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What changed in ENTERPRISE FINANCIAL SERVICES CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ENTERPRISE FINANCIAL SERVICES 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.

+312 added−305 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in ENTERPRISE FINANCIAL SERVICES CORP's 2025 10-K

312 paragraphs added · 305 removed · 258 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+6 added−12 removed100 unchanged
Biggest changeInterchange Income: The Durbin Amendment to the Dodd-Frank Act capped debit card interchange fees for banks with over $10 billion in assets. Interchange fees are paid to banks by merchants for processing transactions. The Durbin Amendment cap for a single debit card transaction is 21 cents plus 5 basis points multiplied by the amount of the transaction.
Biggest changeThe amendments in the final rule, which became effective on October 1, 2020, clarify and expand permissible banking activities and relationships under the Volcker Rule. 11 Interchange Income: The Durbin Amendment to the Dodd-Frank Act capped debit card interchange fees for banks with over $10 billion in assets. Interchange fees are paid to banks by merchants for processing transactions.
The CCB effectively increases the minimum CET1 capital, tier 1 capital, and total capital ratios for U.S. banking organizations to 7.0%, 8.5%, and 10.5%, respectively. A bank that becomes “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized” is required to submit an acceptable capital restoration plan to the FDIC.
The CCB effectively increases the minimum CET1 capital, tier 1 capital, and total capital ratios for U.S. banking organizations to 7.0%, 8.5%, and 10.5%, respectively. 7 A bank that becomes “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized” is required to submit an acceptable capital restoration plan to the FDIC.
The following table summarizes the prompt corrective action categories: Prompt Corrective Action Category Total Risk-Based Capital Tier 1 Risk-Based Capital Common Equity Tier 1 Risk-Based Capital Tier 1 Leverage Ratio Well-capitalized 10.0% 8.0% 6.5% 5.0% Adequately capitalized 8.0% 6.0% 4.5% 4.0% Undercapitalized Significantly undercapitalized Critically undercapitalized Tangible equity / Total assets ≤ 2.0% 7 In addition to the minimum capital ratios noted in the table above, the Basel III Capital Rules require the maintenance of a CCB consisting of CET1 capital in an amount equal to 2.5% of risk weighted assets to avoid restrictions on the ability to make capital distributions and to pay certain discretionary bonus payments to executive officers.
The following table summarizes the prompt corrective action categories: Prompt Corrective Action Category Total Risk-Based Capital Tier 1 Risk-Based Capital Common Equity Tier 1 Risk-Based Capital Tier 1 Leverage Ratio Well-capitalized 10.0% 8.0% 6.5% 5.0% Adequately capitalized 8.0% 6.0% 4.5% 4.0% Undercapitalized Significantly undercapitalized Critically undercapitalized Tangible equity / Total assets ≤ 2.0% In addition to the minimum capital ratios noted in the table above, the Basel III Capital Rules require the maintenance of a CCB consisting of CET1 capital in an amount equal to 2.5% of risk weighted assets to avoid restrictions on the ability to make capital distributions and to pay certain discretionary bonus payments to executive officers.
Lending services include C&I, CRE, real estate construction and development, residential real estate, SBA, consumer and other loan products. A wide variety of deposit products, along with a complete suite of treasury management and international trade services, complement our lending capabilities. Building long-term client relationships – Our growth strategy is first and foremost client relationship driven.
Lending services include C&I, CRE, real estate construction and development, residential real estate, SBA, and consumer loan products. A wide variety of deposit products, along with a complete suite of treasury management and international trade services, complement our lending capabilities. Building long-term client relationships – Our growth strategy is first and foremost client relationship driven.
In June 2024, the United States Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued a proposed rule that would amend the anti-money laundering/countering the financing of terrorism (“AML/CFT”) program requirements for all financial institutions subject to the BSA with 10 AML/CFT program obligations, including the Bank.
In June 2024, the United States Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued a proposed rule that would amend the anti-money laundering/countering the financing of terrorism (“AML/CFT”) program requirements for all financial institutions subject to the BSA with AML/CFT program obligations, including the Bank.
We are a secured lender on affordable housing projects funded through the use of federal and state low income housing tax credits. In addition, we provide leveraged and other loans on projects 2 funded through the U.S. Department of the Treasury Community Development Financial Institution (“Treasury CDFI”) New Markets Tax Credit (“NMTC”) Program.
We are a secured lender on affordable housing projects funded through the use of federal and state low income housing tax credits. In addition, we provide leveraged and other loans on projects funded through the U.S. Department of the Treasury Community Development Financial Institution (“Treasury CDFI”) New Markets Tax Credit (“NMTC”) Program.
We support mid-market company mergers and acquisitions in many domestic markets. We market directly to targeted private equity firms, principally SBICs, and provide primarily senior debt financing to the portfolio companies. In addition, the Company has both financing and depository relationships with the sponsors of the portfolio companies. • Tax Credit Related Lending .
We support mid-market company mergers and acquisitions in many domestic markets. We market directly to targeted private equity firms, principally SBICs, and provide primarily senior debt financing to the portfolio companies. In addition, the Company has both financing and depository relationships with the sponsors of the portfolio companies. 2 • Tax Credit Related Lending .
Also, the FDIC may treat an “undercapitalized” bank as being “significantly undercapitalized” if it determines that those actions are necessary to carry out the purpose of the law. The prompt corrective action regulations do not apply to bank holding companies, such as EFSC.
Also, the FDIC may treat an “undercapitalized” bank as being “significantly undercapitalized” if it determines that those actions are necessary to carry out the purpose of the law. The prompt corrective action regulations do not apply to financial holding companies, such as EFSC.
The Dodd-Frank Act codified this longstanding policy by adopting a provision requiring, among other things, that bank holding companies serve as a source of strength for an subsidiary depository institution.
The Dodd-Frank Act codified this longstanding policy by adopting a provision requiring, among other things, that bank holding companies serve as a source of strength for a subsidiary depository institution.
Regulation W places limits 9 and conditions on the amount of loans or extensions of credit to, investments in, or certain other transactions with, affiliates and on the amount of advances to third parties collateralized by the securities or obligations of affiliates.
Regulation W places limits and conditions on the amount of loans or extensions of credit to, investments in, or certain other transactions with, affiliates and on the amount of advances to third parties collateralized by the securities or obligations of affiliates.
We lend to the partnership and receive interest income and fee income as projects close or credits are sold. Deposit verticals – In addition to commercial operating accounts for our C&I customers, we offer deposit vertical accounts to customers in certain industries with complex account needs. Our focus areas include community associations, property management, legal industry and escrow services.
We lend to the partnership and receive interest income and fee income as projects close or credits are sold. Deposit verticals – In addition to commercial operating accounts for our C&I clients, we offer deposit vertical accounts to clients in certain industries with complex account needs. Our focus areas include community associations, property management, legal industry and escrow services.
These enforcement actions could include an imposition of civil monetary penalties and could directly affect not only the Company and institution-affiliated parties but also the Company’s counterparties, shareholders, and creditors and its commitments, arrangements, or other dealings. Various legislation is from time to time introduced in Congress and state legislatures where we operate.
These enforcement actions could include an imposition of civil monetary penalties and could directly affect not only the Company and institution-affiliated parties but also the Company’s counterparties, stockholders, and creditors and its commitments, arrangements, or other dealings. Various legislation is from time to time introduced in Congress and state legislatures where we operate.
The adoption of a volunteer time-off policy and improvements to internal communication processes are examples of changes that have been made in response to survey results. Our efforts are being recognized. For the past seven years, the Bank has been included in the “Best Banks to Work for” by American Banker magazine for our dedication to employee satisfaction.
The adoption of a volunteer time-off policy and improvements to internal communication processes are examples of changes that have been made in response to survey results. Our efforts are being recognized. For the past eight years, the Bank has been included in the “Best Banks to Work for” by American Banker magazine for our dedication to employee satisfaction.
Our stated mission is “Guiding people to a lifetime of financial success.” We have established an accompanying corporate vision, “To be a company where our associates are proud to work, that delivers ease of navigation to our customers and value to our investors, while helping our communities flourish.” These tenets are fundamental to our business strategies and operations.
Our stated mission is “Guiding people to a lifetime of financial success.” We have established an accompanying corporate vision, “To be a company where our associates are proud to work, that delivers ease of navigation to our clients and value to our investors, while helping our communities flourish.” These tenets are fundamental to our business strategies and operations.
The STIP target is defined as a percentage of base salary based on the associate’s grade level as determined by our Human Resources department. As of January 1, 2025, our minimum wage is $17 per hour. The current minimum wage was instituted to maintain a competitive total rewards package that attracts and retains top talent.
The STIP target is defined as a percentage of base salary based on the associate’s grade level as determined by our Human Resources department. As of January 1, 2026, our minimum wage is $17 per hour. The current minimum wage was instituted to maintain a competitive total rewards package that attracts and retains top talent.
EFSC is the holding company for Enterprise Bank & Trust, a full-service financial institution offering banking and wealth management services to individuals and corporate customers primarily located in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico, in addition to loan and deposit production offices throughout the United States.
EFSC is the holding company for Enterprise Bank & Trust, a full-service financial institution offering banking and wealth management services to individuals and corporate clients primarily located in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico, in addition to loan and deposit production offices throughout the United States.
Currently, 100% of our associates earn more than the minimum wage. 12 We also offer a wide array of benefits for our associates and their families including 401(k), paid time off, parental leave, medical, dental and vision benefits as well as life insurance and short-term disability for all full-time associates.
Currently, 99% of our associates earn more than the minimum wage. 12 We also offer a wide array of benefits for our associates and their families including 401(k), paid time off, parental leave, medical, dental and vision benefits as well as life insurance and short-term disability for all full-time associates.
Dividend Restrictions and Share Repurchases: From time to time the Company may engage in share repurchases. The Federal Reserve requires that bank and financial holding companies, where certain conditions are triggered, provide prior notice to, consult with, and in certain circumstances seek the approval of, the Federal Reserve or reserve bank staff prior to purchasing or redeeming its equity securities.
Dividend Restrictions and Stock Repurchases: From time to time the Company may engage in stock repurchases. The Federal Reserve requires that bank and financial holding companies, where certain conditions are triggered, provide prior notice to, consult with, and in certain circumstances seek the approval of, the Federal Reserve or reserve bank staff prior to purchasing or redeeming its equity securities.
We also offer customer hedging products, international banking, card services and tax credit businesses that generate fee income. The Company also invests in certain private equity and SBIC investments that generate additional fee income. Use of technology – Clients access our products and services both in physical branch locations as well as remotely.
We also offer client hedging products, international banking, card services and tax credit businesses that generate fee income. The Company also invests in certain private equity and SBIC investments that generate additional fee income. Use of technology – Clients access our products and services both in physical branch locations as well as remotely.
In addition to base salary, approximately 67% of associates are eligible to participate in the Company’s Short Term Incentive Plan (“STIP”) program. Our STIP program is designed to align compensation with an associate’s performance in a given year. The program sets a performance level of short-term incentive awards that an associate is eligible to earn.
In addition to base salary, approximately 68% of associates are eligible to participate in the Company’s Short Term Incentive Plan (“STIP”) program. Our STIP program is designed to align compensation with an associate’s performance in a given year. The program sets a performance level of short-term incentive awards that an associate is eligible to earn.
Note 14 – Regulatory Capital”). FDIC Insurance of Certain Accounts and Regulation by the FDIC: The Bank’s deposits are insured under the Federal Deposit Insurance Act (the "FDIA") up to the maximum applicable limits and are subject to deposit insurance assessments designed to tie what banks pay for deposit insurance to the risks they pose.
Note 13 – Regulatory Capital”). FDIC Insurance of Certain Accounts and Regulation by the FDIC: The Bank’s deposits are insured under the Federal Deposit Insurance Act (the "FDIA") up to the maximum applicable limits and are subject to deposit insurance assessments designed to tie what banks pay for deposit insurance to the risks they pose.
Strong competition for deposit and loan products affects the rates of those products, as well as the terms on which they are offered to customers. Supervision and Regulation The Company is a financial holding company registered under the BHCA and is subject to regulation, supervision and examination by the Federal Reserve.
Strong competition for deposit and loan products affects the rates of those products, as well as the terms on which they are offered to clients. Supervision and Regulation The Company is a financial holding company registered under the BHCA and is subject to regulation, supervision and examination by the Federal Reserve.
In certain instances, relating to an undercapitalized depository institution subsidiary, the bank holding company would be required to guarantee the performance of the undercapitalized subsidiary’s capital restoration plan and might be liable for civil money damages for failure to fulfill its commitments on that guarantee.
In certain instances, relating to an undercapitalized depository institution subsidiary, the financial holding company would be required to guarantee the performance of the undercapitalized subsidiary’s capital restoration plan and might be liable for civil money damages for failure to fulfill its commitments on that guarantee.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), U.S. fiscal debt, budget and tax matters, and any slowdown in global economic growth, risks associated with rapid increases or decreases in prevailing interest rates, our ability to attract and retain deposits and access to other sources of liquidity, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, natural disasters (such as wildfires and earthquakes), terrorist activities, war and geopolitical matters (including the war in Israel and potential for a broader regional conflict and the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity; and other risks discussed under the caption “Risk Factors” in Item 1A of this Annual Report on Form 10-K, all of which could cause actual results to differ from those set forth in the forward-looking statements.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions into its operations, retain the clients of these businesses and grow the acquired operations, the Company’s ability to collect insurance proceeds from claims made related to tax recapture events, credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), U.S. fiscal debt, budget and tax matters (including the effect of a prolonged U.S. federal government shutdown), and any slowdown in global economic growth, risks associated with rapid increases or decreases in prevailing interest rates, our ability to attract and retain deposits and access to other sources of liquidity, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, natural disasters (such as wildfires and earthquakes), terrorist activities, war and geopolitical matters (including the war in Israel and potential for a broader regional conflict, and the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity; and other risks discussed under the caption “Risk Factors” in Item 1A of this Annual Report on Form 10-K, all of which could cause actual results to differ from those set forth in the forward-looking statements.
The regulatory and supervisory structure establishes a comprehensive framework of activities in which an institution can engage and is intended primarily for the protection of depositors, the deposit insurance fund and the banking system as a whole, rather than for the protection of shareholders or creditors.
The regulatory and supervisory structure establishes a comprehensive framework of activities in which an institution can engage and is intended primarily for the protection of depositors, the deposit insurance fund and the banking system as a whole, rather than for the protection of stockholders or creditors.
These accounts are primarily demand accounts and have a low overall interest cost. Customers in our deposit vertical products will typically receive an earnings credit that is used to offset the cost of maintaining the deposit accounts.
These accounts are primarily demand accounts and have a low overall interest cost. Clients in our deposit vertical products will typically receive an earnings credit that is used to offset the cost of maintaining the deposit accounts.
Furthermore, in the event of the bankruptcy of the bank holding company, the guarantee would take priority over the bank holding company's general unsecured creditors, as described in “Support of Bank Subsidiary” above. All of the Bank’s capital ratios were at levels that qualify it to be “well-capitalized” for regulatory purposes as of December 31, 2024 (see “Item 8.
Furthermore, in the event of the bankruptcy of the financial holding company, the guarantee would take priority over the financial holding company's general unsecured creditors, as described in “Support of Bank Subsidiary” above. All of the Bank’s capital ratios were at levels that qualify it to be “well-capitalized” for regulatory purposes as of December 31, 2025 (see “Item 8.
These guidelines include concentrations in certain types of CRE that may warrant greater supervisory scrutiny: total reported loans for construction, land development, and other land represent 100% or more of the institutions total capital; or total commercial real estate loans represent 300% or more of the institution’s total capital, and the outstanding balance of the institution’s commercial real estate loan portfolio has increased by 50% or more in the prior 36 months.
These guidelines include concentrations in certain types of CRE that may warrant greater supervisory scrutiny: total reported loans for construction, land development, and other land represent 100% or more of the institutions total capital; or total CRE loans represent 300% or more of the institution’s total capital, and the outstanding balance of the institution’s CRE loan portfolio has increased by 50% or more in the prior 36 months.
Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company, and include, without limitation, statements about the Company’s plans, strategies, goals, objectives, expectations, or consequences of statements about the future performance, operations, products and services of the Company and its subsidiaries, as well as statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, products and services, shareholder value creation and the impact of acquisitions.
Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company, and include, without limitation, statements about the Company’s plans, strategies, goals, objectives, expectations, or consequences of statements about the future performance, operations, products and services of the Company, as well as statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, products and services, stockholder value creation and the impact of acquisitions.
Our business objective is to generate attractive shareholder returns by providing comprehensive financial services primarily to privately-held businesses, their owner families, and other success-minded individuals.
Our business objective is to generate attractive stockholder returns by providing comprehensive financial services primarily to privately-held businesses, their owner families, and other success-minded individuals.
Failure to comply with these laws and regulations could give rise to regulatory sanctions, customer rescission rights, action by state and local attorneys general, and civil or criminal liability.
Failure to comply with these laws and regulations could give rise to regulatory sanctions, client rescission rights, action by state and local attorneys general, and civil or criminal liability.
Community Reinvestment Act: The CRA requires that, in connection with examinations of financial institutions within its jurisdiction, the FDIC is required to evaluate the record of the financial institutions in meeting the credit needs of their local communities, including low and moderate income neighborhoods, consistent with the safe and sound operation of those institutions.
CRA: The CRA requires that, in connection with examinations of financial institutions within its jurisdiction, the FDIC is required to evaluate the record of the financial institutions in meeting the credit needs of their local communities, including low and moderate income neighborhoods, consistent with the safe and sound operation of those institutions.
However, the Federal Reserve is authorized to take appropriate action at the bank holding company level, based upon the undercapitalized status of the bank holding company's depository institution subsidiaries.
However, the Federal Reserve is authorized to take appropriate action at the financial holding company level, based upon the undercapitalized status of the financial holding company's depository institution subsidiaries.
The special assessments will be collected at an annual rate of approximately 13.4 basis points per year (3.36 basis points per quarter) over eight quarters in 2024 and 2025. The first assessment period began January 1, 2024.
The special assessments were collected at an annual rate of approximately 13.4 basis points per year (3.36 basis points per quarter) over eight quarters in 2024 and 2025. The first assessment period began January 1, 2024.
Federal law also places restrictions on the Bank’s ability to extend credit to its executive officers, directors, principal shareholders and their related interests.
Federal law also places restrictions on the Bank’s ability to extend credit to its executive officers, directors, principal stockholders and their related interests.
In 2024, we were ranked fourth among similar financial institutions with more than $10 billion in assets. Belonging & Inclusion . We believe diversity of thought and experiences helps us build better teams and improve our client experience, results in better outcomes, and empowers our associates to make more meaningful contributions within our company and communities.
In 2025, we were ranked sixth among similar financial institutions with more than $10 billion in assets. Belonging & Inclusion . We believe diversity of thought and experiences helps us build better teams and improve our client experience, results in better outcomes, and empowers our associates to make more meaningful contributions within our company and communities.
These specialty niche activities focus on the following areas: • SBA 7(a) . We have a team of experienced bankers in production offices across the country that originate loans through the SBA 7(a) program. These loans are primarily owner-occupied, commercial real estate loans secured by a first lien. These loans predominantly have a 75% portion guaranteed by the SBA.
These specialty niche activities focus on the following areas: • SBA 7(a) . We have a team of experienced bankers in production offices across the country that originate loans through the SBA 7(a) program. These loans are primarily owner-occupied, CRE loans secured by a first lien. These loans predominantly have a 75% portion guaranteed by the SBA.
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. The Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with clients when taking deposits or making loans to such clients. The Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing client relations.
The USA PATRIOT Act includes provisions providing the government with the power to investigate terrorism, including expanded government access to bank account records. Commercial Real Estate Lending: The Bank’s lending operations may be subject to enhanced scrutiny by federal banking regulators based on its concentration of commercial real estate loans.
The USA PATRIOT Act includes provisions providing the government with the power to investigate terrorism, including expanded government access to bank account records. CRE Lending: The Bank’s lending operations may be subject to enhanced scrutiny by federal banking regulators based on its concentration of CRE loans.
Dividends, repurchases and redemptions on the Company’s capital stock (common and preferred) are prohibited under the terms of the junior subordinated debenture agreements (see “Item 8. Note 10 – Subordinated Debentures and Notes”) if the Company is in continuous default on its payment obligations, has elected to defer interest payments or extends the interest payment period.
Dividends, repurchases and redemptions on the Company’s capital stock (common and preferred) are prohibited under the terms of the junior subordinated debenture agreements (see “Item 8. Note 11 – Debt”) if the Company is in continuous default on its payment obligations, has elected to defer interest payments or extends the interest payment period.
Forward-looking statements typically are identified with use of terms such as “may,” “might,” “will, “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “could,” “continue” and the negative and other variations of these terms and similar words, although some forward-looking statements may be expressed differently.
Forward-looking statements typically are identified with use of terms such as “may,” “might,” “will, “would,” “should,” “expect,” “plan,” “anticipate,” “outlook,” “forecast,” “project,” “pro forma”, “pipeline,” “believe,” “estimate,” “predict,” “intend,” “potential,” “could,” “continue,” and the negative and other variations of these terms and similar words, although some forward-looking statements may be expressed differently.
See “Liquidity and Capital Resources” in the MD&A for more information on our capital adequacy, and “Bank Subsidiary - Community Reinvestment Act” below for more information on the CRA.
See “Liquidity and Capital Resources” in the MD&A for more information on our capital adequacy, and “Bank Subsidiary - CRA” below for more information on the CRA.
Performance evaluations facilitate our ongoing assessment of associates’ skills and improvements as needed. We use annual talent reviews to identify high-performing associates and future potential leaders, provide insight into critical development needs and retention risks, and identify business-critical talent needs, including anticipated workforce planning challenges. Additionally, we have established succession plans to ensure continuation of essential roles and operations.
We use annual talent reviews to identify high-performing associates and future potential leaders, provide insight into critical development needs and retention risks, and identify business-critical talent needs, including anticipated workforce planning challenges. Additionally, we have established succession plans to ensure continuation of essential roles and operations.
In 2023 and 2024, we were awarded $60.0 million and $50.0 million, respectively, in NMTC allocations from the Treasury CDFI. These were our sixth and seventh NMTC allocations, respectively, and brings the total amount of these allocations to $353.0 million.
In 2024 and 2025, we were awarded $50.0 million and $80.0 million, respectively, in NMTC allocations from the Treasury CDFI. These were our seventh and eighth NMTC allocations, respectively, and brings the total amount of these allocations to $433.0 million.
It cannot be determined at this time whether compliance with such policies will adversely affect the Company’s ability to hire, retain, and motivate its key employees.
It cannot be determined at this time whether compliance with such policies will adversely affect the Company’s ability to hire, retain, and motivate its key employees. Bank Subsidiary The Bank is subject to extensive federal and state regulatory oversight.
Some privacy laws offer individuals certain rights about how their personal information is processed, provide for significant penalties for non-compliance, and, under certain circumstances, impose requirements for transfers of personal data across national borders.
Generally, privacy laws impose obligations with regard to the collection, use and disclosure of personal information and require public disclosure of privacy practices. Some privacy laws offer individuals certain rights about how their personal information is processed, provide for significant penalties for non-compliance, and, under certain circumstances, impose requirements for transfers of personal data across national borders.
In addition, the Dodd-Frank Act enhanced the regulation of mortgage banking and gave to the CFPB oversight of many of the core laws which regulate the mortgage industry and the authority to implement mortgage regulations. Any new regulations adopted by the CFPB may significantly impact consumer mortgage lending and servicing.
In addition, the Dodd-Frank Act enhanced the regulation of mortgage banking and gave to the CFPB oversight of many of the core laws which regulate the mortgage industry and the authority to implement mortgage regulations.
We have made progress in this area, but continue to strive to further diversify our workforce and deepen our culture of inclusion. Our Belonging & Inclusion Council is a management committee which provides information, ideas and insights from a variety of diverse perspectives to help us foster an inclusive environment for our associates and the communities we serve.
Our Belonging & Inclusion Council is a management committee which provides information, ideas and insights from a variety of diverse perspectives to help us foster an inclusive environment for our associates and the communities we serve.
Accordingly, the Company is subject to both SEC and Nasdaq listing standards. The following is a summary description of the relevant laws, rules, and regulations governing banks and financial holding companies, including the Company. The description of, and references to, the statutes and regulations below are brief summaries and do not purport to be complete.
The following is a summary description of the relevant laws, rules, and regulations governing banks and financial holding companies, including the Company. The description of, and references to, the statutes and regulations below are brief summaries and do not purport to be complete. The descriptions are qualified in their entirety by reference to the related statutes and regulations.
The amendments include new exclusions from the Volcker Rule’s general prohibitions on banking entities investing in and sponsoring private equity funds, hedge funds, and certain other investment vehicles (collectively “covered funds”). The amendments in the final rule, which became effective on October 1, 2020, clarify and expand permissible banking activities and relationships under the Volcker Rule.
The amendments include new exclusions from the Volcker Rule’s general prohibitions on banking entities investing in and sponsoring private equity funds, hedge funds, and certain other investment vehicles (collectively “covered funds”).
Our success is gauged through the measurement of the “efficiency ratio.” The efficiency ratio is equal to noninterest expense divided by total revenue (tax equivalent net interest income plus noninterest income). Growth through Acquisitions – Disciplined strategic acquisitions have contributed significantly to the Company’s growth and expansion. 3 Competition The Company and its subsidiaries operate in highly competitive markets.
Expense management – We manage expenses carefully through detailed budgeting and expense approval processes. Our success is gauged through the measurement of the “efficiency ratio.” The efficiency ratio is equal to noninterest expense divided by total revenue (tax-equivalent net interest income plus noninterest income). Growth through Acquisitions – Disciplined strategic acquisitions have contributed significantly to the Company’s growth and expansion.
Depository institutions with more than $10 billion in assets, such as the Bank, are subject to examination by the CFPB. 8 The CFPB has broad rule-making authority for a wide range of federal consumer protection laws that apply to all banks, including the authority to prohibit unfair, deceptive or abusive acts and practices.
The CFPB has broad rule-making authority for a wide range of federal consumer protection laws that apply to all banks, including the authority to prohibit unfair, deceptive or abusive acts and practices.
Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance.
Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance.
In May 2022, federal bank regulatory agencies jointly issued a proposal to strengthen and modernize regulations implementing the CRA to better achieve the purposes of the law. On October 24, 2023, the Board of Governors of the Federal Reserve System, the FDIC, and the OCC issued a final rule amending the agencies’ CRA regulations.
In May 2022, federal bank regulatory agencies jointly issued a proposal to strengthen and modernize regulations implementing the CRA to better achieve the purposes of the law.
The Bank is also subject to other laws and regulations intended to protect consumers in transactions with depository institutions, as well as other laws or regulations affecting customers of financial institutions generally.
Any new regulations adopted by the CFPB may significantly impact consumer mortgage lending and servicing. 8 The Bank is also subject to other laws and regulations intended to protect consumers in transactions with depository institutions, as well as other laws or regulations affecting clients of financial institutions generally.
However, if the Company has total assets of $15 billion and acquires another bank, or if an acquisition causes the Company to exceed $15 billion in total assets, the trust preferred securities will no longer qualify as tier 1 instruments (but may be included in tier 2 capital).
At December 31, 2025, the Company had $93.6 million of trust preferred securities that are grandfathered under this provision. However, if the Company has total assets of $15 billion and acquires another bank, the trust preferred securities will no longer qualify as tier 1 instruments (but may be included in tier 2 capital).
The Bank’s payment of dividends also could be affected or limited by other factors, such as events or circumstances which would lead the FDIC to require that it maintain capital in excess of regulatory guidelines.
The Bank’s payment of dividends also could be affected or limited by other factors, such as events or circumstances which would lead the FDIC to require that it maintain capital in excess of regulatory guidelines. 9 Transactions with Affiliates and Insiders: The Bank is subject to the provisions of Regulation W promulgated by the Federal Reserve, which encompasses Sections 23A and 23B of the Federal Reserve Act.
In July 2024, the OCC, the Federal Reserve, and the FDIC each proposed rules to amend their respective BSA compliance program rules to align with FinCEN’s June 2024 proposed rule.
In July 2024, the OCC, the Federal Reserve, and the FDIC each proposed rules to amend their respective BSA compliance program rules to align with FinCEN’s June 2024 proposed rule. In December 2025, FinCEN issued a final rule to extend the effective date of the proposed rule from January 1, 2026 to January 1, 2028.
We value accountability because it is essential to our success, and we accept our responsibility to hold ourselves and others accountable for meeting shareholder commitments and achieving exceptional standards of performance. We also believe in supporting our associates to prioritize their wellness. Attracting and Retaining Talent. Our goal is to offer careers to our associates; not just jobs.
We expect and encourage participation and collaboration, and understand we need each other to be successful. We value accountability because it is essential to our success, and we accept our responsibility to hold ourselves and others accountable for meeting stockholder commitments and achieving exceptional standards of performance. We also believe in supporting our associates to prioritize their wellness.
The Company has securities registered with the SEC under the Securities Exchange Act of 1934, as amended. The Company’s common stock is listed on the Nasdaq Stock Market. The Company also has depositary shares, each representing a 1/40th interest in a share of the Company’s 5%, noncumulative perpetual preferred stock (“Series A Preferred Stock”), listed on the Nasdaq Stock Market.
The Company also has depositary shares, each representing a 1/40th interest in a share of the Company’s 5%, noncumulative perpetual preferred stock (“Series A Preferred Stock”), listed on the Nasdaq Global Select Market. Accordingly, the Company is subject to both SEC and Nasdaq listing standards.
At December 31, 2024, we employed 1,218 regular full-time and 38 part-time associates. We also employ seasonal/temporary associates and occasionally hire independent contractors for specific projects that require a highly specialized skill set or to provide additional resources during peak times, as needed. Our performance measures and compensation determinations are designed to ensure the proper balance of risk and reward.
Attracting and Retaining Talent. Our goal is to offer careers to our associates; not just jobs. At December 31, 2025, we employed 1,370 regular full-time and 48 part-time associates. We also employ seasonal/temporary associates and occasionally hire independent contractors for specific projects that require a highly specialized skill set or to provide additional resources during peak times, as needed.
These policies have a significant influence on overall growth and distribution of loans, investments and deposits and affect interest rates charged on loans or paid for deposits. Federal Reserve monetary policies have had a significant effect on the operating results of all financial institutions in the past and may continue to do so in the future.
In particular, the Federal Reserve regulates monetary policy and interest rates in order to influence general economic conditions. These policies have a significant influence on overall growth and distribution of loans, investments and deposits and affect interest rates charged on loans or paid for deposits.
These provisions also provide that, except for certain limited exceptions, a financial institution may not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such information may be so provided and the customer is given the opportunity to opt out of such disclosure.
These provisions also provide that, except for certain limited exceptions, a financial institution may not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such information may be so provided and the customer is given the opportunity to opt out of such disclosure. 10 Anti-Money Laundering, Anti-Terrorism and Sanctions: The Bank Secrecy Act (the "BSA") requires all financial institutions, including banks, to, among other things, establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism.
The objective of the final rule is to strengthen the achievement of the core purpose of the statute, and adapt to changes in the banking industry, including the expanded role of mobile and online banking.
On October 24, 2023, the Federal Reserve, the FDIC, and the OCC (collectively, the “Agencies”) issued a final rule amending the Agencies’ CRA regulations with the objective to strengthen the achievement of the core purpose of the statute, and adapt to changes in the banking industry, including the expanded role of mobile and online banking.
Consumer Financial Protection Bureau: The Dodd-Frank Act centralized responsibility for consumer financial protection including implementing, examining and enforcing compliance with federal consumer financial laws with the CFPB.
CFPB: The Dodd-Frank Act centralized responsibility for consumer financial protection including implementing, examining and enforcing compliance with federal consumer financial laws with the CFPB. Depository institutions with more than $10 billion in assets, such as the Bank, are subject to examination by the CFPB.
In 2024, the Company successfully completed the conversion of its legacy core system into a new core banking platform. Maintaining asset quality – We monitor asset quality through formal, ongoing, multiple-level reviews of loans in each market and specialized lending niche. These reviews are overseen by the Bank’s credit administration department.
Maintaining asset quality – We monitor asset quality through formal, ongoing, multiple-level reviews of loans in each market and specialized lending niche. These reviews are overseen by the Bank’s credit administration department. In addition, the loan portfolio is subject to ongoing monitoring by a loan review function that reports directly to the Bank’s Board of Directors or its committees.
These include, but are not limited to, the Gramm-Leach-Bliley Act, MO Rev Stat § 362.422 and the California Consumer Privacy Act of 2018. Generally, privacy laws impose obligations with regard to the collection, use and disclosure of personal information and require public disclosure of privacy practices.
Privacy and Cybersecurity Regulations: Our businesses are subject to numerous laws and regulations relating to the privacy of information regarding clients, employees and others. These include, but are not limited to, the Gramm-Leach-Bliley Act, MO Rev Stat § 362.422 and the California Consumer Privacy Act of 2018.
In addition, the fraud-prevention adjustment would increase from 1 cent to 1.3 cents. In January 2024, the Federal 11 Reserve announced it would extend the comment period from February 2024 to May 2024. We will continue to monitor for final rulemaking and will evaluate the impact of any changes.
Under the proposal, the base cap would decrease from 21 cents to 14.4 cents and from 5 basis points to 4 basis points. In addition, the fraud-prevention adjustment would increase from 1 cent to 1.3 cents. In January 2024, the Federal Reserve announced it would extend the comment period from February 2024 to May 2024.
Governmental Policies The operations of the Company and its subsidiaries are affected not only by general economic conditions, but also by the policies of various regulatory authorities. In particular, the Federal Reserve regulates monetary policy and interest rates in order to influence general economic conditions.
We will continue to monitor for final rulemaking and will evaluate the impact of any changes. Governmental Policies The operations of the Company and its subsidiaries are affected not only by general economic conditions, but also by the policies of various regulatory authorities.
In October 2023, the Federal Reserve issued a proposed rule to lower the interchange fee cap to a level that the Federal Reserve believes is reasonable and proportional to the cost incurred by card issuers. Under the proposal, the base cap would decrease from 21 cents to 14.4 cents and from 5 basis points to 4 basis points.
The Durbin Amendment cap became effective for the Bank on July 1, 2022 and resulted in a reduction in interchange income earned by the Bank. In October 2023, the Federal Reserve issued a proposed rule to lower the interchange fee cap to a level that the Federal Reserve believes is reasonable and proportional to the cost incurred by card issuers.
In addition, an issuer may receive up to 1 cent per transaction for fraud prevention. The Durbin Amendment cap became effective for the Bank on July 1, 2022 and resulted in a reduction in interchange income earned by the Bank.
The Durbin Amendment cap for a single debit card transaction is 21 cents plus 5 basis points multiplied by the amount of the transaction. In addition, an issuer may receive up to 1 cent per transaction for fraud prevention.
Human Capital Management We focus on creating an inclusive and transparent culture that celebrates teamwork and recognizes associates at all levels. We expect and encourage participation and collaboration, and understand we need each other to be successful.
Federal Reserve monetary policies have had a significant effect on the operating results of all financial institutions in the past and may continue to do so in the future. Human Capital Management We focus on creating an inclusive and transparent culture that celebrates teamwork and recognizes associates at all levels.
Removed
Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma”, “pipeline” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made.
Added
They are neither statements of historical fact nor guarantees or assurances of future performance.
Removed
In addition, the loan portfolio is subject to ongoing monitoring by a loan review function that reports directly to the Bank’s Board of Directors or its committees. Expense management – We manage expenses carefully through detailed budgeting and expense approval processes.
Added
In 2025, the Company expanded its presence in Arizona and Kansas City through an acquisition of 12 former First Interstate Bank branches (the “Branch Acquisition”) that added $292.0 million in loans and $609.5 million in deposits as of December 31, 2025. 3 Competition The Company and its subsidiaries operate in highly competitive markets.
Removed
The descriptions are qualified in their entirety by reference to the related statutes and regulations.
Added
The Company has securities registered with the SEC under the Securities Exchange Act of 1934, as amended. The Company’s common stock is listed on the Nasdaq Global Select Market.
Removed
At December 31, 2024, the Company had $93.0 million of trust preferred securities that are grandfathered under this provision.
Added
In December 2025, the FDIC approved an interim final rule reducing the special assessment rate for the eighth and final collection quarter from 3.36 basis points to 2.97 basis points to minimize amounts collected in excess of the total estimated loss.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe participate in and have previously been an “Allocatee” of the New Markets Tax Credit Program of the U.S. Department of the Treasury Community Development Financial Institutions Fund. Through this program, we provide our allocation to certain projects, which in turn for an equity investment from an investor in the project generate federal tax credits to those investors.
Biggest changeThrough this program, we provide our allocation to certain projects, which in turn for an equity investment from an investor in the project generate federal tax credits to those investors. This equity, coupled with any debt or equity from the project sponsor is in turn invested in a certified community development entity for a period of at least seven years.
We may not be able, however, to effectively implement new technology-driven products and services or be successful in marketing these products and services to our clients. Costs and levels of deposits are affected by competition that could increase our funding costs or liquidity risk. We rely on bank deposits to be a low cost and stable source of funding.
However, we may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our clients. Costs and levels of deposits are affected by competition that could increase our funding costs or liquidity risk. We rely on bank deposits to be a low cost and stable source of funding.
The risks inherent in cash flow lending include, among other things: • reduced use of or demand for the client’s products or services and, thus, reduced cash flow of the client to service the loan and other debt product as well as reduced value of the client as a going concern; • inability of the client to manage working capital, which could result in lower cash flow; • inaccurate or fraudulent reporting of our client’s positions or financial statements; and • our client’s poor management of their business.
The risks inherent in cash flow lending include, among other things: 18 • reduced use of or demand for the client’s products or services and, thus, reduced cash flow of the client to service the loan and other debt product as well as reduced value of the client as a going concern; • inability of the client to manage working capital, which could result in lower cash flow; • inaccurate or fraudulent reporting of our client’s positions or financial statements; and • our client’s poor management of their business.
Significant negative industry or economic trends, including a sustained decrease in the market price of our common stock, or reduced future cash flows or disruptions to our business, could result in impairments to goodwill. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on experience and to rely on projections of future operating performance.
Significant negative industry or economic trends, including a sustained decrease in the market price of our common stock, or reduced future cash flows or disruptions to our business, could result in impairments to goodwill. Our valuation methodology for assessing impairment requires management to make judgments and 16 assumptions based on experience and to rely on projections of future operating performance.
An inability to raise funds through deposits, borrowings, the sale of investment securities and other sources could have a substantial material adverse effect on our liquidity. Our access to funding sources in amounts that are adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general.
An inability to raise funds through deposits, borrowings, the sale of 20 investment securities and other sources could have a substantial material adverse effect on our liquidity. Our access to funding sources in amounts that are adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general.
Our principal competitors include other commercial banks, savings banks, savings and loan associations, mutual funds, money market funds, finance companies, trust companies, technology companies, insurers, credit unions, and mortgage companies among others. Many of our non-bank competitors are not subject to the same degree of regulation as us and have advantages over us in providing certain services.
Our principal competitors 21 include other commercial banks, savings banks, savings and loan associations, mutual funds, money market funds, finance companies, trust companies, technology companies, insurers, credit unions, and mortgage companies among others. Many of our non-bank competitors are not subject to the same degree of regulation as us and have advantages over us in providing certain services.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to 15 pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including any acquisition plans.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including any acquisition plans.
Any changes to the SBA program, including but not limited to, changes to the level of guarantee provided by the federal government on SBA loans, changes to program-specific rules impacting volume eligibility under the guaranty program, as well as changes to the program amounts authorized by Congress, may also have a material adverse effect on our business.
Any changes to the SBA program, including but not limited to, changes to the level of guarantee provided by the federal government on SBA loans, changes to 14 program-specific rules impacting volume eligibility under the guaranty program, as well as changes to the program amounts authorized by Congress, may also have a material adverse effect on our business.
We are headquartered in Missouri, but have branch locations in the Kansas City, Phoenix, Los Angeles, and San Diego metropolitan areas, as well as Northern New Mexico, Florida and Nevada. Over time, we may acquire or open locations in other parts of the United States as well.
We are headquartered in Missouri, but have branch locations in the Kansas City, Phoenix, Tucson, Los Angeles, and San Diego metropolitan areas, as well as Northern New Mexico, Florida and Nevada. Over time, we may acquire or open locations in other parts of the United States as well.
We maintain an allowance for credit losses, which is a reserve established through a provision for credit losses charged to expense, that represents management’s estimate of probable losses within the existing loan portfolio. The allowance, in the judgment of management, is sufficient to reserve for estimated credit losses and risks inherent in the loan portfolio.
We maintain an ACL, which is a reserve established through a provision for credit losses charged to expense, that represents management’s estimate of probable losses within the existing loan portfolio. The allowance, in the judgment of management, is sufficient to reserve for estimated credit losses and risks inherent in the loan portfolio.
In the case of our senior cash flow loans, we generally take a lien on substantially all of a client’s assets, but the value of those assets is typically substantially less than the 18 amount of money we advance to the client under a cash flow transaction.
In the case of our senior cash flow loans, we generally take a lien on substantially all of a client’s assets, but the value of those assets is typically substantially less than the amount of money we advance to the client under a cash flow transaction.
In the event the Bank was restricted from paying 25 dividends to us or making payments under the tax sharing agreement, we may not be able to service our debt, pay our other obligations or pay dividends on our common stock or preferred stock.
In the event the Bank was restricted from paying dividends to us or making payments under the tax sharing agreement, we may not be able to service our debt, pay our other obligations or pay dividends on our common stock or preferred stock.
In addition, if charge-offs in future periods exceed the allowance for credit losses (i.e., if the allowance for credit losses is inadequate), we may need additional credit loss provisions to increase the allowance for loan losses.
In addition, if charge-offs in future periods exceed the ACL (i.e., if the ACL is inadequate), we may need additional credit loss provisions to increase the allowance for loan losses.
No assurance can be given that these counterparties will not call upon us to discharge these obligations in the circumstances under which they are owed. If this were to occur, the amount we may be required to pay a bank investor could be substantial and could have a material adverse effect on our results of operations and financial condition.
No assurance can be given that these counterparties will not call upon us to discharge these obligations in the circumstances under which they are owed. If this were to occur, the amount we may be required to pay a bank investor could be substantial and could have an adverse effect on our results of operations and financial condition.
In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength or operating results. A significant decline in our stock or depositary share prices could result in substantial losses for individual shareholders and could lead to costly and disruptive securities litigation.
In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength or operating results. A significant decline in our stock or depositary share prices could result in substantial losses for individual stockholders and could lead to costly and disruptive securities litigation.
Such issuance could occur regardless of whether our shareholders favorably view the merger, tender offer or other attempt to gain control of the Company. These and other provisions could make it more difficult for a third party to acquire us even if an acquisition might be in the best interests of our shareholders.
Such issuance could occur regardless of whether our stockholders favorably view the merger, tender offer or other attempt to gain control of the Company. These and other provisions could make it more difficult for a third party to acquire us even if an acquisition might be in the best interests of our stockholders.
In addition, bank regulatory agencies periodically review our allowance for credit losses and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments that can differ somewhat from those of our own management.
In addition, bank regulatory agencies periodically review our ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments that can differ somewhat from those of our own management.
In addition, if we are unable or determine not to pay interest on our preferred stock or subordinated debentures, the market price of our common stock could be materially or adversely affected. Anti-takeover provisions could negatively impact our shareholders.
In addition, if we are unable or determine not to pay interest on our preferred stock or subordinated debentures, the market price of our common stock could be materially or adversely affected. Anti-takeover provisions could negatively impact our stockholders.
When we originate SBA loans, we incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on a loan, we share any loss and recovery related to the loan pro-rata with the SBA.
When we originate SBA loans, we incur credit risk on the non-guaranteed portion of the loans, and if a client defaults on a loan, we share any loss and recovery related to the loan pro-rata with the SBA.
If we lose our status as a Preferred Lender, we may lose some or all of our customers to lenders who are Preferred Lenders, and as a result we could experience a material adverse effect to our financial results.
If we lose our status as a Preferred Lender, we may lose some or all of our clients to lenders who are Preferred Lenders, and as a result we could experience a material adverse effect to our financial results.
An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses, and an increase in loan charge-offs, all of these factors could impact allowance, earnings and/or capital levels. Our loan portfolio includes loans secured by real estate, which could result in increased credit risk.
An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses, and an increase in loan charge-offs, all of these factors could impact allowance, earnings and/or capital levels. Our loan portfolio includes loans secured by real estate, which could result in increased credit risk.
Acquiring other banks or businesses involves various risks commonly associated with acquisitions, including, among other things: • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • difficulty and expense of integrating the operations and personnel of the target company; • potential disruption to our business; • potential diversion of our management’s time and attention; • the possible loss of key employees and clients of the target company; • difficulty in estimating the value of the target company; • payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short- and long-term; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits; and/or • potential changes in banking or tax laws or regulations that may affect the target company.
We may be unable to integrate operations successfully or to achieve expected results or cost savings. 22 Acquiring other banks or businesses involves various risks commonly associated with acquisitions, including, among other things: • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • difficulty and expense of integrating the operations and personnel of the target company; • potential disruption to our business; • potential diversion of our management’s time and attention; • the possible loss of key employees and clients of the target company; • difficulty in estimating the value of the target company; • payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short- and long-term; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits; and/or • potential changes in banking or tax laws or regulations that may affect the target company.
Thus, if a cash flow transaction becomes non-performing, our primary recourse to recover some or all of the principal of our loan or other debt product would be to force the sale of all or part of the company as a going concern.
Thus, if a cash flow transaction becomes nonperforming, our primary recourse to recover some or all of the principal of our loan or other debt product would be to force the sale of all or part of the company as a going concern.
Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, rather than shareholders.
Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, rather than stockholders.
Significant fluctuations in market interest rates could materially and adversely affect not only our net interest spread, but also our asset quality and loan origination volume, deposits, funding availability, and/or net income. Our allowance for credit losses may not be adequate to cover actual loan losses.
Significant fluctuations in market interest rates could materially and adversely affect not only our net interest spread, but also our asset quality and loan origination volume, deposits, funding availability, and/or net income. Our ACL may not be adequate to cover actual loan losses.
Increases in non-performing commercial loans could result in operating losses, impaired liquidity and erosion of our capital, and could have a material adverse effect on our financial condition and results of operations.
Increases in nonperforming commercial loans could result in operating losses, impaired liquidity and erosion of our capital, and could have a material adverse effect on our financial condition and results of operations.
If we do not manage our growth successfully, then our business, results of operations or financial condition may be adversely affected. 16 We may incur impairments to goodwill. As of December 31, 2024, we had $365 million recorded as goodwill. We evaluate our goodwill for impairment at least annually.
If we do not manage our growth successfully, then our business, results of operations or financial condition may be adversely affected. We may incur impairments to goodwill. As of December 31, 2025, we had $417 million recorded as goodwill. We evaluate our goodwill for impairment at least annually.
We could experience increased expenses resulting from strategic planning, litigation, and technology and market changes, and reputational harm as a result of public sentiment, regulatory scrutiny, and reduced investor and stakeholder confidence due to our response to climate change and our climate change strategy, which, in turn, could have a material negative impact on our business, results of operations, and financial condition. 26 ITEM 1B: UNRESOLVED STAFF COMMENTS None.
We could experience increased expenses resulting from strategic planning, litigation, and technology and market changes, and reputational harm as a result of public sentiment, regulatory scrutiny, and reduced investor and stakeholder confidence due to our response to climate change and our climate change strategy, which, in turn, could have a material negative impact on our business, results of operations, and financial condition.
Additional provisions to increase the allowance for credit losses, should they become necessary, would result in a decrease in net income and a reduction in capital, and may have a material adverse effect on our financial condition and results of operations.
Additional provisions to increase the ACL, should they become necessary, would result in a decrease in net income and a reduction in capital, and may have a material adverse effect on our financial condition and results of operations.
The acquisition of other financial services companies or assets present risks to us in addition to those presented by the nature of the business acquired. Our earnings, financial condition, and prospects after a merger or acquisition depend in part on our ability to successfully integrate the operations of the acquired company.
The acquisition of other financial services companies or assets, such as the Branch Acquisition we completed in 2025, present risks to us in addition to those presented by the nature of the business acquired. Our earnings, financial condition, and prospects after a merger or acquisition depend in part on our ability to successfully integrate the operations of the acquired company.
Although we have no present intention to issue any additional shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future. General Risk Factors Climate change may materially adversely affect our business and results of operations.
Although we did not issue any additional shares of our authorized preferred stock in the current year, there can be no assurance that the Company will not do so in the future. General Risk Factors Climate change may materially adversely affect our business and results of operations.
Our commercial and industrial loans and sponsor finance loans are underwritten based primarily on cash flow, profitability and enterprise value of the client and are not fully covered by the value of tangible assets or collateral of the client. Consequently, if any of these transactions becomes non-performing, we could experience significant losses.
Our C&I loans and sponsor finance loans are underwritten based primarily on cash flow, profitability and enterprise value of the client and are not fully covered by the value of tangible assets or collateral of the client. Consequently, if any of these transactions becomes nonperforming, we could experience significant losses.
These broad market fluctuations could make it more difficult for you to resell your common stock or depositary shares when you want and at prices you find attractive. 24 Our stock price and the price of our depositary shares can fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated quarterly fluctuations in our operating results and financial condition; • changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts; • reputation; • failure to meet analysts’ revenue or earnings estimates; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructurings; • actions by institutional shareholders; • fluctuations in the stock prices and operating results of our competitors; • general market conditions and, in particular, developments related to market conditions for the financial services industry; • proposed or adopted regulatory changes or developments; • anticipated or pending investigations, proceedings or litigation that involve or affect us; and/or • domestic and international economic factors unrelated to our performance.
Our stock price and the price of our depositary shares can fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated quarterly fluctuations in our operating results and financial condition; • changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts; • reputation; • failure to meet analysts’ revenue or earnings estimates; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructurings; • actions by institutional stockholders; • fluctuations in the stock prices and operating results of our competitors; 24 • general market conditions and, in particular, developments related to market conditions for the financial services industry; • proposed or adopted regulatory changes or developments; • anticipated or pending investigations, proceedings or litigation that involve or affect us; and/or • domestic and international economic factors unrelated to our performance.
If we fail to comply with requirements of the federal New Markets Tax Credit program, the U.S. Department of the Treasury Community Development Financial Institutions Fund could seek any remedies available under its Allocation Agreement with us, and we could suffer significant reputational harm and be subject to greater scrutiny from banking regulators.
If we fail to comply with requirements of the federal New Markets Tax Credit program, the Treasury CDFI could seek any remedies available under its Allocation Agreement with us, and we could suffer significant reputational harm and be subject to greater scrutiny from banking regulators.
Our business plan calls for continued efforts to increase our assets invested in commercial loans. Our commercial loans include loans secured by real estate (commercial property, construction and land and multi-family residential property). Commercial loans generally involve a higher degree of credit risk than residential mortgage loans due, in part, to their larger average size and less marketable collateral.
Our commercial loans include loans secured by real estate (commercial property, construction and land and multi-family residential property). Commercial loans generally involve a higher degree of credit risk than residential mortgage loans due, in part, to their larger average size and less marketable collateral.
These developments could have a material adverse impact on our reputation, business, and financial condition. 20 Liquidity risk could impair our ability to fund operations and meet debt coverage obligations, and jeopardize our financial condition. Liquidity is essential to our business. We are a holding company and depend on our subsidiaries for liquidity needs, including debt coverage requirements.
Liquidity risk could impair our ability to fund operations and meet debt coverage obligations, and jeopardize our financial condition. Liquidity is essential to our business. We are a holding company and depend on our subsidiaries for liquidity needs, including debt coverage requirements.
The regional economic 17 conditions in areas where we conduct our business have an impact on the demand for our products and services as well as the ability of our clients to repay loans, the value of the collateral securing loans, and the stability of our deposit funding sources.
The regional economic conditions in areas where we conduct our business have an impact on the demand for our products and services as well as the ability of our clients to repay loans, the value of the collateral securing loans, and the stability of our deposit funding sources. Consequently, a decline in local economic conditions may adversely affect our earnings.
If we were to default under the New Markets Tax Credit Program, we could suffer negative publicity in the communities in which we operate, and we could face greater scrutiny from federal and state bank regulators, especially with regard to our compliance with the CRA.
If we were to default under the New Markets Tax Credit Program, we could suffer negative publicity in the communities in which we operate, and we could face greater scrutiny from federal and state bank regulators, especially with regard to our compliance with the CRA. These developments could have an adverse effect on our reputation, business, and financial condition.
Our SBA lending program is dependent upon the U.S. federal government, and we face specific risks associated with originating SBA loans. 14 Our SBA lending program is dependent upon the U.S. federal government.
Legal, Regulatory and Tax Risks SBA lending is an important part of our business. Our SBA lending program is dependent upon the U.S. federal government, and we face specific risks associated with originating SBA loans. Our SBA lending program is dependent upon the U.S. federal government.
Holders of our common stock and depositary shares are entitled to receive dividends only when, as and if declared by the Board of Directors. Although we have historically paid cash dividends, we are not required to do so.
Holders of our common stock and depositary shares are entitled to receive dividends only when, as and if declared by the Board of Directors.
Consequently, a decline in local economic conditions may adversely affect our earnings. The proportion of our deposit account balances that exceed FDIC insurance limits may also expose the Company to enhanced liquidity risk in times of financial distress. There are material risks involved in commercial lending that could adversely affect our business.
The proportion of our deposit account balances that exceed FDIC insurance limits may also expose the Company to enhanced liquidity risk in times of financial distress. 17 There are material risks involved in commercial lending that could adversely affect our business. Our business plan calls for continued efforts to increase our assets invested in commercial loans.
We are subject to environmental risks associated with owning real estate or collateral. When a borrower defaults on a loan secured by real property, we may purchase the property in foreclosure or accept a deed to the property surrendered by the borrower. We may also take over the management of commercial properties whose owners have defaulted on loans.
When a borrower defaults on a loan secured by real property, we may purchase the property in foreclosure or accept a deed to the property surrendered by the borrower. We may also take over the management of commercial properties whose owners have defaulted on loans. We may also own and lease premises where branches and other facilities are located.
Nevertheless, risks remain that customers may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which impacted our liquidity, cost of funding, loan funding capacity, net interest margin, capital and results of operations.
In the event there is concern about the financial stability of the banking industry, there is a risk that clients may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which could affect our liquidity, cost of funding, loan funding capacity, net interest margin, capital and results of operations.
The existence of credit and market risk associated with our derivative instruments could adversely affect our net interest income and, therefore, could have a material adverse effect on our business, financial condition, results of operations and future prospects. 21 Competitive and Reputational Risks The loss of any of our executive officers or other key employees, or the inability to recruit highly skilled and other key employees, may adversely affect our operations.
The existence of credit and market risk associated with our derivative instruments could adversely affect our net interest income and, therefore, could have a material adverse effect on our business, financial condition, results of operations and future prospects.
These instruments prohibit the payment of dividends on our common stock in certain situations. See “Item 1. Business – Supervision and Regulation - Financial Holding Company - Dividend Restrictions and Share Repurchases” for additional information.
We have outstanding preferred stock and subordinated debentures issued to statutory trust subsidiaries, which have issued and sold preferred securities in the Trusts to investors. These instruments prohibit the payment of dividends on our common stock in certain situations. See “Item 1. Business – Supervision and Regulation - Financial Holding Company - Dividend Restrictions and Stock Repurchases” for additional information.
We may also own and lease premises where branches and other facilities are located. While we have lending, foreclosure and facilities guidelines intended to exclude properties with an unreasonable risk of contamination, hazardous substances could exist on some of the properties we may own, manage or occupy.
While we have lending, foreclosure and facilities guidelines intended to exclude properties with an unreasonable risk of contamination, hazardous substances could exist on some of the properties we may own, manage or occupy. We face the risk that environmental laws could force us to clean up the properties at our expense.
In addition, we may be required to fund additional amounts to complete 19 the project and may have to hold the property for an unspecified period of time. If any of these events occur, our financial condition, results of operations and cash flows could be materially and adversely affected.
In addition, we may be required to fund additional amounts to complete the project and may have to hold the property for an unspecified period of time.
Higher funding costs could reduce our net interest margin and net interest income and could have a material adverse effect on our business, financial condition and results of operations. 22 Acquisition Risks We have engaged in and may continue to engage in expansion through acquisitions, and these acquisitions present a number of risks related both to the acquisition transactions and to the integration of the acquired businesses.
Acquisition Risks We have engaged in and may continue to engage in expansion through acquisitions, and these acquisitions present a number of risks related both to the acquisition transactions and to the integration of the acquired businesses.
This equity, coupled with any debt or equity from the project sponsor is in turn invested in a certified community development entity for a period of at least seven years. Community development entities must use this capital to make loans to, or other investments in, qualified businesses in low-income communities in accordance with New Markets Tax Credit Program criteria.
Community development entities must use this capital to make loans to, or other investments in, qualified businesses in low-income communities in accordance with New Markets Tax Credit Program criteria.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.
We face the risk that environmental laws could force us to clean up the properties at our expense. The cost of cleaning up or paying damages and penalties associated with environmental problems could increase our operating expenses. It may cost more to clean a property than the property is worth.
The cost of cleaning up or paying damages and penalties associated with environmental problems could increase our operating expenses. It may cost more to clean a property than the property is worth. We could also be liable for pollution generated by a borrower’s operations if we take a role in managing those operations after a default.
We could also be liable for pollution generated by a borrower’s operations if we take a role in managing those operations after a default. The Company may also find it difficult or impossible to sell these properties. We may be obligated to indemnify certain counterparties in financing transactions we enter into pursuant to the New Markets Tax Credit Program.
The Company may also find it difficult or impossible to sell these properties. We may be obligated to indemnify certain counterparties in financing transactions we enter into pursuant to the New Markets Tax Credit Program. We participate in and have previously been an “Allocatee” of the New Markets Tax Credit Program of the Treasury CDFI.
Adverse developments affecting the banking industry, and resulting media coverage, have eroded customer confidence in the banking system and could have a material effect on our operations and/or stock price. The high-profile bank failures in the first quarter of 2023 generated significant market volatility among publicly traded bank holding companies and, in particular, regional banks.
Adverse developments affecting the banking industry, and resulting media coverage, could eroded client confidence in the banking system and could have a material effect on our operations and/or stock price.
In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies.
In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations could make it more difficult for you to resell your common stock or depositary shares when you want and at prices you find attractive.
If the Company or the Bank incur losses that erode its capital, it may become subject to enhanced regulation or supervisory action.
Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects. 15 If the Company or the Bank incur losses that erode its capital, it may become subject to enhanced regulation or supervisory action.
We believe our growth and continued success will depend in large part on our executive team and other key employees.
Competitive and Reputational Risks The loss of any of our executive officers or other key employees, or the inability to recruit highly skilled and other key employees, may adversely affect our operations. We believe our growth and continued success will depend in large part on our executive team and other key employees.
Our outstanding preferred stock and debt securities, including debt securities related to our trust preferred securities, restrict our ability to pay dividends on our capital stock. We have outstanding preferred stock and subordinated debentures issued to statutory trust subsidiaries, which have issued and sold preferred securities in the Trusts to investors.
Although we have historically paid cash dividends, we are not required to do so. 25 Our outstanding preferred stock and debt securities, including debt securities related to our trust preferred securities, restrict our ability to pay dividends on our capital stock.
Further, paying higher interest rates to maintain or replace these deposits could adversely affect our net interest margin and results of operations. In 2024, the FDIC issued a proposed rule that would revise the FDIC’s regulations governing the classification and treatment of brokered deposits.
Further, paying higher interest rates to maintain or replace these deposits could adversely affect our net interest margin and results of operations. By engaging in derivative transactions, we are exposed to additional credit and market risk in our banking business.
Removed
In assessing the failures in 2023, the banking regulators noted that each of the failed banks had a high proportion of deposits that exceeded FDIC deposit insurance limits. The industry has stabilized since these failures and the customer confidence in the safety and soundness of smaller regional banks has improved considerably.
Added
If any of these events occur, our financial condition, results of operations and cash flows could be materially and adversely affected. 19 We are subject to environmental risks associated with owning real estate or collateral.
Removed
While the Department of the Treasury, the Federal Reserve, and the FDIC historically have ensured that depositors of failed banks had access to their deposits, including uninsured deposit accounts, there is no guarantee that such actions will continue to be successful in restoring customer confidence in regional banks and the banking system more broadly.
Added
Higher funding costs could reduce our net interest margin and net interest income and could have a material adverse effect on our business, financial condition and results of operations.
Removed
In addition, the banking operating environment and public trading prices of banking institutions can be highly correlated, in particular during times of stress, which could adversely impact the trading prices of our common stock and potentially our results of operations. Legal, Regulatory and Tax Risks SBA lending is an important part of our business.
Removed
If the proposed rule is finalized as proposed, the Company may be required to classify certain deposits as brokered deposits. Among other changes, this may increase deposit insurance assessments and impact liquidity metrics. By engaging in derivative transactions, we are exposed to additional credit and market risk in our banking business.
Removed
We may be unable to integrate operations successfully or to achieve expected results or cost savings.
Removed
Our core operating system conversion may result in business interruptions or other adverse developments. On October 11, 2024, we replaced our core operating systems, including those for loans, deposits, financials and other ancillary systems (collectively referred to as “core system”). We use the core system to track client relationships and accounts and report financial information.
Removed
The core system is integrated with various other applications that are used to service client requests by Bank personnel or directly by clients (such as online and mobile banking). Changing the core system subjects us to operational risks, including disruptions to technology systems, which may adversely impact our clients.
Removed
We have documented plans, policies and procedures designed to prevent or limit the risks of a failure during and after the conversion of our core system. However, there can be no assurance that any such adverse developments will not occur or, if they do occur, that they will be timely and adequately remediated.
Removed
The ultimate impact of any adverse development could damage our reputation, result in a loss of client business, subject us to regulatory scrutiny, or expose it to civil litigation and possibly financial liability, any of which could have a material effect on our business, financial condition, and results of operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Chief Administrative Officer is a licensed CPA in the state of Missouri. Prior to his appointment as Chief Administrative Officer, he served at Enterprise in senior finance roles within the Company, including Senior Vice President and Controller, and Chief Financial Officer of Enterprise Bank & Trust.
Biggest changeThe Chief Administrative Officer is a licensed CPA in the state of Missouri. Prior to his appointment as Chief Administrative Officer, he served at Enterprise in senior finance roles within the Company, including Senior Vice President and Controller, and Chief Financial Officer of the Bank.
Risk Factors - Technology and Cybersecurity Risks.” Risk Management and Strategy As part of the ongoing maintenance and development of our IS Program, we assess the various risks associated with the unauthorized access or loss of client information and the quality of security controls as prescribed by the Federal Financial Institutions Examinations Council and the National Institute of Standards and Technology Cybersecurity Framework.
Risk Factors - Technology and Cybersecurity Risks.” 27 Risk Management and Strategy As part of the ongoing maintenance and development of our IS Program, we assess the various risks associated with the unauthorized access or loss of client information and the quality of security controls as prescribed by the Federal Financial Institutions Examinations Council and the National Institute of Standards and Technology Cybersecurity Framework.
Although such risks have not materially affected us, we have experienced, and may continue to experience, cyber incidents during our normal 27 course of business. For further discussion about these risks, see “Item 1A.
Although such risks have not materially affected us, we have experienced, and may continue to experience, cyber incidents during our normal course of business. For further discussion about these risks, see “Item 1A.
Additionally, the CISO is a member of this committee, as well as the Risk Oversight and Sustainability Committees, and advises these committees on risks and opportunities related to information security, including data privacy.
Additionally, the CISO is a member of this committee, as well as the Risk Oversight, Sustainability and Disclosure Committees, and advises these committees on risks and opportunities related to information security, including data privacy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, the Company has a limited network of loan production offices and deposit production offices in various other states. We own or lease our facilities and believe all of our properties are in good condition to meet our business needs.
Biggest changeAdditionally, the Company has a limited network of loan production offices and deposit production offices in various other states. We own or lease our facilities and believe all of our properties are in good condition to meet our business needs. 28
ITEM 2: PROPERTIES Our executive offices are located at 150 North Meramec Avenue, Clayton, Missouri, 63105. As of December 31, 2024, we utilized banking locations and administrative offices throughout our market areas of Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico.
ITEM 2: PROPERTIES Our executive offices are located at 150 North Meramec Avenue, Clayton, Missouri, 63105. As of December 31, 2025, we utilized banking locations and administrative offices throughout our market areas of Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeManagement believes there are no such legal proceedings pending or threatened against the Company in the ordinary course of 28 business, directly, indirectly, or in the aggregate that, if determined adversely, would have a material adverse effect on the business, consolidated financial condition, results of operations or cash flows of the Company.
Biggest changeManagement believes there are no such legal proceedings pending or threatened against the Company in the ordinary course of business, directly, indirectly, or in the aggregate that, if determined adversely, would have a material adverse effect on the business, consolidated financial condition, results of operations or cash flows of the Company.
For more information on our legal proceedings, see “Item 8. Note 13 – Litigation and Other Contingencies” in this Annual Report on Form 10-K. ITEM 4: MINE SAFETY DISCLOSURES Not applicable. PART II
For more information on our legal proceedings, see “Item 8. Note 12 – Litigation and Other Contingencies” in this Annual Report on Form 10-K. ITEM 4: MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Ending December 31, Index 2019 2020 2021 2022 2023 2024 Enterprise Financial Services Corp $ 100.00 $ 74.17 $ 101.53 $ 107.65 $ 100.47 $ 129.91 Nasdaq Composite Index $ 100.00 $ 144.92 $ 177.06 $ 119.45 $ 172.77 $ 223.87 S&P Regional Banks Select Industry Index $ 100.00 $ 92.90 $ 129.98 $ 110.80 $ 102.56 $ 122.17 *Source: S&P Global Market Intelligence.
Biggest changeThere is no assurance the Company’s common stock performance will continue in the future with the same or similar results as shown in the graph. 30 Period ending December 31, Index 2020 2021 2022 2023 2024 2025 Enterprise Financial Services Corp $ 100.00 $ 138.15 $ 146.47 $ 136.70 $ 176.77 $ 172.97 Nasdaq Composite Index $ 100.00 $ 142.60 $ 177.25 $ 118.16 $ 166.15 $ 221.45 S&P Regional Banks Select Industry Index $ 100.00 $ 140.64 $ 119.89 $ 110.98 $ 132.20 $ 146.25 *Source: S&P Global Market Intelligence.
As a result, no assurance can be given that dividends will be paid in the future with respect to our common stock. Recent Sales of Unregistered Securities and Use of Proceeds None.
As a result, no assurance can be given that dividends will be paid in the future with respect to our common stock. 29 Recent Sales of Unregistered Securities and Use of Proceeds None.
Business - Supervision and Regulation - Financial Holding Company - Dividend Restrictions and Share Repurchases.” The amount of dividends, if any, that may be declared by the Company also depends on many other factors, including future earnings, bank regulatory capital requirements and business conditions as they affect the Company and its subsidiaries.
Business - Supervision and Regulation - Financial Holding Company - Dividend Restrictions and Stock Repurchases.” The amount of dividends, if any, that may be declared by the Company also depends on many other factors, including future earnings, bank regulatory capital requirements and business conditions as they affect the Company and its subsidiaries.
The graph compares the Company’s common stock with the Nasdaq Composite Index (U.S. companies) and the S&P Regional Banks Select Industry Index. The graph assumes an investment of $100.00 in the Company’s common stock and each index at the respective closing price on December 31, 2019 and reinvestment of all quarterly dividends.
The graph compares the Company’s common stock with the Nasdaq Composite Index (U.S. companies) and the S&P Regional Banks Select Industry Index. The graph assumes an investment of $100.00 in the Company’s common stock and each index at the respective closing price on December 31, 2020 and reinvestment of all quarterly dividends.
However, we have no obligation to pay dividends and we may change our dividend policy at any time without notice to our shareholders. Our ability to pay dividends is substantially dependent upon the ability of our subsidiaries to pay cash dividends to us.
However, we have no obligation to pay dividends and we may change our dividend policy at any time without notice to our stockholders. Our ability to pay dividends is substantially dependent upon the ability of our subsidiaries to pay cash dividends to us.
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock The Company’s common stock trades on the Nasdaq Global Select Market under the symbol “EFSC.” As of February 26, 2025, the Company had 1,523 registered shareholders of common stock.
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock The Company’s common stock trades on the Nasdaq Global Select Market under the symbol “EFSC.” As of February 25, 2026, the Company had 1,422 registered stockholders of common stock.
The repurchases may be made from time to time in the open market or through privately negotiated transactions. 29 Stock Performance Graph The following graph compares the cumulative total shareholder return on the Company’s common stock from December 31, 2019 through December 31, 2024.
The repurchases may be made from time to time in the open market or through privately negotiated transactions. Stock Performance Graph The following graph compares the cumulative total stockholder return on the Company’s common stock from December 31, 2020 through December 31, 2025.
Dividends The Company paid quarterly cash dividends on common shares in each of 2024, 2023 and 2022 and anticipates continuing to pay comparable dividends. Total dividends paid per common share were $1.06 in 2024, $1.00 in 2023 and $0.90 in 2022.
Dividends The Company paid quarterly cash dividends on common stock in each of 2025, 2024 and 2023 and anticipates continuing to pay comparable dividends. Total dividends paid per common share were $1.22 in 2025, $1.06 in 2024 and $1.00 in 2023.
Issuer Purchases of Equity Securities Period Total number of shares purchased Weighted-average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Maximum number of shares that may yet be purchased under the plans or programs (a) October 1, 2024 through October 31, 2024 77,256 $ 50.59 77,256 1,502,495 November 1, 2024 through November 30, 2024 32,000 52.64 32,000 1,470,495 December 1, 2024 through December 31, 2024 97,273 57.17 97,273 1,373,222 Total 206,529 $ 54.01 206,529 (a) In May 2022, the Company’s board of directors authorized the repurchase of up to two million shares of the Company’s common stock.
Issuer Purchases of Equity Securities Period Total number of shares purchased Weighted-average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Maximum number of shares that may yet be purchased under the plans or programs (a) October 1, 2025 through October 31, 2025 — $ — — 1,181,483 November 1, 2025 through November 30, 2025 67,000 52.64 67,000 1,114,483 December 1, 2025 through December 31, 2025 — — — 1,114,483 Total 67,000 $ 52.64 67,000 (a) In May 2022, the Company’s Board of Directors authorized the repurchase of up to two million shares of the Company’s common stock.
The investment is measured as of each subsequent fiscal year end. There is no assurance the Company’s common stock performance will continue in the future with the same or similar results as shown in the graph.
The investment is measured as of each subsequent fiscal year end.
Added
Used with permission. All rights reserved. ITEM 6: [RESERVED]

Item 7. Management's Discussion & Analysis

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

110 edited+45 added−26 removed41 unchanged
Biggest changeThe Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated. 56 Reconciliations of Non-GAAP Financial Measures Pre-Provision Net Revenue (PPNR) and Pre-Provision Net Revenue Return on Average Assets (PPNR ROAA) For the years ended December 31, ($ in thousands) 2024 2023 2022 Net interest income $ 568,096 $ 562,592 $ 473,903 Noninterest income 69,703 68,725 59,162 FDIC special assessment 625 2,412 — Core conversion expense 4,868 — — Less gain on sale of investment securities — 601 — Less gain (loss) on sale of other real estate owned 3,089 187 (93) Less noninterest expense 385,047 348,186 274,216 PPNR (non-GAAP) $ 255,156 $ 284,755 $ 258,942 Average assets $ 14,841,690 $ 13,805,236 $ 13,319,624 PPNR ROAA (non-GAAP) 1.72 % 2.06 % 1.94 % Tangible Common Equity, Tangible Book Value per Share, and Tangible Common Equity Ratio At December 31, ($ and shares in thousands, except per share data) 2024 2023 2022 Shareholders' equity (GAAP) $ 1,824,002 $ 1,716,068 $ 1,522,263 Less preferred stock 71,988 71,988 71,988 Less goodwill 365,164 365,164 365,164 Less intangible assets 8,484 12,318 16,919 Tangible common equity (non-GAAP) $ 1,378,366 $ 1,266,598 $ 1,068,192 Common shares outstanding 36,988 37,416 37,253 Tangible book value per share (non-GAAP) $ 37.27 $ 33.85 $ 28.67 Total assets (GAAP) $ 15,596,431 $ 14,518,590 $ 13,054,172 Less goodwill 365,164 365,164 365,164 Less intangible assets 8,484 12,318 16,919 Tangible assets (non-GAAP) $ 15,222,783 $ 14,141,108 $ 12,672,089 Tangible common equity to tangible assets (non-GAAP) 9.05 % 8.96 % 8.43 % 57 Return on Average Tangible Common Equity (ROATCE) and Return on Average Assets (ROAA) At or for the years ended December 31, ($ in thousands) 2024 2023 2022 Average shareholder’s equity (GAAP) $ 1,784,175 $ 1,623,121 $ 1,498,759 Less average preferred stock 71,988 71,988 71,988 Less average goodwill 365,164 365,164 365,164 Less average intangible assets 10,329 14,531 19,516 Average tangible common equity (non-GAAP) $ 1,336,694 $ 1,171,438 $ 1,042,091 Net income (GAAP) $ 185,266 $ 194,059 $ 203,043 FDIC special assessment (after tax) 470 1,814 — Core conversion expense (after tax) 3,661 — — Less gain on sale of investment securities (after tax) — 452 — Less net gain (loss) on sale of other real estate owned (after tax) 2,323 141 (70) Net income adjusted (non-GAAP) $ 187,074 $ 195,280 $ 203,113 Less preferred stock dividends 3,750 3,750 4,041 Net income available to common shareholders adjusted (non-GAAP) $ 183,324 $ 191,530 $ 199,072 Return on average common equity (non-GAAP) 10.60 % 12.27 % 13.95 % Adjusted return on average common equity (non-GAAP) 10.71 % 12.35 % 13.95 % ROATCE (non-GAAP) 13.58 % 16.25 % 19.10 % Adjusted ROATCE (non-GAAP) 13.71 % 16.35 % 19.10 % Average assets $ 14,841,690 $ 13,805,236 $ 13,319,624 Return on average assets (GAAP) 1.25 % 1.41 % 1.52 % Adjusted return on average assets (non-GAAP) 1.26 % 1.41 % 1.52 % Core Efficiency Ratio For the years ended December 31, ($ in thousands) 2024 2023 2022 Net interest income (GAAP) $ 568,096 $ 562,592 $ 473,903 Tax-equivalent adjustment 8,445 8,079 7,042 Net interest income - FTE (non-GAAP) 576,541 570,671 480,945 Noninterest income (GAAP) 69,703 68,725 59,162 Less gain on sale of investment securities — 601 — Less gain (loss) on sale of other real estate owned 3,089 187 (93) Core revenue (non-GAAP) $ 643,155 $ 638,608 $ 540,200 Noninterest expense (GAAP) $ 385,047 $ 348,186 $ 274,216 Less amortization on intangibles 3,834 4,601 5,367 Less core conversion expense 4,868 — — Less FDIC special assessment 625 2,412 — Core noninterest expense (non-GAAP) $ 375,720 $ 341,173 $ 268,849 Core efficiency ratio (non-GAAP) 58.42 % 53.42 % 49.77 % 58
Biggest changeTangible Common Equity, Tangible Book Value per Common Share, and Tangible Common Equity to Tangible Assets At December 31, (in thousands, except per share data) 2025 2024 2023 Stockholders' equity (GAAP) $ 2,039,386 $ 1,824,002 $ 1,716,068 Less preferred stock 71,988 71,988 71,988 Less goodwill 416,968 365,164 365,164 Less intangible assets 21,175 8,484 12,318 Tangible common equity (non-GAAP) $ 1,529,255 $ 1,378,366 $ 1,266,598 Common shares outstanding 36,965 36,988 37,416 Tangible book value per share (non-GAAP) $ 41.37 $ 37.27 $ 33.85 Total assets (GAAP) $ 17,300,884 $ 15,596,431 $ 14,518,590 Less goodwill 416,968 365,164 365,164 Less intangible assets 21,175 8,484 12,318 Tangible assets (non-GAAP) $ 16,862,741 $ 15,222,783 $ 14,141,108 Tangible common equity to tangible assets (non-GAAP) 9.07 % 9.05 % 8.96 % 59 Adjusted Return on Average Common Equity, Return on Average Tangible Common Equity (ROATCE) and Adjusted Return on Average Assets (ROAA) Year ended December 31, ($ in thousands) 2025 2024 2023 Average stockholder’s equity (GAAP) $ 1,939,494 $ 1,784,175 $ 1,623,121 Less average preferred stock 71,988 71,988 71,988 Less average goodwill 377,690 365,164 365,164 Less average intangible assets 8,238 10,329 14,531 Average tangible common equity (non-GAAP) $ 1,481,578 $ 1,336,694 $ 1,171,438 Net income (GAAP) $ 201,374 $ 185,266 $ 194,059 FDIC special assessment (after tax) (488) 470 1,814 Core conversion expense (after tax) — 3,661 — Acquisition costs (after tax) 2,753 — — Less net gain on sale of investment securities (after tax) 37 — 452 Less net gain on OREO (after tax) 4,685 2,323 141 Net income adjusted (non-GAAP) $ 198,917 $ 187,074 $ 195,280 Less preferred stock dividends 3,750 3,750 3,750 Net income available to common stockholders adjusted (non-GAAP) $ 195,167 $ 183,324 $ 191,530 Return on average common equity (GAAP) 10.58 % 10.60 % 12.27 % Adjusted return on average common equity (non-GAAP) 10.45 % 10.71 % 12.35 % ROATCE (non-GAAP) 13.34 % 13.58 % 16.25 % Adjusted ROATCE (non-GAAP) 13.17 % 13.71 % 16.35 % Average assets $ 16,199,003 $ 14,841,690 $ 13,805,236 Return on average assets (GAAP) 1.24 % 1.25 % 1.41 % Adjusted return on average assets (non-GAAP) 1.23 % 1.26 % 1.41 % 60 Core Efficiency Ratio Year ended December 31, ($ in thousands) 2025 2024 2023 Net interest income (GAAP) $ 626,738 $ 568,096 $ 562,592 Tax-equivalent adjustment 11,735 8,445 8,079 Net interest income - FTE (non-GAAP) 638,473 576,541 570,671 Noninterest income (GAAP) 113,123 69,703 68,725 Less insurance recoveries 1 32,112 — — Less net gain on sale of investment securities 49 — 601 Less net gain on OREO 6,255 3,089 187 Core revenue (non-GAAP) $ 713,180 $ 643,155 $ 638,608 Noninterest expense (GAAP) $ 429,807 $ 385,047 $ 348,186 Less amortization on intangibles 3,724 3,834 4,601 Less core conversion expense — 4,868 — Less FDIC special assessment (652) 625 2,412 Less acquisition costs 3,675 — — Core noninterest expense (non-GAAP) $ 423,060 $ 375,720 $ 341,173 Core efficiency ratio (non-GAAP) 59.32 % 58.42 % 53.42 % 1 Represents anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event.
The impact and any associated risks related to our critical accounting policies on our business operations are described throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies affect our reported and expected financial results. For a detailed 54 discussion on the application of these and other accounting policies, see “Item 8.
The impact and any associated risks related to our critical accounting policies on our business operations are described throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see “Item 8.
Typical demands on liquidity are changes in deposit levels, maturing time deposits which are not renewed, and fundings under credit commitments to customers. Funds are available from a number of sources, such as the core deposit base and loan and security repayments and maturities.
Typical demands on liquidity are changes in deposit levels, maturing time deposits which are not renewed, and fundings under credit commitments to clients. Funds are available from a number of sources, such as the core deposit base and loan and security repayments and maturities.
At December 31, 2024, the Company had derivative contracts to manage interest rate risk, including $400.0 million in notional value on derivatives to hedge the cash flows on floating rate loans and $32.1 million in notional value on derivatives on floating rate debt. Derivative financial instruments are discussed in “Item 8.
At December 31, 2025, the Company had derivative contracts to manage interest rate risk, including $400.0 million in notional value on derivatives to hedge the cash flows on floating rate loans and $32.1 million in notional value on derivatives on floating rate debt. Derivative financial instruments are discussed in “Item 8.
The following table summarizes contractual maturity and tax-equivalent yields on the investment portfolio at December 31, 2024: Within 1 year 1 to 5 years 5 to 10 years Over 10 years Total ($ in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Obligations of U.S.
The following table summarizes contractual maturity and tax-equivalent yields on the investment portfolio at December 31, 2025: Within 1 year 1 to 5 years 5 to 10 years Over 10 years Total ($ in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Obligations of U.S.
Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. There can be no assurances that actual results will not differ from those estimates. Allowance for Credit Losses The Company maintains separate allowances for funded loans, unfunded loans, and held-to-maturity securities, collectively referred to as the ACL.
Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. There can be no assurances that actual results will not differ from those estimates. ACL The Company maintains separate allowances for funded loans, unfunded loans, and held-to-maturity securities, collectively referred to as the ACL.
This portfolio also includes tax credit brokerage through 10-year streams of state tax credits from affordable housing development funds. The tax credits are sold to clients and other individuals for tax planning purposes. SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, commercial real estate loans secured by a 1st lien.
This portfolio also includes tax credit brokerage through 10-year streams of state tax credits from affordable housing development funds. The tax credits are sold to clients and other individuals for tax planning purposes. SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, CRE loans secured by a 1st lien.
The majority of variable loans are based on the prime rate or SOFR. At December 31, 2024, $4.6 billion or 68% of variable rate loans were subject to an interest rate floor. Most variable rate loan originations have one-to three-year maturities. Management monitors this mix as part of its interest rate risk management.
The majority of variable rate loans are based on the prime rate or SOFR. At December 31, 2025, $4.8 billion or 68% of variable rate loans were subject to an interest rate floor. Most variable rate loan originations have one-to three-year maturities. Management monitors this mix as part of its interest rate risk management.
Commercial real estate loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral. In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations.
CRE loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral. In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations.
A detailed discussion comparing 2023 and 2022 results is incorporated herein by reference to Item 7 of the Company’s 2023 Annual Report on Form 10-K filed on February 26, 2024. Executive Summary Our Company offers a broad range of business and personal banking services including wealth management.
A detailed discussion comparing 2024 and 2023 results is incorporated herein by reference to Item 7 of the Company’s 2024 Annual Report on Form 10-K filed on February 28, 2025. Executive Summary The Company offers a broad range of business and personal banking services including wealth management.
The Company uses financial modeling techniques to measure interest rate risk. These techniques measure the sensitivity of future earnings due to changing interest rate environments. Guidelines established by the Bank’s Asset/Liability Management Committee and approved by the Bank’s Board of Directors are used to monitor exposure of earnings at risk.
These techniques measure the sensitivity of future earnings due to changing interest rate environments. Guidelines established by the Bank’s Asset/Liability Management Committee and approved by the Bank’s Board of Directors are used to monitor exposure of earnings at risk.
The Company had no debt securities classified as trading at December 31, 2024, or 2023.
The Company had no debt securities classified as trading at December 31, 2025 or December 31, 2024.
Management considers both on-balance sheet and off-balance sheet transactions in its evaluation of the Company’s liquidity. The Company has $3.1 billion in unused commitments to extend credit as of December 31, 2024.
Management considers both on-balance sheet and off-balance sheet transactions in its evaluation of the Company’s liquidity. The Company has $3.0 billion in unused commitments to extend credit as of December 31, 2025.
NOTE: The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each. Net interest income (on a tax equivalent basis) was $576.5 million for 2024, compared to $570.7 million for 2023, an increase of $5.9 million.
NOTE: The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each. Net interest income (on a tax-equivalent basis) was $638.5 million for 2025, compared to $576.5 million for 2024, an increase of $61.9 million.
The main use of this liquidity is to provide the funds necessary to pay dividends to shareholders, service debt, invest in subsidiaries as necessary, and satisfy other operating requirements. In 2024, the holding company maintained a revolving line of credit for an aggregate amount up to $25 million, all of which was available at December 31, 2024.
The main use of this liquidity is to provide the funds necessary to pay dividends to stockholders, service debt, invest in subsidiaries as necessary, repurchase common stock and satisfy other operating requirements. In 2025, the holding company maintained a revolving line of credit for an aggregate amount up to $25 million, all of which was available at December 31, 2025.
At December 31, 2024 and 2023, the Company had an agricultural loan portfolio of $121.8 million and $229.7 million, respectively. The Company continues to wind down this portfolio over time as the loans mature or pay down. The Company does not intend to enter into new agricultural loans.
At December 31, 2025 and 2024, the Company had an agricultural loan portfolio of $69.3 million and $121.8 million, respectively. The Company continues to wind down this portfolio over time as the loans mature or pay down. The Company does not intend to enter into new agricultural loans.
Securities totaled $2.8 billion at December 31, 2024, and included $1.5 billion pledged as collateral for deposits of public institutions, treasury, loan notes, and other requirements. The remaining $1.3 billion could be pledged or sold to enhance liquidity, if necessary.
Securities totaled $3.7 billion at December 31, 2025, and included $1.7 billion pledged as collateral for deposits of public institutions, treasury, loan notes, and other requirements. The remaining $2.0 billion could be pledged or sold to enhance liquidity, if necessary.
However, the Company provides other financial measures, such as core efficiency ratio, tangible common equity ratio, return on average tangible common equity, and tangible book value per common share, in this report that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
However, the Company provides other financial measures, such as adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, in this report that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
The portfolio is comprised of both available-for-sale and held-to-maturity securities. The table below sets forth the carrying value of investment securities, excluding the allowance for credit losses: December 31, 2024 2023 ($ in thousands) Amount % Amount % Obligations of U.S.
The portfolio is comprised of both available-for-sale and held-to-maturity securities. The table below sets forth the carrying value of investment securities, excluding the ACL: December 31, 2025 2024 ($ in thousands) Amount % Amount % Obligations of U.S.
In addition to amounts borrowed at December 31, 2024, the Company could borrow an additional $1.3 billion from the FHLB of Des Moines under blanket loan pledges and has additional real estate loans that could be pledged. The Company also has $2.8 billion available from the Federal Reserve Bank under a pledged loan agreement.
In addition to amounts borrowed at December 31, 2025, the Company could borrow an additional $1.6 billion from the FHLB of Des Moines as of December 31, 2025 under blanket loan pledges and has additional real estate loans that could be pledged. The Company also has $3.0 billion available from the Federal Reserve under a pledged loan agreement.
The Company also has unsecured federal funds lines with seven correspondent banks totaling $140 million. In the normal course of business, the Company enters into certain forms of off-balance sheet transactions, including unfunded loan commitments and letters of credit. These transactions are managed through the Company’s various risk management processes.
The Company also has unsecured federal funds lines with eight correspondent banks totaling $135 million as of December 31, 2025. 53 In the normal course of business, the Company enters into certain forms of off-balance sheet transactions, including unfunded loan commitments and letters of credit. These transactions are managed through the Company’s various risk management processes.
The line of credit had a one-year term that matured in February 2025, the interest rate was one-month Term SOFR plus 185 basis points, and an annual unused commitment fee of 0.40% was assessed. The proceeds could be used for general corporate purposes.
The line of credit has a one-year term that was renewed in February 2026, has an interest rate of one-month Term SOFR plus 185 basis points, and the annual unused commitment fee was 0.40%. The proceeds can be used for general corporate purposes.
The Company considers its core efficiency ratio, tangible common equity ratio, return on average tangible common equity, and tangible book value per common share, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis.
The Company considers its adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, collectively “core performance measures,” presented in this report as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis.
Core performance measures exclude certain other income and expense items, such as core conversion expenses, FDIC special assessment, merger-related expenses, facilities charges, and the gain or loss on sale of other real estate owned and investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis.
Core performance measures exclude certain other income and expense items, such as acquisition costs, core conversion expenses, FDIC special assessment, net gain or loss on OREO, and net gain or loss on the sale of investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis.
See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the allowance for credit losses methodology. Nonperforming loans and assets See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and other real estate.
See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the ACL methodology. Nonperforming loans and assets See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and OREO.
The guaranteed portion of SBA loans totaling $23.1 million and $42.1 million were sold during 2024 and 2023. Liability liquidity funding sources are available to increase financial flexibility.
The guaranteed portion of SBA loans totaling $78.2 million and $23.1 million were sold during 2025 and 2024, respectively. Liability funding sources are available to increase financial flexibility.
A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.” Noninterest expense increased $36.9 million, or 11%, in 2024 compared to 2023.
A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.” Noninterest expense increased $44.8 million, or 12%, in 2025 compared to 2024.
General interest rate movements are used to develop sensitivity as management believes it has no primary exposure to a specific point on the yield curve. These limits are based on the Company’s exposure to immediate and sustained parallel rate movements, either upward or downward. The Company does not have any direct market risk from commodity exposures.
General interest rate movements are used to develop sensitivity as management believes it has no primary exposure to a specific point on the yield curve. These limits are based on the Company’s exposure to immediate and sustained parallel rate movements, either upward or downward.
Interest income includes net loan fees of $9.6 million, $13.8 million, and $16.7 million for the years ended December 31, 2024, 2023, and 2022 respectively. Loan fees in 2022 included Paycheck Protection Program fees of $4.1 million. 2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%.
Interest income includes loan fees of $7.0 million, $9.6 million, and $13.8 million for the years ended December 31, 2025, 2024, and 2023 respectively. 2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%.
At December 31, 2024, $334.2 million of these loans include the use of interest reserves and follow standard underwriting guidelines.
At December 31, 2025, $378.5 million of these loans include the use of interest reserves and follow standard underwriting guidelines.
Interest Rate Risk Our interest rate risk management practices are aimed at optimizing net interest income, while guarding against deterioration that could be caused by certain interest rate scenarios. Interest rate sensitivity varies with different types of interest-earning assets and interest-bearing liabilities.
The Company does not have any direct market risk from commodity exposures. 55 Interest Rate Risk Our interest rate risk management practices are aimed at optimizing net interest income, while guarding against deterioration that could be caused by certain interest rate scenarios. Interest rate sensitivity varies with different types of interest-earning assets and interest-bearing liabilities.
This difference represents the Company’s earnings sensitivity to a positive or negative parallel rate shock. 53 The following table summarizes the projected impact of interest rate shocks on net interest income: Annual % change in net interest income At December 31, Rate Shock 2024 2023 + 300 bp 7.9% 9.8% + 200 bp 5.4% 6.6% + 100 bp 2.7% 3.3% - 100 bp (3.0)% (3.5)% - 200 bp (6.0)% (7.3)% - 300 bp (8.5)% (11.2)% In addition to the rate shocks shown in the table above, the Company models net interest income under various dynamic interest rate scenarios.
The following table summarizes the projected impact of interest rate shocks on net interest income: Annual % change in net interest income At December 31, Rate Shock 2025 2024 + 300 bp 10.1% 7.9% + 200 bp 6.9% 5.4% + 100 bp 3.6% 2.7% - 100 bp (4.1)% (3.0)% - 200 bp (7.9)% (6.0)% - 300 bp (11.0)% (8.5)% In addition to the rate shocks shown in the table above, the Company models net interest income under various dynamic interest rate scenarios.
For additional information on the Company’s contractual obligations and commitments see the following footnotes in Item 8: “Note 5 – Leases,” “Note 6 – Derivative Financial Instruments,” “Note 10 – Subordinated Debentures and Notes,” “Note 11 – Federal Home Loan Bank Advances,” “Note 12 – Other Borrowings,” and “Note 17 – Commitments and Contingent Liabilities.” Capital Resources The Company and the Bank are subject to various regulatory capital requirements administered by the state and federal banking agencies.
For additional information on the Company’s contractual obligations and commitments, see the following footnotes in Item 8: “Note 6 – Leases,” “Note 7 – Derivative Financial Instruments,” “Note 11 – Debt,” and “Note 16 – Commitments and Contingent Liabilities.” Capital Resources The Company and the Bank are subject to various regulatory capital requirements administered by the state and federal banking agencies.
The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio. These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million and $350.0 million at December 31, 2024 and 2023, respectively.
The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio. These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million at both December 31, 2025 and 2024. See “Interest Rate Risk” of this MD&A section for additional information.
Conversely, a decrease in interest rates would reduce the amount available for reimbursement and decrease noninterest expense. Critical Accounting Policies and Estimates The following accounting policies are considered most critical to the understanding of the Company’s financial condition and results of operations. These critical accounting policies require management’s most difficult, subjective and complex judgments about matters that are inherently uncertain.
Conversely, a decrease in interest rates would reduce the amount available for reimbursement and decrease noninterest expense. 56 Critical Accounting Policies and Estimates The following accounting policies are considered most critical to the understanding of the Company’s financial condition and results of operations.
Other real estate The following table summarizes the changes in other real estate: Year ended December 31, ($ in thousands) 2024 2023 Other real estate, beginning of period $ 5,736 $ 269 Additions 6,559 5,736 Changes in valuation allowance (156) — Sales (8,184) (269) Other real estate, end of period $ 3,955 $ 5,736 47 Investments At December 31, 2024, our portfolio of investment securities was $2.8 billion, or 18% of total assets, compared to $2.4 billion, or 16% of total assets as of December 31, 2023.
OREO The following table summarizes the changes in OREO: Year ended December 31, ($ in thousands) 2025 2024 OREO, beginning of period $ 3,955 $ 5,736 Additions 84,905 6,559 Changes in valuation allowance — (156) Sales (7,316) (8,184) OREO, end of period $ 81,544 $ 3,955 Investment Securities At December 31, 2025, our portfolio of investment securities was $3.7 billion, or 22% of total assets, compared to $2.8 billion, or 18% of total assets as of December 31, 2024.
The following table summarizes the Company’s capital ratios: December 31, 2024 December 31, 2023 ($ in thousands) EFSC Bank EFSC Bank To Be Well-Capitalized Minimum Ratio with CCB Common Equity Tier 1 Capital to Risk Weighted Assets 11.8 % 12.4 % 11.3 % 12.2 % 6.5 % 7.0 % Tier 1 Capital to Risk Weighted Assets 13.1 % 12.4 % 12.7 % 12.2 % 8.0 % 8.5 % Total Capital to Risk Weighted Assets 14.6 % 13.4 % 14.2 % 13.2 % 10.0 % 10.5 % Leverage Ratio (Tier 1 Capital to Average Assets) 11.1 % 10.5 % 11.0 % 10.6 % 5.0 % N/A Tangible common equity to tangible assets 1 9.05 % 8.96 % Common equity tier 1 capital $ 1,505,162 $ 1,578,293 $ 1,387,802 $ 1,493,105 Tier 1 capital 1,670,810 1,578,353 1,553,448 1,493,163 Total risk-based capital 1,864,334 1,708,626 1,732,501 1,608,966 1 Not a required regulatory capital ratio 52 Total regulatory capital includes $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%.
The following table summarizes the Company’s and Bank’s capital ratios: December 31, 2025 December 31, 2024 ($ in thousands) EFSC Bank EFSC Bank To Be Well-Capitalized Minimum Ratio with CCB CET1 Capital to Risk Weighted Assets 11.6 % 11.9 % 11.8 % 12.4 % 6.5 % 7.0 % Tier 1 Capital to Risk Weighted Assets 12.8 % 11.9 % 13.1 % 12.4 % 8.0 % 8.5 % Total Capital to Risk Weighted Assets 13.9 % 13.0 % 14.6 % 13.4 % 10.0 % 10.5 % Leverage Ratio (Tier 1 Capital to Average Assets) 10.5 % 9.7 % 11.1 % 10.5 % 5.0 % N/A Tangible common equity to tangible assets 1 9.07 % 9.05 % CET1 capital $ 1,583,989 $ 1,623,652 $ 1,505,162 $ 1,578,293 Tier 1 capital 1,749,635 1,623,711 1,670,810 1,578,353 Total risk-based capital 1,891,444 1,765,520 1,864,334 1,708,626 1 Not a required regulatory capital ratio At December 31, 2024, total regulatory capital included $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%.
Estimated uninsured deposits include $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2024 and 2023, respectively. Shareholders’ equity Shareholders’ equity totaled $1.8 billion at December 31, 2024, an increase of $107.9 million, or 6%, from December 31, 2023.
Estimated uninsured deposits include $0.4 billion and $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2025 and 2024, respectively. Stockholders’ equity Stockholders’ equity totaled $2.0 billion at December 31, 2025, an increase of $215.4 million, or 12%, from December 31, 2024.
In 2024, the Company sold the guaranteed portion of SBA 7(a) loans of $23.1 million for a gain of $1.4 million, compared to $42.1 million and $2.0 million, respectively, in 2023. 36 Noninterest Expense The following table presents a comparative summary of the components of noninterest expense: Year ended December 31, Change from ($ in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Employee compensation and benefits $ 182,713 $ 164,566 $ 147,029 $ 18,147 $ 17,537 Deposit costs 88,645 72,293 31,082 16,352 41,211 Occupancy 17,231 16,526 17,640 705 (1,114) Data processing 19,671 15,196 13,513 4,475 1,683 Professional fees 6,257 5,719 7,079 538 (1,360) Other expenses 70,530 73,886 57,873 (3,356) 16,013 Total noninterest expense $ 385,047 $ 348,186 $ 274,216 $ 36,861 $ 73,970 Efficiency ratio 60.37 % 55.15 % 51.44 % 5.22 % 3.71 % Core efficiency ratio 1 58.42 % 53.42 % 49.77 % 5.00 % 3.65 % 1 A non-GAAP measure.
In 2025, the Company sold the guaranteed portion of SBA 7(a) loans of $78.2 million for a gain of $4.2 million, compared to $23.1 million and $1.4 million, respectively, in 2024. 37 Noninterest Expense The following table presents a comparative summary of the components of noninterest expense: Year ended December 31, Change from ($ in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Employee compensation and benefits $ 198,666 $ 182,713 $ 164,566 $ 15,953 $ 18,147 Deposit costs 103,231 88,645 72,293 14,586 16,352 Occupancy 20,154 17,231 16,526 2,923 705 Data processing 20,239 19,671 15,196 568 4,475 Professional fees 9,605 6,257 5,719 3,348 538 Other expenses 77,912 70,530 73,886 7,382 (3,356) Total noninterest expense $ 429,807 $ 385,047 $ 348,186 $ 44,760 $ 36,861 Efficiency ratio 58.1 % 60.4 % 55.2 % (2.3) % 5.2 % Core efficiency ratio 1 59.3 % 58.4 % 53.4 % 0.9 % 5.0 % 1 A non-GAAP measure.
Brokered certificates of deposit increased $1.8 million, to $484.6 million at December 31, 2024. Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings. The brokered certificates of deposit balance has a weighted average cost of 4.50% and a weighted average remaining term of 9 months at December 31, 2024.
Brokered certificates of deposit increased $237.4 million, to $722.0 million at December 31, 2025. Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings. The brokered certificates of deposit balance has a weighted average cost of 3.98% and a weighted average remaining term of six months at December 31, 2025.
Because economic conditions can change and are difficult to predict, the anticipated amount of estimated loan defaults and losses, and therefore the adequacy of the allowance, could change significantly and have a direct impact on the Company’s credit costs.
Because economic conditions can change and are difficult to predict, the anticipated amount of estimated loan defaults and losses, and therefore the adequacy of the allowance, could change significantly and have a direct impact on the Company’s credit costs. The Company’s ACL on loans was $140.0 million at December 31, 2025 based on the weighting of the different economic scenarios.
($ in thousands, except per share data) At or for the year ended December 31, 2024 2023 2022 EARNINGS Total interest income $ 851,051 $ 764,919 $ 515,082 Total interest expense 282,955 202,327 41,179 Net interest income 568,096 562,592 473,903 Provision (benefit) for credit losses 21,508 36,605 (611) Net interest income after provision (benefit) for credit losses 546,588 525,987 474,514 Total noninterest income 69,703 68,725 59,162 Total noninterest expense 385,047 348,186 274,216 Income before income tax expense 231,244 246,526 259,460 Income tax expense 45,978 52,467 56,417 Net income $ 185,266 $ 194,059 $ 203,043 Preferred dividends 3,750 3,750 4,041 Net income available to common shareholders $ 181,516 $ 190,309 $ 199,002 Basic earnings per share $ 4.86 $ 5.09 $ 5.32 Diluted earnings per share $ 4.83 $ 5.07 $ 5.31 Return on average assets 1.25 % 1.41 % 1.52 % Adjusted return on average assets 1 1.26 % 1.41 % 1.52 % Return on average common equity 10.60 % 12.27 % 13.95 % Adjusted return on average common equity 1 10.71 % 12.35 % 13.95 % Return on average tangible common equity 1 13.58 % 16.25 % 19.10 % Adjusted return on average tangible common equity 1 13.71 % 16.35 % 19.10 % Net interest margin (fully tax equivalent) 4.16 % 4.43 % 3.89 % Efficiency ratio 60.37 % 55.15 % 51.44 % Core efficiency ratio 1 58.42 % 53.42 % 49.77 % Common dividend payout ratio 2 21.95 % 19.72 % 16.95 % Book value per common share $ 47.37 $ 43.94 $ 38.93 Tangible book value per common share 1 $ 37.27 $ 33.85 $ 28.67 Average common equity to average assets 11.54 % 11.24 % 10.71 % Tangible common equity to tangible assets 1 9.05 % 8.96 % 8.43 % ASSET QUALITY Net charge-offs $ 17,450 $ 38,044 $ 3,899 Nonperforming loans 42,687 43,728 9,981 Nonaccrual loans 42,667 43,181 9,766 Classified assets 193,838 185,389 99,122 Total assets 15,596,431 14,518,590 13,054,172 Total loans 11,220,355 10,884,118 9,737,138 Classified assets to total assets 1.24 % 1.28 % 0.76 % Nonperforming loans to total loans 0.38 % 0.40 % 0.10 % Nonperforming assets to total assets 0.30 % 0.34 % 0.08 % ACL on loans to total loans 1.23 % 1.24 % 1.41 % Net charge-offs to average loans 0.16 % 0.37 % 0.04 % 1 Non-GAAP measures.
($ in thousands, except per share data) At or for the year ended December 31, 2025 2024 2023 EARNINGS Total interest income $ 888,410 $ 851,051 $ 764,919 Total interest expense 261,672 282,955 202,327 Net interest income 626,738 568,096 562,592 Provision for credit losses 26,337 21,508 36,605 Net interest income after provision for credit losses 600,401 546,588 525,987 Total noninterest income 113,123 69,703 68,725 Total noninterest expense 429,807 385,047 348,186 Income before income tax expense 283,717 231,244 246,526 Income tax expense 82,343 45,978 52,467 Net income $ 201,374 $ 185,266 $ 194,059 Preferred dividends 3,750 3,750 3,750 Net income available to common stockholders $ 197,624 $ 181,516 $ 190,309 Basic earnings per common share $ 5.34 $ 4.86 $ 5.09 Diluted earnings per common share $ 5.31 $ 4.83 $ 5.07 Return on average assets 1.24 % 1.25 % 1.41 % Adjusted return on average assets 1 1.23 % 1.26 % 1.41 % Return on average common equity 10.58 % 10.60 % 12.27 % Adjusted return on average common equity 1 10.45 % 10.71 % 12.35 % Return on average tangible common equity 1 13.34 % 13.58 % 16.25 % Adjusted return on average tangible common equity 1 13.17 % 13.71 % 16.35 % Net interest margin (tax-equivalent) 4.21 % 4.16 % 4.43 % Efficiency ratio 58.09 % 60.37 % 55.15 % Core efficiency ratio 1 59.32 % 58.42 % 53.42 % Common dividend payout ratio 2 22.98 % 21.95 % 19.72 % Book value per common share $ 53.22 $ 47.37 $ 43.94 Tangible book value per common share 1 $ 41.37 $ 37.27 $ 33.85 Average common equity to average assets 11.53 % 11.54 % 11.24 % Tangible common equity to tangible assets 1 9.07 % 9.05 % 8.96 % ASSET QUALITY Net charge-offs $ 24,302 $ 17,450 $ 38,044 Nonperforming loans 82,809 42,687 43,728 Nonaccrual loans 81,180 42,667 43,181 Nonperforming assets 164,353 46,642 49,464 Classified assets 410,485 193,838 185,389 Total assets 17,300,884 15,596,431 14,518,590 Total loans 11,800,338 11,220,355 10,884,118 Classified assets to total assets 2.37 % 1.24 % 1.28 % Nonperforming loans to total loans 0.70 % 0.38 % 0.40 % Nonperforming assets to total assets 0.95 % 0.30 % 0.34 % ACL on loans to total loans 1.19 % 1.23 % 1.24 % Net charge-offs to average loans 0.21 % 0.16 % 0.37 % 1 Non-GAAP measures.
The attached tables contain a reconciliation of these core performance measures to the GAAP measures. The Company believes that the tangible common equity ratio provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.
The Company believes that tangible common equity to tangible assets provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject. 58 The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength.
The decrease in the provision for credit losses in 2024 was primarily due to improved credit quality, including a reduction in net charge-offs. The higher provision for credit losses in the prior year was primarily due to loan growth, net charge-offs and the increase in nonperforming loans.
The increase in the provision for credit losses in 2025 was primarily due to loan growth, net charge-offs and the increase in nonperforming loans. The higher provision for credit losses in 2024 was also primarily due to loan growth, net charge-offs and the increase in nonperforming loans.
FINANCIAL CONDITION Summary Balance Sheet ($ in thousands) December 31, % Increase (Decrease) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Cash and cash equivalents $ 764,170 $ 433,029 $ 291,359 76.47 % 48.62 % Securities 2,791,205 2,368,707 2,245,722 17.84 % 5.48 % Loans 11,220,355 10,884,118 9,737,138 3.09 % 11.78 % Assets 15,596,431 14,518,590 13,054,172 7.42 % 11.22 % Deposits 13,146,492 12,176,371 10,829,150 7.97 % 12.44 % Liabilities 13,772,429 12,802,522 11,531,909 7.58 % 11.02 % Shareholders’ equity 1,824,002 1,716,068 1,522,263 6.29 % 12.73 % 37 The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total shareholders’ equity), as applicable: December 31, 2024 2023 2022 Cash and cash equivalents to total assets 4.90 % 2.98 % 2.23 % Securities to total assets 17.90 % 16.31 % 17.20 % Loans to total assets 71.94 % 74.97 % 74.59 % Deposits to total liabilities 95.46 % 95.11 % 93.91 % Assets Loans by Type The Company has a diversified loan portfolio, with no particular concentration of credit in any one economic sector other than those noted in the table of loans by NAICS code below; however, a substantial portion of the portfolio, including the C&I category, is secured by real estate.
A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.” 38 FINANCIAL CONDITION Summary Balance Sheet ($ in thousands) December 31, % Increase (Decrease) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Cash and cash equivalents $ 681,902 $ 764,170 $ 433,029 (10.77) % 76.47 % Securities 3,729,992 2,791,205 2,368,707 33.63 % 17.84 % Loans 11,800,338 11,220,355 10,884,118 5.17 % 3.09 % Assets 17,300,884 15,596,431 14,518,590 10.93 % 7.42 % Deposits 14,609,342 13,146,492 12,176,371 11.13 % 7.97 % Liabilities 15,261,498 13,772,429 12,802,522 10.81 % 7.58 % Stockholders’ equity 2,039,386 1,824,002 1,716,068 11.81 % 6.29 % The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total stockholders’ equity), as applicable: December 31, 2025 2024 2023 Cash and cash equivalents to total assets 3.94 % 4.90 % 2.98 % Securities to total assets 21.56 % 17.90 % 16.31 % Loans to total assets 68.21 % 71.94 % 74.97 % Deposits to total liabilities 95.73 % 95.46 % 95.11 % Assets Loans by Type The Company has a diversified loan portfolio, with no particular concentration of credit in any one economic sector other than those noted in the table of loans by NAICS code below; however, a substantial portion of the portfolio, including the C&I category, is secured by real estate.
Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets.
The banking affiliate’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. 54 Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets.
The following table shows the average balance and average rate of the Company’s deposits by type: Years ended December 31, 2024 2023 2022 ($ in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid Average Balance Average Rate Paid Noninterest-bearing deposit accounts $ 4,042,368 — % $ 4,131,163 — % $ 4,805,549 — % Interest-bearing demand accounts 3,033,616 2.54 % 2,559,238 1.84 % 2,318,363 0.30 % Money market accounts 3,494,497 3.65 % 3,043,794 3.05 % 2,781,579 0.69 % Savings accounts 567,147 0.22 % 668,368 0.15 % 819,043 0.04 % Certificates of deposit: Brokered 519,279 4.73 % 557,761 4.44 % 128,120 1.08 % Customer 851,730 4.01 % 640,790 2.81 % 441,152 0.48 % Total interest-bearing deposits $ 8,466,269 3.13 % $ 7,469,951 2.46 % $ 6,488,257 0.46 % Total average deposits $ 12,508,637 2.12 % $ 11,601,114 1.58 % $ 11,293,806 0.27 % Average total deposits were $12.5 billion for the year ended December 31, 2024, an increase of $907.5 million, or 8%, from December 31, 2023.
These deposits totaled $3.8 billion and $3.4 billion at the end of 2025 and 2024, respectively. 51 The following table shows the average balance and average rate of the Company’s deposits by type: Year ended December 31, 2025 2024 2023 ($ in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid Average Balance Average Rate Paid Noninterest-bearing demand accounts $ 4,525,761 — % $ 4,042,368 — % $ 4,131,163 — % Interest-bearing demand accounts 3,311,368 2.08 % 3,033,616 2.54 % 2,559,238 1.84 % Money market accounts 3,730,110 3.04 % 3,494,497 3.65 % 3,043,794 3.05 % Savings accounts 535,021 0.14 % 567,147 0.22 % 668,368 0.15 % Certificates of deposit: Brokered 654,786 4.34 % 519,279 4.73 % 557,761 4.44 % Customer 878,822 3.39 % 851,730 4.01 % 640,790 2.81 % Total interest-bearing deposits $ 9,110,107 2.65 % $ 8,466,269 3.13 % $ 7,469,951 2.46 % Total average deposits $ 13,635,868 1.77 % $ 12,508,637 2.12 % $ 11,601,114 1.58 % Average total deposits were $13.6 billion for the year ended December 31, 2025, an increase of $1.1 billion, or 9%, from December 31, 2024.
Available on- and off-balance sheet liquidity sources include the following items: ($ in thousands) December 31, 2024 Federal Reserve Bank borrowing capacity $ 2,751,533 FHLB borrowing capacity 1,304,235 Unpledged securities 1,325,619 Federal funds lines (7 correspondent banks) 140,000 Cash and interest-bearing deposits 764,170 Holding Company line of credit 25,000 Total $ 6,310,557 The Company also has a portfolio of SBA guaranteed loans, a portion of which could be sold in the secondary market to generate earnings and liquidity.
Available on- and off-balance sheet liquidity sources include the following items: ($ in thousands) December 31, 2025 Federal Reserve borrowing capacity $ 3,047,606 FHLB borrowing capacity 1,603,974 Unpledged securities 1,992,864 Federal funds lines ( eight correspondent banks) 135,000 Cash and interest-bearing deposits 681,902 Holding company line of credit 25,000 Total $ 7,486,346 The Company also has a portfolio of SBA guaranteed loans, a portion of which could be sold in the secondary market to generate earnings and liquidity.
Risk Management Market risk arises from exposure to changes in interest rates and other relevant market rate or price risk. The Company faces market risk in the form of interest rate risk through transactions other than trading activities. Market risk from these activities, in the form of interest rate risk, is measured and managed through a number of methods.
The Company faces market risk in the form of interest rate risk through transactions other than trading activities. Market risk from these activities, in the form of interest rate risk, is measured and managed through a number of methods. The Company uses financial modeling techniques to measure interest rate risk.
PPNR 1 for 2024 was $255.2 million, compared to $284.8 million in 2023. PPNR ROAA 1 for 2024 and 2023 was 1.72% and 2.06%, respectively.
PPNR 1 for 2025 was $274.7 million, compared to $255.2 million in 2024. PPNR ROAA 1 for 2025 and 2024 was 1.70% and 1.72%, respectively.
Treasury Bills 128,893 4.6 % 181,701 7.7 % Corporate debt securities 142,967 5.1 % 130,994 5.5 % Total $ 2,791,462 100.0 % $ 2,369,492 100.0 % The allowance for credit losses on held-to-maturity debt securities was $0.3 million and $0.8 million at December 31, 2024 and 2023, respectively.
Treasury Bills 170,984 4.6 % 128,893 4.6 % Corporate debt securities 130,527 3.5 % 142,967 5.1 % Total $ 3,730,137 100.0 % $ 2,791,462 100.0 % The ACL on held-to-maturity debt securities was $0.1 million and $0.3 million at December 31, 2025 and 2024, respectively.
Noninterest Income The following table presents a comparative summary of the major components of noninterest income for each of the years in the three-year period ended December 31, 2024: Year ended December 31, Change from ($ in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Service charges on deposit accounts $ 18,344 $ 16,559 $ 18,326 $ 1,785 $ (1,767) Wealth management revenue 10,452 10,030 10,010 422 20 Card services revenue 9,966 10,028 11,551 (62) (1,523) Tax credit income 8,954 9,196 2,558 (242) 6,638 Other income 21,987 22,912 16,717 (925) 6,195 Total noninterest income $ 69,703 $ 68,725 $ 59,162 $ 978 $ 9,563 Noninterest income increased $1.0 million, or 1%, in 2024 compared to 2023.
Noninterest Income The following table presents a comparative summary of the major components of noninterest income for each of the years in the three-year period ended December 31, 2025: Year ended December 31, Change from ($ in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Deposit service charges $ 19,376 $ 18,344 $ 16,559 $ 1,032 $ 1,785 Wealth management revenue 10,456 10,452 10,030 4 422 Card services revenue 9,995 9,966 10,028 29 (62) Tax credit income 7,697 8,954 9,196 (1,257) (242) Anticipated insurance recoveries 32,112 — — 32,112 — Other income 33,487 21,987 22,912 11,500 (925) Total noninterest income $ 113,123 $ 69,703 $ 68,725 $ 43,420 $ 978 Noninterest income increased $43.4 million, or 62%, in 2025 compared to 2024.
The tax-equivalent adjustments were $8.4 million, $8.1 million, and $7.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. 34 Rate/Volume The following table sets forth, on a tax-equivalent basis for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in yield/rates and volume. 2024 compared to 2023 2023 compared to 2022 Increase (decrease) due to Increase (decrease) due to ($ in thousands) Volume 1 Rate 2 Net Volume 1 Rate 2 Net Interest earned on: Loans $ 45,473 $ 21,536 $ 67,009 $ 61,460 $ 170,276 $ 231,736 Taxable securities 6,347 5,900 12,247 2,355 8,927 11,282 Non-taxable securities 3 936 818 1,754 2,981 2,045 5,026 Interest-earning deposits 5,549 (61) 5,488 (13,192) 16,023 2,831 Total interest-earning assets 58,305 28,193 86,498 53,604 197,271 250,875 Interest paid on: Interest-bearing demand accounts $ 9,794 $ 20,162 $ 29,956 $ 805 $ 39,133 $ 39,938 Money market accounts 14,928 19,747 34,675 1,987 71,683 73,670 Savings (165) 451 286 (66) 736 670 Certificates of deposit 6,674 9,294 15,968 7,363 31,924 39,287 Subordinated debentures and notes 35 681 716 32 583 615 FHLB advances (1,326) 265 (1,061) 555 1,599 2,154 Securities sold under agreements to repurchase (84) 2,104 2,020 (126) 3,268 3,142 Other borrowed funds (839) (1,093) (1,932) 1,729 (56) 1,673 Total interest-bearing liabilities 29,017 51,611 80,628 12,279 148,870 161,149 Net interest income $ 29,288 $ (23,418) $ 5,870 $ 41,325 $ 48,401 $ 89,726 1 Change in volume multiplied by yield/rate of prior period. 2 Change in yield/rate multiplied by volume of prior period. 3 Nontaxable income is presented on a fully tax equivalent basis using a tax rate of approximately 25%.
The tax-equivalent adjustments were $11.7 million, $8.4 million, and $8.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. 35 Rate/Volume The following table sets forth, on a tax-equivalent basis for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in yield/rates and volume. 2025 compared to 2024 2024 compared to 2023 Increase (decrease) due to Increase (decrease) due to ($ in thousands) Volume 1 Rate 2 Net Volume 1 Rate 2 Net Interest earned on: Loans $ 31,919 $ (32,145) $ (226) $ 45,473 $ 21,536 $ 67,009 Taxable securities 21,260 9,307 30,567 6,347 5,900 12,247 Non-taxable securities 3 7,204 4,456 11,660 936 818 1,754 Interest-earning deposits 2,402 (3,754) (1,352) 5,549 (61) 5,488 Total interest-earning assets 62,785 (22,136) 40,649 58,305 28,193 86,498 Interest paid on: Interest-bearing demand accounts $ 6,617 $ (14,617) $ (8,000) $ 9,794 $ 20,162 $ 29,956 Money market accounts 8,192 (22,557) (14,365) 14,928 19,747 34,675 Savings accounts (68) (469) (537) (165) 451 286 Certificates of deposit 6,562 (7,170) (608) 6,674 9,294 15,968 Subordinated debentures and notes (1,421) 467 (954) 35 681 716 FHLB advances 2,086 (355) 1,731 (1,326) 265 (1,061) Securities sold under agreements to repurchase 1,126 (964) 162 (84) 2,104 2,020 Other borrowed funds 334 954 1,288 (839) (1,093) (1,932) Total interest-bearing liabilities 23,428 (44,711) (21,283) 29,017 51,611 80,628 Net interest income $ 39,357 $ 22,575 $ 61,932 $ 29,288 $ (23,418) $ 5,870 1 Change in volume multiplied by yield/rate of prior period. 2 Change in yield/rate multiplied by volume of prior period. 3 Nontaxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%.
See “Interest Rate Risk” of this MD&A section for additional information. 44 Provision and Allowance for Credit Losses The following table presents the components of the provision for credit losses for the periods indicated: December 31, ($ in thousands) 2024 2023 Provision for credit losses on loans $ 20,629 $ 35,883 Provision for available-for-sale securities — 4,281 Benefit for off-balance sheet commitments (586) (5,450) Provision / (Benefit) for held-to-maturity securities (528) 50 Charge-offs of accrued interest 1,993 1,841 Provision for credit losses $ 21,508 $ 36,605 The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date.
Provision and ACL The following table presents the components of the provision for credit losses for the periods indicated: December 31, ($ in thousands) 2025 2024 Provision for credit losses on loans $ 23,076 $ 20,629 Benefit for off-balance sheet commitments (100) (586) Benefit for held-to-maturity securities (112) (528) Charge-offs of accrued interest 3,473 1,993 Provision for credit losses $ 26,337 $ 21,508 46 The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL on loans at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date.
Year ended December 31, 2024 2023 2022 ($ in thousands) Average Balance Interest Income/Expense Average Yield/ Rate Average Balance Interest Income/Expense Average Yield/ Rate Average Balance Interest Income/Expense Average Yield/ Rate Assets Interest-earning assets: Loans 1, 2 $ 10,990,774 $ 755,448 6.87 % $ 10,324,951 $ 688,439 6.67 % $ 9,193,682 $ 456,703 4.97 % Taxable securities 1,512,132 53,167 3.52 1,320,664 40,920 3.10 1,228,514 29,638 2.41 Non-taxable securities 2 1,000,558 31,963 3.19 970,888 30,209 3.11 872,173 25,184 2.89 Total securities 2,512,690 85,130 3.39 2,291,552 71,129 3.10 2,100,687 54,822 2.61 Interest-earning deposits 368,221 18,918 5.14 260,214 13,430 5.16 1,074,165 10,599 0.99 Total interest-earning assets 13,871,685 859,496 6.20 12,876,717 772,998 6.00 12,368,534 522,124 4.22 Noninterest-earning assets 970,005 928,519 951,090 Total assets $ 14,841,690 $ 13,805,236 $ 13,319,624 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing demand accounts $ 3,033,616 $ 76,932 2.54 % $ 2,559,238 $ 46,976 1.84 % $ 2,318,363 $ 7,038 0.30 % Money market accounts 3,494,497 127,651 3.65 3,043,794 92,976 3.05 2,781,579 19,306 0.69 Savings accounts 567,147 1,261 0.22 668,368 975 0.15 819,043 305 0.04 Certificates of deposit 1,371,009 58,764 4.29 1,198,551 42,796 3.57 569,272 3,509 0.62 Total interest-bearing deposits 8,466,269 264,608 3.13 7,469,951 183,723 2.46 6,488,257 30,158 0.46 Subordinated debentures and notes 156,260 10,497 6.72 155,702 9,781 6.28 155,160 9,166 5.91 FHLB advances 30,363 1,691 5.57 54,615 2,752 5.04 33,467 599 1.79 Securities sold under agreements to repurchase 164,959 5,667 3.44 168,745 3,647 2.16 211,039 506 0.24 Other borrowings 37,833 492 1.30 71,738 2,424 3.38 22,812 750 3.29 Total interest-bearing liabilities 8,855,684 282,955 3.20 7,920,751 202,327 2.55 6,910,735 41,179 0.60 Noninterest-bearing liabilities: Demand deposits 4,042,368 4,131,163 4,805,549 Other liabilities 159,463 130,201 104,581 Total liabilities 13,057,515 12,182,115 11,820,865 Shareholders' equity 1,784,175 1,623,121 1,498,759 Total liabilities & shareholders' equity $ 14,841,690 $ 13,805,236 $ 13,319,624 Net interest income $ 576,541 $ 570,671 $ 480,945 Net interest spread 3.00 % 3.45 % 3.62 % Net interest margin (tax equivalent) 4.16 % 4.43 % 3.89 % 1 Average balances include non-accrual loans.
Year ended December 31, 2025 2024 2023 ($ in thousands) Average Balance Interest Income/Expense Average Yield/ Rate Average Balance Interest Income/Expense Average Yield/ Rate Average Balance Interest Income/Expense Average Yield/ Rate Assets Interest-earning assets: Loans 1, 2 $ 11,463,410 $ 755,222 6.59 % $ 10,990,774 $ 755,448 6.87 % $ 10,324,951 $ 688,439 6.67 % Taxable securities 2,057,017 83,734 4.07 1,512,132 53,167 3.52 1,320,664 40,920 3.10 Non-taxable securities 2 1,209,424 43,623 3.61 1,000,558 31,963 3.19 970,888 30,209 3.11 Total securities 3,266,441 127,357 3.90 2,512,690 85,130 3.39 2,291,552 71,129 3.10 Interest-earning deposits 418,980 17,566 4.19 368,221 18,918 5.14 260,214 13,430 5.16 Total interest-earning assets 15,148,831 900,145 5.94 13,871,685 859,496 6.20 12,876,717 772,998 6.00 Noninterest-earning assets 1,050,172 970,005 928,519 Total assets $ 16,199,003 $ 14,841,690 $ 13,805,236 Liabilities and Stockholders' Equity Interest-bearing liabilities: Interest-bearing demand accounts $ 3,311,368 $ 68,932 2.08 % $ 3,033,616 $ 76,932 2.54 % $ 2,559,238 $ 46,976 1.84 % Money market accounts 3,730,110 113,286 3.04 3,494,497 127,651 3.65 3,043,794 92,976 3.05 Savings accounts 535,021 724 0.14 567,147 1,261 0.22 668,368 975 0.15 Certificates of deposit 1,533,608 58,156 3.79 1,371,009 58,764 4.29 1,198,551 42,796 3.57 Total interest-bearing deposits 9,110,107 241,098 2.65 8,466,269 264,608 3.13 7,469,951 183,723 2.46 Subordinated debentures and notes 135,809 9,543 7.03 156,260 10,497 6.72 155,702 9,781 6.28 FHLB advances 75,027 3,422 4.56 30,363 1,691 5.57 54,615 2,752 5.04 Securities sold under agreements to repurchase 201,001 5,829 2.90 164,959 5,667 3.44 168,745 3,647 2.16 Other borrowings 56,610 1,780 3.14 37,833 492 1.30 71,738 2,424 3.38 Total interest-bearing liabilities 9,578,554 261,672 2.73 8,855,684 282,955 3.20 7,920,751 202,327 2.55 Noninterest-bearing liabilities: Demand deposits 4,525,761 4,042,368 4,131,163 Other liabilities 155,194 159,463 130,201 Total liabilities 14,259,509 13,057,515 12,182,115 Stockholders' equity 1,939,494 1,784,175 1,623,121 Total liabilities & stockholders’ equity $ 16,199,003 $ 14,841,690 $ 13,805,236 Net interest income $ 638,473 $ 576,541 $ 570,671 Net interest spread 3.21 % 3.00 % 3.45 % Net interest margin 4.21 % 4.16 % 4.43 % 1 Average balances include nonaccrual loans.
The core efficiency ratio 1 was 58.4% in 2024, compared to 53.4% in 2023. • The Company’s effective tax rate was 19.9% in 2024 compared to 21.3% in 2023. 2024 Financial Highlights During 2024, we announced the following significant transactions: • The Company had a return on average assets of 1.25%.
The core efficiency ratio 1 was 59.3% in 2025, compared to 58.4% in 2024. 2024 Financial Highlights During 2024, noted the following significant developments: • The Company had a return on average assets of 1.25%.
Such obligations relate to funding operations through deposits or debt issuances, as well as leases for premises and equipment. As a financial services provider, the Company routinely enters into commitments to extend credit. While contractual obligations represent future cash requirements of the Company, a significant portion of commitments to extend credit may expire without being drawn upon.
Through the normal course of operations, the Company has entered into certain contractual obligations and other commitments. Such obligations relate to funding operations through deposits or debt issuances, as well as leases for premises and equipment. As a financial services provider, the Company routinely enters into commitments to extend credit.
Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter. 39 The following table presents a breakdown of loans by NAICS code at the periods indicated: December 31, 2024 2023 ($ in thousands) Outstanding Balance % Outstanding Balance % Accommodation and Food Services $ 1,052,105 9 % $ 975,357 9 % Administrative and Support and Waste Management and Remediation Services 207,003 2 % 215,733 2 % Agriculture, Forestry, Fishing and Hunting 1 141,339 1 % 229,719 2 % Arts, Entertainment, and Recreation 139,256 1 % 125,487 1 % Construction 584,421 5 % 692,403 6 % Educational Services 49,942 NM 54,044 1 % Finance and Insurance 2,252,420 20 % 2,005,183 18 % Health Care and Social Assistance 612,767 5 % 551,979 5 % Information 68,839 1 % 97,052 1 % Management of Companies and Enterprises 91,890 1 % 88,079 1 % Manufacturing 750,480 7 % 704,750 7 % Mining, Quarrying, and Oil and Gas Extraction 5,494 NM 32,024 NM Other Services (except Public Administration) 556,325 5 % 588,449 5 % Professional, Scientific, and Technical Services 311,160 3 % 326,176 3 % Public Administration 11,889 NM 13,774 NM Real Estate and Rental and Leasing 2,904,153 26 % 2,766,754 25 % Retail Trade 561,932 5 % 513,763 5 % Transportation and Warehousing 286,906 3 % 284,706 3 % Utilities 7,139 NM 15,853 NM Wholesale Trade 517,761 5 % 535,666 5 % Other 107,134 1 % 67,167 1 % Total Loans $ 11,220,355 100 % $ 10,884,118 100 % 1 Includes $54.2 million and $95.0 million in animal production at December 31, 2024, and 2023, respectively and $69.4 million and $113.8 million in crop production at December 31, 2024, and 2023, respectively.
Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter. 41 The following table presents a breakdown of loans by NAICS code at the periods indicated: December 31, 2025 2024 ($ in thousands) Outstanding Balance % Outstanding Balance % Accommodation and food services $ 995,727 8 % $ 1,052,105 9 % Administrative and support and waste management and remediation services 217,833 2 % 207,003 2 % Agriculture, forestry, fishing and hunting 1 106,535 1 % 141,339 1 % Arts, entertainment, and recreation 143,315 1 % 139,256 1 % Construction 635,854 5 % 584,421 5 % Educational services 49,753 NM 49,942 NM Finance and insurance 2,540,455 22 % 2,252,420 20 % Health care and social assistance 678,129 6 % 612,767 5 % Information 75,033 1 % 68,839 1 % Management of companies and enterprises 65,127 1 % 91,890 1 % Manufacturing 812,042 7 % 750,480 7 % Mining, quarrying, and oil and gas extraction 15,872 NM 5,494 NM Other services (except public administration) 547,447 5 % 556,325 5 % Professional, scientific, and technical services 334,802 3 % 311,160 3 % Public administration 13,156 NM 11,889 NM Real estate and rental and leasing 3,091,499 26 % 2,904,153 26 % Retail trade 602,440 5 % 561,932 5 % Transportation and warehousing 254,049 2 % 286,906 3 % Utilities 27,097 NM 7,139 NM Wholesale trade 524,525 4 % 517,761 5 % Other 69,648 1 % 107,134 1 % Total loans $ 11,800,338 100 % $ 11,220,355 100 % 1 Includes $40.6 million and $54.2 million in animal production at December 31, 2025, and 2024, respectively and $53.4 million and $69.4 million in crop production at December 31, 2025, and 2024, respectively.
Because these estimates and judgments are based on current circumstances, they may change over time or prove to be inaccurate based on experience. In the event different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected.
In the event different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected.
Such commitments are subject to the same credit policies and approval process accorded to loans made by the Company. The Company also enters into derivative contracts under which the Company either receives cash from or pays cash to counterparties depending on changes in interest rates.
The Company also enters into derivative contracts under which the Company either receives cash from or pays cash to counterparties depending on changes in interest rates.
The Company also had $322.5 million and $271.8 million of multifamily commercial real estate loans as of December 31, 2024 and 2023, respectively.
The Company also had $399.0 million and $322.5 million of multifamily CRE loans as of December 31, 2025 and 2024, respectively.
Income Taxes Management uses certain assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax assets and liabilities and income tax expense. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Such valuation allowance would be established through a charge to income tax expense that would adversely affect our operating results. Effects of New Accounting Pronouncements See “Item 8.
Such valuation allowance would be established through a charge to income tax expense that would adversely affect our operating results. Effects of New Accounting Pronouncements See “Item 8. Note 1 – Summary of Significant Accounting Policies – Recent Accounting Pronouncements” for information on recent accounting pronouncements and their impact, if any, on our consolidated financial statements.
The following table summarizes the allocation of the ACL on loans: December 31, ($ in thousands) 2024 2023 Balance at End of Period Applicable to: Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Commercial and industrial $ 63,231 42.1 % $ 58,886 42.9 % Real estate: Commercial 54,617 44.3 % 54,685 44.1 % Construction and land development 9,837 8.0 % 10,198 7.0 % Residential 6,534 3.2 % 6,142 3.4 % Other 3,731 2.4 % 4,860 2.6 % Total allowance $ 137,950 100.0 % $ 134,771 100.0 % The allowance for credit losses was 1.23% of total loans at December 31, 2024, compared to 1.24%, and 1.41%, at December 31, 2023 and 2022, respectively.
The following table summarizes the allocation of the ACL on loans: December 31, ($ in thousands) 2025 2024 Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans C&I $ 68,345 44.4 % $ 63,231 42.1 % Real estate: Commercial 50,783 46.2 % 54,617 44.3 % Construction and land development 11,016 5.8 % 9,837 8.0 % Residential 8,023 3.1 % 6,534 3.2 % Consumer 1,855 0.5 % 3,731 2.4 % Total allowance $ 140,022 100.0 % $ 137,950 100.0 % The ACL on loans was 1.19% of total loans at December 31, 2025, compared to 1.23%, and 1.24%, at December 31, 2024 and 2023, respectively.
Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties. Other investments primarily consist of the FHLB capital stock, common stock investments related to our trust preferred securities, community development funds, and other investments in private equity funds, primarily SBICs.
Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties. The following table details the balance of FHLB capital stock and other investments.
The total cost of the core conversion in noninterest expense was $4.9 million in 2024. For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts. These costs are reflected in noninterest expense as Deposit costs.
The increase from 2024 was also primarily due to a $14.6 million increase in deposit costs due to an increase in average deposit vertical balances. For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit allowance on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts.
The increase in 2024 was primarily due to organic growth in money market and interest-bearing demand accounts. 49 The following table sets forth the maturities of estimated uninsured certificates of deposit as of December 31, 2024. Uninsured deposits are amounts estimated to exceed the FDIC deposit insurance limit and are not subject to any federal or state insurance program.
The increase in 2025 was primarily due to acquired deposits related to the Branch Acquisition, and organic growth in noninterest-bearing demand accounts, interest-bearing demand accounts, and money market accounts. The following table sets forth the maturities of estimated uninsured certificates of deposit as of December 31, 2025.
The Company believes the tangible common equity and regulatory capital ratios are important measures of capital strength. The tangible common equity to tangible assets ratio is considered a non-GAAP measure. The tables included in this MD&A section under the caption “Use of Non-GAAP Financial Measures” reconcile these ratios to U.S. GAAP.
The tangible common equity to tangible assets ratio is considered a non-GAAP measure. The tables included in this MD&A section under the caption “Use of Non-GAAP Financial Measures” reconcile these ratios to U.S. GAAP. Risk Management Market risk arises from exposure to changes in interest rates and other relevant market rate or price risk.
Louis, MO-IL MSA $ 2,225,856 $ 2,382,192 Los Angeles-Long Beach-Santa Ana, CA MSA 1,557,990 1,561,720 Phoenix-Mesa-Scottsdale, AZ MSA 993,239 899,768 Kansas City, MO-KS MSA 975,457 953,557 San Diego-Carlsbad-San Marcos, CA MSA 297,359 234,808 Dallas-Fort Worth-Arlington, TX MSA 185,242 155,459 Albuquerque, NM MSA 211,642 183,813 Santa Fe, NM MSA 151,883 167,321 Las Vegas-Paradise, NV MSA 165,485 83,737 All other MSAs 77,364 95,024 Specialty and other loans 4,378,838 4,166,719 Total $ 11,220,355 $ 10,884,118 Loan guarantees, primarily on SBA 7(a) loans, totaled $947.7 million and $932.1 million at December 31, 2024 and 2023, respectively. 42 The following table sets forth additional information on certain categories of loans that are included in total loans above at the periods indicated: ($ in thousands) December 31, 2024 December 31, 2023 Increase (decrease) SBA loans 1,298,007 1,281,632 16,375 1 % Sponsor finance 782,722 872,264 (89,542) (10) % Life insurance premium finance 1,114,299 956,162 158,137 17 % Tax credits 760,229 734,594 25,635 3 % The sponsor finance portfolio is primarily comprised of loans in the manufacturing and wholesale trade sectors.
Louis, MO-IL MSA $ 2,203,659 $ 2,225,856 Los Angeles-Long Beach-Santa Ana, CA MSA 1,318,397 1,557,990 Phoenix-Mesa-Chandler, AZ MSA 1,254,713 993,239 Kansas City, MO-KS MSA 1,038,226 975,457 San Diego-Carlsbad-San Marcos, CA MSA 564,038 297,359 Dallas-Fort Worth-Arlington, TX MSA 279,196 185,242 Albuquerque, NM MSA 216,130 211,642 Santa Fe, NM MSA 169,771 151,883 Las Vegas-Paradise, NV MSA 236,047 165,485 Tucson-Nogales, AZ MSA 69,564 — All other MSAs 135,039 77,364 Specialty and Consumer loans 4,315,558 4,378,838 Total $ 11,800,338 $ 11,220,355 Loan guarantees, primarily on SBA 7(a) loans, totaled $960.1 million and $947.7 million at December 31, 2025 and 2024, respectively. 44 The following table sets forth additional information on certain categories of loans that are included in total loans above at the periods indicated: ($ in thousands) December 31, 2025 December 31, 2024 Increase (decrease) SBA loans $ 1,262,456 1,298,007 $ (35,551) (3) % Sponsor finance 694,905 782,722 (87,817) (11) % Life insurance premium finance 1,187,128 1,114,299 72,829 7 % Tax credits 802,818 760,229 42,589 6 % The sponsor finance portfolio is primarily comprised of loans in the manufacturing and wholesale trade sectors.
The resulting net interest income for the next 12-month period is compared to the net interest income amount calculated using flat rates.
The resulting net interest income for the next 12-month period is compared to the net interest income amount calculated using flat rates. This difference represents the Company’s earnings sensitivity to a positive or negative parallel rate shock.
The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services. These deposits totaled $3.4 billion and $2.8 billion at the end of 2024 and 2023, respectively.
The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services.
The Bank is subject to regulations and, among other things, may be limited in its ability to pay dividends or transfer funds to the parent company.
The Bank is subject to regulations and, among other things, may be limited in its ability to pay dividends or transfer funds to the parent company. Accordingly, consolidated cash flows as presented in the consolidated statements of cash flows may not represent cash immediately available for the payment of cash dividends to the Company’s stockholders or for other cash needs.
To be categorized as “well-capitalized”, banks must maintain minimum total risk-based (10%), tier 1 risk-based (8%), common equity tier 1 risk-based (6.5%), and tier 1 leverage ratios (5%). As of December 31, 2024, and December 31, 2023, the Company and the Bank met all capital adequacy requirements to which they are subject.
To be categorized as “well-capitalized”, banks must maintain minimum capital ratios as noted in the table below. As of December 31, 2025, and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they are subject. The Company and the Bank met the definition of “well-capitalized” at each of December 31, 2025 and 2024.
Government sponsored enterprises $ 276,040 9.9 % $ 296,446 12.5 % Obligations of states and political subdivisions 1,168,256 41.9 % 1,007,870 42.5 % Agency mortgage-backed securities 1,075,306 38.5 % 752,481 31.8 % U.S.
Government sponsored enterprises $ 182,572 4.9 % $ 276,040 9.9 % Obligations of states and political subdivisions 1,492,904 40.0 % 1,168,256 41.9 % Agency mortgage-backed securities 1,753,150 47.0 % 1,075,306 38.5 % U.S.
December 31, ($ in thousands) 2024 2023 Non-accrual loans $ 42,667 $ 43,181 Loans past due 90 days or more and still accruing interest 20 547 Total nonperforming loans 42,687 43,728 Other real estate 3,955 5,736 Total nonperforming assets $ 46,642 $ 49,464 Total assets $ 15,596,431 $ 14,518,590 Total loans 11,220,355 10,884,118 Total allowance for credit losses 137,950 134,771 ACL to nonaccrual loans 323 % 312 % ACL to nonperforming loans 323 % 308 % ACL to total loans 1.23 % 1.24 % Nonaccrual loans to total loans 0.38 % 0.40 % Nonperforming loans to total loans 0.38 % 0.40 % Nonperforming assets to total assets 0.30 % 0.34 % 46 Nonperforming loans based on loan type were as follows: ($ in thousands) December 31, 2024 Number of loans December 31, 2023 Number of loans Commercial and industrial $ 15,821 37 % 23 $ 7,756 18 % 15 Commercial real estate 25,096 59 % 33 33,739 77 % 27 Construction and land development 1,503 3 % 2 1,269 3 % 3 Residential real estate 258 1 % 1 959 2 % 1 Other 9 NM 4 5 — % 2 Total $ 42,687 100 % 63 $ 43,728 100 % 48 The following table summarizes the changes in nonperforming loans: Year ended December 31, ($ in thousands) 2024 2023 Nonperforming loans, beginning of period $ 43,728 $ 9,981 Additions to nonaccrual loans 55,747 109,766 Charge-offs (21,874) (43,215) Principal payments (29,000) (25,871) Moved to other real estate (5,914) (6,933) Nonperforming loans, end of period $ 42,687 $ 43,728 Nonperforming loans at December 31, 2024 decreased $1.0 million, or 2%, when compared to December 31, 2023.
December 31, ($ in thousands) 2025 2024 Nonaccrual loans $ 81,180 $ 42,667 Loans past due 90 days or more and still accruing interest 1,629 20 Total nonperforming loans 82,809 42,687 OREO 81,544 3,955 Total nonperforming assets $ 164,353 $ 46,642 Total assets $ 17,300,884 $ 15,596,431 Total loans 11,800,338 11,220,355 Total ACL on loans 140,022 137,950 ACL on loans to nonaccrual loans 172 % 323 % ACL on loans to nonperforming loans 169 % 323 % ACL on loans to total loans 1.19 % 1.23 % Nonaccrual loans to total loans 0.69 % 0.38 % Nonperforming loans to total loans 0.70 % 0.38 % Nonperforming assets to total assets 0.95 % 0.30 % 48 Nonperforming loans based on loan type were as follows: December 31, 2025 December 31, 2024 ($ in thousands) Amount Percent Number of loans Amount Percent Number of loans C&I $ 27,979 34 % 19 $ 15,821 37 % 23 CRE 46,326 56 % 39 25,096 59 % 33 Construction and land development 155 NM 1 1,503 3 % 2 Residential real estate 8,340 10 % 5 258 1 % 1 Consumer 9 NM 4 9 NM 4 Total $ 82,809 100 % 68 $ 42,687 100 % 63 The following table summarizes the changes in nonperforming loans: Year ended December 31, ($ in thousands) 2025 2024 Nonperforming loans, beginning of period $ 42,687 $ 43,728 Additions to nonaccrual loans 178,029 55,747 Charge-offs (34,516) (21,874) Principal payments (26,845) (29,000) Moved to OREO (76,546) (5,914) Nonperforming loans, end of period $ 82,809 $ 42,687 Nonperforming loans at December 31, 2025 increased $40.1 million, or 94%, when compared to December 31, 2024.
The Bank met the definition of “well-capitalized” at each of December 31, 2024 and 2023. Refer to “Item 8. Note 14 – Regulatory Capital” for a summary of our risk-based capital and leverage ratios.
Refer to “Item 8. Note 13 – Regulatory Capital” for a summary of our risk-based capital and leverage ratios.
However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP.
The Company’s management uses, and believes investors benefit from referring to, these non-GAAP measures and ratios in assessing the Company’s operating results and related trends and when forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP.
The Company had $6.7 billion in variable rate loans as of December 31, 2024. Of these loans, $4.6 billion have an interest rate floor and nearly all of those loans were at or above the floor. Variable rate loans include $2.7 billion indexed to the prime rate, $3.2 billion are indexed to SOFR, and $807.4 million indexed to other rates.
Note 7 – Derivative Financial Instruments.” The Company had $7.0 billion in variable rate loans as of December 31, 2025. Of these loans, $4.8 billion have an interest rate floor and nearly all of those loans were at or above the floor.
Changes in interest rates will also have an effect on noninterest expense. Certain deposit accounts receive an earnings credit that provides a reimbursement for costs clients incur on the accounts. As interest rates increase, the amount available for reimbursement also increases, resulting in an increase to noninterest expense.
Variable rate loans include $2.7 billion indexed to the prime rate, $3.5 billion are indexed to SOFR, and $0.8 billion indexed to other rates. Changes in interest rates will also have an effect on noninterest expense. Certain deposit accounts receive an earnings credit that provides a reimbursement for costs clients incur on the accounts.
Average balances in the deposit verticals were approximately $3.1 billion and $2.6 billion, resulting in an average deposit vertical cost of 2.82% and 2.75% for 2024 and 2023, respectively. Income Taxes The Company’s blended federal and state tax rate was approximately 24.8% in 2024 and 2023.
These costs are reflected in noninterest expense as deposit costs. Average balances in the deposit verticals were approximately $3.8 billion and $3.1 billion, resulting in an average deposit vertical cost of 2.75% and 2.82% for 2025 and 2024, respectively.

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