ​ ​ $ 1,123,050 ​ ​ ​ ​ ​ ​ ​ $ 1,393,284 ​ ​ ​ ​ ​ ​ Other noninterest-bearing liabilities ​ 418,810 ​ ​ ​ ​ ​ ​ ​ ​ 406,274 ​ ​ ​ ​ ​ ​ ​ 274,241 ​ ​ ​ ​ ​ ​ Total liabilities ​ $ 7,891,545 ​ ​ ​ ​ ​ ​ ​ ​ $ 7,340,248 ​ ​ ​ ​ ​ ​ ​ $ 6,458,148 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity ​ 945,848 ​ ​ ​ ​ ​ ​ ​ ​ 825,557 ​ ​ ​ ​ ​ ​ ​ 748,032 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 8,837,393 ​ ​ ​ ​ ​ ​ ​ ​ $ 8,165,805 ​ ​ ​ ​ ​ ​ ​ $ 7,206,180 ​ ​ ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 268,320 ​ ​ ​ ​ ​ ​ ​ $ 249,243 ​ ​ ​ ​ ​ ​ $ 247,460 ​ ​ ​ Net interest spread ​ ​ ​ ​ ​ 2.60 % ​ ​ ​ ​ ​ 2.63 % ​ ​ ​ ​ ​ 3.38 % Net interest margin ​ ​ ​ ​ ​ 2.88 % ​ ​ ​ ​ ​ 2.97 % ​ ​ ​ ​ ​ 3.49 % Net interest margin (TEY)(Non-GAAP) ​ ​ ​ ​ ​ 3.33 % ​ ​ ​ ​ ​ 3.35 % ​ ​ ​ ​ ​ 3.73 % Adjusted net interest margin (TEY)(Non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ 3.31 % ​ ​ ​ ​ ​ ​ ​ 3.32 % ​ ​ ​ ​ ​ ​ ​ 3.60 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of average interest-earning assets to average interest-bearing liabilities ​ 123.73 % ​ ​ ​ ​ ​ 127.95 % ​ ​ ​ ​ ​ 138.36 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Interest earned and yields on nontaxable investment securities and loans are determined on a tax equivalent basis using a 21% tax rate.
Management continually addresses this issue with pricing and other balance sheet management strategies which included better loan pricing, reducing reliance on rate-sensitive funding, closely managing deposit rates and finding additional ways to manage cost of funds through derivatives. 40 Table of Contents The Company’s average balances, interest income/expense, and rates earned/paid on major balance sheet categories are presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ 2023 ​ ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ ​ ​ Interest ​ Average ​ ​ ​ Average ​ Earned ​ Yield or ​ ​ Average ​ Earned ​ Yield or ​ ​ Average ​ Earned ​ Yield or ​ ​ ​ Balance ​ ​ ​ or Paid ​ ​ ​ Cost ​ ​ ​ ​ Balance ​ ​ ​ or Paid ​ ​ ​ Cost ​ ​ ​ ​ Balance ​ ​ ​ or Paid ​ ​ ​ Cost ​ ​ ​ ​ ​ (dollars in thousands) ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal funds sold ​ $ 12,325 ​ $ 532 ​ 4.26 % ​ $ 12,788 ​ $ 692 5.33 % ​ $ 19,110 ​ $ 998 5.22 % Interest-bearing deposits at financial institutions ​ 155,900 ​ 6,509 ​ 4.18 ​ ​ 119,255 ​ 6,077 5.10 ​ ​ 80,924 ​ 4,137 5.11 ​ Investment securities - taxable ​ 401,866 ​ 19,159 ​ 4.77 ​ ​ 377,039 ​ 17,216 4.55 ​ ​ 346,579 ​ 14,927 4.30 ​ Investment securities - nontaxable (1) ​ ​ 911,979 ​ ​ 52,844 ​ ​ 5.79 ​ ​ ​ 745,502 ​ ​ 41,843 ​ 5.61 ​ ​ ​ 611,924 ​ ​ 28,272 ​ 4.62 ​ Restricted investment securities ​ 31,908 ​ 2,273 ​ 7.02 ​ ​ 39,293 ​ 2,991 7.49 ​ ​ 39,273 ​ 2,346 5.89 ​ Gross loans/leases receivable (1) (2) (3) ​ 7,004,737 ​ 449,851 ​ 6.42 ​ ​ 6,764,754 ​ 449,570 6.65 ​ ​ 6,337,551 ​ 390,967 6.17 ​ Total interest earning assets ​ $ 8,518,715 ​ 531,168 ​ 6.24 ​ ​ $ 8,058,631 ​ 518,389 6.43 ​ ​ $ 7,435,361 ​ 441,647 5.94 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 78,978 ​ ​ ​ ​ ​ ​ ​ ​ $ 78,683 ​ ​ ​ ​ ​ ​ ​ $ 80,386 ​ ​ ​ ​ ​ ​ Premises and equipment ​ 182,054 ​ ​ ​ ​ ​ ​ ​ ​ 140,727 ​ ​ ​ ​ ​ ​ ​ 119,177 ​ ​ ​ ​ ​ ​ Less allowance ​ (88,934) ​ ​ ​ ​ ​ ​ ​ ​ (86,265) ​ ​ ​ ​ ​ ​ ​ (86,983) ​ ​ ​ ​ ​ ​ Other ​ 632,358 ​ ​ ​ ​ ​ ​ ​ ​ 645,617 ​ ​ ​ ​ ​ ​ ​ 617,684 ​ ​ ​ ​ ​ ​ Total assets ​ $ 9,323,171 ​ ​ ​ ​ ​ ​ ​ ​ $ 8,837,393 ​ ​ ​ ​ ​ ​ ​ $ 8,165,625 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits ​ $ 5,159,542 ​ 154,524 ​ 2.99 % ​ $ 4,700,762 ​ 161,584 ​ 3.44 % ​ $ 4,191,913 ​ 121,662 ​ 2.90 % Time deposits ​ 1,228,407 ​ 50,177 ​ 4.08 ​ ​ 1,153,407 ​ 51,547 ​ 4.47 ​ ​ 1,010,827 ​ 37,784 ​ 3.74 ​ Short-term borrowings ​ 2,044 ​ 83 ​ 4.01 ​ ​ 1,850 ​ 98 ​ 5.24 ​ ​ 2,781 ​ 152 ​ 6.44 ​ FHLB advances ​ 205,397 ​ 9,327 ​ 4.48 ​ ​ 375,214 ​ 19,751 ​ 5.18 ​ ​ 323,904 ​ 16,740 ​ 5.10 ​ Other borrowings ​ 43,091 ​ 2,291 ​ 5.32 ​ ​ — ​ — ​ — ​ ​ — ​ — ​ — ​ Subordinated notes ​ ​ 234,508 ​ ​ 15,063 ​ ​ 6.42 ​ ​ ​ 233,260 ​ ​ 14,314 ​ 6.14 ​ ​ ​ 232,837 ​ ​ 13,230 ​ 5.68 ​ Junior subordinated debentures ​ 48,921 ​ 2,740 ​ 5.52 ​ ​ 48,791 ​ 2,775 ​ 5.59 ​ ​ 48,662 ​ 2,836 ​ 5.75 ​ Total interest-bearing liabilities ​ $ 6,921,910 ​ 234,205 ​ 3.38 ​ ​ $ 6,513,284 ​ 250,069 ​ 3.83 ​ ​ $ 5,810,924 ​ 192,404 ​ 3.31 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing demand deposits ​ $ 955,565 ​ ​ ​ ​ ​ ​ ​ ​ $ 959,451 ​ ​ ​ ​ ​ ​ ​ $ 1,123,050 ​ ​ ​ ​ ​ ​ Other noninterest-bearing liabilities ​ 382,646 ​ ​ ​ ​ ​ ​ ​ ​ 418,810 ​ ​ ​ ​ ​ ​ ​ 406,274 ​ ​ ​ ​ ​ ​ Total liabilities ​ $ 8,260,121 ​ ​ ​ ​ ​ ​ ​ ​ $ 7,891,545 ​ ​ ​ ​ ​ ​ ​ $ 7,340,248 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity ​ 1,063,050 ​ ​ ​ ​ ​ ​ ​ ​ 945,848 ​ ​ ​ ​ ​ ​ ​ 825,557 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 9,323,171 ​ ​ ​ ​ ​ ​ ​ ​ $ 8,837,393 ​ ​ ​ ​ ​ ​ ​ $ 8,165,805 ​ ​ ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 296,963 ​ ​ ​ ​ ​ ​ ​ $ 268,320 ​ ​ ​ ​ ​ ​ $ 249,243 ​ ​ ​ Net interest margin ​ ​ ​ ​ ​ 3.00 % ​ ​ ​ ​ ​ 2.88 % ​ ​ ​ ​ ​ 2.97 % Net interest margin (TEY)(Non-GAAP) ​ ​ ​ ​ ​ 3.49 % ​ ​ ​ ​ ​ 3.33 % ​ ​ ​ ​ ​ 3.35 % Adjusted net interest margin (TEY)(Non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ 3.48 % ​ ​ ​ ​ ​ ​ ​ 3.31 % ​ ​ ​ ​ ​ ​ ​ 3.32 % Cost of funds (4) ​ ​ ​ ​ ​ ​ ​ ​ 2.97 % ​ ​ ​ ​ ​ ​ ​ 3.34 % ​ ​ ​ ​ ​ ​ ​ 2.77 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of average interest-earning assets to average interest-bearing liabilities ​ 123.07 % ​ ​ ​ ​ ​ 123.73 % ​ ​ ​ ​ 127.95 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Interest earned and yields on nontaxable investment securities and loans are determined on a tax equivalent basis using a 21% tax rate.
The Company expects trust and investment advisory and management fees to be negatively impacted during periods of lower market valuations and positively impacted during periods of higher market valuations.
Similar to trust fees, investment advisory and management fees are largely determined based on the value of the investments managed. The Company expects trust and investment advisory and management fees to be negatively impacted during periods of lower market valuations and positively impacted during periods of higher market valuations.
The table below presents the composition of the Company’s deposit portfolio. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 2023 ​ ​ Amount % Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest bearing demand deposits ​ $ 921,160 13 % $ 1,038,689 16 % Interest bearing demand deposits ​ 4,828,216 68 % 4,338,390 67 % Time deposits ​ 953,496 14 % 851,950 13 % Brokered deposits ​ 358,315 5 % 284,976 4 % ​ ​ $ 7,061,187 100 % $ 6,514,005 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company actively participates in the ICS/CDARS program, which is a trusted resource that provides FDIC insurance coverage for clients of the Company that maintain larger deposit balances.
The table below presents the composition of the Company’s deposit portfolio. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest bearing demand deposits ​ $ 945,513 13 % $ 921,160 13 % Interest bearing demand deposits ​ 5,196,438 70 % 4,828,216 68 % Time deposits ​ 1,035,317 14 % 953,496 14 % Brokered deposits ​ 236,930 3 % 358,315 5 % ​ ​ $ 7,414,198 100 % $ 7,061,187 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company actively participates in the ICS/CDARS program, which is a trusted resource that provides FDIC insurance coverage for clients of the Company that maintain larger deposit balances.
The Company also uses unhedged cap instruments to manage interest rate risk related to the variability of interest payments due to changes in interest rates. See Note 7 to the Consolidated Financial Statements for additional information. Other noninterest income decreased 28% in 2024 primarily due to declines in the market value of the Company’s equity investments.
The Company also uses unhedged cap instruments to manage interest rate risk related to the variability of interest payments due to changes in interest rates. See Note 7 to the Consolidated Financial Statements for additional information.
The Company will pay the contractor a contract price of approximately $17.0 million, subject to additions and deductions as provided in the contract documents. As of December 31, 2024, the Company has paid $15.8 million of the contract price, resulting in a future commitment of $1.2 million. Construction is anticipated to be completed in March 2025.
The Company will pay the contractor a contract price of approximately $66.5 million, subject to additions and deductions as provided in the contract documents. As of December 31, 2025, the Company has paid $10.6 million of the contract price, resulting in a future commitment of $55.9 million. Construction is anticipated to be completed in 2027.
STOCKHOLDERS’ EQUITY The table below presents the composition of the Company’s stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 2023 ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ $ 16,882 ​ $ 16,749 ​ Additional paid in capital ​ 374,975 ​ 370,814 ​ Retained earnings ​ 665,171 ​ 554,992 ​ AOCI ​ (59,641) ​ (55,959) ​ Total stockholders' equity ​ $ 997,387 ​ $ 886,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ TCE / TA ratio (non-GAAP)* ​ 9.55 % 8.75 % ​ * TCE/TA ratio is defined as total common stockholders’ equity excluding goodwill and other intangibles divided by total assets.
STOCKHOLDERS’ EQUITY The table below presents the composition of the Company’s stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ $ 16,691 ​ $ 16,882 ​ Additional paid in capital ​ 372,851 ​ 374,975 ​ Retained earnings ​ 773,353 ​ 665,171 ​ AOCI ​ (50,584) ​ (59,641) ​ Total stockholders' equity ​ $ 1,112,311 ​ $ 997,387 ​ ​ ​ ​ ​ ​ ​ ​ ​ TCE / TA ratio (non-GAAP)* ​ 10.24 % 9.55 % ​ * TCE/TA ratio is defined as total common stockholders’ equity excluding goodwill and other intangibles divided by total assets.
Trust fees continue to be a significant contributor to noninterest income. Assets under management increased by $1.1 billion in 2024 with 469 new relationships totaling $1.5 billion in new assets under management. Income is generated primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services.
Trust and investment advisory and management fees continue to be a significant contributor to noninterest income. Assets under management increased by $779.7 million in 2025 totaling $7.1 billion in assets under management as of December 31, 2025. Income is generated primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services.
JUNIOR SUBORDINATED DEBENTURES The Company had junior subordinated debentures totaling $48.9 million and $48.7 million as of December 31, 2024 and 2023, respectively.
JUNIOR SUBORDINATED DEBENTURES 55 Table of Contents The Company had junior subordinated debentures totaling $49.0 million and $48.9 million as of December 31, 2025 and 2024, respectively.
INVESTMENT SECURITIES The composition of the Company’s securities portfolio is managed to meet liquidity needs while prioritizing the impact on interest rate risk and maximizing return, while minimizing credit risk. Over the recent years, the Company has continued to change the mix of the portfolio by decreasing U.S. government sponsored agency securities, while increasing tax-exempt municipal securities.
INVESTMENT SECURITIES The composition of the Company’s securities portfolio is managed to meet liquidity needs while prioritizing the impact on interest rate risk and maximizing return, while minimizing credit risk. The Company has continued to grow its portfolio of tax-exempt municipal securities.
On May 19, 2022, the board of directors of the Company approved a share repurchase program under which the Company is authorized to repurchase, from time to time as the Company deems appropriate, up to an additional 1,500,000 shares of its outstanding common stock, or approximately 10% of the outstanding shares as of December 31, 2021.
On May 19, 2022, the board of directors of the Company approved the prior repurchase program under which the Company was authorized to repurchase, from time to time as the Company deemed appropriate, up to 1,500,000 shares of its outstanding common stock, or approximately 8.5% of the outstanding shares as of May 1, 2022.
Although management believes the level of the ACL as of December 31, 2024 was adequate to absorb losses inherent in the loan/lease portfolio, the HTM portfolio and OBS exposures, a decline in local economic conditions, or other factors, could result in increasing losses that cannot be reasonably predicted at this time.
Although management believes the level of the ACL as of December 31, 2025 was adequate to absorb losses inherent in the loan/lease portfolio, the HTM portfolio and OBS exposures, a decline in local economic conditions, or other factors, could result in increasing losses that cannot be reasonably predicted at this time. 35 Table of Contents EXECUTIVE OVERVIEW The Company reported net income of $127.2 million for the year ended December 31, 2025, and diluted EPS of $7.49.
As of December 31, 2024, the Company has paid $8.7 million of the contract price, resulting in a remaining future commitment of $32.6 million. Construction is anticipated to be completed in 2026. The Company entered into a construction contract in 2023 for the construction of a new CRBT facility in Cedar Rapids, Iowa.
As of December 31, 2025, the Company has paid $36.6 million of the contract price, resulting in a remaining future commitment of $4.7 million. Construction is anticipated to be completed in 2026. The Company entered into a construction contract in 2025 for the construction of a new corporate headquarters including a new branch facility for QCBT in Bettendorf, Iowa.
The mix of loan/lease types within the Company’s loan/lease portfolio is presented in the following tables. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ December 31, 2024 ​ ​ December 31, 2023 ​ ​ Amount % ​ Amount % ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 387,991 6 % ​ $ 325,243 5 % C&I - other ​ ​ 1,514,932 ​ 22 % ​ ​ 1,481,778 ​ 23 ​ CRE - owner occupied ​ ​ 605,993 ​ 9 % ​ ​ 607,365 ​ 9 ​ CRE - non-owner occupied ​ ​ 1,077,852 ​ 16 % ​ ​ 1,008,892 ​ 16 ​ Construction and land development ​ ​ 1,313,543 ​ 19 % ​ ​ 1,420,525 ​ 22 ​ Multi-family ​ 1,132,110 17 % ​ 996,143 15 ​ Direct financing leases ​ 17,076 - % ​ 31,164 - ​ 1-4 family real estate ​ 588,179 9 % ​ 544,971 8 ​ Consumer ​ 146,728 2 % ​ 127,335 2 ​ Total loans/leases ​ $ 6,784,404 100 % ​ $ 6,543,416 100 % Less allowance ​ (89,841) ​ ​ ​ (87,200) ​ Net loans/leases ​ $ 6,694,563 ​ ​ ​ ​ $ 6,456,216 ​ ​ ​ ​ CRE loans are predominantly included within the CRE – owner occupied, CRE – non-owner occupied, construction and land development and multi-family loan classes, however, CRE loans can also be included in 1-4 family real estate based on the nature of the loan.
The mix of loan/lease types within the Company’s loan/lease portfolio is presented in the following tables. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ ​ December 31, 2025 ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ C&I - revolving ​ $ 384,656 5 % ​ $ 387,991 6 % ​ C&I - other ​ ​ 1,318,866 ​ 18 % ​ ​ 1,514,932 ​ 22 % ​ CRE - owner occupied ​ ​ 577,352 ​ 8 % ​ ​ 605,993 ​ 9 % ​ CRE - non-owner occupied ​ ​ 1,036,655 ​ 15 % ​ ​ 1,077,852 ​ 16 % ​ Construction and land development ​ ​ 1,308,422 ​ 18 % ​ ​ 1,313,543 ​ 19 % ​ Multi-family ​ 1,769,331 25 % ​ 1,132,110 17 % ​ Direct financing leases ​ 9,533 - % ​ 17,076 - % ​ 1-4 family real estate ​ 603,683 9 % ​ 588,179 9 % ​ Consumer ​ 158,457 2 % ​ 146,728 2 % ​ Total loans/leases ​ $ 7,166,955 100 % ​ $ 6,784,404 100 % ​ Less allowance ​ (90,127) ​ ​ ​ (89,841) ​ ​ ​ Net loans/leases ​ $ 7,076,828 ​ ​ ​ ​ $ 6,694,563 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CRE loans are predominantly included within the CRE – owner occupied, CRE – non-owner occupied, construction and land development and multi-family loan classes, however, CRE loans can also be included in 1-4 family real estate based on the nature of the loan.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Quantitative and Qualitative Disclosures About Market Risk 69 ​ Item 8.
Quantitative and Qualitative Disclosures About Market Risk 61 ​ Item 8.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 ​ ​ General 39 ​ ​ Critical Accounting Policies and Critical Accounting Estimates 39 ​ ​ Executive Overview 41 ​ ​ Strategic Financial Metrics 42 ​ ​ Strategic Developments 43 ​ ​ GAAP to Non-GAAP Reconciliations 44 ​ ​ Net Interest Income and Margin (Tax Equivalent Basis)(Non-GAAP) 45 ​ ​ Results of Operations 48 ​ ​ Interest Income 48 ​ ​ Interest Expense 49 ​ ​ Provision for Credit Losses 49 ​ ​ Noninterest Income 50 ​ ​ Noninterest Expenses 52 ​ ​ Income Tax Expense 54 ​ ​ Financial Condition 54 ​ ​ Overview 54 ​ ​ Investment Securities 54 ​ ​ Loans/Leases 56 ​ ​ Allowance for Credit Losses on Loans/Leases and OBS Exposures 57 ​ ​ Nonperforming Assets 60 ​ ​ Deposits 61 ​ ​ Short-Term Borrowings 62 ​ ​ FHLB Advances and Other Borrowings 62 ​ ​ Subordinated Notes 62 ​ ​ Junior Subordinated Debentures 63 ​ ​ Stockholders’ Equity 63 ​ ​ Liquidity and Capital Resources 64 ​ ​ Commitments, Contingencies, Contractual Obligations, and Off-Balance Sheet Arrangements 65 ​ ​ Impact of Inflation and Changing Prices 67 ​ ​ Forward-Looking Statements 67 ​ Item 7A.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 ​ ​ General 35 ​ ​ Critical Accounting Policies and Critical Accounting Estimates 35 ​ ​ Executive Overview 36 ​ ​ Strategic Financial Metrics 37 ​ ​ Strategic Developments 37 ​ ​ GAAP to Non-GAAP Reconciliations 38 ​ ​ Net Interest Income and Margin (Tax Equivalent Basis)(Non-GAAP) 40 ​ ​ Results of Operations 42 ​ ​ Interest Income 42 ​ ​ Interest Expense 42 ​ ​ Provision for Credit Losses 43 ​ ​ Noninterest Income 44 ​ ​ Noninterest Expenses 45 ​ ​ Income Tax Expense 47 ​ ​ Financial Condition 47 ​ ​ Overview 47 ​ ​ Investment Securities 47 ​ ​ Loans/Leases 49 ​ ​ Allowance for Credit Losses on Loans/Leases and OBS Exposures 50 ​ ​ Nonperforming Assets 53 ​ ​ Deposits 54 ​ ​ Short-Term Borrowings 55 ​ ​ FHLB Advances and Other Borrowings 55 ​ ​ Subordinated Notes 55 ​ ​ Junior Subordinated Debentures 55 ​ ​ Stockholders’ Equity 56 ​ ​ Liquidity and Capital Resources 57 ​ ​ Commitments, Contingencies, Contractual Obligations, and Off-Balance Sheet Arrangements 58 ​ ​ Impact of Inflation and Changing Prices 59 ​ ​ Forward-Looking Statements 59 ​ Item 7A.
Financial Statements and Supplementary Data 71 ​ ​ Consolidated Balance Sheets as of December 31, 2024 and 2023 74 ​ ​ Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022 75 2 Table of Contents ​ ​ Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022 76 ​ ​ Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 77 ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 78 ​ ​ Notes to Consolidated Financial Statements 80 ​ ​ Note 1 : Nature of Business and Significant Accounting Policies 80 ​ ​ Note 2 : Investment Securities 97 ​ ​ Note 3 : Loans/Leases Receivable 102 ​ ​ Note 4: Securitizations and Variable Interest Entities 112 ​ ​ Note 5: Premises and Equipment 115 ​ ​ Note 6 : Goodwill and Intangibles 117 ​ ​ Note 7 : Derivatives and Hedging Activities 118 ​ ​ Note 8 : Deposits 122 ​ ​ Note 9 : Short-Term Borrowings 123 ​ ​ Note 10 : FHLB Advances 124 ​ ​ Note 11 : Other Borrowings and Unused Lines of Credit 124 ​ ​ Note 12 : Subordinated Notes 125 ​ ​ Note 13 : Junior Subordinated Debentures 127 ​ ​ Note 14 : Federal and State Income Taxes 128 ​ ​ Note 15 : Employee Benefit Plans 130 ​ ​ Note 16 : Stock-Based Compensation 131 ​ ​ Note 17 : Regulatory Requirements and Restrictions on Dividends 135 ​ ​ Note 18 : Earnings Per Share 137 ​ ​ Note 19 : Commitments and Contingencies 137 ​ ​ Note 20: Parent Company Only Financial Statements 139 ​ ​ Note 21 : Fair Value 142 ​ ​ Note 22 : Business Segment Information 145 ​
Financial Statements and Supplementary Data 63 ​ ​ Consolidated Balance Sheets as of December 31, 2025 and 2024 66 ​ ​ Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 67 ​ ​ Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 68 2 Table of Contents ​ ​ Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 69 ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 70 ​ ​ Notes to Consolidated Financial Statements 72 ​ ​ Note 1 : Nature of Business and Significant Accounting Policies 72 ​ ​ Note 2 : Investment Securities 90 ​ ​ Note 3 : Loans/Leases Receivable 95 ​ ​ Note 4: Securitizations and Variable Interest Entities 105 ​ ​ Note 5: Premises and Equipment 109 ​ ​ Note 6 : Goodwill and Intangibles 110 ​ ​ Note 7 : Derivatives and Hedging Activities 112 ​ ​ Note 8 : Deposits 116 ​ ​ Note 9 : Short-Term Borrowings 116 ​ ​ Note 10 : FHLB Advances 117 ​ ​ Note 11 : Other Borrowings and Unused Lines of Credit 118 ​ ​ Note 12 : Subordinated Notes 118 ​ ​ Note 13 : Junior Subordinated Debentures 121 ​ ​ Note 14 : Federal and State Income Taxes 122 ​ ​ Note 15 : Employee Benefit Plans 125 ​ ​ Note 16 : Stock-Based Compensation 126 ​ ​ Note 17 : Regulatory Requirements and Restrictions on Dividends 129 ​ ​ Note 18 : Earnings Per Share 131 ​ ​ Note 19 : Commitments and Contingencies 131 ​ ​ Note 20: Parent Company Only Financial Statements 133 ​ ​ Note 21 : Fair Value 136 ​ ​ Note 22 : Business Segment Information 139 ​

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The simulation is within the board-established policy limits for all three scenarios. Additionally, for all of the various interest rate scenarios modeled and measured by management (as described above), the results at December 31, 2024 were well within established risk tolerances as established by policy or by best practice (if the interest rate scenario didn’t have a specific policy limit).
The simulation is within the board-established policy limits for all three scenarios. Additionally, for all of the various interest rate scenarios modeled and measured by management (as described above), the results at December 31, 2025 were well within established risk tolerances as established by policy or by best practice (if the interest rate scenario didn’t have a specific policy limit).
Application of the simulation model analysis for select interest rate scenarios at December 31, 2024 and 2023 demonstrated the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME EXPOSURE in YEAR 1 ​ ​ As of December 31, As of December 31, INTEREST RATE SCENARIO ​ POLICY LIMIT 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ 300 basis point downward parallel shock ​ (30.0) % 4.8 % 2.1 % 200 basis point downward parallel shift ​ (10.0) % 2.3 % 1.4 % 200 basis point upward parallel shift (10.0) % (3.2) % (2.3) % 300 basis point upward parallel shock (30.0) % (9.2) % (8.0) % ​ With the shift in funding from non-interest bearing and lower beta deposits to higher beta deposits, the Company’s balance sheet is now moderately liability sensitive.
Application of the simulation model analysis for select interest rate scenarios at December 31, 2025 and 2024 demonstrated the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME EXPOSURE IN YEAR 1 ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ As of December 31, ​ ​ ​ INTEREST RATE SCENARIO ​ POLICY LIMIT 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ 300 basis point downward parallel shock ​ (30.0) % 0.9 % 4.8 % 200 basis point downward parallel shift ​ (10.0) % 0.5 % 2.3 % 200 basis point upward parallel shift (10.0) % (0.6) % (3.2) % 300 basis point upward parallel shock (30.0) % (1.9) % (9.2) % ​ With the shift in funding from non-interest bearing and lower beta deposits to higher beta deposits, the Company’s balance sheet is now moderately liability sensitive.
Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities. ​ 70 Table of Contents
Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities. ​ 62 Table of Contents
This sensitivity analysis demonstrates net interest income exposure annually over a five-year horizon, assuming no balance sheet growth, no balance sheet mix change, and various interest rate scenarios including no change in rates; 100, 200, 300 and 400 basis point upward shifts; and 100 and 200 basis point downward shifts in interest rates, where interest-bearing assets and liabilities reprice at their earliest possible repricing date.
This sensitivity analysis demonstrates net interest income exposure annually over a five-year horizon, assuming no balance sheet growth, no balance sheet mix change, and various interest rate scenarios including no change in rates; 100, 200, 300 and 400 basis 61 Table of Contents point upward shifts; and 100 and 200 basis point downward shifts in interest rates, where interest-bearing assets and liabilities reprice at their earliest possible repricing date.
The increased 69 Table of Contents policy limit is appropriate as the shock scenario is extreme and unlikely and warrants a higher limit than the more realistic and traditional parallel/pro-rata shift scenarios.
The increased policy limit is appropriate as the shock scenario is extreme and unlikely and warrants a higher limit than the more realistic and traditional parallel/pro-rata shift scenarios.

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