10q10k10q10k.net

What changed in UNIVEST FINANCIAL Corp's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of UNIVEST FINANCIAL Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+274 added−263 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-24)

Top changes in UNIVEST FINANCIAL Corp's 2025 10-K

274 paragraphs added · 263 removed · 231 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

49 edited+4 added−7 removed62 unchanged
Biggest change(Most recent available statistics) Montgomery Bucks Lancaster Philadelphia Pennsylvania National Unemployment rate (1) (2) 2.7% 2.9% 2.6% 4.4% 3.3% 4.1% Median Household Income (3) $113,000 $110,000 $87,000 $57,000 $75,000 $79,000 Median Age (3) 42 45 40 36 41 40 Population Growth (2020-2025) (3) 2.2% 0.1% 1.7% (4.8)% (0.3)% 1.9% (1) Pennsylvania Department of Labor and Industry - Montgomery, Bucks, Lancaster, Philadelphia and Pennsylvania unemployment rates are as of December 2024 (2) Bureau of Labor Statistics - National unemployment rates are as of December 2024, seasonally adjusted (3) S&P Global - Demographic data is provided by Claritas based primarily on US Census data Significant types of employment industries for our markets include health care and social assistance, professional, scientific and technical services, retail trade, manufacturing, accommodation and food services, educational services, construction, and public administration.
Biggest change(Most recent available statistics) Montgomery Bucks Lancaster Philadelphia Pennsylvania National Unemployment rate (1) (2) 3.4% 3.7% 3.4% 5.1% 4.2% 4.4% Median Household Income (3) $117,000 $119,000 $88,000 $66,000 $83,000 $87,000 Median Age (3) 42 45 40 37 42 40 Population Growth (2020-2026) (3) 3.3% 0.5% 2.2% (2.3)% 0.6% 3.5% (1) Pennsylvania Department of Labor and Industry - Montgomery, Bucks, Lancaster, Philadelphia unemployment rates are as of November 2025 and the Pennsylvania unemployment rate is as of December 2025 (2) Bureau of Labor Statistics - National unemployment rates are as of December 2025, seasonally adjusted (3) S&P Global - Demographic data is provided by Claritas based primarily on US Census data 3 Table of Contents Significant types of employment industries for our markets include health care and social assistance, retail trade, manufacturing, educational services, accommodation and food services, professional, scientific and technical services, transportation and warehousing, administrative and support and waste management and remediation services, construction, and finance and insurance.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution's privacy policy and provide such customers the opportunity to "opt out" of the sharing of certain personal financial information with unaffiliated third parties.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution's privacy policy and the opportunity to "opt out" of the sharing of certain personal financial information with unaffiliated third parties.
Other Laws and Regulations The Bank's operations are also subject to federal laws and regulations applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; • Truth in Savings Act; • Laws and regulations prohibiting unfair or deceptive acts or practices; and • other regulations of the various federal agencies charged with the responsibility of implementing such federal laws. 8 Table of Contents The operations of the Bank are further subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and consumer customers' rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21st Century Act (also known as "Check 21"), which gives "substitute checks," such as digital check images and copies made from that image, the same legal standing as the original paper checks; • Regulations of the Office of Foreign Assets Control that enforce economic and trade sanctions programs based on United States foreign policy and national security goals; and • Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties.
Other Laws and Regulations The Bank's operations are also subject to federal laws and regulations applicable to credit transactions, such as the: • Truth In Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; • Laws and regulations prohibiting unfair or deceptive acts or practices; and • Other regulations of the various federal agencies charged with the responsibility of implementing such federal laws and regulations. 8 Table of Contents The operations of the Bank are further subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and consumer customers' rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21st Century Act (also known as "Check 21"), which gives "substitute checks," such as digital check images and copies made from that image, the same legal standing as the original paper checks; • Truth in Savings Act, governing disclosures of deposit account terms to consumers; • Regulations of the Office of Foreign Assets Control that enforce economic and trade sanctions programs based on United States foreign policy and national security goals; and • Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties.
There is a rebuttable presumption of control if, immediately after the transaction, the acquiring person will own, control, or hold with power to vote 10% or more of a class of voting stock, and if (i) the holding company involved has its shares registered under the Securities Exchange Act of 1934, or, (ii) if no other person will own, control or hold the power to vote a greater percentage of that class of voting stock after the acquisition. 9 Table of Contents In addition, the Bank Holding Company Act ("BHCA") prohibits any company from acquiring control of a bank or bank holding company, or ownership or control of any voting shares of any bank or bank holding company if after such acquisition it would own or control, directly or indirectly, more than 5.0% of the voting shares of such bank or bank holding company, without first having obtained the approval of the Board.
There is a rebuttable presumption of control if, immediately after the transaction, the acquiring person will own, control, or hold with power to vote 10% or more of a class of voting stock, and if (i) the holding company involved has its shares registered under the Securities Exchange Act of 1934, or, (ii) if no other person will own, control or hold the power to vote a greater percentage of that class of voting stock after the acquisition. 9 Table of Contents In addition, the Bank Holding Company Act ("BHCA") prohibits any company from acquiring control of a bank or bank holding company, or ownership or control of any voting shares of any bank or bank holding company if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank or bank holding company, without first having obtained the approval of the Board.
The highest concentration of our deposits and loans are in Montgomery, Bucks, Lancaster and Philadelphia counties in Pennsylvania where 27 out of our 38 financial centers are located. The following table details key demographics for our Montgomery, Bucks, Lancaster and Philadelphia markets compared to Pennsylvania and the national average.
The highest concentration of our deposits and loans are in Montgomery, Bucks, Lancaster and Philadelphia counties in Pennsylvania where 27 of our 38 financial centers are located. The following table details key demographics for our Montgomery, Bucks, Lancaster and Philadelphia markets compared to Pennsylvania and the national average.
Univest United Univest is committed to fostering, cultivating and preserving a culture of inclusivity. We embrace and encourage our employees' differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.
Univest United Univest is committed to fostering, cultivating and preserving a culture of inclusivity. We embrace differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.
The Corporation will provide at no charge a copy of the SEC Form 10-K annual report for the year 2024 to each shareholder who requests one in writing. Requests should be directed to: Megan Duryea Santana, Corporate Secretary, Univest Financial Corporation, P.O. Box 197, Souderton, PA 18964.
The Corporation will provide at no charge a copy of the SEC Form 10-K annual report for the year 2025 to each shareholder who requests one in writing. Requests should be directed to: Megan Duryea Santana, Corporate Secretary, Univest Financial Corporation, P.O. Box 197, Souderton, PA 18964.
The Corporation prides itself on being a financial organization that continues to increase its scope of services while maintaining a determined commitment to the communities it serves. The Corporation and its subsidiaries have experienced stable growth, both organically and through various acquisitions, to be the best integrated financial solutions provider in the market.
Acquisitions The Corporation prides itself on being a financial organization that continues to increase its scope of services while maintaining a determined commitment to the communities it serves. The Corporation and its subsidiaries have experienced stable growth, both organically and through various acquisitions, as it strives to be the best integrated financial solutions provider in the market.
The SEC maintains an internet site that contains the Corporation's SEC filings electronically at www.sec.gov . Information about our Executive Officers Name Age Current Primary Positions Current Position Since Jeffrey M. Schweitzer 51 Chair of the Board, President and Chief Executive Officer of the Corporation and Chair of the Board and Chief Executive Officer of the Bank.
The SEC maintains an internet site that contains the Corporation's SEC filings electronically at www.sec.gov . Information about our Executive Officers Name Age Current Primary Positions Current Position Since Jeffrey M. Schweitzer 52 Chair of the Board, President and Chief Executive Officer of the Corporation and Chair of the Board and Chief Executive Officer of the Bank.
Assessments for institutions of less than $10 billion of assets are based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of failure within three years. The FDIC has authority to increase initial base deposit insurance assessment rates and did so by two basis points beginning in the first quarterly assessment period of 2023.
Assessments for institutions of less than $10 billion of assets are based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of failure within three years. 7 Table of Contents The FDIC has authority to increase initial base deposit insurance assessment rates and did so by two basis points beginning in the first quarterly assessment period of 2023.
Richardson 42 Senior Executive Vice President and Chief Financial Officer of the Corporation and the Bank (Has been employed by the Corporation since 2016, most recently as Director of Finance prior to his current position). 2019 Michael S.
Richardson 43 Senior Executive Vice President and Chief Financial Officer of the Corporation and the Bank (Has been employed by the Corporation since 2016, most recently as Director of Finance prior to his current position). 2019 Michael S.
Keim 57 Senior Executive Vice President and Chief Operating Officer of the Corporation, President and Director of the Bank (Has been employed by the Corporation since 2008, most recently as Senior Executive Vice President and Chief Financial Officer of the Corporation and Bank, prior to his current position). 2015 Megan D.
Keim 58 Senior Executive Vice President and Chief Operating Officer of the Corporation, President and Director of the Bank (Has been employed by the Corporation since 2008, most recently as Senior Executive Vice President and Chief Financial Officer of the Corporation and Bank, prior to his current position). 2015 Megan D.
The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness of controls designed to combat money laundering activities in determining whether to approve a merger or other acquisition application.
The USA PATRIOT Act also requires the federal banking agencies to take into consideration the effectiveness of controls designed to combat money laundering activities in determining whether to approve a merger or other acquisition application.
Retention Employee retention helps us operate efficiently and offers continuity to our customers and the community. We believe our commitment to our core values, actively prioritizing concern for our employees' well-being, supporting our employees' career 4 Table of Contents goals, offering competitive wages and providing valuable benefits aids in the retention of our employees.
Retention Employee retention helps us operate efficiently and offers continuity to our customers and the community. We believe our commitment to our core values, actively prioritizing concern for our employees' well-being, supporting our employees' career goals, offering competitive wages and providing valuable benefits aids in the retention of our employees.
Market Area The Corporation's headquarters are in Souderton, Montgomery County, Pennsylvania, which is located in Southeastern Pennsylvania, approximately thirty-five miles north of Philadelphia. The Corporation provides banking and financial services to customers in 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and four counties in Maryland.
Market Area The Corporation's headquarters are in Souderton in Montgomery County, Pennsylvania, which is located in Southeastern Pennsylvania, approximately 35 miles north of Philadelphia. The Corporation provides banking and financial services to customers in 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and five counties in Maryland.
Our selection and promotion processes are without bias and based on merit. We currently source candidates using various methods, including social media, third party search firms, internal referral programs and connections with local schools. Whenever possible, we seek to fill positions by promotion and transfer within the organization. During 2024, we promoted 143 employees.
Our selection and promotion processes are without bias and based on merit. We currently source candidates using various methods, including social media, third-party search firms, internal referral programs and connections with local schools. Whenever possible, we seek to fill positions by promotion and transfer within the organization. During 2025, we promoted 144 employees.
The Bank is a member of the Federal Home Loan Bank System ("FHLBanks"), which consists of 11 regional FHLBanks, and is subject to supervision and regulation by the Federal Housing Finance Agency. The FHLBanks provide a central credit 10 Table of Contents facility primarily for member institutions.
The Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks ("FHLBanks"), that are subject to supervision and regulation by the Federal Housing Finance Agency. The FHLBanks provide 10 Table of Contents a central credit facility primarily for member institutions.
Our benefits package includes health care coverage, retirement benefits, life and disability insurance, wellness programs, paid time-off and leave policies. We also provide our lower-wage earners with higher insurance subsidies. We also offer an Employee Assistance Program in which employees and members of their families may utilize counseling services freely and confidentially.
Our benefits package includes health care coverage, retirement benefits, life and disability insurance, wellness programs, paid time-off and leave policies. We also provide our lower-wage earners with higher insurance subsidies. Our employees have access to an Employee Assistance Program in which employees and members of their families may utilize counseling services freely and confidentially.
(Has been employed by the Bank since 2022 as Executive Vice President and Chief Credit Officer prior to his current position. Prior to joining the Bank, he was Chief Credit Officer at WSFS Bank from 2015-2022). 2023 Eleni S. Monios 60 Executive Vice President and Chief Credit Officer of the Bank.
(Has been employed by the Bank since 2022 as Executive Vice President and Chief Credit Officer prior to his current position. Prior to joining the Bank, he was Chief Credit Officer at WSFS Bank from 2015 to2022). 2023 Eleni S. Monios 61 Executive Vice President and Chief Credit Officer of the Bank.
Santana 49 Senior Executive Vice President, General Counsel and Chief Risk Officer of the Corporation and the Bank (Has been employed by the Corporation since 2016 as General Counsel prior to her current position). 2018 Patrick C. McCormick 47 Senior Executive Vice President and Chief Commercial Banking Officer of the Bank.
Santana 50 Senior Executive Vice President, General Counsel and Chief Risk Officer of the Corporation and the Bank (Has been employed by the Corporation since 2016 as General Counsel prior to her current position). 2018 Patrick C. McCormick 48 Senior Executive Vice President and Chief Commercial Banking Officer of the Bank.
Univest's inclusivity initiatives are applicable, but not limited to: our practices and policies on recruitment and selection; compensation and benefits; professional development and training; promotions; transfers; social and recreational programs; layoffs; terminations; and the ongoing development of a work environment built on the premise of gender and diversity equity that encourages and enforces: • Respectful communication and cooperation between all employees; • Teamwork and employee participation, fostering representation of all groups and perspectives; and • Employer and employee contributions to the communities we serve to promote a greater understanding and respect for inclusivity.
Univest's inclusivity initiatives are applicable, but not limited to: our practices and policies on recruitment and selection; compensation and benefits; professional development and training; promotions; transfers; social and recreational programs; layoffs; terminations; and the ongoing development of an inclusive work environment encourages and enforces: • Respectful communication and cooperation between all employees; • Teamwork and employee participation, fostering representation of all groups and perspectives; and • Employer and employee contributions to the communities we serve to promote a greater understanding and respect for inclusivity.
In 2024, the Corporation partnered with a financial education innovator to provide more than 8,300 students with access to interactive online courses that educate on critical financial topics, as well as post informative articles and videos on social media channels on financial topics, such as budgeting, saving for retirement and tips for first-time homebuyers.
In 2025, the Corporation partnered with a financial education innovator to provide more than 3,200 students with access to interactive online courses that educate on critical financial topics, as well as post informative articles and videos on social media channels on financial topics, such as budgeting, saving for retirement and tips for first-time homebuyers.
Univest’s annual turnover rate of 19.5% continues to be below the industry average of 24.1% according to the Bureau of Labor Statistics. At December 31, 2024, 18% of our current staff had been with us for 15 years or more. Safety, Health and Welfare The safety, health and wellness of our employees is consistently a top priority.
Univest’s annual turnover rate of 17.5% continues to be below the industry average of 25.1% according to the Bureau of Labor Statistics. At December 31, 2025, 17% of our current staff had been with us for 15 years or more. Safety, Health and Welfare The safety, health and wellness of our employees is consistently a top priority.
At December 31, 2024, the Corporation had total assets of $8.1 billion, net loans and leases of $6.7 billion, total deposits of $6.8 billion and total shareholders' equity of $887.3 million. The Bank is a Pennsylvania state-chartered bank and trust company.
At December 31, 2025, the Corporation had total assets of $8.4 billion, net loans and leases of $6.8 billion, total deposits of $7.1 billion and total shareholders' equity of $943.3 million. The Bank is a Pennsylvania state-chartered bank and trust company.
As of December 31, 2024, 22% of our Senior Leadership Team members were women. Training and Development The training and development of our employees remains a priority. In 2024, we invested more than $665 thousand in tools, training programs and continuing education to help our employees build their knowledge, skills and experience.
As of December 31, 2025, 21% of our Senior Leadership Team members were women. Training and Development The training and development of our employees remains a priority. In 2025, we invested more than $579 thousand in tools, training programs and continuing education to help our employees build their knowledge, skills and experience.
Pursuant to Section 404 of SOX ("SOX 404"), management of the Corporation is required to furnish a report on internal control over financial reporting, identify any material weaknesses in its internal controls over financial reporting and assert that such internal controls are effective. The Corporation has continued to be in compliance with SOX 404 during 2024.
Pursuant to Section 404 of SOX ("SOX 404"), management of the Corporation is required to furnish a report on internal control over financial reporting, identify any material weaknesses in its internal controls over financial reporting and assert that such internal controls are effective. The Corporation remained in compliance with SOX 404 during 2025.
As an integrated full-service financial institution, approximately 65% of our employees are employed through our banking segment, 9% through our wealth management business, 10% through our insurance business and the remaining 16% of our employees serve in shared support functions for each of our three segments.
As an integrated full-service financial institution, approximately 68% of our employees are employed through our banking segment, 8% through our wealth management business, 10% through our insurance business and the remaining 14% of our employees serve in shared support functions for each of our three segments.
Our Univest United Committee was established to ensure that our workplace is a supportive environment with equal opportunities for everyone. Progress on our culture of inclusivity is reported to the Board of Directors on a quarterly basis. Our Director of Inclusive Culture works to cultivate a supportive and inclusive work environment and implement inclusion programs.
Our Univest United Committee was established to ensure that our workplace is a supportive 5 Table of Contents environment with equal opportunities for everyone. Progress on our culture of inclusivity is reported to the Board of Directors on a quarterly basis. Our Manager of Employee Engagement works to cultivate a supportive and inclusive work environment and implement inclusion programs.
During 2024, the Corporation contributed $2.1 million to non-profit organizations to provide financial support to the communities it serves.
During 2025, the Corporation contributed $2.2 million to non-profit organizations to provide financial support to the communities it serves.
Item 1. Business General The Corporation is a Pennsylvania corporation, organized in 1973, and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956. The Corporation owns all of the capital stock of Univest Bank and Trust Co. (the "Bank").
Item 1. Business General The Corporation is a Pennsylvania corporation, organized in 1973, and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956. The Corporation owns all of the capital stock of Univest Bank and Trust Co. (the "Bank") and is the sole member of 1876 Double Eagle LLC.
As a result, effective January 1, 2023, assessment rates for institutions of the 7 Table of Contents Bank's size range from 2.5 to 32 basis points. Any significant future increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of the Bank.
As a result, effective January 1, 2023, assessment rates for institutions of the Bank's size range from 2.5 to 32 basis points. Any significant future increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of the Bank. Management cannot predict what insurance assessment rates will be in the future.
The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiary, the Bank. The Corporation's and the Bank's headquarters are located at 14 North Main Street, Souderton, Pennsylvania 18964.
The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries, the Bank and 1876 Double Eagle LLC. The Corporation's and the Bank's headquarters are located at 14 North Main Street, Souderton, Pennsylvania 18964.
Any change in applicable laws or regulations, whether by Congress, the Pennsylvania legislature, the Pennsylvania Department of Banking and Securities, the Board, the FDIC, or the Securities and Exchange Commission ("SEC") could have a material adverse impact on the Corporation and the Bank and their operations.
In addition, the Board has enforcement authority over the Corporation. 6 Table of Contents Any change in applicable laws or regulations, whether by Congress, the Pennsylvania legislature, the Pennsylvania Department of Banking and Securities, the Board, the FDIC, or the Securities and Exchange Commission ("SEC") could have a material adverse impact on the Corporation and the Bank and their operations.
As of June 30, 2024 (the latest date for which such information is available), the Corporation ranked fourth out of 32 financial institutions in deposit market share in Montgomery County with 11 financial centers, sixth out of 31 financial institutions in Bucks County with eight financial centers, ninth out of 24 financial institutions in Lancaster County with five financial centers, and thirteenth out of 38 financial institutions in Philadelphia County with five 3 Table of Contents financial centers, with 4.1% of total combined deposit market share in the four counties, according to data provided by Federal Deposit Insurance Corporation ("FDIC") Market Share Data.
As of June 30, 2025 (the latest date for which such information is available), the Corporation ranked fourth out of 31 financial institutions in deposit market share in Montgomery County with 11 financial centers, sixth out of 28 financial institutions in Bucks County with eight financial centers, tenth out of 24 financial institutions in Lancaster County with five financial centers, and thirteenth out of 37 financial institutions in Philadelphia County with five financial centers, with 4.0% of total combined deposit market share in the four counties, according to data provided by Federal Deposit Insurance Corporation (the "FDIC") Market Share Data.
The Corporation is subject to the reporting requirements of the Board of Governors of the Federal Reserve System (the "Board"), and the Corporation, together with its subsidiaries, is subject to examination by the Board. In addition, the Board has enforcement authority over the Corporation.
The Corporation is subject to the reporting requirements of the Board of Governors of the Federal Reserve System (the "Board"), and the Corporation, together with its subsidiaries, is subject to examination by the Board.
Management cannot predict what insurance assessment rates will be in the future. Transactions with Affiliates and Loans to Insiders A state member bank's authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and by the Act's implementing regulation, Regulation W.
Transactions with Affiliates and Loans to Insiders A state member bank's authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and by the Act's implementing regulation, Regulation W.
Our new Inclusive Conversations series includes five sessions aimed at creating a safe space to discuss meaningful topics from navigating difficult conversations to the impact of seasonal affective disorder. Benefits On an ongoing basis, we further promote the health and wellness of our employees by strongly encouraging work-life balance.
Our Inclusive Conversations series included five sessions in 2025 aimed at creating a safe space to discuss meaningful topics from neurodivergence in the workplace to women's health and well-being. Benefits On an ongoing basis, we further promote the health and wellness of our employees by strongly encouraging work-life balance.
The Dodd-Frank Act codified this policy. The ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized or otherwise suffers financial difficulties. In addition, the Board's regulations and guidance require prior notice to the agency of a bank holding company's payment of dividends or repurchase of its stock under certain circumstances.
The Dodd-Frank Act and Board regulations codified this policy. The ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized or otherwise suffers financial difficulties.
These regulatory policies could affect the ability of the Corporation to pay dividends, repurchase its stock or otherwise engage in capital distributions. The Bank is also subject to limitations and requirements under state and federal law with respect to capital distributions, including payment of dividends to the Corporation.
The Bank is also subject to limitations and requirements under state and federal law with respect to capital distributions, including payment of dividends to the Corporation.
The most recent acquisitions include certain assets of the Paul I. Sheaffer Insurance Agency on December 1, 2021, Fox Chase Bancorp on July 1, 2016 and Valley Green Bank on January 1, 2015.
The most recent acquisitions include certain assets of the Paul I. Sheaffer Insurance Agency on December 1, 2021, Fox Chase Bancorp on July 1, 2016 and Valley Green Bank on January 1, 2015. Human Capital Resources As of December 31, 2025, we employed 960 individuals, approximately 94% of whom are full-time and of which approximately 56% are women.
The Bank, as a member of the Federal Home Loan Bank of Pittsburgh ("FHLB"), is required to acquire and hold shares of capital stock in the FHLB. Acquisitions The Corporation, through its business segments, provide financial solutions to individuals, businesses, municipalities and non-profit organizations.
The Bank, as a member of the Federal Home Loan Bank of Pittsburgh ("FHLB"), is required to acquire and hold shares of capital stock in the FHLB.
Employee Engagement Our Chairman, President and Chief Executive Officer communicates with our entire organization on a weekly basis via email. These emails provide updates on key organizational initiatives, financial performance, as well as industry insights. Additionally, we hold quarterly employee webcasts during which senior management presents financial and strategic information and employees have the opportunity to ask questions.
These emails provide updates on key organizational initiatives, financial performance, as well as industry insights. Additionally, we hold quarterly employee webcasts during which senior management presents financial and strategic information and employees have the opportunity to ask questions. We continue to recognize employee milestones and acknowledge these achievements with in-person Service Awards that celebrate employees reaching a five-year milestone.
In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.
The CRA requires all FDIC-insured institutions to publicly disclose their rating. The Bank received a "satisfactory" CRA rating in its most recent federal examination. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.
Human Capital Resources At December 31, 2024, we employed 949 individuals, approximately 94% of whom are full-time and of which approximately 59% are women. None of these employees are covered by collective bargaining agreements, and the Corporation believes it enjoys good relations with its personnel.
None of these employees are covered by collective bargaining agreements, and the Corporation believes it enjoys good relations with its personnel.
We continue to recognize employee milestones and acknowledge these achievements with in-person Service Awards that celebrate employees reaching a 5-year milestone. Our employees are also invited to attend holiday socials at locations across our service area. Community Involvement Our Connecting with Community volunteer initiative is one of the pillars of our philanthropy program.
Our employees are also invited to attend holiday socials at locations across our service area. Community Involvement Our Connecting with Community volunteer initiative is one of the pillars of our philanthropy program. In 2025, we provided our employees with 48 Connecting with Community events to choose from in support of local charitable organizations.
These programs include courses that address communication skills, customer service, managing conflict, alternative management styles, business ethics and emotional intelligence. The Corporation offers a Women in Business program, Business Ethics for Leaders training, and a mentorship program. During the year ended December 31, 2024, we provided approximately 29,000 training hours to our employees.
These programs include courses that address communication skills, customer service, managing conflict, alternative management styles, business ethics and emotional intelligence. The Corporation also offers a Business 4 Table of Contents Ethics for Leaders training and a mentorship program. During 2025, we brought our entire organization together for a learning initiative focused on Psychological Safety.
In addition, enhancements were made to our Summer Internship Program in 2024 to include additional opportunities for networking and professional development and a group volunteer project.
The Corporation offers a Summer Internship Program, which includes additional opportunities for networking and professional development and a group volunteer project.
In 2024, we provided our employees with 47 Connecting with Community events to choose from in support of local charitable organizations. In addition to these Connecting with Community opportunities, we encourage our employees to volunteer independently so that they truly bring our community core values to life. In 2024, Univest employees volunteered 16,328 hours.
In addition to these Connecting with Community opportunities, we encourage our employees to volunteer independently so that they truly bring our community core values to life. In 2025, Univest employees volunteered 15,255 hours. In addition to being generous with their time, our employees also supported our annual fundraiser for the United Way.
All employees have completed this training and it is included as part of new hire orientation to ensure all future employees receive this important information. Our quarterly Inclusive Leadership Workshop for supervisors and hiring managers supports our efforts to create a more inclusive workspace.
All employees have completed this training and it is included as part of new hire orientation to ensure all future employees receive this important information. Our Employee Resource Groups ("ERGs") help foster an inclusive and supportive environment, providing a platform for employees to connect, share experiences, and drive positive change within the organization.
Removed
In 2024, we introduced Employee Resource Groups ("ERGs") to help foster an inclusive and supportive environment, providing a platform for employees to connect, share experiences, and drive positive change within the organization. RISE , the Women's ERG, and EMBRACE , the People of Color ERG, are at the forefront of these efforts.
Added
Over the course of five months, every employee participated in one of 44 interactive sessions designed to strengthen trust, collaboration and open communication across the Univest Family. During the year ended December 31, 2025, we provided approximately 33,000 training hours to our employees.
Removed
During 2024, the Corporation hosted in-person networking events, offered volunteer opportunities and provided virtual sessions. Additionally, in 2024, we 5 Table of Contents also introduced our new Inclusive Conversations series. These virtual sessions are aimed at creating a safe space to discuss meaningful topics from navigating difficult conversations to the impact of seasonal affective disorder.
Added
RISE , the Women's ERG, and EMBRACE , the People of Color ERG, are at the forefront of these efforts. During 2025, the Corporation hosted in-person networking events, offered volunteer opportunities and provided virtual sessions. Employee Engagement Our Chairman, President and Chief Executive Officer communicates with our entire organization on a weekly basis via email.
Removed
In addition to being generous with their time, our employees also supported our annual fundraiser for the United Way. Through voluntary payroll deductions, Univest employees contributed more than $68 thousand.
Added
Through voluntary payroll deductions, Univest employees contributed more than $64 thousand.
Removed
The CRA requires all FDIC-insured institutions to publicly disclose their rating. The Bank received a "satisfactory" CRA rating in its most recent federal examination. On October 6 Table of Contents 24, 2023, the FDIC, the Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations.
Added
In addition, the Board's regulations and guidance require prior notice to the agency of a bank holding company's payment of dividends or repurchase of its stock under certain circumstances. These regulatory policies could affect the ability of the Corporation to pay dividends, repurchase its stock or otherwise engage in capital distributions.
Removed
Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a "large bank." The agencies will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
Removed
The applicability date for the majority of the provisions under the CRA regulations is January 1, 2026, and additional requirements under the regulations are applicable on January 1, 2027.
Removed
On March 29, 2024, a federal court in the Northern District of Texas issued a preliminary injunction of the new CRA regulations, enjoining the federal banking agencies from enforcing the regulations against the plaintiff bank industry trade groups, and extending the regulations' implementation dates day-for-day for each day the injunction is in place.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+26 added−11 removed103 unchanged
Biggest changeThe factors that could cause our stock price to decrease include, but are not limited to: • Our past and future dividend practice; • Our financial condition, performance, creditworthiness and prospects; • Variations in our operating results or the quality of our assets; • General investor sentiment regarding the banking industry; • Operating results that vary from the expectations of management, securities analysts and investors; • Changes in expectations as to our future financial performance; • Changes in financial markets related to market valuations of financial industry companies; • The operating and securities price performance of other companies that investors believe are comparable to us; • Future sales of our equity or equity-related securities; • The credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; and • Changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, inflation, recessionary conditions, stock, commodity or real estate valuations or volatility and other geopolitical, regulatory or judicial events. 21 Table of Contents The limited liquidity of our common stock may limit your ability to trade our shares and may impact the value of our common stock.
Biggest changeThe factors that could cause our stock price to decrease include, but are not limited to: • Our past and future dividend practice; • Our financial condition, performance, creditworthiness and prospects; • Variations in our operating results or the quality of our assets; • General investor sentiment regarding the banking industry; • Operating results that vary from the expectations of management, securities analysts and investors; • Changes in expectations as to our future financial performance; • Changes in financial markets related to market valuations of financial industry companies; • The operating and securities price performance of other companies that investors believe are comparable to us; • Future sales of our equity or equity-related securities; • The imposition of tariffs and any retaliatory responses; • Proposed or adopted legislative, regulatory or accounting changes or developments; • The credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; and • Changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, inflation, recessionary conditions, stock, commodity or real estate valuations or volatility and other geopolitical, regulatory or judicial events.
Liquidity is essential to our business. We rely on its ability to generate deposits and effectively manage the repayment of its liabilities to ensure that there is adequate liquidity to fund operations. An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity.
Liquidity is essential to our business. We rely on our ability to generate deposits and effectively manage the repayment of our liabilities to ensure that there is adequate liquidity to fund operations. An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity.
Although we take protective measures to maintain the confidentiality, integrity and availability of information, its computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-attacks and other events that could have an adverse security impact.
Although we take protective measures to maintain the confidentiality, integrity and availability of information, our computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-attacks and other events that could have an adverse security impact.
Negative changes in these general business and economic conditions could have the following consequences, any of which could have a material adverse effect on the business, financial condition, liquidity and results of operations: • demand for the products and services may decline; • our allowance for credit losses may increase; • loan delinquencies, problem assets, and foreclosures may increase; • our funding costs and noninterest expenses may increase; • collateral for loans, especially real estate, may decline in value, thereby reducing customers' borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments.
Negative changes in these general business and economic conditions could have the following consequences, any of which could have a material adverse effect on the business, financial condition, liquidity and results of operations: • demand for the products and services may decline; • our allowance for credit losses may increase; • loan delinquencies, problem assets, and foreclosures may increase; • our funding costs and noninterest expenses may increase; • the value of our securities portfolio may decrease; • collateral for loans, especially real estate, may decline in value, thereby reducing customers' borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition and results of operations. Potential acquisitions may disrupt our business and dilute shareholder value. We regularly evaluate opportunities to acquire and invest in banks and in other complementary businesses.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition and results of operations. Potential acquisitions may disrupt our business and dilute shareholder value. We regularly evaluate opportunities to acquire banks and other complementary businesses.
Any material interruption in our customers' supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Any material interruption in our customers' supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, restrictions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
While we have policies and procedures designed to prevent or limit the impact of any failure, interruption, or breach in its security systems (including cyber-attacks), there can be no assurance that such events will not occur or if they do occur, that they will be adequately addressed.
While we have policies and procedures designed to prevent or limit the impact of any failure, interruption, or breach in our security systems (including cyber-attacks), there can be no assurance that such events will not occur or if they do occur, that they will be adequately addressed.
Our profitability is affected by economic conditions in our markets. Unlike larger regional banks that operate in large geographies, we provide banking and financial services to customers primarily in 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and four counties in Maryland.
Our profitability is affected by economic conditions in our markets. Unlike larger regional banks that operate in large geographies, we provide banking and financial services to customers primarily in 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and five counties in Maryland.
Because of our geographic concentration, a downturn in the local economy could make it more difficult to attract loans and deposits, and could cause higher losses and delinquencies on our loans than if the loans were more geographically diversified.
Because of our geographic concentration, a downturn in the local economies could make it more difficult to attract loans and deposits, and could cause higher losses and delinquencies on our loans than if the loans were more geographically diversified.
Our most 14 Table of Contents important source of funds is our deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk adjusted return, which are strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
Our most important source of funds is our deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk adjusted return, which are strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
While the Corporation's common stock is traded on the NASDAQ Global Select Market, the trading volume has historically been less than that of larger financial services companies. Stock price volatility may make it more difficult for investors to sell their common stock when they want and at prices they find attractive.
While the Corporation's common stock is traded on the NASDAQ Global Select Market, the trading volume has historically been less than that of larger financial services companies, which may make it more difficult for investors to sell their common stock when they want and at prices they find attractive.
Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyber-attacks, a breach of our systems and global payments infrastructure or those of our fintech partners and processors could result in: losses to us and our customers; loss of business and/or customers; damage to its reputation; the incurrence of additional expenses (including the cost of investigation and remediation and the cost of notification to consumers, credit monitoring and forensics, and fees and fines imposed by the card networks); disruption to our business; an inability to grow our online services or other businesses; additional regulatory scrutiny, investigation or penalties; and/or exposure to civil litigation and possible financial liability - any of which could have a material adverse effect on our reputation, 15 Table of Contents business, financial condition and results of operations.
Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyber-attacks, a breach of our systems and global payments infrastructure or those of our fintech vendors and processors could result in: losses to us and our customers; loss of business and/or customers; damage to our reputation; the incurrence of additional expenses (including the cost of investigation and remediation and the cost of notification to consumers, credit monitoring and forensics, and fees and fines imposed by the card networks); disruption to our business; an inability to grow our online services or other businesses; additional regulatory scrutiny, investigation or penalties; and/or exposure to civil litigation and possible financial liability - any of which could have a material adverse effect on our reputation, business, financial condition and results of operations.
These lenders could reduce the percentages loaned against various collateral categories, could eliminate certain types of collateral and could otherwise modify or even terminate their loan programs, particularly to the extent they are required to do so, because of capital adequacy or other balance sheet 16 Table of Contents concerns about us.
These lenders could reduce the percentages loaned against various collateral categories, could eliminate certain types of collateral and could otherwise modify or even terminate their loan programs, particularly to the extent they are required to do so, because of capital adequacy or other balance sheet concerns about us.
Adverse economic conditions in the region, including, without limitation, declining real estate values or higher unemployment, could cause our levels of nonperforming assets and loan losses to increase. Regional economic 17 Table of Contents conditions have a significant impact on the ability of borrowers to repay their loans as scheduled.
Adverse economic conditions in the region, including, without limitation, declining real estate values or higher unemployment, could cause our levels of nonperforming assets and loan losses to increase. Regional economic conditions have a significant impact on the ability of borrowers to repay their loans as scheduled.
The schedule on page 42 provides a break-out of our loan portfolio by certain loan and industry types. We depend on the accuracy and completeness of information about customers and counterparties.
The schedule on page 43 provides a break-out of our loan portfolio by certain loan and industry types. We depend on the accuracy and completeness of information about customers and counterparties.
Commercial real estate loans may be affected to a greater extent than residential 12 Table of Contents loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers' ability to repay their loans depends on successful development of their properties and the successful operation of the borrower's business.
Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers' ability to repay their loans depends on successful development of their properties and the successful operation of the borrower's business.
Weakness in the market areas we serve could depress our earnings as customers may not demand our products or services, borrowers may not be able to repay their loans, the value of the collateral securing our loans to borrowers may decline and/or 13 Table of Contents the quality of our loan portfolio may decline.
Weakness in the market areas we serve could depress our earnings as customers may not demand our products or services, borrowers may not be able to repay their loans, the value of the collateral securing our loans to borrowers may decline and/or the quality of our loan portfolio may decline.
The occurrence of any system failures, interruptions, or breaches in security could expose us to reputation risk, litigation, regulatory scrutiny and possible financial liability that could have a material adverse effect on our financial condition and results of operations.
The occurrence of any system failures, interruptions, or breaches in security could expose us to 15 Table of Contents reputation risk, litigation, regulatory scrutiny and possible financial liability that could have a material adverse effect on our financial condition and results of operations.
Any failure to follow or circumvention of these controls, policies and procedures could have a material adverse impact on our financial condition and results of operations. We may not be able to attract and retain skilled people.
Any failure to follow or circumvention of these controls, policies and procedures could have a material adverse impact on our financial condition and results of operations. 14 Table of Contents We may not be able to attract and retain skilled people.
Credit loss charges would negatively impact our earnings and regulatory capital ratios. We are subject to interest rate risk. Our profitability is dependent to a large extent on our net interest income. Like most financial institutions, we are affected by changes in general interest rates and by other economic factors beyond our control.
Credit loss charges would negatively impact our earnings and regulatory capital ratios. 11 Table of Contents We are subject to interest rate risk. Our profitability is dependent to a large extent on our net interest income. Like most financial institutions, we are affected by changes in general interest rates and by other economic factors beyond our control.
Anti-takeover provisions could negatively impact our shareholders. Certain provisions in the Corporation's Articles of Incorporation and Bylaws, as well as federal banking laws, regulatory approval requirements, and Pennsylvania law, could make it more difficult for a third party to acquire the Corporation, even if doing so would be perceived to be beneficial to our shareholders.
Certain provisions in the Corporation's Articles of Incorporation and Bylaws, as well as federal banking laws, regulatory approval requirements, and Pennsylvania law, could make it more difficult for a third party to acquire the Corporation, even if doing so would be perceived to be beneficial to our shareholders.
Assets under management may decline for various reasons including declines in the market value of the assets in the funds and accounts managed, which could be caused by price declines in the securities markets generally or by price declines in specific market segments.
Assets 19 Table of Contents under management may decline for various reasons including declines in the market value of the assets in the funds and accounts managed, which could be caused by price declines in the securities markets generally or by price declines in specific market segments.
Item 1A. Risk Factors An investment in the Corporation's common stock is subject to risks inherent to the Corporation's business. Before making an investment, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this report.
Item 1A. Risk Factors An investment in the Corporation's common stock is subject to risks inherent to the Corporation's business. Before making an investment, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this report. This report is qualified in its entirety by these risk factors.
These insurance policy commissions can fluctuate as insurance carriers change the premiums on the insurance products we sell. Due to the cyclical nature of the insurance market and the impact of other market and macroeconomic conditions on insurance premiums, 19 Table of Contents commission levels may vary.
These insurance policy commissions can fluctuate as insurance carriers change the premiums on the insurance products we sell. Due to the cyclical nature of the insurance market and the impact of other market and macroeconomic conditions on insurance premiums, commission levels may vary.
As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including on our short- and long-term liquidity and capital structure. Our acquisition activities could be material to us.
As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and 21 Table of Contents financial condition, including on our short- and long-term liquidity and capital structure. Our acquisition activities could be material to us.
Numerous factors, including changes in market interest rates, the lack of liquidity for resales of certain investment securities, the absence of reliable pricing information for investment securities, adverse changes in the business climate, adverse regulatory actions, any changes to the rating of the security by a rating agency, unanticipated changes in the competitive environment and limited investor demand, could have a negative effect on our investment portfolio.
Numerous factors, including changes in market interest rates, the lack of liquidity for resales of certain investment securities, the absence of reliable pricing information for investment securities, adverse changes in the business climate, the impact of the imposition of tariffs, adverse regulatory or political actions, any changes to the rating of the security by a rating agency, unanticipated changes in the competitive environment and limited investor demand, could have a negative effect on our investment portfolio.
Stockholders' equity is increased or decreased by the amount of the change in the unrealized gain or loss (the difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulated other comprehensive income (loss).
Stockholders' equity increases or decreases by the amount of the change in the unrealized gain or loss (the difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulated other comprehensive income (loss).
Accordingly, we may need to raise additional 20 Table of Contents capital in the future to provide us with sufficient capital resources to meet our commitments and business needs. We may also need to raise additional capital to support our continued growth.
Accordingly, we may need to raise additional capital in the future to provide us with sufficient capital resources to meet our commitments and business needs. We may also need to raise additional capital to support our continued growth.
Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity incidents and questionable or fraudulent activities of our customers.
Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity incidents, errors in the use of artificial intelligence and questionable or fraudulent activities of our customers.
At December 31, 2024, 21% of our deposit base was comprised of noninterest-bearing deposits, of which 14% consisted of business deposits, which are primarily operating accounts for businesses, and 7% consisted of consumer deposits. The competition for these deposits is strong and customers are increasingly seeking investments with higher interest rates that are safe, including the purchase of U.S.
At December 31, 2025, 20% of our deposit base was comprised of noninterest-bearing deposits, of which 13% consisted of business deposits, which were primarily operating accounts for businesses, and 7% consisted of consumer deposits. The competition for these deposits is strong and customers are increasingly seeking investments with higher interest rates that are safe, including the purchase of U.S.
Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. Our earnings are impacted by general business and economic conditions.
Moreover, additions to the allowance may be necessary based on changes in economic and real estate market conditions, new information regarding existing loans and leases, identification of additional impaired loans and leases and other factors, both within and outside of our control. Additions to the allowance would have a negative impact on our results of operations.
Moreover, additions to the allowance may be necessary based on changes in economic and real estate market conditions, new information regarding existing loans and leases, identification of additional impaired loans and leases and other factors, both within and outside of our control.
We have established disaster recovery policies and procedures that are expected to mitigate events related to natural or man-made disasters; however, the occurrence of any such event and the impact of an overall economic decline resulting from such a disaster could have a material adverse effect on our financial condition and results of operations.
We have established disaster recovery policies and procedures that are expected to mitigate events related to natural or man-made disasters; however, the occurrence of any such event and the impact of an overall economic decline resulting from such a disaster could have a material adverse effect on our financial condition and results of operations. 17 Table of Contents Risks Related to Economic Conditions Inflation can have an adverse impact on our business and on our customers.
At December 31, 2024, the Corporation maintained a debt securities portfolio of $491.5 million, of which $357.4 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on changes in interest rates, the credit quality of the underlying issuer, market liquidity and other factors.
At December 31, 2025, the Corporation maintained a debt securities portfolio of $494.3 million, of which $371.3 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on changes in interest rates, the credit quality of the underlying issuer, market liquidity and other factors.
We have been required, and may be required in the future, to expend additional resources to employ the latest technologies. Failure to keep pace with technological change could potentially have an adverse effect on our business operations and financial condition and results of operations. Our Board of Directors relies on management and outside consultants in overseeing cybersecurity risk management.
We have been required, and may be required in the future, to expend additional resources to employ the latest technologies. Failure to keep pace with technological change could potentially have an adverse effect on our business operations and financial condition and results of operations.
Given the relatively low trading volume of our common stock, significant sales of our common stock in the public market, or the perception that those sales may occur, could cause the trading price of our common stock to decline or to be lower than it otherwise might be in the absence of those sales or perceptions.
Given the relatively low trading volume of our common stock, significant sales of our common stock in the public market, or the perception that those sales may occur, could cause the trading price of our common stock to decline or to be lower than it otherwise might be in the absence of those sales or perceptions. 22 Table of Contents Anti-takeover provisions could negatively impact our shareholders.
We have devoted substantial time and resources to our strategic digital initiatives. The success of these initiatives will depend on, among other things, whether our upgraded technology and digital solutions are received favorably by our customers and employees and improves their experiences and interactions with us.
The success of these initiatives will depend on, among other things, whether our upgraded technology and digital solutions are received favorably by our customers and employees and improves their experiences and interactions with us.
For example, an increase in unemployment, an increase in inflation, potential recessionary conditions, the imposition of tariffs, a decrease in real estate values or changes in interest rates, as well as other factors, could weaken the economies of the communities we serve.
Changes in national and regional economic conditions could impact our loan and lease portfolios. For example, an increase in unemployment, an increase in inflation, potential recessionary conditions, the imposition of tariffs, a decrease in real estate values or changes in interest rates, as well as other factors, could weaken the economies of the communities we serve.
Due to their size, many competitors can achieve larger economies of scale and may offer a broader range of products and services than we can. If we are unable to compete effectively in the offerings of our products and services, our business may be negatively affected.
Due to their size, many competitors can achieve larger economies of scale and may offer a broader range of products and services, more accessible branch locations, higher lending limits or more favorable pricing than we can. If we are unable to compete effectively in the offerings of our products and services, our business may be negatively affected.
At December 31, 2024, approximately 78.8% of our loan and lease portfolio consisted of commercial, financial and agricultural, commercial real estate and construction loans and leases, which are generally perceived as having more risk of default than residential real estate loans.
At December 31, 2025, approximately 79.7% of our loan and lease portfolio consisted of commercial, financial and agricultural, commercial real estate and construction loans and leases, which are generally perceived as having more risk of 12 Table of Contents default than residential real estate loans.
Risks associated with lending activities include, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans and the value of the associated collateral.
Risks Related to Our Lending Activities We are subject to lending risk. Risks associated with lending are impacted by, among other things, changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans and the value of the associated collateral.
Government securities, adjustments of the discount rate and changes in banks' reserve requirements against bank 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.
Government securities, adjustments of the discount rate and changes in banks' reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
If the evaluation we perform in connection with establishing loan and lease loss reserves is wrong, our allowance for credit losses on loans and leases may not be sufficient to cover our losses, which would have an adverse effect on our operating results.
If the evaluation we perform in connection with establishing loan and lease loss reserves is wrong or the assumptions on which we rely prove to be incorrect, our allowance for credit losses on loans and leases may not be sufficient to cover our losses or adjustments may be necessary to address different economic conditions or adverse development in the loan portfolio, which would have an adverse effect on our operating results.
Additionally, these competitors may offer higher interest rates than we do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits. Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations.
Additionally, these 20 Table of Contents competitors may offer more favorable interest rates than we do, which could decrease the loans or deposits that we attract or require us to adjust our rates to retain and/or attract loans or deposits. Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations.
Not all of our directors or members of the Enterprise-Wide Risk Management Committee have significant experience in cybersecurity risk management in other business entities comparable to the Corporation, and directors rely on the Chief Risk Officer, the Chief Information Security Officer and consultants for cybersecurity guidance.
We also engage outside consultants to support our cybersecurity efforts. While select members of the Enterprise-Wide Risk Management Committee have experience in cybersecurity risk management in other business entities comparable to the Corporation, directors rely on the Chief Risk Officer, the Chief Information Security Officer and consultants for cybersecurity guidance.
We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or the release of hazardous or toxic substances at a property. Our policies and procedures require environmental factors to be considered during the loan application process.
We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or the release of hazardous or toxic substances at a property. The costs associated with investigation or remediation activities could be substantial.
An environmental review is performed before initiating any commercial foreclosure action; however, these reviews may not be sufficient to detect all potential environmental hazards. Possible remediation costs and liabilities could have a material adverse effect on our financial condition. Risks Related to Our Operations Our controls and procedures may fail or be circumvented.
Our policies and procedures require environmental factors to be considered during the loan application process. An environmental review is performed before initiating any commercial foreclosure action; however, these reviews may not be sufficient to detect all potential environmental hazards. Possible remediation costs and liabilities could have a material adverse effect on our financial condition.
Changes in such regulation and oversight, whether in the form of regulatory or enforcement policy, new regulations, legislation or supervisory action, may have a material impact on our operations.
Changes in such regulation and oversight, whether in the form of regulatory or enforcement policy, new regulations, executive orders, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.
Changes in economic conditions and the composition of our loan and lease portfolio could lead to higher loan charge-offs and/or an increase in our provision for credit losses, which may reduce our net income. Changes in national and regional economic conditions could impact our loan and lease portfolios.
Additions to the allowance would have a negative impact on our results of operations. 13 Table of Contents Changes in economic conditions and the composition of our loan and lease portfolio could lead to higher loan charge-offs and/or an increase in our provision for credit losses, which may reduce our net income.
Our management and board review and update our internal controls over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.
Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations. We are subject to extensive regulation, supervision, and examination by our regulators.
These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions.
If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury's Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions.
As a result, we may need to seek other sources of funds that may be more expensive to obtain, which could increase the cost of funds and decrease profitability.
As a result, we may need to seek other sources of funds that may be more expensive to obtain, which could increase the cost of funds and decrease profitability. Some of the financial services organizations with which we compete are not subject to the same degree of regulation or tax structure as we are.
We are dependent on the ability and experience of a number of key management personnel who have substantial experience with our operations, the financial services industry, and the markets in which we offer products and services. The loss of one or more senior executives or key managers may have an adverse effect on our businesses.
We are dependent on the ability and experience of a number of key management personnel who have substantial experience with our operations, the financial services industry, and the markets in which we offer products and services. Competition for qualified employees and personnel in the banking industry is intense.
In the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all. Risks Related to Regulation The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations.
In the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
This report is qualified in its entirety by these risk factors. 11 Table of Contents Risks Related to Market Interest Rates Our results of operations may be adversely affected by credit losses relating to our investment portfolio. We maintain an investment portfolio, including available-for-sale and held-to-maturity securities.
Risks Related to Market Interest Rates Our results of operations may be adversely affected by credit losses relating to our investment portfolio. We maintain an investment portfolio, including available-for-sale and held-to-maturity securities. We are required to record charges to earnings if we determine a decline in fair value of these investments has resulted from credit losses.
During the year ended December 31, 2024, we incurred other comprehensive losses of $796 thousand related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio. A decline in the estimated fair value of this portfolio will result in a decline in stockholders' equity, as well as book value per common share.
At December 31, 2025, accumulated other comprehensive income was $13.6 million related to unrealized holding gains in the available-for-sale investment securities portfolio. A decline in the estimated fair value of this portfolio will result in a decline in stockholders' equity, as well as book value per common share. The decrease will occur even though the securities are not sold.
The banking business in our primary market areas is very competitive, and the level of competition and their pricing structure facing us may increase further, which may limit our asset growth and financial results. Risks Related to Strategic Activities The anticipated benefits of our digital initiatives may not be fully realized.
As a result, these non-bank competitors have certain advantages over us in providing lower-cost products, accessing funding and in providing various services. The banking business in our primary market areas is very competitive, and the level of competition and their pricing structure facing us may increase further, which may limit our asset growth and financial results.
In that regard, the Chief Information Security Officer provides information security updates to the Enterprise-Wide Risk Management Committee at each Enterprise-Wide Risk Management Committee meeting. We also engage outside consultants to support our cybersecurity efforts.
The Chief Risk Officer is the primary management liaison to the Enterprise-Wide Risk Management Committee. The Enterprise-Wide Risk Management Committee provides oversight, from a risk perspective, of information systems security, among other things. In that regard, the Chief Information Security Officer provides information security updates to the Enterprise-Wide Risk Management Committee at each Enterprise-Wide Risk Management Committee meeting.
The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs and procedures to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury's Office of Financial Crimes Enforcement Network.
Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions. The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs and procedures to prevent financial institutions from being used for money laundering and terrorist activities.
If the yield curve inversion re-occurs, the difference between rates paid on deposits and received on loans could narrow significantly resulting in a decrease in net interest income and our profitability. Changes in the estimated fair value of debt securities may reduce stockholders' equity .
Should the yield curve invert, the difference between rates paid on deposits and received on loans could narrow significantly resulting in a decrease in net interest income and our profitability. Our interest-bearing liabilities generally have shorter contractual maturities than our interest-earning assets. This imbalance can create significant earnings volatility because market interest rates change over time.
Removed
We are required to record charges to earnings if we determine a decline in fair value of these investments has resulted from credit losses.
Added
In a period of declining interest rates, the interest income we earn on our interest-earning assets may decrease more rapidly than the interest we pay on our interest-bearing liabilities, as borrowers prepay mortgage loans and as mortgage-backed securities and callable investment securities are called, requiring us to reinvest those cash flows at lower, prevailing interest rates.
Removed
The decrease will occur even though the securities are not sold. Risks Related to Our Lending Activities We are subject to lending risk.
Added
Conversely, in a period of rising interest rates, the interest income we earn on our interest-earning assets may not increase as rapidly as the interest we pay on deposits and other interest-bearing liabilities.
Removed
The Board of Directors has established an Enterprise-Wide Risk Management Committee, consisting of a minimum of four directors, at least three of which are independent directors. The Chief Risk Officer is the primary management liaison to the Enterprise-Wide Risk Management Committee.
Added
In addition to these factors, if market interest rates rise rapidly, interest rate adjustment caps may limit increases in the interest rates on adjustable-rate loans, thus reducing our net interest income.
Removed
The Enterprise-Wide Risk Management Committee meets four times a year, or more frequently if needed, and provides minutes of its meetings to the Board of Directors. The Enterprise-Wide Risk Management Committee provides oversight, from a risk perspective, of information systems security, among other things.
Added
In a period of rising interest rates, increases in interest rates may adversely affect the ability of our borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase. Furthermore, increases in interest rates may adversely affect our ability to originate loans.
Removed
Risks Related to Economic Conditions Inflation can have an adverse impact on our business and on our customers. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. The FRB had raised certain benchmark interest rates to combat inflation.
Added
Also, certain adjustable-rate loans re-price based on lagging interest rate indices. This lagging effect may also negatively impact our net interest income when general interest rates continue to rise periodically. Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations.
Removed
However, in September, the FRB reduced rates by 50 basis points and by an additional 25 basis points in November and December, respectively.
Added
While we pursue an asset/liability strategy designed to mitigate our risk from changes in interest rates, changes in interest rates can still have a material adverse effect on our financial condition and results of operations. Changes in the estimated fair value of debt securities may reduce stockholders' equity .
Removed
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
Added
These loans also expose us to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate.
Removed
Our earnings are impacted by general business and economic conditions.
Added
If we foreclose on these loans, our holding period for the collateral typically is longer than for a single or multi-family residential property because there are fewer potential purchasers of the collateral.
Removed
We are subject to extensive regulation, supervision, and examination by our primary regulators, the Pennsylvania Department of Banking and Securities and the Federal Reserve Bank of Philadelphia, and by the FDIC, the regulating authority that insures customer deposits. The Bank also must comply with applicable regulations of the Federal Housing Finance Agency and the FHLB.
Added
In addition, if we are the owner or former owner of a contaminated site, we may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
Removed
Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities. 18 Table of Contents Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.

… 18 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

20 edited+0 added−0 removed14 unchanged
Biggest changeIn addition, independent third-party 23 Table of Contents penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors. Management determines the scope and objectives of the penetration analysis. Service Providers.
Biggest changeIn addition, independent third-party penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted. Management determines the scope and objectives of the penetration analysis. Service Providers Like many companies, the Corporation relies on third-party vendor solutions to support its operations.
In response to identified risks, management may take certain steps to correct and respond to security vulnerabilities, which may include: a. Eliminating unwarranted risks by applying vendor-provided software fixes, commonly called patches. b. Ensuring that changes to security configurations are documented, approved, and tested. c.
Response to Security Vulnerabilities In response to identified risks, management may take certain steps to correct and respond to security vulnerabilities, which may include: a. Eliminating unwarranted risks by applying vendor-provided software fixes, commonly called patches. b. Ensuring that changes to security configurations are documented, approved, and tested. c.
To ensure that information security incidents can be recovered from quickly and with the least impact to the Corporation and its customers, the Corporation maintains a structured and systematic incident response plan (the "IRP") for all information security incidents that affect any of the IT systems, network, or data of the Corporation, including the Corporation's data held, or IT services provided, by third-party vendors or other service providers.
Incident Response Plan To ensure that information security incidents can be recovered from quickly and with the least impact to the Corporation and its customers, the Corporation maintains a structured and systematic incident response plan (the "IRP") for all information security incidents that affect any of the IT systems, network, or data of the Corporation, including the Corporation's data held, or IT services provided, by third-party vendors or other service providers.
On a periodic basis, but not less than annually, the CISO, in conjunction with the Enterprise-Wide Risk Management Committee, identifies and documents internal and external vulnerabilities that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer records.
Risk Assessment On a periodic basis, but not less than annually, the CISO, in conjunction with the Enterprise-Wide Risk Management Committee, identifies and documents internal and external vulnerabilities that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer records.
Based on the results of the risk assessment, the Corporation's Information Security Program may be revised to protect against any anticipated threats or hazards to the security or integrity of such information. The Enterprise-Wide Risk Management Committee reviews changes to the program designed to monitor, measure, and respond to vulnerabilities identified. Response to Security Vulnerabilities.
Based on the results of the risk assessment, the Corporation's Information Security Program may be revised to protect against any anticipated threats or hazards to the security or integrity of such information. The Enterprise-Wide Risk Management Committee reviews changes to the program designed to monitor, measure, and respond to vulnerabilities identified.
Employees are an important defense against cybersecurity threats. Each employee is responsible for protecting Corporation and client information. Employees are provided training at initial onboarding and thereafter regarding information security and cybersecurity-related policies and procedures applicable to their respective roles within the organization.
Employees and Training Employees are an important defense against cybersecurity threats. Each employee is responsible for protecting Corporation and client information. Employees are provided training at initial onboarding and regularly thereafter regarding information security and cybersecurity-related policies and procedures applicable to their respective roles within the organization.
On a quarterly basis, the CISO reports to the Board, directly or through the Enterprise-Wide Risk Management Committee, on the overall status of the Information Security Program, including the Corporation's compliance with the Interagency Guidelines for Safeguarding Customer Information.
Board Reporting On a quarterly basis, the CISO reports to the Board, directly or through the Enterprise-Wide Risk Management Committee, on the overall status of the Information Security Program, including the Corporation's compliance with the Interagency Guidelines for Safeguarding Customer Information.
Any material findings related to the risk assessment, risk management and control decisions, service provider arrangements, results of testing, security breaches or violations are discussed as are management’s responses and any recommendations for program changes. Program Adjustments .
Any material findings related to the risk assessment, risk management and control decisions, service provider arrangements, results of testing, security breaches or violations are discussed as are management’s responses and any recommendations for program changes.
Through December 31, 2024, the Corporation has not, to its knowledge, experienced a cybersecurity incident materially affecting or reasonably likely to materially affect the Corporation. The structure of our information security program is generally designed around the National Institute of Standards and Technology Cybersecurity Framework, regulatory guidance, and other industry standards.
Through December 31, 2025, the Corporation has not, to its knowledge, experienced a cybersecurity incident materially affecting or reasonably likely to materially affect the Corporation. The structure of our information security program is generally designed around the National Institute of Standards and Technology Cybersecurity Framework, regulatory guidance, and other industry standards.
The Third-Party Risk Management Policy applies to any business arrangement between the Corporation and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Third-Party Relationships: Risk Management. The Third-Party Risk Management Program is reviewed as part of the Corporation's annual Internal Audit Risk Assessment. Employees and Training.
The Third-Party Risk Management Policy applies to any business arrangement between the Corporation and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Third-Party Relationships: Risk Management. The Third-Party Risk Management Program is reviewed as part of the Corporation's annual Internal Audit Risk Assessment.
Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications. Notable services include 24/7 security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence. Board Reporting.
Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications. Notable services include 24/7 security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence.
Prior to joining the Corporation, the CISO held management roles of increasing responsibility in a variety of regulated industries including food, pharma, and manufacturing. The CISO holds a Bachelor of Science Degree in Computer Science and has earned a certificate in Cybersecurity Oversight from the National Association of Corporate Directors.
Prior to joining the Corporation, the CISO held management roles of increasing responsibility in a variety of regulated industries including food, pharmaceuticals, and manufacturing. The CISO holds a Bachelor of Science Degree in Computer Science and has earned a certificate in Cybersecurity Oversight from the National Association of Corporate Directors.
The Information Security Program identifies data sources, threats and vulnerabilities and ensures awareness, accountability, and oversight for data protection throughout the Corporation and with trusted third parties to ensure that data is protected and able to be recovered in the event of a breach or failure (technical or other disaster).
The Information Security Program identifies data sources, threats and vulnerabilities and ensures awareness, accountability, and oversight for data protection throughout the Corporation and with trusted third parties to 23 Table of Contents ensure that data is protected and able to be recovered in the event of a breach or failure (technical or other disaster).
The Board of Directors recognizes the importance of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information and has incorporated those elements in its ongoing oversight of the Information Security Program. Risk Assessment.
The Board of Directors recognizes the importance of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information and has incorporated those elements in its ongoing oversight of the Information Security Program.
In order to mitigate the operational, informational and other risks associated with the use of vendors, the Corporation maintains a Third-Party Risk Management Program, which is implemented through a Third-Party Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive Corporation data.
In order to mitigate the operational, informational and other risks associated with the use of vendors, the Corporation maintains a Third-Party Risk 24 Table of Contents Management Program, which is implemented through a Third-Party Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive Corporation data.
To prepare and respond to incidents, the Corporation has implemented a multi-layered cybersecurity strategy, integrating people, technology, and processes. This includes employee training, the use of innovative technologies, and the implementation of policies and procedures in the areas of Information Security, Data Governance, Business Continuity and Disaster Recovery, Privacy, Third-Party Risk Management, 22 Table of Contents and Incident Response.
To prepare for and respond to incidents, the Corporation has implemented a multi-layered cybersecurity strategy, integrating people, technology, and processes. This includes employee training, the use of innovative technologies, and the implementation of policies and procedures in the areas of Information Security, Data Governance, Business Continuity and Disaster Recovery, Privacy, Third-Party Risk Management, and Incident Response.
The Enterprise-Wide Risk Management Committee provides oversight, from a risk perspective, of information systems security. Additional information security training to employees is provided through a management Information Security Steering Committee and also through targeted training overseen by the CISO.
The Enterprise-Wide Risk Management Committee provides oversight, from a risk perspective, of information systems security. Additional information security training for employees is provided through a management Information Security Steering Committee and through targeted training overseen by the CISO.
The CISO monitors, evaluates, and adjusts the Information Security Program considering any relevant changes in technology, the sensitivity of its customer information, internal or external threats to information, and changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to customer information systems. Incident Response Plan .
Program Adjustments The CISO monitors, evaluates, and adjusts the Information Security Program considering any relevant changes in technology, the sensitivity of its customer information, internal or external threats to information, and changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to customer information systems.
For further discussion of risks from cybersecurity threats, see the section captioned "The Corporation's information technology systems, and the systems of third parties upon which the Corporation relies, may experience a failure, interruption or breach in security, which could negatively affect our operations and reputation." in Item 1A. Risk Factors. 24 Table of Contents
For further discussion of risks from cybersecurity threats, see the section captioned "Our information technology systems, and the systems of third parties upon which we rely, may experience a failure, interruption or breach in security, which could negatively affect our operations and reputation." in Item 1A. Risk Factors. 25 Table of Contents
Like many companies, the Corporation relies on third-party vendor solutions to support its operations. Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information.
Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed2 unchanged
Biggest changeBroad St., Philadelphia, PA 19146 Philadelphia, PA Leased 1642 Fairmount Ave., Philadelphia, PA 19130 Philadelphia, PA Leased 3601 Market St., Philadelphia, PA 19104 Philadelphia, PA Leased 7226 Germantown Ave., Philadelphia, PA 19119 Philadelphia, PA Leased 1501 Ardmore Blvd., Pittsburgh, PA 15221 (3) Allegheny, PA Leased 1103 Rocky Dr., Reading, PA 19609 (2) (3) Berks, PA Leased 216 Hartman Bridge Rd., Ronks, PA 17572 Lancaster, PA Leased 200 North High St., West Chester, PA 19380 (3) Chester, PA Leased 90 Willow Valley Lakes Dr., Willow Street, PA 17584 Lancaster, PA Leased 5089 Hamilton Blvd., Allentown, PA 18106 Lehigh, PA Land Lease 380 Water Loop Dr., Collegeville, PA 19426 Montgomery, PA Land Lease 1 Heritage Dr., Gordonville, PA 17529 Lancaster, PA Land Lease 2870 Shelly Rd., Harleysville, PA 19438 Montgomery, PA Land Lease 120 Forty Foot Rd., Hatfield, PA 19440 Montgomery, PA Land Lease 940 2nd Street Pk., Richboro, PA 18954 Bucks, PA Land Lease Corporate Headquarters: 14 North Main St., Souderton, PA 18964 (1) (3) Montgomery, PA Owned 15 Washington Ave., Souderton, PA 18964* (1) Montgomery, PA Owned 16 Harbor Pl., Souderton, PA 18964 Montgomery, PA Owned 1715 Sumneytown Pk., Lansdale, PA 19446 Montgomery, PA Leased Subsidiary Offices (Wealth Management Segment) 4600 Broadway, Allentown, PA 18104 (1) (3) Lehigh, PA Leased 5237 Summerlin Commons Blvd., Fort Meyers, FL 33907 Lee, FL Leased 555 Croton Rd., King of Prussia, PA 19406 (3) Montgomery, PA Leased 25 Table of Contents 41 West Broad St., Souderton, PA 18964 Montgomery, PA Owned Subsidiary Offices (Insurance Segment) 6339 Beverly Hills Rd., Coopersburg, PA 18036 Lehigh, PA Owned 3541 Old Philadelphia Pk., Intercourse, PA 17534 Lancaster, PA Owned 521 Main St., Lansdale, PA 19446 Montgomery, PA Owned 9120 Chesapeake Ave., Suite 101, North Beach, MD 20714 Calvert, MD Leased Other Offices: Greenfield Corporate Center, 1869 Charter Ln., Suite 301, Lancaster, PA 17601 (1) (3) Lancaster, PA Leased 312 West Route 38 Ste 105, Moorestown, NJ 08057 (3) Burlington, NJ Leased 2000 Market St., Suite 700, Philadelphia, PA 19103 (3) Philadelphia, PA Leased *Limited-service drive-through banking and ATM (1) Banking Segment (2) Wealth Management Segment (3) Corporate banking Additionally, the Bank provides banking services for the residents and employees of 10 retirement home communities and has two off-premise automated teller machines.
Biggest changeBroad St., Philadelphia, PA 19146 Philadelphia, PA Leased 1642 Fairmount Ave., Philadelphia, PA 19130 Philadelphia, PA Leased 3601 Market St., Philadelphia, PA 19104 Philadelphia, PA Leased 7226 Germantown Ave., Philadelphia, PA 19119 Philadelphia, PA Leased 1501 Ardmore Blvd., Pittsburgh, PA 15221 (3) Allegheny, PA Leased 1103 Rocky Dr., Reading, PA 19609 (2) (3) Berks, PA Leased 216 Hartman Bridge Rd., Ronks, PA 17572 Lancaster, PA Leased 200 North High St., West Chester, PA 19380 (3) Chester, PA Leased 90 Willow Valley Lakes Dr., Willow Street, PA 17584 Lancaster, PA Leased 5089 Hamilton Blvd., Allentown, PA 18106 Lehigh, PA Land Lease 380 Water Loop Dr., Collegeville, PA 19426 Montgomery, PA Land Lease 1 Heritage Dr., Gordonville, PA 17529 Lancaster, PA Land Lease 2870 Shelly Rd., Harleysville, PA 19438 Montgomery, PA Land Lease 120 Forty Foot Rd., Hatfield, PA 19440 Montgomery, PA Land Lease 940 2nd Street Pk., Richboro, PA 18954 Bucks, PA Land Lease Corporate Headquarters: 14 North Main St., Souderton, PA 18964 (1) (3) Montgomery, PA Owned 15 Washington Ave., Souderton, PA 18964* (1) Montgomery, PA Owned 16 Harbor Pl., Souderton, PA 18964 Montgomery, PA Owned 1715 Sumneytown Pk., Lansdale, PA 19446 Montgomery, PA Leased Subsidiary Offices (Wealth Management Segment) 4600 Broadway, Allentown, PA 18104 (1) (3) Lehigh, PA Leased 5237 Summerlin Commons Blvd., Fort Meyers, FL 33907 Lee, FL Leased 555 Croton Rd., King of Prussia, PA 19406 (3) Montgomery, PA Leased 26 Table of Contents 41 West Broad St., Souderton, PA 18964 Montgomery, PA Owned Subsidiary Offices (Insurance Segment) 6339 Beverly Hills Rd., Coopersburg, PA 18036 Lehigh, PA Owned 3541 Old Philadelphia Pk., Intercourse, PA 17534 Lancaster, PA Owned 521 Main St., Lansdale, PA 19446 Montgomery, PA Owned 9120 Chesapeake Ave., Suite 101, North Beach, MD 20714 Calvert, MD Leased Other Offices: Greenfield Corporate Center, 1869 Charter Ln., Suite 301, Lancaster, PA 17601 (1) (3) Lancaster, PA Leased 2000 Market St., Suite 700, Philadelphia, PA 19103 (3) Philadelphia, PA Leased *Limited-service drive-through banking and ATM (1) Banking Segment (2) Wealth Management Segment (3) Corporate banking Additionally, the Bank provides banking services for the residents and employees of 10 retirement home communities and has two off-premise automated teller machines.
The following table details the Corporation's properties as of December 31, 2024: Property Address County, State Owned/Leased Full Service Branches (Banking Segment): 195 East Butler Ave., Chalfont, PA 18914 Bucks, PA Owned 5871 Lower York Rd., Lahaska, PA 18931 Bucks, PA Owned Route 309 & Line Lexington Rd., Line Lexington, PA 18932 Montgomery, PA Owned 4601 Carlisle Pk., Mechanicsburg, PA 17050 (2) (3) Cumberland, PA Owned 1950 John Fries Highway, Milford Square, PA 18935 Bucks, PA Owned Route 309 & Stump Rd., Montgomeryville, PA 18936 Montgomery, PA Owned 15 Swamp Rd., Newtown, PA 18940 Bucks, PA Owned 921 West Ave., Ocean City, NJ 08226 (3) Cape May, NJ Owned 401 Rhawn St., Philadelphia, PA 19111 Philadelphia, PA Owned Township Line Rd. and Route 113, Schwenksville, PA 19473 Montgomery, PA Owned 500 Harleysville Pk., Souderton, PA 18964 Montgomery, PA Owned Routes 113 and Bethlehem Pk., Souderton, PA 18964 Bucks, PA Owned 1041 York Rd., Warminster, PA 18974 Bucks, PA Owned 2901 Whiteford Rd., York, PA 17402 (3) York, PA Owned 175 West Ostend St., Baltimore, MD 21230 (3) Baltimore City, MD Leased 574 Main St., Bethlehem, PA 18018 Northampton, PA Leased 694 DeKalb Pk., Blue Bell, PA 19422 Montgomery, PA Leased 1135 Georgetown Rd., Christiana, PA 17509 Lancaster, PA Leased 51 Dutilh Rd., Cranberry, PA 16066 (3) Butler, PA Leased 1980 S.
The following table details the Corporation's properties as of December 31, 2025: Property Address County, State Owned/Leased Full Service Branches (Banking Segment): 195 East Butler Ave., Chalfont, PA 18914 Bucks, PA Owned 5871 Lower York Rd., Lahaska, PA 18931 Bucks, PA Owned Route 309 & Line Lexington Rd., Line Lexington, PA 18932 Montgomery, PA Owned 4601 Carlisle Pk., Mechanicsburg, PA 17050 (2) Cumberland, PA Owned 1950 John Fries Highway, Milford Square, PA 18935 Bucks, PA Owned Route 309 & Stump Rd., Montgomeryville, PA 18936 Montgomery, PA Owned 15 Swamp Rd., Newtown, PA 18940 Bucks, PA Owned 921 West Ave., Ocean City, NJ 08226 (3) Cape May, NJ Owned 401 Rhawn St., Philadelphia, PA 19111 Philadelphia, PA Owned Township Line Rd. and Route 113, Schwenksville, PA 19473 Montgomery, PA Owned 500 Harleysville Pk., Souderton, PA 18964 Montgomery, PA Owned Routes 113 and Bethlehem Pk., Souderton, PA 18964 Bucks, PA Owned 1041 York Rd., Warminster, PA 18974 Bucks, PA Owned 2901 Whiteford Rd., York, PA 17402 (3) York, PA Owned 175 West Ostend St., Baltimore, MD 21230 (3) Baltimore City, MD Leased 574 Main St., Bethlehem, PA 18018 Northampton, PA Leased 694 DeKalb Pk., Blue Bell, PA 19422 Montgomery, PA Leased 1135 Georgetown Rd., Christiana, PA 17509 Lancaster, PA Leased 51 Dutilh Rd., Cranberry, PA 16066 (3) Butler, PA Leased 1980 S.
Item 2. Properties As of December 31, 2024, the Corporation and its subsidiaries occupied 53 properties, most of which are used principally as banking offices.
Item 2. Properties As of December 31, 2025, the Corporation and its subsidiaries occupied 52 properties, most of which are used principally as banking offices.
Removed
On February 3 2025, the Bank closed the Corporate Banking office at 312 West Route 38, Suite 105, Moorestown, New Jersey, located in Burlington County.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+0 added−0 removed3 unchanged
Biggest changeFive Year Cumulative Total Return Summary ($) 2019 2020 2021 2022 2023 2024 Univest Financial Corporation 100.00 79.57 119.04 107.19 94.26 130.73 NASDAQ Bank Index 100.00 89.37 124.84 101.92 95.12 111.03 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.50 96.65 132.60 Russell 2000 Index 100.00 120.28 138.10 109.88 128.48 143.31 27 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The following table provides information on repurchases by the Corporation of its common stock during the fourth quarter of 2024, under the Corporation's Board approved program: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2024 46,882 $ 27.96 46,882 1,492,764 November 1 - 30, 2024 36,892 30.95 36,892 1,455,872 December 1 – 31, 2024 55,718 30.95 55,718 1,400,154 Total 139,492 $ 29.94 139,492 1.
Biggest changeFive Year Cumulative Total Return Summary ($) 2020 2021 2022 2023 2024 2025 Univest Financial Corporation 100.00 149.59 134.71 118.46 164.29 187.66 NASDAQ Bank Index 100.00 139.69 114.04 106.43 124.24 129.49 KBW NASDAQ Bank Index 100.00 138.38 108.73 107.76 147.85 196.01 Russell 2000 Index 100.00 114.52 91.12 106.55 118.84 134.06 28 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The following table provides information on repurchases by the Corporation of its common stock during the fourth quarter of 2025, under the Corporation's Board approved program: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2025 138,254 $ 29.97 138,254 612,373 November 1 - 30, 2025 133,354 31.23 133,354 479,019 December 1 – 31, 2025 208,082 34.13 208,082 2,270,937 Total 479,690 $ 32.14 479,690 1.
Shares repurchased pursuant to these plans during the three months ended December 31, 2024 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share October 1 - 31, 2024 — $ — November 1 - 30, 2024 — — December 1 – 31, 2024 — — Total — $ — Dividend Reinvestment and Employee Stock Purchase Plans The Univest Dividend Reinvestment Plan allows the issuance of 2,718,750 shares of common stock.
Shares repurchased pursuant to these plans during the three months ended December 31, 2025 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share October 1 - 31, 2025 — $ — November 1 - 30, 2025 — — December 1 – 31, 2025 — — Total — $ — Dividend Reinvestment and Employee Stock Purchase Plans The Univest Dividend Reinvestment Plan allows the issuance of 2,718,750 shares of common stock.
Stock Performance Graph The following chart compares the yearly percentage change in the cumulative shareholder return on the Corporation's common stock during the five years ended December 31, 2024, with the following indices: (1) NASDAQ Bank Index, (2) KBW NASDAQ Bank Index, and (3) Russell 2000 Index.
Stock Performance Graph The following chart compares the yearly percentage change in the cumulative shareholder return on the Corporation's common stock during the five years ended December 31, 2025, with the following indices: (1) NASDAQ Bank Index, (2) KBW NASDAQ Bank Index, and (3) Russell 2000 Index.
This comparison assumes $100.00 was invested on December 31, 2019 in our common stock and the comparison groups, and assumes the reinvestment of all cash dividends on the ex-dividend date prior to any tax effect and retention of all stock dividends.
This comparison assumes $100.00 was invested on December 31, 2020 in our common stock and the comparison groups, and assumes the reinvestment of all cash dividends on the ex-dividend date prior to any tax effect and retention of all stock dividends.
Shares withheld to cover income taxes upon the vesting of restricted stock awards and stock swaps to exercise stock options are repurchased pursuant to the terms of the applicable plan and not under the Corporation's share repurchase program.
Shares withheld to cover income taxes upon the vesting of restricted stock awards and stock swaps to exercise stock options are repurchased pursuant to the terms of the applicable plan and not under the Corporation's share repurchase programs.
The stock repurchase plan has no scheduled expiration date, and the Board of Directors has the right to suspend or discontinue the plan at any time.
The stock repurchase plans have no scheduled expiration date, and the Board of Directors has the right to suspend or discontinue the plans at any time.
Average price paid per share includes stock repurchase excise tax. On October 26, 2022, the Corporation's Board of Directors approved the repurchase of 1,000,000 additional shares, or approximately 3.4% of the Corporation's common stock outstanding as of September 30, 2022.
Average price paid per share includes stock repurchase excise tax. On October 23, 2024, the Corporation's Board of Directors approved the repurchase of 1,000,000 shares, or approximately 3.4% of the Corporation's common stock outstanding as of September 30, 2024.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Corporation's common stock is traded on the NASDAQ Global Select Market under the symbol "UVSP." At February 7, 2025, the Corporation had 2,229 stockholders of record.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Corporation's common stock is traded on the NASDAQ Global Select Market under the symbol "UVSP." At February 6, 2026, the Corporation had 2,182 stockholders of record.
During 2024 and 2023, 61,087 and 75,998 shares, respectively, were issued under the dividend reinvestment plan, with 612,270 shares available for future purchase at December 31, 2024. The 1996 Employee Stock Purchase Plan allows the issuance of 984,375 shares of common stock.
During 2025 and 2024, 46,708 and 61,087 shares, respectively, were issued under the dividend reinvestment plan, with 565,562 shares available for future issuance at December 31, 2025. The 1996 Employee Stock Purchase Plan allows the issuance of 984,375 shares of common stock.
On October 23, 2024, the Corporation's Board of Directors approved the repurchase of an additional 1,000,000 additional shares, or approximately 3.4% of the Corporation's common stock outstanding as of September 30, 2024. The stock repurchase plans do not include normal treasury activity such as purchases to fund the dividend reinvestment, employee stock purchase and equity compensation plans.
On December 10, 2025, the Corporation's Board of Directors approved the repurchase of 2,000,000 additional shares, or approximately 7.1% of the Corporation's common stock outstanding as of November 30, 2025. The stock repurchase plans do not include normal treasury activity such as purchases to fund the dividend reinvestment, employee stock purchase and equity compensation plans.
During 2024 and 2023, 37,337 and 52,482 shares, respectively, were issued under the employee stock purchase plan, with 384,870 shares available for future issuance at December 31, 2024.
During 2025 and 2024, 29,773 and 37,337 shares, respectively, were issued under the employee stock purchase plan, with 355,097 shares available for future issuance at December 31, 2025.

Item 7. Management's Discussion & Analysis

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

86 edited+13 added−13 removed69 unchanged
Biggest changeThe net interest margin decrease was attributable to the increase in interest rates and the liability sensitivity of the Corporation's balance sheet, offset by an increase in the yield and average balance of interest-earning assets. 33 Table of Contents Table 1—Average Balances and Interest Rates—Tax-Equivalent Basis For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate Assets: Interest-earning deposits with other banks $ 220,356 $ 11,193 5.08 % $ 130,309 $ 6,660 5.11 % $ 325,875 $ 1,920 0.59 % U.S. government obligations — — — — — — 1,929 40 2.07 Obligations of states and political subdivisions* 1,447 33 2.28 2,282 62 2.72 2,302 71 3.08 Other debt and equity securities 495,604 14,909 3.01 505,343 14,225 2.81 510,961 11,392 2.23 Federal Home Loan Bank, Federal Reserve Bank and other stock 38,647 2,912 7.53 40,092 2,869 7.16 27,784 1,627 5.86 Total interest-earning deposits, investments and other interest-earning assets 756,054 29,047 3.84 678,026 23,816 3.51 868,851 15,050 1.73 Commercial, financial and agricultural loans 972,213 69,921 7.19 991,505 67,487 6.81 963,755 43,861 4.55 Real estate—commercial and construction loans 3,587,147 207,053 5.77 3,483,576 188,644 5.42 3,060,689 127,906 4.18 Real estate—residential loans 1,670,126 82,344 4.93 1,505,799 70,349 4.67 1,219,275 47,472 3.89 Loans to individuals 26,646 2,161 8.11 27,063 2,011 7.43 26,642 1,325 4.97 Tax-exempt loans and leases 232,020 10,157 4.38 232,501 9,597 4.13 236,858 9,703 4.10 Lease financings 189,054 12,845 6.79 178,220 11,025 6.19 144,046 8,791 6.10 Gross loans and leases 6,677,206 384,481 5.76 6,418,664 349,113 5.44 5,651,265 239,058 4.23 Total interest-earning assets 7,433,260 413,528 5.56 7,096,690 372,929 5.25 6,520,116 254,108 3.90 Cash and due from banks 57,799 58,593 57,196 Allowance for credit losses, loans and leases (86,530) (82,474) (72,069) Premises and equipment, net 48,610 51,921 51,362 Operating lease right-of-use asset 29,990 31,351 30,443 Other assets 414,578 400,977 369,244 Total assets $ 7,897,707 $ 7,557,058 $ 6,956,292 Liabilities: Interest-bearing checking deposits $ 1,191,634 $ 32,857 2.76 % $ 1,034,327 $ 23,668 2.29 % $ 884,656 $ 5,010 0.57 % Money market savings 1,801,035 80,217 4.45 1,611,169 64,153 3.98 1,389,226 13,835 1.00 Regular savings 740,493 3,529 0.48 871,332 3,249 0.37 1,056,019 1,269 0.12 Time deposits 1,413,589 64,266 4.55 931,944 34,979 3.75 443,845 5,308 1.20 Total time and interest-bearing deposits 5,146,751 180,869 3.51 4,448,772 126,049 2.83 3,773,746 25,422 0.67 Short-term borrowings 13,703 249 1.82 148,776 7,095 4.77 60,468 1,389 2.30 Long-term debt 253,733 10,942 4.31 263,877 9,464 3.59 95,000 1,287 1.35 Subordinated notes 149,007 9,125 6.12 148,507 9,125 6.14 105,356 5,798 5.50 Total borrowings 416,443 20,316 4.88 561,160 25,684 4.58 260,824 8,474 3.25 Total interest-bearing liabilities 5,563,194 201,185 3.62 5,009,932 151,733 3.03 4,034,570 33,896 0.84 Noninterest-bearing deposits 1,380,178 1,646,286 2,068,086 Operating lease liabilities 33,006 34,474 33,508 Accrued expenses and other liabilities 63,310 60,699 48,629 Total liabilities 7,039,688 6,751,391 2,150,223 Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,943,372 2.90 6,656,218 2.28 6,102,656 0.56 Shareholders' Equity: Common stock 157,784 157,784 157,784 Additional paid-in capital 300,644 299,804 299,121 Retained earnings and other equity 399,591 348,079 314,594 Total shareholders' equity 858,019 805,667 771,499 Total liabilities and shareholders' equity $ 7,897,707 $ 7,557,058 $ 6,956,292 Net interest income $ 212,343 $ 221,196 $ 220,212 Net interest spread 1.94 2.22 3.06 Effect of net interest-free funding sources 0.92 0.90 0.32 Net interest margin 2.86 % 3.12 % 3.38 % Ratio of average interest-earning assets to average interest-bearing liabilities 133.61 % 141.65 % 161.61 % *Obligations of states and political subdivisions are tax-exempt earning assets.
Biggest changeThe net interest margin decrease was attributable to the increase in interest rates and the liability sensitivity of the Corporation's balance sheet. 34 Table of Contents Table 1—Average Balances and Interest Rates—Tax-Equivalent Basis For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate Assets: Interest-earning deposits with other banks $ 333,556 $ 13,902 4.17 % $ 220,356 $ 11,193 5.08 % $ 130,309 $ 6,660 5.11 % Obligations of states and political subdivisions* 217 4 1.84 1,447 33 2.28 2,282 62 2.72 Other debt and equity securities 496,435 15,925 3.21 495,604 14,909 3.01 505,343 14,225 2.81 Federal Home Loan Bank, Federal Reserve Bank and other stock 37,584 2,848 7.58 38,647 2,912 7.53 40,092 2,869 7.16 Total interest-earning deposits, investments and other interest-earning assets 867,792 32,679 3.77 756,054 29,047 3.84 678,026 23,816 3.51 Commercial, financial and agricultural loans 971,245 67,829 6.98 972,213 69,921 7.19 991,505 67,487 6.81 Real estate—commercial and construction loans 3,720,892 218,473 5.87 3,587,147 207,053 5.77 3,483,576 188,644 5.42 Real estate—residential loans 1,723,191 87,127 5.06 1,670,126 82,344 4.93 1,505,799 70,349 4.67 Loans to individuals 15,360 1,335 8.69 26,646 2,161 8.11 27,063 2,011 7.43 Tax-exempt loans and leases 228,478 11,951 5.23 232,020 10,157 4.38 232,501 9,597 4.13 Lease financings 176,420 12,749 7.23 189,054 12,845 6.79 178,220 11,025 6.19 Gross loans and leases 6,835,586 399,464 5.84 6,677,206 384,481 5.76 6,418,664 349,113 5.44 Total interest-earning assets 7,703,378 432,143 5.61 7,433,260 413,528 5.56 7,096,690 372,929 5.25 Cash and due from banks 57,252 57,799 58,593 Allowance for credit losses, loans and leases (87,942) (86,530) (82,474) Premises and equipment, net 46,797 48,610 51,921 Operating lease right-of-use asset 26,936 29,990 31,351 Other assets 425,134 414,578 400,977 Total assets $ 8,171,555 $ 7,897,707 $ 7,557,058 Liabilities: Interest-bearing checking deposits $ 1,281,075 $ 32,735 2.56 % $ 1,191,634 $ 32,857 2.76 % $ 1,034,327 $ 23,668 2.29 % Money market savings 1,920,600 73,424 3.82 1,801,035 80,217 4.45 1,611,169 64,153 3.98 Regular savings 720,718 4,024 0.56 740,493 3,529 0.48 871,332 3,249 0.37 Time deposits 1,485,281 61,838 4.16 1,413,589 64,266 4.55 931,944 34,979 3.75 Total time and interest-bearing deposits 5,407,674 172,021 3.18 5,146,751 180,869 3.51 4,448,772 126,049 2.83 Short-term borrowings 11,112 19 0.17 13,703 249 1.82 148,776 7,095 4.77 Long-term debt 204,452 8,778 4.29 253,733 10,942 4.31 263,877 9,464 3.59 Subordinated notes 139,584 9,473 6.79 149,007 9,125 6.12 148,507 9,125 6.14 Total borrowings 355,148 18,270 5.14 416,443 20,316 4.88 561,160 25,684 4.58 Total interest-bearing liabilities 5,762,822 190,291 3.30 5,563,194 201,185 3.62 5,009,932 151,733 3.03 Noninterest-bearing deposits 1,406,985 1,380,178 1,646,286 Operating lease liabilities 29,765 33,006 34,474 Accrued expenses and other liabilities 55,550 63,310 60,699 Total liabilities 7,255,122 7,039,688 6,751,391 Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 7,169,807 2.65 6,943,372 2.90 6,656,218 2.28 Shareholders' Equity: Common stock 157,784 157,784 157,784 Additional paid-in capital 302,243 300,644 299,804 Retained earnings and other equity 456,406 399,591 348,079 Total shareholders' equity 916,433 858,019 805,667 Total liabilities and shareholders' equity $ 8,171,555 $ 7,897,707 $ 7,557,058 Net interest income $ 241,852 $ 212,343 $ 221,196 Net interest spread 2.31 1.94 2.22 Effect of net interest-free funding sources 0.83 0.92 0.90 Net interest margin 3.14 % 2.86 % 3.12 % Ratio of average interest-earning assets to average interest-bearing liabilities 133.67 % 133.61 % 141.65 % *Obligations of states and political subdivisions are tax-exempt earning assets.
While the assumptions used are bank specific and based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.
While the assumptions used are bank specific and based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.
The Corporation manages credit risk in the loan portfolio through the adherence to consistent and conservative standards and policies established by the senior credit leadership and approved by the Board of Directors. Written loan policies establish underwriting standards, lending limits and other standards or limits as deemed necessary and prudent.
The Corporation manages credit risk in the loan portfolio through adherence to consistent and conservative underwriting standards and policies established by the senior credit leadership and approved by the Board of Directors. Written loan policies establish underwriting standards, lending limits and other standards or limits as deemed necessary and prudent.
The Corporation projects all non-interest bearing deposits to be considered non-rate sensitive, while utilizing an all-encompassing deposit beta assumption that captures changes in interest expense that may occur as interest rates change or balances shift into other products.
The Corporation projects all noninterest-bearing deposits to be considered non-rate sensitive, while utilizing an all-encompassing deposit beta assumption that captures changes in interest expense that may occur as interest rates change or balances shift into other products.
In addition, because future events affecting borrowers 29 Table of Contents and collateral cannot be predicted without uncertainty, the existing ACL may not be adequate or increases may be necessary should the quality of any loans or leases deteriorate or if there are changes to the assumptions noted above.
In addition, because future events affecting 30 Table of Contents borrowers and collateral cannot be predicted without uncertainty, the existing ACL may not be adequate or increases may be necessary should the quality of any loans or leases deteriorate or if there are changes to the assumptions noted above.
Table 1 presents the Corporation's average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the years ended December 31, 2024, 2023 and 2022. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets.
Table 1 presents the Corporation's average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the years ended December 31, 2025, 2024 and 2023. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets.
These commitments do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon. 49 Table of Contents Recent Accounting Pronouncements For information regarding recent accounting pronouncements, refer to Note 1, "Summary of Significant Accounting Policies" of this Form 10-K.
These commitments do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon. 50 Table of Contents Recent Accounting Pronouncements For information regarding recent accounting pronouncements, refer to Note 1, "Summary of Significant Accounting Policies" of this Form 10-K.
An increase in interest income of $40.6 million, driven by increases in asset yields, including loan and investment yields, and increases in the average balance of average interest-earning assets was outpaced by an increase in interest expense of $49.5 million, which was largely driven by an increase in the cost of, and the average balances of, interest-bearing deposits.
An increase in tax-equivalent interest income of $40.6 million, driven by increases in asset yields, including loan and investment yields, and increases in the average balance of average interest-earning assets was outpaced by an increase in interest expense of $49.5 million, which was largely driven by an increase in the cost of, and the average balances of, interest-bearing deposits.
Sources of Funds Core deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, public funds and non-profit customers located in our primary service areas.
Sources of Funds Non-brokered deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, public funds and non-profit customers located in our primary service areas.
The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate these risks. 48 Table of Contents Risk also lies in the residual value of the underlying equipment.
The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate these risks. 49 Table of Contents Risk also lies in the residual value of the underlying equipment.
Tax-equivalent amounts for the years ended December 31, 2024, 2023 and 2022 have been calculated using the Corporation's federal applicable rate of 21%. 34 Table of Contents Table 2—Analysis of Changes in Net Interest Income The rate-volume variance analysis set forth in the table below compares changes in tax-equivalent net interest income for the year ended December 31, 2024 compared to 2023 and for the year ended December 31, 2023 compared to 2022, indicated by their rate and volume components.
Tax-equivalent amounts for the years ended December 31, 2025, 2024 and 2023 have been calculated using the Corporation's federal applicable rate of 21%. 35 Table of Contents Table 2—Analysis of Changes in Net Interest Income The rate-volume variance analysis set forth in the table below compares changes in tax-equivalent net interest income for the year ended December 31, 2025 compared to 2024 and for the year ended December 31, 2024 compared to 2023, indicated by their rate and volume components.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. Net interest income includes net deferred costs amortization of $2.7 million, $2.1 million and $1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. Nonaccrual loans and leases have been included in the average loan and lease balances.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. Net interest income includes net deferred costs amortization of $2.5 million, $2.7 million and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Nonaccrual loans and leases have been included in the average loan and lease balances.
This simulation incorporates the same assumptions noted above and assumes a static balance sheet with no incremental growth in interest-earning assets or interest-bearing liabilities over the next twelve months. 47 Table of Contents The changes to net interest income are shown in the below table at December 31, 2024.
This simulation incorporates the same assumptions noted above and assumes a static balance sheet with no incremental growth in interest-earning assets or interest-bearing liabilities over the next twelve months. 48 Table of Contents The changes to net interest income are shown in the below table at December 31, 2025.
At December 31, 2024 and 2023, the Bank had outstanding short-term letters of credit with the FHLB totaling $1.3 billion and $1.1 billion, respectively, which were utilized to collateralize public fund deposits and other secured deposits.
At December 31, 2025 and 2024, the Bank had outstanding short-term letters of credit with the FHLB totaling $1.4 billion and $1.3 billion, respectively, which were utilized to collateralize public fund deposits and other secured deposits.
Asset/Liability Management The primary functions of Asset/Liability Management are to minimize interest rate risk and to ensure adequate earnings, capital and liquidity while maintaining an appropriate balance between the maturity and rate sensitivity of interest-earning assets and interest-bearing liabilities.
Asset/Liability Management The primary functions of Asset/Liability Management are to minimize interest rate risk and to ensure adequate earnings, capital and liquidity while maintaining an appropriate balance of interest-earning assets and interest-bearing liabilities.
The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $468.0 million at December 31, 2024 and $369.0 million at December 31, 2023. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.
The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $457.0 million at December 31, 2025 and $468.0 million at December 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.
Tax Provision The provision for income taxes was $19.4 million, $17.6 million and $19.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, at effective rates of 20.3%, 19.8% and 19.6%, respectively. The effective tax rates reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Tax Provision The provision for income taxes was $22.6 million, $19.4 million and $17.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, at effective rates of 19.9%, 20.3% and 19.8%, respectively. The effective tax rates reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Interest Rate Sensitivity Interest rate sensitivity is a function of the repricing characteristics of the Corporation's assets and liabilities. Minimizing the balance sheet's maturity and repricing risk is a continual focus in a changing interest rate environment.
Interest Rate Sensitivity Interest rate sensitivity is a function of the repricing characteristics of the Corporation's assets and liabilities. Minimizing the balance sheet's maturity and repricing risk is a continual focus.
The Corporation continues to be in the "well-capitalized" category under regulatory standards. Details on the capital ratios can be found in Note 21, "Regulatory Matters," included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K along with a discussion on dividend and other restrictions.
Details on the capital ratios can be found in Note 21, "Regulatory Matters," included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K along with a discussion on dividend and other restrictions.
The net interest margin on a tax-equivalent basis for the year ended 32 Table of Contents December 31, 2024 was 2.86% compared to 3.12% for 2023.
The net interest margin on a tax-equivalent basis for the year ended December 31, 2024 was 2.86% compared to 3.12% for 2023.
Factors considered by management in determining accrual status include payment status, borrower cash flows, collateral value and the probability of collecting scheduled principal and interest payments when due. At December 31, 2024, nonaccrual loans and leases were $12.7 million and had a related allowance for credit losses on loans and leases of $1.9 million.
Factors considered by management in determining accrual status include payment status, borrower cash flows, collateral value and the probability of collecting scheduled principal and interest payments when due. At December 31, 2025, nonaccrual loans and leases were $13.7 million and had a related allowance for credit losses on loans and leases of $3.0 million.
Although management believes it uses the best information available to establish the ACL, future adjustments to the ACL may be necessary and the Corporation’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.
Although management believes it uses the best information available to establish the ACL, future adjustments to the ACL may be necessary and the Corporation’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. While management believes it has established the ACL in conformity with U.S.
Economic Factors At December 31, 2024 At December 31, 2023 Description of Economic Factors Prepayment rates 11.58 % 12.62 % Average total portfolio rate Curtailment rates 28.21 % 28.97 % Average total portfolio rate Recovery delay 31 months 32 months Average across all pools Economic forecast Moody's downside S2 weighted 60%, Baseline weighted 40% Moody's downside S2 weighted 70%, Baseline weighted 30% Moody's US Macro Forecast Narratives for December 2023 & 2022 Unemployment rates 5.42 % 5.18 % Average of 4 quarter forecast period GDP rates 1.12 % 0.76 % Average of 4 quarter forecast period House price index (1.62) % (1.72) % Average of 4 quarter forecast period Sensitivity Analysis The below table indicates the impact to the allowance for credit losses on loans and leases if the factors described below were adjusted in the Corporation's CECL model.
Economic Factors At December 31, 2025 At December 31, 2024 Description of Economic Factors Prepayment rates 11.27 % 11.58 % Average total portfolio rate Curtailment rates 27.93 % 28.21 % Average total portfolio rate Recovery delay 30 months 31 months Average across all pools Economic forecast Moody's downside S2 weighted 42.5%, Baseline weighted 57.5% Moody's downside S2 weighted 60%, Baseline weighted 40% Moody's US Macro Forecast Narratives for December 2025 & 2024 Unemployment rates 5.48 % 5.42 % Average of 4 quarter forecast period GDP rates 1.21 % 1.12 % Average of 4 quarter forecast period House price index (1.90) % (1.62) % Average of 4 quarter forecast period Sensitivity Analysis The below table indicates the impact to the allowance for credit losses on loans and leases if the factors described below were adjusted in the Corporation's CECL model.
Increase (Decrease) ($) Adjustment Factor Prepayment rates +/- 2,000 If rates were adjusted across all pools by +/-100 basis points Curtailment rates +/- 425 If rates were adjusted across all pools by +/- 100 basis points Recovery delay +/- 3,600 If recovery delays were adjusted by +/- 3 months across all pools Economic forecast (28,500) If Baseline forecasts were used instead of the weighted Downside/Baseline scenarios Economic forecast 21,800 If S2 Downside forecasts were used instead of the weighted Downside/Baseline scenarios Economic forecast 49,000 If S3 Downside forecasts were used instead of the weighted Downside/Baseline scenarios Unemployment rates 20,300 If rates were increased across all pools by 100 basis points Unemployment rates (17,400) If rates were decreased across all pools by 100 basis points GDP rates +/- 2,300 If the GDP forecast inputs were adjusted by +/- 100 basis points House price index +/- 160 If the HPI forecast inputs were adjusted by +/- 100 basis points Reversion period 1,100 If the reversion period was increased by 2 quarters across all pools Reversion period (1,200) If the reversion period was decreased by 2 quarters across all pools Readers of the Corporation’s financial statements should be aware that the estimates and assumptions used in the Corporation’s current financial statements may need to be updated in future financial presentations for changes in circumstances, business or economic conditions in order to fairly represent the condition of the Corporation at that time.
Increase (Decrease) ($) Adjustment Factor Prepayment rates +/- 2,000 If rates were adjusted across all pools by +/-100 basis points Curtailment rates +/- 460 If rates were adjusted across all pools by +/- 100 basis points Recovery delay +/- 3,600 If recovery delays were adjusted by +/- 3 months across all pools Economic forecast (19,000) If Baseline forecasts were used instead of the weighted Downside/Baseline scenarios Economic forecast 28,100 If S2 Downside forecasts were used instead of the weighted Downside/Baseline scenarios Economic forecast 52,000 If S3 Downside forecasts were used instead of the weighted Downside/Baseline scenarios Unemployment rates 20,900 If rates were increased across all pools by 100 basis points Unemployment rates (18,600) If rates were decreased across all pools by 100 basis points GDP rates +/- 2,200 If the GDP forecast inputs were adjusted by +/- 100 basis points House price index +/- 50 If the HPI forecast inputs were adjusted by +/- 100 basis points Reversion period 650 If the reversion period was increased by 2 quarters across all pools Reversion period (775) If the reversion period was decreased by 2 quarters across all pools Readers of the Corporation’s financial statements should be aware that the estimates and assumptions used in the Corporation’s current financial statements may need to be updated in future financial presentations for changes in circumstances, business or economic conditions in order to fairly represent the condition of the Corporation at that time.
The Corporation seeks to achieve adequate and reliable earnings through business growth while maintaining adequate levels of capital and liquidity and limiting exposure to credit and interest rate risk. 30 Table of Contents Selected Financial Data As of or For the Years Ended December 31, (Dollars in thousands, except per share data) 2024 2023 2022 2021 2020 Results of Operations Interest income $ 412,355 $ 371,730 $ 252,193 $ 209,731 $ 203,945 Interest expense 201,185 151,733 33,896 21,348 29,584 Net interest income 211,170 219,997 218,297 188,383 174,361 Provision (reversal of provision) for credit losses 5,933 10,770 12,198 (10,132) 40,794 Net interest income after provision for credit losses 205,237 209,227 206,099 198,515 133,567 Noninterest income 88,055 76,824 77,885 83,224 78,328 Noninterest expense 197,992 197,362 186,774 167,409 154,998 Net income before income taxes 95,300 88,689 97,210 114,330 56,897 Income taxes 19,369 17,585 19,090 22,529 9,981 Net income $ 75,931 $ 71,104 $ 78,120 $ 91,801 $ 46,916 Financial Condition at Year End Cash and cash equivalents $ 328,844 $ 249,799 $ 152,799 $ 890,150 $ 219,858 Investment securities, net of allowance for credit losses 493,978 500,623 507,562 496,989 373,176 Net loans and leases held for investment 6,739,492 6,481,827 6,044,226 5,238,093 5,223,797 Assets 8,128,417 7,780,628 7,222,016 7,122,421 6,336,496 Deposits 6,759,259 6,375,781 5,913,526 6,055,124 5,242,715 Borrowings 385,442 465,067 440,401 213,980 311,421 Shareholders' equity 887,301 839,208 776,500 773,794 692,472 Per Common Share Data Average shares outstanding (in thousands) 29,215 29,433 29,393 29,403 29,244 Earnings per share – basic $ 2.60 $ 2.42 $ 2.66 $ 3.12 $ 1.60 Earnings per share – diluted 2.58 2.41 2.64 3.11 1.60 Dividends declared per share 0.84 0.84 0.83 0.80 0.60 Book value (at year-end) 30.55 28.44 26.53 26.23 23.64 Dividends declared to net income 32.3 % 34.8 % 31.2 % 25.6 % 37.4 % Profitability Ratios Return on average assets 0.96 % 0.94 % 1.12 % 1.38 % 0.78 % Return on average equity 8.85 8.83 10.13 12.50 7.02 Average equity to average assets 10.86 10.66 11.09 11.04 11.12 Efficiency ratio 65.7 66.0 62.4 60.9 60.6 Asset Quality Ratios Nonaccrual loans and leases to loans and leases held for investment 0.19 % 0.31 % 0.22 % 0.63 % 0.60 % Nonperforming loans and leases to loans and leases held for investment (1) 0.19 0.32 0.23 0.63 0.62 Nonperforming assets to total assets (1) 0.41 0.52 0.46 0.48 0.64 Net charge-offs to average loans and leases outstanding 0.06 0.08 0.07 — 0.10 Allowance for credit losses, loans and leases to total loans and leases held for investment 1.28 1.30 1.29 1.35 1.56 Allowance for credit losses, loans and leases to nonaccrual loans and leases 687.54 415.97 591.66 216.57 262.03 Allowance for credit losses, loans and leases to nonperforming loans and leases (1) 670.55 405.43 555.27 213.37 251.01 (1) The Corporation adopted ASU 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" effective January 1, 2023, which eliminated the category of troubled debt restructurings.
The Corporation seeks to achieve adequate and reliable earnings through business growth while maintaining adequate levels of capital and liquidity and limiting exposure to credit and interest rate risk. 31 Table of Contents Selected Financial Data As of or For the Years Ended December 31, (Dollars in thousands, except per share data) 2025 2024 2023 2022 2021 Results of Operations Interest income $ 430,486 $ 412,355 $ 371,730 $ 252,193 $ 209,731 Interest expense 190,291 201,185 151,733 33,896 21,348 Net interest income 240,195 211,170 219,997 218,297 188,383 Provision (reversal of provision) for credit losses 11,667 5,933 10,770 12,198 (10,132) Net interest income after provision for credit losses 228,528 205,237 209,227 206,099 198,515 Noninterest income 87,861 88,055 76,824 77,885 83,224 Noninterest expense 203,039 197,992 197,362 186,774 167,409 Net income before income taxes 113,350 95,300 88,689 97,210 114,330 Income taxes 22,593 19,369 17,585 19,090 22,529 Net income $ 90,757 $ 75,931 $ 71,104 $ 78,120 $ 91,801 Financial Condition at Year End Cash and cash equivalents $ 553,712 $ 328,844 $ 249,799 $ 152,799 $ 890,150 Investment securities, net of allowance for credit losses 496,289 493,978 500,623 507,562 496,989 Net loans and leases held for investment 6,826,639 6,739,492 6,481,827 6,044,226 5,238,093 Assets 8,436,897 8,128,417 7,780,628 7,222,016 7,122,421 Deposits 7,087,313 6,759,259 6,375,781 5,913,526 6,055,124 Borrowings 323,278 385,442 465,067 440,401 213,980 Shareholders' equity 943,318 887,301 839,208 776,500 773,794 Per Common Share Data Average shares outstanding (in thousands) 28,735 29,215 29,433 29,393 29,403 Earnings per share – basic $ 3.16 $ 2.60 $ 2.42 $ 2.66 $ 3.12 Earnings per share – diluted 3.13 2.58 2.41 2.64 3.11 Dividends declared per share 0.87 0.84 0.84 0.83 0.80 Book value (at year-end) 33.50 30.55 28.44 26.53 26.23 Dividends declared to net income 27.6 % 32.3 % 34.8 % 31.2 % 25.6 % Profitability Ratios Return on average assets 1.11 % 0.96 % 0.94 % 1.12 % 1.38 % Return on average equity 9.90 8.85 8.83 10.13 12.50 Average equity to average assets 11.21 10.86 10.66 11.09 11.04 Efficiency ratio 61.3 65.7 66.0 62.4 60.9 Asset Quality Ratios Nonaccrual loans and leases to loans and leases held for investment 0.20 % 0.19 % 0.31 % 0.22 % 0.63 % Nonperforming loans and leases to loans and leases held for investment (1) 0.20 0.19 0.32 0.23 0.63 Nonperforming assets to total assets (1) 0.45 0.41 0.52 0.46 0.48 Net charge-offs to average loans and leases outstanding 0.16 0.06 0.08 0.07 — Allowance for credit losses, loans and leases to total loans and leases held for investment 1.28 1.28 1.30 1.29 1.35 Allowance for credit losses, loans and leases to nonaccrual loans and leases 641.53 687.54 415.97 591.66 216.57 Allowance for credit losses, loans and leases to nonperforming loans and leases (1) 637.40 670.55 405.43 555.27 213.37 (1) The Corporation adopted ASU 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" effective January 1, 2023, which eliminated the category of troubled debt restructurings.
Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank and Federal Reserve Bank of $3.7 billion and $3.4 billion at December 31, 2024 and December 31, 2023, respectively, of which $2.1 billion and $1.9 billion was available as of December 31, 2024 and December 31, 2023, respectively.
Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank, Federal Reserve Bank and a correspondent bank of $3.8 billion and $3.7 billion at December 31, 2025 and December 31, 2024, respectively, of which $2.3 billion and $2.1 billion was available as of December 31, 2025 and December 31, 2024, respectively.
The growth in gross loans and leases held for investment was primarily due to increases in commercial, commercial real estate and residential mortgage loans, partially offset by a decrease in construction loans. 39 Table of Contents Table 5—Loan and Lease Maturities and Sensitivity to Changes in Interest Rates The following table presents the maturity schedule of the loan and lease portfolio at December 31, 2024.
The growth in gross loans and leases held for investment was primarily due to increases in construction, commercial real estate and home equity loans, partially offset by decreases in commercial and residential mortgage loans and lease financings. 40 Table of Contents Table 5—Loan and Lease Maturities and Sensitivity to Changes in Interest Rates The following table presents the maturity schedule of the loan and lease portfolio at December 31, 2025.
At December 31, 2024, noninterest-bearing deposits totaled $1.4 billion and represented 20.9% of total deposits, compared to $1.5 billion representing 23.0% at December 31, 2023. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.5 billion at December 31, 2024 and 2023.
At December 31, 2025, noninterest-bearing deposits totaled $1.4 billion and represented 20.2% of total deposits, compared to $1.4 billion representing 20.9% at December 31, 2024. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.6 billion and $1.5 billion at December 31, 2025 and 2024, respectively.
The amount of the individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits. Net loan and lease charge-offs for the year ended December 31, 2024 were $3.8 million compared to net loan and lease charge-offs of $5.4 million for the year ended December 31, 2023.
The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits. 41 Table of Contents Net loan and lease charge-offs for the year ended December 31, 2025 were $11.1 million compared to net loan and lease charge-offs of $3.8 million for the year ended December 31, 2024.
At December 31, 2023, the allowance for credit losses on individually analyzed loans was $1.8 million, or 8.6% of the balance of individually analyzed loans of $20.7 million. Goodwill and Other Intangible Assets Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions.
At December 31, 2024, the allowance for credit losses on individually analyzed loans was $1.9 million, or 16.1% of the balance of individually analyzed loans of $12.1 million. Goodwill and Other Intangible Assets Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions.
At December 31, 2024 and 2023, the Corporation had $276.0 million and $187.0 million, respectively, in time deposits in excess of $250,000 maturing disclosed in the table below. Brokered deposits in the amount of $360.0 million and $305.4 million at December 31, 2024 and December 31, 2023, respectively, are not included in time deposits more than $250,000.
At December 31, 2025 and 2024, the Corporation had $281.9 million and $276.0 million, respectively, in time deposits in excess of $250,000 maturing disclosed in the table below. Brokered deposits in the amount of $405.1 million and $360.0 million at December 31, 2025 and December 31, 2024, respectively, are not included in time deposits more than $250,000.
Our most liquid asset, unencumbered cash and cash equivalents, were $327.8 million and $241.5 million at December 31, 2024 and December 31, 2023, respectively. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $55.4 million and $23.3 million at December 31, 2024 and December 31, 2023, respectively.
Our most liquid assets, unencumbered cash and cash equivalents, were $549.2 million and $327.8 million at December 31, 2025 and December 31, 2024, respectively. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $37.3 million and $55.4 million at December 31, 2025 and December 31, 2024, respectively.
Ratios at December 31, 2022, 2021 and 2020 were restated to exclude troubled debt restructured loans from nonperforming loans and nonperforming assets. 31 Table of Contents Executive Overview The Corporation's consolidated net income, earnings per share and return on average assets and average equity were as follows: For the Years Ended December 31, Amount of Change Percent Change (Dollars in thousands, except per share data) 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 Net income $ 75,931 $ 71,104 $ 78,120 $ 4,827 $ (7,016) 6.8 % (9.0) % Net income per share: Basic $ 2.60 $ 2.42 $ 2.66 $ 0.18 $ (0.24) 7.4 (9.0) Diluted 2.58 2.41 2.64 0.17 (0.23) 7.1 (8.7) Return on average assets 0.96 % 0.94 % 1.12 % 2 BP (18) BP 2.1 (16.1) Return on average equity 8.85 % 8.83 % 10.13 % 2 BP (130) BP 0.2 (12.8) 2024 Overview The Corporation reported net income of $75.9 million, or $2.58 diluted earnings per share, for 2024 compared to net income of $71.1 million, or $2.41 diluted earnings per share, for 2023.
Ratios at December 31, 2022 and 2021 were restated to exclude troubled debt restructured loans from nonperforming loans and nonperforming assets. 32 Table of Contents Executive Overview The Corporation's consolidated net income, earnings per share and return on average assets and average equity were as follows: For the Years Ended December 31, Amount of Change Percent Change (Dollars in thousands, except per share data) 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 Net income $ 90,757 $ 75,931 $ 71,104 $ 14,826 $ 4,827 19.5 % 6.8 % Net income per share: Basic $ 3.16 $ 2.60 $ 2.42 $ 0.56 $ 0.18 21.5 7.4 Diluted 3.13 2.58 2.41 0.55 0.17 21.3 7.1 Return on average assets 1.11 % 0.96 % 0.94 % 15 BP 2 BP 15.6 2.1 Return on average equity 9.90 % 8.85 % 8.83 % 105 BP 2 BP 11.9 0.2 2025 Overview The Corporation reported net income of $90.8 million, or $3.13 diluted earnings per share, for 2025 compared to net income of $75.9 million, or $2.58 diluted earnings per share, for 2024.
Additionally, the financial results for the year ended December 31, 2024 included bank owned life insurance ("BOLI") death benefit claims of $241 thousand, or $0.01 diluted earnings per share. 2023 Overview The Corporation reported net income of $71.1 million, or $2.41 diluted earnings per share, for 2023 compared to net income of $78.1 million, or $2.64 diluted earnings per share, for 2022.
The financial results for the year ended December 31, 2025 included bank owned life insurance ("BOLI") death benefit claims of $2.1 million, or $0.07 diluted earnings per share. 2024 Overview The Corporation reported net income of $75.9 million, or $2.58 diluted earnings per share, for 2024 compared to net income of $71.1 million, or $2.41 diluted earnings per share, for 2023.
At December 31, (Dollars in thousands) 2024 2023 2022 State and political subdivisions $ 1,295 $ 2,301 $ 2,285 Residential mortgage-backed securities 417,492 410,329 418,115 Collateralized mortgage obligations 1,685 2,001 2,322 Corporate bonds 71,000 82,699 82,261 Equity securities 2,506 3,293 2,579 Total investment securities $ 493,978 $ 500,623 $ 507,562 Table 4—Investment Securities (Yields) The following table shows the maturity distribution and weighted average yields of investment securities at amortized cost at December 31, 2024.
At December 31, (Dollars in thousands) 2025 2024 2023 State and political subdivisions $ — $ 1,295 $ 2,301 Residential mortgage-backed securities 412,604 417,492 410,329 Collateralized mortgage obligations 1,368 1,685 2,001 Corporate bonds 80,303 71,000 82,699 Equity securities 2,014 2,506 3,293 Total investment securities $ 496,289 $ 493,978 $ 500,623 Table 4—Investment Securities (Yields) The following table shows the maturity distribution and weighted average yields of investment securities at amortized cost at December 31, 2025.
The financial results for the year ended December 31, 2023 included $1.5 million in restructuring charges, or $0.04 diluted earnings per share, associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds.
Additionally, the year ended December 31, 2023 included $1.5 million in restructuring charges associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds.
The most significant contractual obligations, in both the under and over one-year time period, are for the Bank to repay certificates of deposit and short- and long-term borrowings.
The most significant contractual obligations, in both the under and over one-year time period, are for the Bank to repay certificates of deposit and short- and long-term borrowings. Certificates of deposit due within one year of December 31, 2025 totaled $960.1 million.
Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components. 2024 versus 2023 Reported net interest income for the year ended December 31, 2024 was $211.2 million, a decrease of $8.8 million, or 4.0%, from the prior year.
Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components. 2025 versus 2024 Reported net interest income for the year ended December 31, 2025 was $240.2 million, an increase of $29.0 million, or 13.7%, from the prior year.
Table 10—Deposits The following table summarizes the average amount of deposits for the periods indicated: For the Years Ended December 31, (Dollars in thousands) 2024 2023 2022 Noninterest-bearing deposits $ 1,380,178 $ 1,646,286 $ 2,068,086 Interest-bearing checking deposits 1,191,634 1,034,327 884,656 Money market savings 1,801,035 1,611,169 1,389,226 Regular savings 740,493 871,332 1,056,019 Time deposits 1,413,589 931,944 443,845 Total average deposits $ 6,526,929 $ 6,095,058 $ 5,841,832 At December 31, 2024 and 2023, the Corporation had $3.2 billion and $3.0 billion, respectively, in uninsured deposits in excess of the FDIC insurance limit of $250,000.
Table 10—Deposits The following table summarizes the average amount of deposits for the periods indicated: For the Years Ended December 31, (Dollars in thousands) 2025 2024 2023 Noninterest-bearing deposits $ 1,406,985 $ 1,380,178 $ 1,646,286 Interest-bearing checking deposits 1,281,075 1,191,634 1,034,327 Money market savings 1,920,600 1,801,035 1,611,169 Regular savings 720,718 740,493 871,332 Time deposits 1,485,281 1,413,589 931,944 Total average deposits $ 6,814,659 $ 6,526,929 $ 6,095,058 At December 31, 2025 and 2024, the Corporation had $3.4 billion and $3.2 billion, respectively, in uninsured deposits in excess of the FDIC insurance limit of $250,000.
While management believes it has established the ACL in conformity with GAAP, our regulators, in reviewing the loan portfolio, may request us to increase our ACL based on judgments different from ours.
GAAP, our regulators, in reviewing the loan portfolio, may request us to increase our ACL based on judgments different from ours.
Discussion of Segments The Corporation has three operating segments: Banking, Wealth Management and Insurance. Detailed segment information appears in Note 23, "Segment Reporting" included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K. The Banking segment reported pre-tax income of $96.1 million in 2024, $90.3 million in 2023 and $93.5 million in 2022.
Detailed segment information appears in Note 23, "Segment Reporting" included in the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K. The Banking segment reported pre-tax income of $115.6 million in 2025, $96.1 million in 2024 and $90.3 million in 2023.
At December 31, 2024 2023 (Dollars in thousands) ACL % of ACL to Total ACL % of Loans to Total Loans ACL % of ACL to Total ACL % of Loans to Total Loans Commercial, financial and agricultural $ 16,079 18.5 % 15.2 % $ 13,699 16.0 % 15.1 % Real estate-commercial 46,867 53.8 51.7 45,849 53.7 50.3 Real estate-construction 4,924 5.7 4.0 6,543 7.7 6.0 Real estate-residential secured for business purpose 7,491 8.6 7.9 8,692 10.2 7.9 Real estate-residential secured for personal purpose 7,222 8.3 14.6 6,349 7.4 13.8 Real estate-home equity secured for personal purpose 1,706 2.0 2.7 1,289 1.5 2.7 Loans to individuals 342 0.4 0.3 392 0.5 0.4 Lease financings 2,460 2.8 3.6 2,574 3.0 3.8 Total $ 87,091 100.0 % 100.0 % $ 85,387 100.0 % 100.0 % At December 31, 2024, the allowance for credit losses on individually analyzed loans was $1.9 million, or 16.1% of the balance of individually analyzed loans of $12.1 million.
At December 31, 2025 2024 (Dollars in thousands) ACL % of ACL to Total ACL % of Loans to Total Loans ACL % of ACL to Total ACL % of Loans to Total Loans Commercial, financial and agricultural $ 16,983 19.3 % 14.9 % $ 16,079 18.5 % 15.2 % Real estate-commercial 47,166 53.5 52.4 46,867 53.8 51.7 Real estate-construction 5,475 6.2 4.4 4,924 5.7 4.0 Real estate-residential secured for business purpose 7,600 8.6 8.0 7,491 8.6 7.9 Real estate-residential secured for personal purpose 6,341 7.2 13.9 7,222 8.3 14.6 Real estate-home equity secured for personal purpose 1,638 1.9 2.9 1,706 2.0 2.7 Loans to individuals 348 0.4 0.2 342 0.4 0.3 Lease financings 2,614 3.0 3.4 2,460 2.8 3.6 Total $ 88,165 100.0 % 100.0 % $ 87,091 100.0 % 100.0 % At December 31, 2025, the allowance for credit losses on individually analyzed loans was $3.0 million, or 22.9% of the balance of individually analyzed loans of $13.2 million.
At December 31, (Dollars in thousands) 2024 2023 2022 Allowance for credit losses, loans and leases $ 87,091 $ 85,387 $ 79,004 Loans and leases held for investment 6,826,583 6,567,214 6,123,230 Allowance for credit losses, loans and leases / loans and leases held for investment 1.28 % 1.30 % 1.29 % Noninterest Income The following table presents noninterest income for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, $ Change % Change (Dollars in thousands) 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 Trust fee income $ 8,491 $ 7,732 $ 7,743 $ 759 $ (11) 9.8 % (0.1) % Service charges on deposit accounts 8,082 7,048 6,175 1,034 873 14.7 14.1 Investment advisory commission and fee income 21,208 18,864 19,748 2,344 (884) 12.4 (4.5) Insurance commission and fee income 22,349 21,043 19,065 1,306 1,978 6.2 10.4 Other service fee income 14,747 12,381 12,425 2,366 (44) 19.1 (0.4) Bank owned life insurance income 3,861 3,185 3,787 676 (602) 21.2 (15.9) Net gain on sales of investment securities 18 — 30 18 (30) N/M N/M Net gain on mortgage banking activities 5,265 3,689 4,412 1,576 (723) 42.7 (16.4) Other income 4,034 2,882 4,500 1,152 (1,618) 40.0 (36.0) Total noninterest income $ 88,055 $ 76,824 $ 77,885 $ 11,231 $ (1,061) 14.6 % (1.4) % 2024 versus 2023 Noninterest income for the year ended December 31, 2024 was $88.1 million, an increase of $11.2 million, or 14.6%, compared to 2023.
At December 31, (Dollars in thousands) 2025 2024 2023 Allowance for credit losses, loans and leases $ 88,165 $ 87,091 $ 85,387 Loans and leases held for investment 6,914,804 6,826,583 6,567,214 Allowance for credit losses, loans and leases / loans and leases held for investment 1.28 % 1.28 % 1.30 % Noninterest Income The following table presents noninterest income for the years ended December 31, 2025, 2024 and 2023: For the Years Ended December 31, $ Change % Change (Dollars in thousands) 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 Trust fee income $ 8,853 $ 8,491 $ 7,732 $ 362 $ 759 4.3 % 9.8 % Service charges on deposit accounts 8,991 8,082 7,048 909 1,034 11.2 14.7 Investment advisory commission and fee income 22,799 21,208 18,864 1,591 2,344 7.5 12.4 Insurance commission and fee income 22,443 22,349 21,043 94 1,306 0.4 6.2 Other service fee income 10,938 14,747 12,381 (3,809) 2,366 (25.8) 19.1 Bank owned life insurance income 5,849 3,861 3,185 1,988 676 51.5 21.2 Net gain on sales of investment securities — 18 — (18) 18 N/M N/M Net gain on mortgage banking activities 3,362 5,265 3,689 (1,903) 1,576 (36.1) 42.7 Other income 4,626 4,034 2,882 592 1,152 14.7 40.0 Total noninterest income $ 87,861 $ 88,055 $ 76,824 $ (194) $ 11,231 (0.2) % 14.6 % 2025 versus 2024 Noninterest income for the year ended December 31, 2025 was $87.9 million, a decrease of $194 thousand, or 0.2%, compared to 2024.
Any material increase in the ACL would adversely affect the Corporation’s financial condition and results of operations.
Any material increase in the ACL would adversely affect the Corporation’s financial condition and results of operations. The following table indicates the economic factors utilized in the Corporation's CECL model.
Loans and Leases Gross loans and leases held for investment at December 31, 2024 increased $259.4 million, or 3.9%, from December 31, 2023.
Loans and Leases Gross loans and leases held for investment at December 31, 2025 increased $88.2 million, or 1.3%, from December 31, 2024.
Excluding this impact, the effective tax rates were 22.1%, 21.7% and 21.3% for the years ended December 31, 2024, 2023 and 2022. The increase in the effective tax rate for 2024 compared to 2023 was primarily due to increases in state tax rates and the impact of stock-based compensation during the year.
The increase in the effective tax rate for 2024 compared to 2023 was primarily due to increases in state tax rates and the impact of stock-based compensation during the year.
Net interest income, on a tax-equivalent basis, for the year ended December 31, 2023 was $221.2 million, an increase of $1.0 million, or 0.4%, from the prior year.
Net interest income, on a tax-equivalent basis, for the year ended December 31, 2025 was $241.9 million, an increase of $29.5 million, or 13.9%, from the prior year.
Noninterest Expense The following table presents noninterest expense for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, $ Change % Change (Dollars in thousands) 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 Salaries, benefits and commissions $ 123,745 $ 120,188 $ 115,806 $ 3,557 $ 4,382 3.0 % 3.8 % Net occupancy 11,025 10,686 10,193 339 493 3.2 4.8 Equipment 4,453 4,132 3,904 321 228 7.8 5.8 Data processing 16,956 16,799 15,215 157 1,584 0.9 10.4 Professional fees 6,402 7,141 9,332 (739) (2,191) (10.3) (23.5) Marketing and advertising 2,173 2,180 2,462 (7) (282) (0.3) (11.5) Deposit insurance premiums 4,432 4,825 3,075 (393) 1,750 (8.1) 56.9 Intangible expenses 694 938 1,293 (244) (355) (26.0) (27.5) Restructuring charges — 1,519 184 (1,519) 1,335 N/M 725.5 Other expense 28,112 28,954 25,310 (842) 3,644 (2.9) 14.4 Total noninterest expense $ 197,992 $ 197,362 $ 186,774 $ 630 $ 10,588 0.3 % 5.7 % 2024 versus 2023 Noninterest expense for the year ended December 31, 2024 was $198.0 million, an increase of $630 thousand, or 0.3%, compared to 2023.
Noninterest Expense The following table presents noninterest expense for the years ended December 31, 2025, 2024 and 2023: For the Years Ended December 31, $ Change % Change (Dollars in thousands) 2025 2024 2022 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 Salaries, benefits and commissions $ 127,023 $ 123,745 $ 120,188 $ 3,278 $ 3,557 2.6 % 3.0 % Net occupancy 11,149 11,025 10,686 124 339 1.1 3.2 Equipment 4,293 4,453 4,132 (160) 321 (3.6) 7.8 Data processing 17,425 16,956 16,799 469 157 2.8 0.9 Professional fees 7,217 6,402 7,141 815 (739) 12.7 (10.3) Marketing and advertising 1,653 2,173 2,180 (520) (7) (23.9) (0.3) Deposit insurance premiums 4,526 4,432 4,825 94 (393) 2.1 (8.1) Intangible expenses 469 694 938 (225) (244) (32.4) (26.0) Restructuring charges — — 1,519 — (1,519) N/M N/M Other expense 29,284 28,112 28,954 1,172 (842) 4.2 (2.9) Total noninterest expense $ 203,039 $ 197,992 $ 197,362 $ 5,047 $ 630 2.5 % 0.3 % 2025 versus 2024 Noninterest expense for the year ended December 31, 2025 was $203.0 million, an increase of $5.0 million, or 2.5%, compared to 2024.
For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Commercial, financial and agricultural $ 1,035,684 $ 2,329 0.22 % $ 1,056,025 $ 4,510 0.43 % $ 1,034,106 $ 323 0.03 % Real estate-commercial 3,367,837 21 — 3,182,965 37 — 2,863,580 3,276 0.11 Real estate-construction 329,218 500 0.15 414,567 206 0.05 312,024 — — Real estate-residential secured for business purpose 528,631 (235) (0.04) 505,240 (135) (0.03) 427,849 (55) (0.01) Real estate-residential secured for personal purpose 960,915 (134) (0.01) 826,943 — — 626,102 — — Real estate-home equity secured for personal purpose 180,579 (46) (0.03) 175,395 2 — 168,289 (38) (0.02) Loans to individuals 26,645 828 3.11 27,063 426 1.57 26,642 179 0.67 Lease financings 247,697 539 0.22 230,466 351 0.15 192,673 210 0.11 Total $ 6,677,206 $ 3,802 0.06 % $ 6,418,664 $ 5,397 0.08 % $ 5,651,265 $ 3,895 0.07 % During the year ended December 31, 2023, the Corporation recorded charge-offs of $2.4 million related to two nonaccrual commercial loans to one borrower totaling $5.9 million.
For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Average Loans Net Charge-offs (Recoveries) Net Charge-offs (Recoveries) to Average Loans Commercial, financial and agricultural $ 1,041,998 $ 8,444 0.81 % $ 1,035,684 $ 2,329 0.22 % $ 1,056,025 $ 4,510 0.43 % Real estate-commercial 3,520,879 1,147 0.03 3,367,837 21 — 3,182,965 37 — Real estate-construction 300,136 — — 329,218 500 0.15 414,567 206 0.05 Real estate-residential secured for business purpose 539,146 — — 528,631 (235) (0.04) 505,240 (135) (0.03) Real estate-residential secured for personal purpose 990,788 35 — 960,915 (134) (0.01) 826,943 — — Real estate-home equity secured for personal purpose 193,257 (2) — 180,579 (46) (0.03) 175,395 2 — Loans to individuals 15,360 675 4.39 26,645 828 3.11 27,063 426 1.57 Lease financings 234,022 819 0.35 247,697 539 0.22 230,466 351 0.15 Total $ 6,835,586 $ 11,118 0.16 % $ 6,677,206 $ 3,802 0.06 % $ 6,418,664 $ 5,397 0.08 % During the year ended December 31, 2025, the Corporation recorded charge-offs of $7.3 million related to a $23.7 million commercial loan relationship.
Gains on the sale of Small Business Administration loans increased $1.9 million due to increased sale volume, partially offset by a $605 thousand decrease in interest rate swap income due to decreased demand. 36 Table of Contents 2023 versus 2022 Noninterest income for the year ended December 31, 2023 was $76.8 million, a decrease of $1.1 million, or 1.4%, compared to 2022.
Gains on the sale of Small Business Administration loans increased $1.9 million due to increased sale volume, partially offset by a $605 thousand decrease in interest rate swap income due to decreased demand.
Estimated Change in Net Interest Income Over Next 12 Months (Dollars in thousands) Amount Percent Rate shock - Change in interest rates +300 basis points $ 16,163 5.25 % +200 basis points 8,306 3.46 +100 basis points 5,163 2.15 -100 basis points (2,904) (1.21) -200 basis points (8,780) (3.65) -300 basis points (29,198) (6.92) The estimated sensitivities are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows.
Estimated Change in Net Interest Income Over Next 12 Months (Dollars in thousands) Amount Percent Rate shock - Change in interest rates +300 basis points $ 14,807 5.47 % +200 basis points 10,382 3.84 +100 basis points 5,817 2.15 -100 basis points (7,318) (2.70) -200 basis points (19,851) (7.34) -300 basis points (37,532) (13.87) The estimated sensitivities are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows.
Salaries, benefits and commissions increased $3.6 million, or 3.0%, for the year ended December 31, 2024, primarily due to an increase in incentive compensation due to increased profitability in the current year.
Salaries, benefits and commissions increased $3.3 million, or 2.6%, for the year ended December 31, 2025, primarily due to annual merit increases and an increase in incentive compensation due to increased profitability, partially offset by an increase in capitalized compensation driven by higher loan production.
This represented 22.0% of total deposits at December 31, 2024, down from 23.3% at December 31, 2023.
This represented 23.2% of total deposits at December 31, 2025 compared to 22.0% at December 31, 2024.
The following table details information pertaining to the Corporation's allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.
The year ended December 31, 2023 included $2.4 million in charge-offs related to two nonaccrual commercial loans to one borrower. The following table details information pertaining to the Corporation's allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.
The Insurance segment reported pre-tax income of $5.7 million in 2024, $5.1 million in 2023 and $3.3 million in 2022, which included noninterest income of $22.5 million in 2024, $21.5 million in 2023 and $19.9 million in 2022.
The Wealth Management segment reported pre-tax income of $8.3 million in 2025, $6.1 million in 2024 and $5.0 million in 2023, which included noninterest income of $31.9 million in 2025, $29.9 million in 2024 and $26.8 million in 2023. Noninterest expense was $23.7 million in 2025, $23.9 million in 2024 and $21.8 million in 2023.
Maturities and pay-downs of $69.8 million, sales of $5.4 million net amortization of purchased premiums and discounts of $1.1 million, decreases in the fair value of available-for-sale investment securities of $1.0 million and a provision for credit losses of $108 thousand were partially offset by purchases of $70.7 million, which were primarily residential mortgage-backed securities.
Purchases of $60.3 million, which were primarily residential mortgage-backed securities, increases in the fair value of available-for-sale investment securities of $17.2 million and a reversal of provision for credit losses of $828 thousand were partially offset by maturities and pay-downs of $68.1 million, sales of $6.9 million and net amortization of purchased premiums and discounts of $1.0 million. 39 Table of Contents Table 3—Investment Securities The following table shows the carrying amount of investment securities, net of allowance for credit losses, at the dates indicated.
Financial Condition ASSETS The following table presents assets at the dates indicated: At December 31, (Dollars in thousands) 2024 2023 $ Change % Change Cash and cash equivalents $ 328,844 $ 249,799 $ 79,045 31.6 % Investment securities, net of allowance for credit losses 493,978 500,623 (6,645) (1.3) Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost 38,980 40,499 (1,519) (3.8) Loans held for sale 16,653 11,637 5,016 43.1 Loans and leases held for investment 6,826,583 6,567,214 259,369 3.9 Allowance for credit losses, loans and leases (87,091) (85,387) (1,704) 2.0 Premises and equipment, net 46,671 51,441 (4,770) (9.3) Operating lease right-of-use asset 28,531 31,795 (3,264) (10.3) Goodwill and other intangibles, net 183,819 186,460 (2,641) (1.4) Bank owned life insurance 139,351 131,344 8,007 6.1 Accrued interest receivable and other assets 112,098 95,203 16,895 17.7 Total assets $ 8,128,417 $ 7,780,628 $ 347,789 4.5 % Cash and Interest-Earning Deposits Cash and interest-earning deposits increased $79.0 million, or 31.6%, from December 31, 2023, primarily due to increased interest-earning deposits at the Federal Reserve Bank of $82.5 million due to increases in deposits outpacing loan growth, partially offset by the repayment of long-term debt. 38 Table of Contents Investment Securities Total investment securities at December 31, 2024 decreased $6.6 million, or 1.3%, from December 31, 2023.
Financial Condition ASSETS The following table presents assets at the dates indicated: At December 31, (Dollars in thousands) 2025 2024 $ Change % Change Cash and cash equivalents $ 553,712 $ 328,844 $ 224,868 68.4 % Investment securities, net of allowance for credit losses 496,289 493,978 2,311 0.5 Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost 37,808 38,980 (1,172) (3.0) Loans held for sale 15,288 16,653 (1,365) (8.2) Loans and leases held for investment 6,914,804 6,826,583 88,221 1.3 Allowance for credit losses, loans and leases (88,165) (87,091) (1,074) 1.2 Premises and equipment, net 45,554 46,671 (1,117) (2.4) Operating lease right-of-use asset 25,795 28,531 (2,736) (9.6) Goodwill and other intangibles, net 182,838 183,819 (981) (0.5) Bank owned life insurance 140,001 139,351 650 0.5 Accrued interest receivable and other assets 112,973 112,098 875 0.8 Total assets $ 8,436,897 $ 8,128,417 $ 308,480 3.8 % Cash and Interest-Earning Deposits Cash and interest-earning deposits increased $224.9 million, or 68.4%, from December 31, 2024, primarily due to increased interest-earning deposits at the Federal Reserve Bank of $231.7 million due to increases in deposits outpacing loan growth, partially offset by the repayment of subordinated notes and long-term debt.
See the section of this Management's Discussion and Analysis under the heading "Results of Operations" and "Financial Condition" for a discussion of the key items impacting the Banking Segment. The Wealth Management segment reported pre-tax income of $6.1 million in 2024, $5.0 million in 2023 and $7.9 million in 2022.
See the section of this Management's Discussion and Analysis under the heading "Results of Operations" and "Financial Condition" for a discussion of the key items impacting the Banking Segment.
At December 31, (Dollars in thousands) 2024 2023 2022 Nonaccrual loans held for sale $ — $ 8 $ — Nonaccrual loans and leases held for investment 12,667 20,519 13,353 Accruing loans and leases, 90 days or more past due 321 534 875 Total nonperforming loans and leases $ 12,988 $ 21,061 $ 14,228 Other real estate owned 20,141 19,032 19,258 Repossessed assets 76 — — Total nonperforming assets $ 33,205 $ 40,093 $ 33,486 Loans and leases held for investment $ 6,826,583 $ 6,567,214 $ 6,123,230 Allowance for credit losses, loans and leases 87,091 85,387 79,004 Nonaccrual loans and leases with partial charge-offs 273 814 928 Life-to-date partial charge-offs on nonaccrual loans and leases 649 885 448 Reserves on individually analyzed loans 1,945 1,787 2,765 Allowance for credit losses, loans and leases / loans and leases held for investment 1.28 % 1.30 % 1.29 % Nonaccrual loans and leases / loans and leases held for investment 0.19 % 0.31 % 0.22 % Allowance for credit losses, loans and leases / nonaccrual loans and leases 687.54 % 415.97 % 591.66 % 41 Table of Contents Table 7—Loan Portfolio Overview The following table provides summarized detail related to outstanding commercial loan balances segmented by industry description as of December 31, 2024: (Dollars in thousands) December 31, 2024 Industry Description Total Outstanding Balance % of Commercial Loan Portfolio CRE - Retail $ 463,882 8.6 % Animal Production 393,902 7.3 CRE - Multi-family 344,169 6.4 CRE - Office 294,331 5.5 CRE - 1-4 Family Residential Investment 287,690 5.3 CRE - Industrial / Warehouse 255,232 4.7 Hotels & Motels (Accommodation) 198,815 3.7 Specialty Trade Contractors 191,896 3.6 Nursing and Residential Care Facilities 176,130 3.3 Education 170,487 3.2 Motor Vehicle and Parts Dealers 147,580 2.7 Merchant Wholesalers, Durable Goods 138,633 2.6 Repair and Maintenance 132,950 2.5 Homebuilding (tract developers, remodelers) 129,031 2.4 Crop Production 111,628 2.1 CRE - Mixed-Use - Residential 111,590 2.1 Wood Product Manufacturing 98,629 1.8 Food Services and Drinking Places 87,765 1.6 Administrative and Support Services 78,656 1.5 Fabricated Metal Product Manufacturing 76,611 1.4 Religious Organizations, Advocacy Groups 74,011 1.4 Real Estate Lenders, Secondary Market Financing 70,748 1.3 Personal and Laundry Services 70,595 1.3 Amusement, Gambling, and Recreation Industries 68,990 1.3 CRE - Mixed-Use - Commercial 67,187 1.2 Miniwarehouse / Self-Storage 65,018 1.2 Merchant Wholesalers, Nondurable Goods 63,662 1.2 Private Equity & Special Purpose Entities (except 52592) 56,186 1.0 Truck Transportation 55,679 1.0 Food Manufacturing 50,771 0.9 Industries with >$50 million in outstandings $ 4,532,454 84.3 % Industries with $ 846,410 15.7 % Total Commercial Loans $ 5,378,864 100.0 % Consumer Loans and Lease Financings Total Outstanding Balance Real Estate-Residential Secured for Personal Purpose $ 994,972 Real Estate-Home Equity Secured for Personal Purpose 186,836 Loans to Individuals 21,250 Lease Financings 244,661 Total Consumer Loans and Lease Financings $ 1,447,719 Total $ 6,826,583 42 Table of Contents Table 8—Summary of Loan and Lease Loss Experience The following table presents average loans and leases and loan and lease loss experience for the periods indicated.
At December 31, (Dollars in thousands) 2025 2024 2023 Nonaccrual loans held for sale $ — $ — $ 8 Nonaccrual loans and leases held for investment 13,743 12,667 20,519 Accruing loans and leases, 90 days or more past due 89 321 534 Total nonperforming loans and leases $ 13,832 $ 12,988 $ 21,061 Other real estate owned 23,926 20,141 19,032 Repossessed assets 65 76 — Total nonperforming assets $ 37,823 $ 33,205 $ 40,093 Loans and leases held for investment $ 6,914,804 $ 6,826,583 $ 6,567,214 Allowance for credit losses, loans and leases 88,165 87,091 85,387 Nonaccrual loans and leases with partial charge-offs 1,532 273 814 Reserves on individually analyzed loans 3,022 1,945 1,787 Allowance for credit losses, loans and leases / loans and leases held for investment 1.28 % 1.28 % 1.30 % Nonaccrual loans and leases / loans and leases held for investment 0.20 % 0.19 % 0.31 % Allowance for credit losses, loans and leases / nonaccrual loans and leases 641.53 % 687.54 % 415.97 % 42 Table of Contents Table 7—Loan Portfolio Overview The following table provides summarized detail related to outstanding commercial loan balances segmented by industry description as of December 31, 2025: (Dollars in thousands) December 31, 2025 Industry Description Total Outstanding Balance % of Commercial Loan Portfolio CRE - Retail $ 437,864 7.9 % Animal Production 428,809 7.8 CRE - Multi-family 383,688 7.0 CRE - 1-4 Family Residential Investment 277,643 5.0 Hotels & Motels (Accommodation) 259,170 4.7 CRE - Office 244,534 4.4 CRE - Industrial / Warehouse 222,619 4.0 Specialty Trade Contractors 209,450 3.8 Nursing and Residential Care Facilities 163,938 3.0 Homebuilding (tract developers, remodelers) 150,906 2.7 Merchant Wholesalers, Durable Goods 137,124 2.5 Crop Production 135,818 2.5 Repair and Maintenance 124,570 2.3 Motor Vehicle and Parts Dealers 116,657 2.1 CRE - Mixed-Use - Commercial 114,659 2.1 CRE - Mixed-Use - Residential 108,517 2.0 Administrative and Support Services 99,083 1.8 Wood Product Manufacturing 98,771 1.8 Real Estate Lenders, Secondary Market Financing 93,066 1.7 Professional, Scientific, and Technical Services 92,883 1.7 Food Services and Drinking Places 90,211 1.6 Fabricated Metal Product Manufacturing 79,947 1.5 Merchant Wholesalers, Nondurable Goods 79,922 1.5 Education 78,031 1.4 Amusement, Gambling, and Recreation Industries 76,874 1.4 Religious Organizations, Advocacy Groups 65,397 1.2 Miniwarehouse / Self-Storage 63,371 1.2 Personal and Laundry Services 62,052 1.1 Food Manufacturing 59,804 1.1 Machinery Manufacturing 52,598 1.0 Industries with >$50 million in outstandings $ 4,607,976 83.6 % Industries with $ 901,965 16.4 % Total Commercial Loans $ 5,509,941 100.0 % Consumer Loans and Lease Financings Total Outstanding Balance Real Estate-Residential Secured for Personal Purpose $ 959,610 Real Estate-Home Equity Secured for Personal Purpose 200,394 Loans to Individuals 12,793 Lease Financings 232,066 Total Consumer Loans and Lease Financings $ 1,404,863 Total $ 6,914,804 43 Table of Contents Table 8—Summary of Loan and Lease Loss Experience The following table presents average loans and leases and loan and lease loss experience for the periods indicated.
Held-to-maturity and available-for-sale portfolios are combined, net of allowance for credit losses. 1 Year or less After 1 Year to 5 Years After 5 Years to 10 Years After 10 Years (Dollars in thousands) Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield State and political subdivisions $ 1,300 2.10 % $ — — % $ — — % $ — — % Residential mortgage-backed securities 20 2.81 1,412 2.46 21,469 2.71 433,914 2.80 Collateralized mortgage obligations — — 155 2.62 — — 1,663 1.60 Corporate bonds 5,905 2.68 10,924 2.68 60,000 3.94 — — Total held-to- maturity and available-for-sale investment securities $ 7,225 2.58 % $ 12,491 2.66 % $ 81,469 3.62 % $ 435,577 2.80 % At December 31, 2024, the Corporation had no reportable investments in any single issuer representing more than 10% of shareholders' equity.
Held-to-maturity and available-for-sale portfolios are combined, net of allowance for credit losses. 1 Year or less After 1 Year to 5 Years After 5 Years to 10 Years After 10 Years (Dollars in thousands) Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Residential mortgage-backed securities $ — — % $ 644 2.44 % $ 24,543 2.43 % $ 412,023 2.95 % Collateralized mortgage obligations — — 71 2.44 — — 1,371 1.57 Corporate bonds 7,482 2.09 75,366 4.09 — — — — Total held-to- maturity and available-for-sale investment securities $ 7,482 2.09 % $ 76,081 4.08 % $ 24,543 2.43 % $ 413,394 2.95 % At December 31, 2025, the Corporation had no reportable investments in any single issuer representing more than 10% of shareholders' equity.
For the Years Ended December 31, 2024 Versus 2023 For the Years Ended December 31, 2023 Versus 2022 (Dollars in thousands) Volume Change Rate Change Total Volume Change Rate Change Total Interest income: Interest-earning deposits with other banks $ 4,572 $ (39) $ 4,533 $ (1,796) $ 6,536 $ 4,740 U.S. government obligations — — — (40) — (40) Obligations of states and political subdivisions (20) (9) (29) (1) (8) (9) Other debt and equity securities (285) 969 684 (125) 2,958 2,833 Federal Home Loan Bank, Federal Reserve Bank and other stock (104) 147 43 828 414 1,242 Interest on deposits, investments and other interest-earning assets 4,163 1,068 5,231 (1,134) 9,900 8,766 Commercial, financial and agricultural loans (1,319) 3,753 2,434 1,295 22,331 23,626 Real estate—commercial and construction loans 5,804 12,605 18,409 19,300 41,438 60,738 Real estate—residential loans 7,943 4,052 11,995 12,344 10,533 22,877 Loans to individuals (31) 181 150 21 665 686 Tax-exempt loans and leases (20) 580 560 (178) 72 (106) Lease financings 702 1,118 1,820 2,103 131 2,234 Interest and fees on loans and leases 13,079 22,289 35,368 34,885 75,170 110,055 Total interest income 17,242 23,357 40,599 33,751 85,070 118,821 Interest expense: Interest-bearing checking deposits 3,911 5,278 9,189 990 17,668 18,658 Money market savings 8,024 8,040 16,064 2,560 47,758 50,318 Regular savings (549) 829 280 (256) 2,236 1,980 Time deposits 20,730 8,557 29,287 10,118 19,553 29,671 Total time and interest-bearing deposits 32,116 22,704 54,820 13,412 87,215 100,627 Short-term borrowings (4,072) (2,774) (6,846) 3,288 2,418 5,706 Long-term debt (373) 1,851 1,478 4,229 3,948 8,177 Subordinated notes — — — 2,591 736 3,327 Interest on borrowings (4,445) (923) (5,368) 10,108 7,102 17,210 Total interest expense 27,671 21,781 49,452 23,520 94,317 117,837 Net interest income $ (10,429) $ 1,576 $ (8,853) $ 10,231 $ (9,247) $ 984 35 Table of Contents Provision for Credit Losses The provision for credit losses for the years ended December 31, 2024, 2023 and 2022 was $5.9 million, $10.8 million and $12.2 million, respectively.
For the Years Ended December 31, 2025 Versus 2024 For the Years Ended December 31, 2024 Versus 2023 (Dollars in thousands) Volume Change Rate Change Total Volume Change Rate Change Total Interest income: Interest-earning deposits with other banks $ 4,982 $ (2,273) $ 2,709 $ 4,572 $ (39) $ 4,533 Obligations of states and political subdivisions (24) (5) (29) (20) (9) (29) Other debt and equity securities 25 991 1,016 (285) 969 684 Federal Home Loan Bank, Federal Reserve Bank and other stock (82) 18 (64) (104) 147 43 Interest on deposits, investments and other interest-earning assets 4,901 (1,269) 3,632 4,163 1,068 5,231 Commercial, financial and agricultural loans (69) (2,023) (2,092) (1,319) 3,753 2,434 Real estate—commercial and construction loans 7,796 3,624 11,420 5,804 12,605 18,409 Real estate—residential loans 2,614 2,169 4,783 7,943 4,052 11,995 Loans to individuals (971) 145 (826) (31) 181 150 Tax-exempt loans and leases (157) 1,951 1,794 (20) 580 560 Lease financings (894) 798 (96) 702 1,118 1,820 Interest and fees on loans and leases 8,319 6,664 14,983 13,079 22,289 35,368 Total interest income 13,220 5,395 18,615 17,242 23,357 40,599 Interest expense: Interest-bearing checking deposits 2,363 (2,485) (122) 3,911 5,278 9,189 Money market savings 5,076 (11,869) (6,793) 8,024 8,040 16,064 Regular savings (95) 590 495 (549) 829 280 Time deposits 3,196 (5,624) (2,428) 20,730 8,557 29,287 Total time and interest-bearing deposits 10,540 (19,388) (8,848) 32,116 22,704 54,820 Short-term borrowings (40) (190) (230) (4,072) (2,774) (6,846) Long-term debt (2,113) (51) (2,164) (373) 1,851 1,478 Subordinated notes (604) 952 348 — — — Interest on borrowings (2,757) 711 (2,046) (4,445) (923) (5,368) Total interest expense 7,783 (18,677) (10,894) 27,671 21,781 49,452 Net interest income $ 5,437 $ 24,072 $ 29,509 $ (10,429) $ 1,576 $ (8,853) 36 Table of Contents Provision for Credit Losses The provision for credit losses for the years ended December 31, 2025, 2024 and 2023 was $11.7 million, $5.9 million and $10.8 million, respectively.
Repossessed assets were $76 thousand at December 31, 2024. During the year ended December 31, 2024, repossessed assets totaling $68 thousand were sold. The Corporation had no repossessed assets at December 31, 2023.
Repossessed assets were $65 thousand at December 31, 2025, compared to $76 thousand at December 31, 2024. During the year ended December 31, 2025, repossessed assets totaling $143 thousand were acquired and repossessed assets totaling $105 thousand were sold.
SHAREHOLDERS' EQUITY The following table presents total shareholders' equity at the dates indicated: At December 31, (Dollars in thousands) 2024 2023 $ Change % Change Common stock $ 157,784 $ 157,784 $ — — % Additional paid-in capital 302,829 301,066 1,763 0.6 Retained earnings 525,780 474,691 51,089 10.8 Accumulated other comprehensive loss (43,992) (50,646) 6,654 (13.1) Treasury stock (55,100) (43,687) (11,413) 26.1 Total shareholders' equity $ 887,301 $ 839,208 $ 48,093 5.7 % The increase in shareholders' equity at December 31, 2024 of $48.1 million from December 31, 2023 was primarily related to an increase in retained earnings of $51.1 million.
SHAREHOLDERS' EQUITY The following table presents total shareholders' equity at the dates indicated: At December 31, (Dollars in thousands) 2025 2024 $ Change % Change Common stock $ 157,784 $ 157,784 $ — — % Additional paid-in capital 304,021 302,829 1,192 0.4 Retained earnings 591,202 525,780 65,422 12.4 Accumulated other comprehensive loss (25,467) (43,992) 18,525 (42.1) Treasury stock (84,222) (55,100) (29,122) 52.9 Total shareholders' equity $ 943,318 $ 887,301 $ 56,017 6.3 % The increase in shareholders' equity at December 31, 2025 of $56.0 million from December 31, 2024 was primarily related to an increase in retained earnings of $65.4 million.
Net loan and lease charge-offs for the years ended December 31, 2024, 2023, and 2022 were $3.8 million, $5.4 million and $3.9 million, respectively. The year ended December 31, 2023 included $2.4 million in charge-offs related to two nonaccrual commercial loans to one borrower.
During the year ended December 31, 2024, the Corporation recorded charge-offs of $900 thousand related to five commercial loan relationships. During the year ended December 31, 2023, the Corporation recorded charge-offs of $2.4 million related to two nonaccrual commercial loans to one borrower totaling $5.9 million.
The components of risk-based capital for the Corporation are Tier 1 and Tier 2. At December 31, 2024, the Corporation had a Tier 1 risk-based capital ratio of 10.85% and total risk-based capital ratio of 14.19%. At December 31, 2023, the Corporation had a Tier 1 capital ratio of 10.58% and total risk-based capital ratio of 13.90%.
At December 31, 2025, the Corporation had a Tier 1 risk-based capital ratio of 11.22% and total risk-based capital ratio of 13.86%. At December 31, 2024, the Corporation had a Tier 1 capital ratio of 10.85% and total risk-based capital ratio of 14.19%. The Corporation continues to be in the "well-capitalized" category under regulatory standards.
Retained earnings was impacted by net income of $75.9 million, partially offset by $24.6 million in cash dividends paid during the year. Accumulated other comprehensive loss decreased by $6.7 million, which was primarily attributable to an increase in unrecognized actuarial losses related to the Corporation's pension plan of $6.7 million, net of tax.
Accumulated other comprehensive loss decreased by $18.5 million, which was primarily attributable to increases in the fair value of available-for-sale investment securities of $13.6 million, net of tax, and an increase in unrecognized actuarial losses related to the Corporation's pension plan of $3.9 million, net of tax.
(Dollars in thousands) For the Years Ended December 31, Maturity Period 2024 2023 Due Three Months or Less $ 76,621 $ 40,475 Due Over Three Months to Six Months 94,290 30,090 Due Over Six Months to Twelve Months 81,338 47,709 Due Over Twelve Months 23,734 68,681 Total $ 275,983 $ 186,955 44 Table of Contents Borrowings Total borrowings decreased $79.6 million from December 31, 2023, primarily due to pay-downs of $85.0 million in long-term debt, partially offset by an increase of $4.9 million in customer repurchase agreements.
(Dollars in thousands) For the Years Ended December 31, Maturity Period 2025 2024 Due Three Months or Less $ 108,462 $ 76,621 Due Over Three Months to Six Months 81,603 94,290 Due Over Six Months to Twelve Months 76,954 81,338 Due Over Twelve Months 14,864 23,734 Total $ 281,883 $ 275,983 45 Table of Contents Borrowings Total borrowings decreased $62.2 million from December 31, 2024, primarily due to a $100.0 million redemption of previously issued subordinated notes partially offset by $50.0 million aggregate principal amount fixed-to-floating rate subordinated notes issued in the third quarter of 2025, and pay-downs of $25.0 million in long-term debt.
Net charge-offs for the year ended December 31, 2023 included $2.4 million of charge-offs recorded against two nonaccrual commercial loans to one borrower. 40 Table of Contents Other real estate owned was $20.1 million at December 31, 2024, compared to $19.0 million at December 31, 2023.
Net charge-offs for the year ended December 31, 2025 included a $6.8 million net charge-off recorded on a $23.7 million commercial loan relationship. Other real estate owned was $23.9 million at December 31, 2025, compared to $20.1 million at December 31, 2024.
Service charges on deposits accounts increased $873 thousand, or 14.1%, for the year ended December 31, 2023, primarily due to an increase of $962 thousand in treasury management fees.
Investment advisory commission and fee income increased $1.6 million, or 7.5%, for the year ended December 31, 2025, primarily due to increased assets under management and supervision driven by market appreciation. Service charges on deposit accounts increased $909 thousand, or 11.2%, for the year ended December 31, 2025, primarily due to an increase of $976 thousand in treasury management fees.
Wealth Management assets under management and supervision were $5.2 billion as of December 31, 2024, $4.7 billion as of December 31, 2023 and $4.2 billion as of December 31, 2022.
Wealth Management assets under management and supervision were $5.9 billion as of December 31, 2025, $5.2 billion as of December 31, 2024 and $4.7 billion as of December 31, 2023. 46 Table of Contents The Insurance segment reported pre-tax income of $5.5 million in 2025, $5.7 million in 2024 and $5.1 million in 2023, which included noninterest income of $22.5 million in 2025 and 2024 and $21.5 million in 2023.
These borrowings were replaced with lower cost deposits during the year. Short-term borrowings at December 31, 2024 consisted of $11.2 million of customer repurchase agreements. Long-term debt at December 31, 2024 consisted of $225.0 million of FHLB advances and $149.3 million of subordinated notes.
These decreases were partially offset by an increase of $13.2 million in customer repurchase agreements. Short-term borrowings at December 31, 2025 consisted of $24.4 million of customer repurchase agreements. Long-term debt at December 31, 2025 consisted of $200.0 million of FHLB advances and $98.9 million of subordinated notes.
The pre-tax income increase from 2023 was primarily due to new customer relationships and appreciation of assets under management and supervision. The pre-tax income decrease in 2023 as compared to 2022 was primarily due to an increase in employee salary expense as we continued to invest in revenue producing positions, and increases in data processing expense and consulting fees.
The increases in noninterest income from 2024 and 2023 were primarily due to new customer relationships and appreciation of assets under management and supervision. Noninterest expense in 2025 compared to 2024 was relatively unchanged, while the increase in noninterest expense from 2023 to 2024 was primarily due to increases in salaries and commissions.
LIABILITIES The following table presents liabilities at the dates indicated: At December 31, (Dollars in thousands) 2024 2023 $ Change % Change Deposits $ 6,759,259 $ 6,375,781 $ 383,478 6.0 % Short-term borrowings 11,181 6,306 4,875 77.3 Long-term debt 225,000 310,000 (85,000) (27.4) Subordinated notes 149,261 148,761 500 0.3 Operating lease liabilities 31,485 34,851 (3,366) (9.7) Accrued interest payable and other liabilities 64,930 65,721 (791) (1.2) Total liabilities $ 7,241,116 $ 6,941,420 $ 299,696 4.3 % Deposits Total deposits increased $383.5 million, or 6.0%, from December 31, 2023, primarily due to increases in consumer, commercial, brokered and public funds deposits.
There can be no assurance that future impairment assessments or tests will not result in a charge to earnings. 44 Table of Contents LIABILITIES The following table presents liabilities at the dates indicated: At December 31, (Dollars in thousands) 2025 2024 $ Change % Change Deposits $ 7,087,313 $ 6,759,259 $ 328,054 4.9 % Short-term borrowings 24,411 11,181 13,230 118.3 Long-term debt 200,000 225,000 (25,000) (11.1) Subordinated notes 98,867 149,261 (50,394) (33.8) Operating lease liabilities 28,531 31,485 (2,954) (9.4) Accrued interest payable and other liabilities 54,457 64,930 (10,473) (16.1) Total liabilities $ 7,493,579 $ 7,241,116 $ 252,463 3.5 % Deposits Total deposits increased $328.1 million, or 4.9%, from December 31, 2024, primarily due to increases in commercial, brokered and public funds deposits, partially offset by a decrease in consumer deposits.
The increase in noninterest income in 2023 compared to 2022 was primarily due to increases in revenue from commercial lines of $1.0 million and contingent commission income of $600 thousand. 45 Table of Contents Capital Adequacy Capital guidelines assign minimum capital requirements for categories of assets depending on their assigned risks.
The increases in noninterest expense were primarily due to increases in salaries and commissions. Capital Adequacy Capital guidelines assign minimum capital requirements for categories of assets depending on their assigned risks. The components of risk-based capital for the Corporation are Tier 1 and Tier 2.
The net interest margin on a tax-equivalent basis for the year ended December 31, 2023 was 3.12% compared to 3.38% for 2022.
The net interest margin on a tax-equivalent basis for the year ended December 31, 2025 was 3.14% compared to 2.86% for 2024. 33 Table of Contents 2024 versus 2023 Reported net interest income for the year ended December 31, 2024 was $211.2 million, a decrease of $8.8 million, or 4.0%, from the prior year.
Net gain on mortgage banking activities decreased $723 thousand, or 16.4%, for the year ended December 31, 2023, primarily due to a contraction of gain on sale margins. Bank owned life insurance income decreased $602 thousand, or 15.9%, for the year ended December 31, 2023, primarily due to death benefit claims of $965 thousand recorded during 2022.
Net gain on mortgage banking activities decreased $1.9 million, or 36.1%, for the year ended December 31, 2025, primarily due to decreased salable volume and lower margins. BOLI income increased $2.0 million, or 51.5%, for the year ended December 31, 2025, primarily due to death benefit claims of $2.1 million received during the year.
Treasury stock increased by $11.4 million, related to purchases of 802,535 shares on the open market under the stock repurchase plan and buybacks of 1,158 shares related to stock-based incentive plans, at a cost of $18.9 million, offset by $7.5 million of stock issued under the dividend reinvestment plan, employee stock purchase plan, and stock-based incentive plan activity.
Treasury stock increased $29.1 million from December 31, 2024, related to repurchases of 1,129,217 shares at a cost of $34.6 million, offset by $5.5 million of stock issued under the dividend reinvestment plan and employee stock purchase plan, and stock-based incentive plan activity. Discussion of Segments The Corporation has three operating segments: Banking, Wealth Management and Insurance.
Table 3—Investment Securities The following table shows the carrying amount of investment securities, net of allowance for credit losses, at the dates indicated. Held-to-maturity, available-for-sale and equity security portfolios are combined.
Held-to-maturity, available-for-sale and equity security portfolios are combined.
While actual results will differ from simulated results due to customer behavioral change and/or market and regulatory influences, the following models are important tools to guide management. 46 Table of Contents Table 11—Interest Rate Sensitivity Gap Analysis The following table presents the Corporation's gap analysis at December 31, 2024: (Dollars in thousands) Within Three Months After Three Months to Twelve Months After One Year to Five Years Over Five Years Non-Rate Sensitive Total Assets: Cash and due from banks $ — $ — $ — $ — $ 75,998 $ 75,998 Interest-earning deposits with other banks 252,846 — — — — 252,846 Investment securities, net of allowance for credit losses 68,808 43,688 175,867 244,527 (38,912) 493,978 Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost — — — — 38,980 38,980 Loans held for sale 10,842 — — — 5,811 16,653 Loans and leases, net of allowance for credit losses 2,364,911 541,157 3,090,062 800,774 (57,412) 6,739,492 Other assets — — — — 510,470 510,470 Total assets $ 2,697,407 $ 584,845 $ 3,265,929 $ 1,045,301 $ 534,935 $ 8,128,417 Liabilities and shareholders' equity: Noninterest-bearing deposits $ — $ — $ — $ — $ 1,414,635 $ 1,414,635 Interest-bearing demand deposits 3,186,597 — — — — 3,186,597 Savings deposits 704,321 — — — — 704,321 Time deposits 292,878 736,693 423,353 782 — 1,453,706 Borrowings 60,442 125,000 200,000 — — 385,442 Other liabilities — — — — 96,415 96,415 Shareholders' equity — — — — 887,301 887,301 Total liabilities and shareholders' equity $ 4,244,238 $ 861,693 $ 623,353 $ 782 $ 2,398,351 $ 8,128,417 Incremental gap $ (1,546,831) $ (276,848) $ 2,642,576 $ 1,044,519 $ (1,863,416) Cumulative gap $ (1,546,831) $ (1,823,679) $ 818,897 $ 1,863,416 Cumulative gap as a percentage of interest-earning assets (20.7 %) (24.5 %) 11.0 % 25.0 % The table above indicates that the Corporation holds a greater amount of liabilities that have the opportunity to reprice over assets in the next twelve months.
While actual results will differ from simulated results due to customer behavioral change and/or market and regulatory influences, the following models are important tools to guide management. 47 Table of Contents Table 11—Interest Rate Sensitivity Gap Analysis The following table presents the Corporation's gap analysis at December 31, 2025: (Dollars in thousands) Within Three Months After Three Months to Twelve Months After One Year to Five Years Over Five Years Non-Rate Sensitive Total Assets: Cash and due from banks $ — $ — $ — $ — $ 63,579 $ 63,579 Interest-earning deposits with other banks 490,133 --- --- --- --- 490,133 Investment securities, net of allowance for credit losses 70,003 43,901 181,185 223,208 (22,008) 496,289 Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost --- --- --- --- 37,808 37,808 Loans held for sale 11,058 --- --- --- 4,230 15,288 Loans and leases, net of allowance for credit losses 2,551,201 704,999 2,997,771 647,660 (74,992) 6,826,639 Other assets --- --- --- --- 507,161 507,161 Total assets $ 3,122,395 $ 748,900 $ 3,178,956 $ 870,868 $ 515,778 $ 8,436,897 Liabilities and shareholders' equity: Noninterest-bearing deposits $ --- $ --- $ --- $ --- $ 1,431,974 $ 1,431,974 Interest-bearing demand deposits 3,478,924 --- --- --- --- 3,478,924 Savings deposits 762,130 --- --- --- --- 762,130 Time deposits 375,740 584,127 454,038 380 --- 1,414,285 Borrowings 73,278 50,000 200,000 --- --- 323,278 Other liabilities --- --- --- --- 82,988 82,988 Shareholders' equity --- --- --- --- 943,318 943,318 Total liabilities and shareholders' equity $ 4,690,072 $ 634,127 $ 654,038 $ 380 $ 2,458,280 $ 8,436,897 Incremental gap $ (1,567,677) $ 114,773 $ 2,524,918 $ 870,488 $ (1,942,502) Cumulative gap $ (1,567,677) $ (1,452,904) $ 1,072,014 $ 1,942,502 Cumulative gap as a percentage of interest-earning assets (19.7 %) (18.3 %) 13.5 % 24.4 % The table above indicates that the Corporation holds a greater amount of liabilities that have the opportunity to reprice over assets in the next twelve months.
There was no impairment of goodwill or identifiable intangibles recorded during 2022 through 2024. There can be no assurance that future impairment assessments or tests will not result in a charge to earnings.
There was no impairment of goodwill or identifiable intangibles recorded during 2023 through 2025.

… 32 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed3 unchanged
Biggest changeThe Corporation's Board of Directors establishes policies that govern interest rate risk management. Information with respect to quantitative and qualitative disclosures about market risk can be found in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" including Liquidity and Interest Rate Sensitivity. 50 Table of Contents
Biggest changeThe Corporation's Board of Directors establishes policies that govern interest rate risk management. Information with respect to quantitative and qualitative disclosures about market risk can be found in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" including Liquidity and Interest Rate Sensitivity. 51 Table of Contents

Other UVSP 10-K year-over-year comparisons