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What changed in FIRST INTERSTATE BANCSYSTEM INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIRST INTERSTATE BANCSYSTEM INC'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.

+493 added−433 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in FIRST INTERSTATE BANCSYSTEM INC's 2025 10-K

493 paragraphs added · 433 removed · 327 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

59 edited+35 added−29 removed99 unchanged
Biggest changeThrough our bank subsidiary, First Interstate Bank, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, government entities, and others throughout our market areas. 2 Table of Contents We are proud to provide lending opportunities to clients that participate in a wide variety of industries, including: • Agriculture • Healthcare • Professional services • Technology • Construction • Hospitality • Real Estate Development • Tourism • Education • Housing • Retail • Wholesale trade • Governmental services Historically, our authorized common stock had consisted of two classes of common stock: Class A common stock and Class B common stock.
Biggest changeThrough our bank subsidiary, First Interstate Bank, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, government entities, and others throughout our market areas.
Also included in Tier 2 capital is the allowance for credit losses (“ACL”) limited to a maximum of 1.25% of risk-weighted assets and, for institutions like us that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive Income (“AOCI”), up to 45.0% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values.
Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions like us that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive Income (“AOCI”), up to 45.0% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values.
Each loan must meet minimum underwriting standards specified in our credit policies and procedures, which generally specify that loans: (1) are made to borrowers who are generally located within or adjacent to our market footprint or own businesses and/or real estate within or adjacent to our footprint, with limited exceptions that may include participation loans and loans to national accounts; (2) are made only for identified legal purposes; (3) have specifically identified sources of repayment; (4) mature within designated maximum maturity periods that coincide with repayment sources; (5) are appropriately collateralized whenever possible; (6) are supported by current credit information; (7) do not exceed the Bank’s legal lending limit; (8) include medium-term fixed interest rates or variable rates that are adjusted within designated time frames; and (9) require compliance with laws and regulations including a flood zone and risk determination prior to closing.
Each loan must meet minimum underwriting standards specified in our credit policies and procedures, with certain exceptions to those policies, which generally specify that loans: (1) are made to borrowers who are generally located within or adjacent to our market footprint or own businesses and/or real estate within or adjacent to our footprint, with limited exceptions that may include participation loans and loans to national accounts; (2) are made only for identified legal purposes; (3) have specifically identified sources of repayment; (4) mature within designated maximum maturity periods that coincide with repayment sources; (5) are appropriately collateralized whenever possible; (6) are supported by current credit information; (7) do not exceed the Bank’s legal lending limit; (8) include medium-term fixed interest rates or variable rates that are adjusted within designated time frames; and (9) require compliance with laws and regulations including a flood zone and risk determination prior to closing.
To reduce operating costs and capitalize on the technical capabilities of selected vendors, we also leverage third-party service providers to selectively outsource certain bank operations and services, such as certain data processing, loan servicing, credit card servicing, and deposit processing systems. Additionally, specialized staff support services have been centralized to enable our branches to more efficiently serve their markets.
To reduce operating costs and capitalize on the technical capabilities of selected vendors, we also leverage third-party service providers to selectively outsource certain bank operations and services, such as certain data processing, loan servicing, credit card issuance, and deposit processing systems. Additionally, specialized staff support services have been centralized to enable our branches to more efficiently serve their markets.
We offer the following compensation and benefit programs as part of our total rewards package: • Competitive Total Compensation • Base salary • Short-term Incentive Plan (for eligible employees) • Long-term Incentive Plan (for eligible employees) • Referral incentive programs • Comprehensive Benefit Programs • Medical, dental, and vision plans • 401(k) plan with a 100% match on the first 6% contributed • Paid time off 13 Table of Contents • Health savings accounts with employer contribution • Flexible spending accounts • Company paid childcare assistance program • Student debt employer repayment program • Additional Benefits: short-term disability; long-term disability; employee assistance program; free or discounted banking products and services; wellness program; and flexible work arrangements Growth and Development As part of our commitment to fostering a dynamic and competitive workforce, we have invested significant time and resources to develop and empower our talent.
We offer the following compensation and benefit programs as part of our total rewards package: • Competitive Total Compensation • Base salary • Short-term Incentive Plan (for eligible employees) • Long-term Incentive Plan (for eligible employees) • Referral incentive programs • Comprehensive Benefit Programs • Medical, dental, and vision plans • 401(k) plan with a 100% match on the first 6% contributed • Paid time off • Health savings accounts with employer contribution 14 Table of Contents • Flexible spending accounts • Company paid childcare assistance program • Student debt employer repayment program • Additional Benefits: short-term disability; long-term disability; employee assistance program; free or discounted banking products and services; wellness program; and flexible work arrangements Growth and Development As part of our commitment to fostering a dynamic and competitive workforce, we have invested significant time and resources to develop and empower our talent.
Centralized operational activities generally support our banking offices in the delivery of products and services to clients and include: • marketing; • credit review; • loan servicing; • credit card issuance and servicing; • mortgage loan sales and servicing; • loan collections; and • other operational activities.
Centralized operational activities generally support our banking offices in the delivery of products and services to clients and include: • marketing; • credit review; • loan servicing; • credit card servicing; • mortgage loan sales and servicing; • loan collections; and • other operational activities.
Although final rules had not been adopted as of December 31, 2024, if these or other regulations are adopted in a form similar to the proposed rule-making, they could impose limitations on the manner in which we may structure compensation for our executives. Cybersecurity Federal regulators have issued two related statements regarding cybersecurity.
Although final rules had not been adopted as of December 31, 2025, if these or other regulations are adopted in a form similar to the proposed rule-making, they could impose limitations on the manner in which we may structure compensation for our executives. Cybersecurity Federal regulators have issued two related statements regarding cybersecurity.
In addition, our credit policies include lending limitations to minimize concentrations of credit in agricultural, commercial, real estate, or consumer loans. Furthermore, the criteria meeting our underwriting standards must be documented, with exceptions noted, as a part of the loan approval process.
In addition, our credit policies include lending limitations to minimize undue (or excessive) concentrations of credit in agricultural, commercial, real estate, or consumer loans. Furthermore, the criteria meeting our underwriting standards must be documented, with exceptions noted, as a part of the loan approval process.
If a depository institution fails to submit an acceptable plan, it is treated as if it is “significantly under-capitalized.” “Significantly under-capitalized” depository institutions are subject to additional requirements and restrictions, such as orders to sell sufficient stock to become “adequately capitalized,” to reduce total assets, restrict interest rates paid, remove management and directors, and cease receipt of deposits from correspondent banks.
If a depository institution fails to submit an acceptable plan, it is treated as if it is “significantly under-capitalized.” 9 Table of Contents “Significantly under-capitalized” depository institutions are subject to additional requirements and restrictions, such as orders to sell sufficient stock to become “adequately capitalized,” to reduce total assets, restrict interest rates paid, remove management and directors, and cease receipt of deposits from correspondent banks.
In addition, the Bank may not pay dividends in excess of the previous two years’ net earnings without providing notice to the Montana Division. 7 Table of Contents The capital buffer rules adopted by the federal banking regulators in accordance with the Basel Accords impose further limitations on the Bank’s ability to pay dividends.
In addition, the Bank may not pay dividends in excess of the previous two years’ net earnings without providing notice to the Montana Division. The capital buffer rules adopted by the federal banking regulators in accordance with the Basel Accords impose further limitations on the Bank’s ability to pay dividends.
Federal Reserve Regulation O restricts loans to the Bank and its parent holding company’s insiders, which includes directors, certain officers, and principal shareholders and their respective related interests.
Federal Reserve Regulation O restricts loans to the Bank’s and its parent holding company’s insiders, which includes directors, certain officers, and principal shareholders and their respective related interests.
Our website and the information contained therein or connected thereto is not intended to be incorporated by reference into this report and should not be considered a part of this report, and the referenced websites are not intended to act as active hyperlinks.
Our website and the information contained therein or connected thereto is not intended to be incorporated by reference into this report and should not be considered a part of this report, and the referenced websites are not intended to act as active hyperlinks. 15 Table of Contents
As of June 30, 2024, based on publicly available information provided by the FDIC, we believe the Bank controlled approximately 16.4% of the total deposits of all insured depository institutions located in Montana. As such, the state limitation may limit our ability to directly or indirectly acquire additional banks located in Montana.
As of June 30, 2025, based on publicly available information provided by the FDIC, we believe the Bank controlled approximately 16.6% of the total deposits of all insured depository institutions located in Montana. As such, the state limitation may limit our ability to directly or indirectly acquire additional banks located in Montana.
Under federal law and regulations, a bank holding company may acquire banks in states other than its home state if, among other things, the bank holding company is both “well-capitalized” and “well-managed” both before and after the acquisition. Banks may also merge across state lines.
Under federal law and regulations, a bank holding company may acquire banks in states other than its home state if, among other things, the bank holding company is both “well-capitalized” and “well-managed” both before and after the acquisition. 7 Table of Contents Banks may also merge across state lines.
We encourage employees to take active leadership roles within their communities to further demonstrate our values and help us respond to the needs of the markets we serve. The Company provides employees an opportunity to participate in a Bank-sponsored service project annually, marking the second Wednesday in September as our Commitment to Community Volunteer Day.
We encourage employees to take active leadership roles within their communities to further demonstrate our principles and help us respond to the needs of the markets we serve. In 2025, the Company provided employees an opportunity to participate in a Bank-sponsored service project annually, marking the second Wednesday in September as our Commitment to Community Volunteer Day.
In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (for example, recourse obligations, direct credit substitutes, residual interests), are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. 8 Table of Contents Higher levels of capital are required for asset categories believed to present greater risk.
In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (for example, recourse obligations, direct credit substitutes, residual interests), are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset.
Better Together At First Interstate Bank we recognize that fostering an inclusive workplace contributes to innovation, enhances decision-making, and improves customer experiences. Our commitment to inclusion is reflected not only within our Company but also in the communities where we live and work.
Better Together At First Interstate Bank we recognize that fostering an inclusive workplace contributes to innovation, enhances decision-making, and improves client experiences. Our commitment to inclusion is reflected not only within our Company but also in the communities where we live and work. We take pride in creating a workplace that values the unique skills and experiences our employees bring.
Leaders across the organization are held accountable for fostering engagement through active participation, sharing team results, and creating actionable engagement plans. The aggregated results are shared with the Company’s board of directors (the “Board”), serving as a key indicator of the overall health of our workforce.
These insights drive innovative solutions tailored to our employees’ needs. Leaders across the organization are held accountable for fostering engagement through active participation, sharing team results, and creating actionable engagement plans. The aggregated results serve as a key indicator of the overall health of our workforce and are shared with the Company’s board of directors (the “Board”).
The final rule became effective July 1, 2023. In October 2023, the Federal Reserve proposed revising Regulation II to lower the cap from its current rate of 21 cents and .05% of the transaction, plus a one-cent fraud-prevention adjustment, to 14.4 cents and .04% per transaction and a 1.3 cents fraud-prevention adjustment, effective June 30, 2025.
In October 2023, the Federal Reserve proposed revising Regulation II to lower the cap from its current rate of 21 cents and 0.05% of the transaction, plus a one-cent fraud-prevention adjustment, to 14.4 cents and 0.04% per transaction and a 1.3 cents fraud-prevention adjustment, which originally was to take effect on June 30, 2025.
These regulatory policies may affect our ability to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.
These regulatory policies may affect our ability to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions. The Bank remains compliant with these policies and requirements.
As of December 31, 2024, approximately 67.8% of our workforce was female, 32.0% was male, and 0.2% have not declared. The executive team is comprised of 75.0% female and 25.0% male, and the Company’s senior leadership team was 55.6% female and 44.4% male.
As of December 31, 2025, approximately 67.2% of our workforce was female, 32.6% was male, and 0.2% have not declared. The executive team is comprised of 37.5% female and 62.5% male, and the Company’s senior leadership team was 32.4% female and 67.6% male.
Furthermore, the descriptions that follow do not purport to be complete and are qualified in their entirety by reference to the full provisions of those laws and regulations.
Summaries of the material laws and regulations that are applicable to us are provided below. The descriptions that follow are not intended to summarize all laws and regulations applicable to us. Furthermore, the descriptions that follow do not purport to be complete and are qualified in their entirety by reference to the full provisions of those laws and regulations.
In light of these Executive Orders, we are continuing to analyze our policies to ensure compliance with laws while retaining our commitment to creating an inclusive and equitable environment for employees and clients alike. 14 Table of Contents Website Access to SEC Filings The Company’s electronic filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Proxy Statements, as well as amendments to these reports and statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are made available at no cost through our website at www.FIBK.com by clicking through the “Financials” tab found there and selecting “SEC Filings,” as soon as reasonably practicable after the Company files such material with, or furnishes such materials to, the SEC.
Website Access to SEC Filings The Company’s electronic filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Proxy Statements, as well as amendments to these reports and statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are made available at no cost through our website at www.FIBK.com by clicking through the “Financials” tab found there and selecting “SEC Filings,” as soon as reasonably practicable after the Company files such material with, or furnishes such materials to, the SEC.
We generally compete on the basis of service and responsiveness to client needs, available loan and deposit products, rates of interest charged on loans, rates of interest paid for deposits, and the availability and pricing of services such as trust, employee benefit, investment, and insurance services.
We generally compete on the basis of service and responsiveness to client needs, available loan and deposit products, rates of interest charged on loans, rates of interest paid for deposits, and the availability and pricing of services such as trust, employee benefit, investment, and insurance services. 6 Table of Contents Government Regulation and Supervision We are subject to extensive government regulation and supervision under federal and state laws.
Credit authorization is granted under the direction of our Chief Credit Officer and is reviewed on an ongoing basis. Loan requests over the authority of our bankers are approved by designated Credit Officers and/or the Chief Credit Officer with the concurrence of our Chief Risk Officer as necessary. Under the direction of James A.
Credit authorization is granted under the direction of our Chief Credit Officer and is reviewed on an ongoing basis. Loan requests over the authority of our bankers are approved by designated Credit Officers and, if necessary, by our new credit committee as further discussed below.
Our Employee Engagement survey allows us to track year over year progress, giving us insight into areas of strengths and opportunities for improvement, helping us continuously refine our approach to inclusion and workplace culture. Our Community Responsibility department encourages activities that remind our employees of the importance of community.
Our Employee Engagement survey allows us to track year over year progress, through the Culture of Inclusion Index questions, giving us insight into areas of strengths and opportunities for improvement, helping us continuously refine our approach to inclusion and workplace culture.
(2) As of December 31, 2024. 5 Table of Contents We operate in markets with a diverse employment base covering numerous industries and we believe our community bank approach to providing client service is a competitive advantage that strengthens the Company’s ability to effectively provide financial products and services to businesses and individuals in its markets.
We operate in markets with a diverse employment base covering numerous industries and we believe our community bank approach to providing client service is a competitive advantage that strengthens the Company’s ability to effectively provide financial products and services to businesses and individuals in its markets. Competition There is significant competition among commercial banks in our market areas.
Compensation and Benefits We strive to provide competitive wages, benefits, and programs that meet the varying needs of our workforce. We continually review our programs to ensure we remain competitive and take care of our employees.
Compensation and Benefits We strive to provide competitive wages, benefits, and programs that meet the varying needs of our workforce. We continually review our programs to ensure we remain competitive and take care of our employees. Our compensation philosophy is designed to attract, retain, and motivate talent through fair, competitive, and performance-driven pay.
We operate 300 banking offices, including branches and detached drive-up facilities, in communities across 14 states—Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
As of February 20, 2026, we operated 290 banking offices, including branches and detached drive-up facilities, in communities across 12 states— Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
We continued our Collective Learning Series, a monthly educational and community-building webinar that brings together employees to share experiences, perspectives, and learn more about our team and the communities we serve.
We continued our Collective Learning Series, a monthly educational and community-building webinar that brings together employees to share experiences, perspectives, and learn more about our team and the communities we serve. Now in its third year, this series has experienced remarkable growth, with attendance climbing significantly year after year.
We measure our success by how effectively we address workplace needs and empower local leaders to activate meaningful progress. To deepen our understanding of organizational dynamics, we conduct an annual census survey each fall and administer strategic pulse surveys throughout the year. These insights drive innovative solutions tailored to our employees’ needs.
Employee Engagement Our employee engagement strategy prioritizes creating a work environment where every employee feels heard and valued. We measure our success by how effectively we address workplace needs and empower local leaders to activate meaningful progress. To deepen our understanding of organizational dynamics, we conduct an annual census survey each fall and administer strategic pulse surveys throughout the year.
Further, the laws and regulations impose reporting and information collection obligations on the Bank. The Bank incurs significant costs relating to compliance with various laws and regulations and the collection and retention of information.
The extensive regulation of the Bank limits both the activities in which the Bank may engage and the conduct of its permitted activities. Further, the laws and regulations impose reporting and information collection obligations on the Bank. The Bank incurs significant costs relating to compliance with various laws and regulations and the collection and retention of information.
These services include the administration of estates and personal trusts, management of investment accounts for individuals, employee benefit plans and charitable foundations, and insurance planning. Centralized Services We have centralized certain operational activities to provide consistent service levels to our clients across the Bank, which helps us gain efficiency in management of those activities as well as ensure regulatory compliance.
Centralized Services We have centralized certain operational activities to provide consistent service levels to our clients across the Bank, which helps us gain efficiency in management of those activities as well as ensure regulatory compliance.
The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product. 10 Table of Contents On October 3, 2022, the Federal Reserve finalized a rule that amends Regulation II to specify, among other things, that debit card issuers should enable all debit card transactions, including card-not-present transactions such as online payments, to be processed on at least two unaffiliated payment card networks.
On October 3, 2022, the Federal Reserve finalized a rule that amends Regulation II to specify, among other things, that debit card issuers should enable all debit card transactions, including card-not-present transactions such as online payments, to be processed on at least two unaffiliated payment card networks. The final rule became effective July 1, 2023.
Market Area The following table reflects our deposit market share and branch locations by state: Deposit Market Share and Branch Locations by State % of Market Deposits (1) Deposit Market Share Rank (1) Number of Branches (2) Arizona 0.3 22 10 Colorado 0.4 29 19 Idaho 4.3 8 20 Iowa 1.9 8 45 Kansas 0.1 169 2 Minnesota — 298 1 Missouri 0.1 144 6 Montana 16.4 2 41 Nebraska 2.2 8 44 North Dakota 0.1 73 1 Oregon 2.5 9 33 South Dakota 0.4 5 46 Washington 0.4 30 17 Wyoming 13.2 1 15 Total 300 (1) Source: FDIC.gov-data as of June 30, 2024.
These services include: • credit risk management; • finance; • human resource management; • internal audit; • facilities management; • technology; • risk management; • legal; • compliance; and • other support services. 5 Table of Contents Market Area The following table reflects our deposit market share and branch locations by state: Deposit Market Share and Branch Locations by State % of Market Deposits (1) Deposit Market Share Rank (1) Number of Branches (2) Colorado 0.5 26 19 Idaho 4.2 9 20 Iowa 1.6 11 45 Minnesota (3) — 289 1 Missouri 0.1 157 6 Montana (4) 16.6 2 42 Nebraska (5) 2.1 8 44 North Dakota (3) 0.1 72 1 Oregon 2.4 9 33 South Dakota 0.4 5 46 Washington 0.4 29 17 Wyoming 13.3 1 15 Total 289 (1) Source: FDIC.gov-data as of June 30, 2025.
We take pride in creating a workplace that values diverse perspectives while ensuring fair and equitable opportunities for all employees. We are committed to advocating for the rights and respect of all and actively participate in achieving this by setting an example of this leadership in the communities we call home.
We are committed to advocating for the rights and respect of all and actively participate in achieving this by setting an example of this leadership in the communities we call home.
Our values guide how we make decisions, treat each other, and serve our clients. Workforce As of December 31, 2024, we employed 3,481 employees, with none represented by a collective bargaining agreement. This represents a decrease of 104 employees from December 31, 2023.
It is not a stand-alone initiative or program—it is integrated in our systems, and our processes. Our principles guide how we make decisions, treat each other, and serve our clients. Workforce As of December 31, 2025, we employed 3,376 employees, with none represented by a collective bargaining agreement. This represents a decrease of 105 employees from December 31, 2024.
Deposit Products We offer traditional depository products including checking, savings, and time deposits. Deposits at the Bank are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to statutory limits. We also offer repurchase agreements primarily to commercial and municipal depositors.
Deposits at the Bank are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to statutory limits. We also offer repurchase agreements primarily to commercial and municipal depositors. Under repurchase agreements, we sell investment securities held by the Bank to our clients under an agreement to repurchase the investment securities at a specified time or on demand.
Our common stock is traded on the NASDAQ Global Select Market, or NASDAQ, under the symbol “FIBK.” Since our initial public offering, we have expanded our market reach through organic growth and strategic acquisitions, including our acquisitions of Mountain West Bank, United Bank, N.A., Flathead Bank of Bigfork, Bank of the Cascades, Inland Northwest Bank, Idaho Independent Bank, Community 1st Bank, and GWB.
We are proud to provide financial services and products to clients that participate in a wide variety of industries, including: • Agriculture • Healthcare • Professional services • Technology • Construction • Hospitality • Real Estate Development • Tourism • Education • Housing • Retail • Wholesale trade • Governmental services Our common stock is traded on the NASDAQ Global Select Market, or NASDAQ, under the symbol “FIBK.” Since our initial public offering, we have expanded our market reach through organic growth and strategic acquisitions, including our acquisitions of Mountain West Bank, United Bank, N.A., Flathead Bank of Bigfork, Bank of the Cascades, Inland Northwest Bank, Idaho Independent Bank, Community 1st Bank, and Great Western Bank.
Federal regulations require FDIC-insured depository institutions and bank holding companies to meet several minimum capital standards: • a common equity Tier 1 capital to risk-based assets ratio of 4.5%; • a Tier 1 capital to risk-based assets ratio of 6.0%; • a total capital to risk-based assets ratio of 8.0%; and • a 4.0% Tier 1 capital to total assets leverage ratio.
The capital requirements are intended to ensure that banking organizations have adequate capital given the risk levels of assets and off-balance sheet financial instruments and are applied separately to the Bank and its parent holding company. 8 Table of Contents Federal regulations require FDIC-insured depository institutions and bank holding companies to meet several minimum capital standards: • a common equity Tier 1 capital to risk-based assets ratio of 4.5%; • a Tier 1 capital to risk-based assets ratio of 6.0%; • a total capital to risk-based assets ratio of 8.0%; and • a 4.0% Tier 1 capital to total assets leverage ratio.
The Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits, among other things, lending practices to consumers that are unfair, deceptive, or abusive.
The Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits, among other things, lending practices to consumers that are unfair, deceptive, or abusive. The CFPB has promulgated numerous regulations relating to consumer financial services-related topics, such as mortgage origination disclosures, mortgage servicing practices, and others.
The Fair Housing Act regulates, among other things, lending practices in residential housing and prohibits discrimination in housing-related lending activities on the basis of race, color, religion, national origin, sex, handicap, disability, or familial status.
The Truth in Lending Act (“TILA”) requires disclosures to borrowers and other parties in consumer loans, including, among other things, disclosures relating to interest rates and other finance charges, payments and payment schedules, and annual percentage rates. 11 Table of Contents The Fair Housing Act regulates, among other things, lending practices in residential housing and prohibits discrimination in housing-related lending activities on the basis of race, color, religion, national origin, sex, handicap, disability, or familial status.
The Federal Reserve has risk-based capital adequacy guidelines intended to measure capital adequacy with regard to a banking organization’s balance sheet, including off-balance sheet exposures such as unused portions of loan commitments, letters of credit, and recourse arrangements. 6 Table of Contents The extensive regulation of the Bank limits both the activities in which the Bank may engage and the conduct of its permitted activities.
We are currently subject to the regulatory capital framework and guidelines reached by Basel III as adopted by the Federal Reserve. The Federal Reserve has risk-based capital adequacy guidelines intended to measure capital adequacy with regard to a banking organization’s balance sheet, including off-balance sheet exposures such as unused portions of loan commitments, letters of credit, and recourse arrangements.
In addition, Regulation O imposes lending limits on loans to insiders and their related interests and imposes, in certain circumstances, requirements for prior approval of the loans by the Bank Board. 9 Table of Contents Safety and Soundness Standards and Other Supervisory and Enforcement Mechanisms The federal banking agencies have adopted guidelines establishing standards for safety and soundness, asset quality and earnings, loan documentation, credit underwriting, interest rate risk exposure, internal controls, and audit systems.
Safety and Soundness Standards and Other Supervisory and Enforcement Mechanisms The federal banking agencies have adopted guidelines establishing standards for safety and soundness, asset quality and earnings, loan documentation, credit underwriting, interest rate risk exposure, internal controls, and audit systems.
On October 18, 2022, the FDIC finalized a rule that would increase initial base deposit insurance assessment rates by two basis points, beginning with the first quarterly assessment period of 2023 and in 2024 the FDIC Board maintained the designated reserve ratio for the DIF at two basis points for 2025.
On October 18, 2022, the FDIC finalized a rule that would increase initial base deposit insurance assessment rates by two basis points, beginning with the first quarterly assessment period of 2023 and in 2024 and 2025 the FDIC Board maintained the designated reserve ratio for the DIF at two basis points for 2025 and 2026, respectively. 10 Table of Contents In addition, to recover costs associated with protecting uninsured depositors during the bank failures in the first half of 2023, in November 2023, the FDIC implemented a 13.4 basis point annual special assessment on uninsured deposits above $5 billion, to be collected during eight consecutive quarters beginning with the first quarter of 2024.
Under these requirements, a financial company is required to protect the security and confidentiality of clients’ nonpublic personal information.
Client Privacy and Other Consumer Protections Federal and State laws impose client privacy requirements on any company engaged in financial activities, including us. Under these requirements, a financial company is required to protect the security and confidentiality of clients’ nonpublic personal information.
We make data-driven decisions regarding employee compensation based on the job, experience, and performance. The approach we take in our benefit offerings is a holistic one to address our employees’ total well-being, which includes aspects of their health, physical, mental/emotional, social, and financial needs.
We benchmark roles against market data to ensure competitiveness, maintain a clear job architecture for internal equity and career progression, and reward performance through merit increase and incentive programs. The approach we take in our benefit offerings is a holistic one to address our employees’ total well-being, which includes aspects of their health, physical, mental/emotional, social, and financial needs.
The laws and related regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes. Federal banking regulators are required, when reviewing bank holding company acquisition or merger applications, to take into account the effectiveness of the anti-money laundering activities of the applicants.
The laws and related regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes.
Additionally, the Company is a member of the IntraFi Network, which enables us to offer our customers insurance coverage on interest-bearing demand, money market and certificate of deposit balances in excess of the FDIC insurance limits. 4 Table of Contents Wealth Management We provide a wide range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations.
All outstanding repurchase agreements are due in one business day. Additionally, the Company is a member of the IntraFi Network, which enables us to offer our customers insurance coverage on interest-bearing demand, money market and certificate of deposit balances in excess of the FDIC insurance coverage limits.
The CFPB has promulgated numerous regulations relating to consumer financial services-related topics, such as mortgage origination disclosures, mortgage servicing practices, and others. 11 Table of Contents The Community Reinvestment Act (“CRA”) generally requires the federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities, including low- and moderate-income neighborhoods.
The CRA generally requires the federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities, including low- and moderate-income neighborhoods.
We close all offices in the afternoon on Volunteer Day so employees can lend a hand in their community, either as teams or as individuals.
We closed all offices in the afternoon on Volunteer Day so employees could lend a hand in their community, either as teams or as individuals. We have also implemented a Volunteer Time benefit, which allows employees to utilize up to eight work hours each year to participate in volunteer activities of their choosing.
Our Council is comprised of 15 individuals across our footprint from various departments and includes a range of tenure with the Company. The Council meets quarterly with smaller working groups convening monthly to drive education, employee engagement, and communications that align with our overall business strategy.
The Council meets quarterly with smaller working groups convening as necessary to drive optional education opportunities, employee engagement, and communications that fit within our overall business strategy.
Interchange fees are charges that merchants pay to us and other card-issuing banks for processing electronic payment transactions.
Interchange fees are charges that merchants pay to us and other card-issuing banks for processing electronic payment transactions. The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
In an update provided on October 17, 2024, the FDIC staff projects that the reserve ratio is on track to meet the 1.35% ahead of the statutory deadline of September 30, 2028.
In an update provided on December 16, 2025, the FDIC staff projects that the reserve ratio is on track to exceed the initial estimate ahead of the statutory deadline of September 30, 2028 and reduced the special assessment rate for the eighth collection quarter from 3.36 basis points to 2.97 basis points.
Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting, and other factors. The capital requirements are intended to ensure that banking organizations have adequate capital given the risk levels of assets and off-balance sheet financial instruments and are applied separately to the Bank and its parent holding company.
Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting, and other factors.
In conjunction with our Learning & Development team, we created Better Together, a learning opportunity to ensure employees understand the value every person brings and their role in creating an inclusive and equitable environment. Better Together is now the foundational learning opportunity for incoming employees and creates a common understanding among new and more tenured employees.
Better Together is now the foundational learning opportunity for incoming employees and creates a common understanding among new and more tenured employees. Launched in the third quarter of 2024, 78% of our workforce has engaged with Better Together as of December 31, 2025.
Office of Foreign Asset Control The United States Treasury Office of Foreign Asset Control enforces economic and trade sanctions imposed by the United States on foreign persons and governments.
Federal banking regulators are required, when reviewing bank holding company acquisition or merger applications, to take into account the effectiveness of the anti-money laundering activities of the applicants. 12 Table of Contents Office of Foreign Asset Control The United States Treasury Office of Foreign Asset Control enforces economic and trade sanctions imposed by the United States on foreign persons and governments.
We are subject to the interchange fee cap and having at least two unaffiliated payment card networks because our assets exceed $10 billion. Client Privacy and Other Consumer Protections Federal and State laws impose client privacy requirements on any company engaged in financial activities, including us.
Due to active litigation involving the rule, it is not clear whether the Federal Reserve will finalize the October 2023 proposed rulemaking, and how, if at all, the Federal Reserve will enforce the rule. We are subject to the interchange fee cap and having at least two unaffiliated payment card networks because our assets exceed $10 billion.
For additional discussion on cybersecurity, see Part I, Item 1C, “Cybersecurity” included herein. 12 Table of Contents Human Capital Culture is critically important to the Company’s success; our people are our number one priority. We approach our culture with an aspirational lens. It is not a stand-alone initiative or program—it is integrated in our systems, and our processes.
The Bank continues to monitor these and other regulatory developments and remains committed to providing fair and competitive banking products and services in compliance with applicable laws and regulations. 13 Table of Contents Human Capital Culture is critically important to the Company’s success; our people are our number one priority. We approach our culture with an aspirational lens.
Removed
In March 2022, following the completion of our acquisition of Great Western Bank (“GWB”) in February 2022, all outstanding shares of our Class B common stock automatically converted into shares of our Class A common stock on a one-for-one basis. On May 24, 2023, our shareholders approved a conversion of our state of incorporation from Montana to Delaware.
Added
Our current strategy emphasizes disciplined organic growth by deepening and expanding full client relationships across deposits, lending and fee-based services. As of December 31, 2025, we had consolidated assets of $26.6 billion, deposits of $22.1 billion, loans held for investment of $15.2 billion, and total stockholders’ equity of $3.4 billion.
Removed
At the effective time of the conversion, each outstanding share of our Class A common stock became an outstanding share of our common stock. All shares of our outstanding capital stock are now composed solely of shares of common stock.
Added
Our vision is to meet people where they are and help them reach where they want to be. Rooted in the principles of community banking, we build lasting relationships and make thoughtful decisions that serve our employees, clients, communities and shareholders.
Removed
As of December 31, 2024, we had consolidated assets of $29.1 billion, deposits of $23.0 billion, loans held for investment of $17.8 billion, and total stockholders’ equity of $3.3 billion. Our mission is to help people and their money work better together.
Added
Building on this foundation, we are executing a strategic plan intended to refocus capital investment, optimize our balance sheet and improve core profitability, while continuing to advance our business in a disciplined and prudent manner.
Removed
With that as our guiding focus, we strive to be the most relevant everyday experience our clients have with their money.
Added
This plan includes initiatives to enhance credit processes and risk culture, optimize our footprint and branch network, and emphasize disciplined, relationship-driven organic growth in our existing market areas.
Removed
With our focus on community banking, we adhere to common values that have long provided a foundation for our growth and success: (1) Put people first; (2) Seek greatness; (3) Demonstrate integrity; (4) Celebrate success; and (5) Be committed to our communities. These values support our commitment to our employees, our clients, our communities, and our shareholders.
Added
In furtherance of our strategic plan focused on organic growth and relationship banking, we are prioritizing investment into existing market areas where we have brand density and are well positioned to serve the needs of our customers.
Removed
Our business model is strategically focused around four key pillars, which help us align, organize, and prioritize business strategies. These pillars guide our actions related to our employees, our clients, and our operations, ultimately leading to our financial success and creating value for our shareholders. • The first pillar is Our People, Our Priority .
Added
Accordingly, we are undertaking a comprehensive review of our branch network to optimize our physical footprint, including exiting markets that are not aligned with our strategic plan and reallocating capital, talent and resources to expand in markets where we have meaningful market share and attractive growth prospects.
Removed
The success of our Company is a reflection of our people. We are building a diverse company, attracting the right people, retaining them in the right jobs, and developing them to meet our long-term needs. Our people are informed, capable, and resilient. • The second pillar is Relentless Client Focus .
Added
For example, in October 2025, we completed the divestiture of our banking operations in Arizona and Kansas and also announced the contemplated sale of 11 branches in Nebraska, which transaction is expected to close at the beginning of the second quarter of 2026.
Removed
Our client loyalty is cultivated by our focus on every interaction, every time. By listening to our clients and learning about their needs, we are better able to connect their goals and dreams to the right products and services. • The third pillar is Future Ready, Today .
Added
We opened one branch in Montana on February 2, 2026 and intend to close four branches in eastern Nebraska, one in Minnesota, and one in North Dakota at the end of February 2026. We have further aligned select products and activities with our strategic plan, emphasizing relationship-based business and disciplined underwriting consistent with long-term performance.
Removed
We live in a world in constant motion, which requires agility and resiliency; adapting our products and processes to be scalable and sustainable is essential.
Added
In 2025, we took deliberate actions to reduce or exit selected exposures, including the intentional runoff of certain non-relationship and transactional credits and the discontinuation or outsourcing of lending products. For example, we exited our indirect lending origination business in early 2025 and outsourced our consumer credit card portfolio in mid-2025, as further described in Part II, Item 7.
Removed
Robust and relevant systems and processes create a foundation for our employees to excel—not only in their personal performance, but in their delivery of our products and services to our clients. • The fourth pillar is Financial Vitality . Our strategic focus on balance sheet management and goal-oriented financial rigor keeps us a top-performing bank.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, during the fourth quarter of 2025, we initiated a transformation of our banking organization, changing from a layered, regional and market structure to a flatter model.
Removed
Our emphasis on accountability and our collaborative approach to aligning our efforts under our four pillars allows our community banking model to flourish. By adhering to a strong set of values, we have significantly and strategically grown our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

83 edited+59 added−19 removed193 unchanged
Biggest changeOther transactions, including divestitures of any of our branches or other financial assets, also present a number of risks, including, in the case of any divestiture, the risks of not being able to timely or fully replace liquidity previously provided by deposits which may be transferred as part of such divestiture, and any divestiture or other transaction we undertake could adversely affect our business, financial condition, results of operations and cash flows.
Biggest changeFuture investment activities and efforts to monitor or reap the benefits of a new strategic relationship may require us to devote substantial time and resources and may cause these investments and relationships to be unprofitable or cause us to be unable to pursue other business opportunities, any of which could harm our business. 30 Table of Contents Other transactions and actions taken as part of our strategic plan to optimize our branch network, such as divestitures or planned closures of any of our branches or other financial assets, also present a number of risks, including, in the case of any divestiture, the risks of not being able to timely or fully replace liquidity previously provided by deposits which may be transferred as part of such divestiture, and any divestiture, strategic action or other transaction we undertake could adversely affect our business, financial condition, results of operations and cash flows.
These factors include: • general economic conditions; • prevailing market conditions; • our historical performance and capital structure; 29 Table of Contents • estimates of our business potential and earnings prospects; • an overall assessment of our management; • our performance relative to our peers; • market demand for our shares; • impact of potential large sales by investors with significant holdings, including members of the Scott Family shareholder group; • perceptions of the banking industry in general; • political influences on investor sentiment; • consumer confidence; • consummation of a strategic acquisition or other implementation of our expansion plans; • international or domestic hostilities, or other international or domestic calamities, including wars or international conflicts with respect to which the United States may or may not be directly involved; and • global conditions, earthquakes, tsunamis, tornados, floods, fires, pandemics, and other natural catastrophic events.
These factors include: • general economic conditions; • prevailing market conditions; • our historical performance and capital structure; 32 Table of Contents • estimates of our business potential and earnings prospects; • an overall assessment of our management; • our performance relative to our peers; • market demand for our shares; • impact of potential large sales by investors with significant holdings, including members of the Scott Family shareholder group; • perceptions of the banking industry in general; • political influences on investor sentiment; • consumer confidence; • consummation of a strategic acquisition or other implementation of our expansion plans; • international or domestic hostilities, or other international or domestic calamities, including wars or international conflicts with respect to which the United States may or may not be directly involved; and • global conditions, earthquakes, tsunamis, tornados, floods, fires, pandemics, and other natural catastrophic events.
For example, the FDIC and the federal banking agencies implemented “Basel III” regulatory capital reforms, which became effective in 2015 and were fully phased in as of January 2019, that substantially amended the regulatory risk-based capital rules applicable to us, as further described in Part I, Item 1. “Business” included herein.
For example, federal banking agencies implemented “Basel III” regulatory capital reforms, which became effective in 2015 and were fully phased in as of January 2019, that substantially amended the regulatory risk-based capital rules applicable to us, as further described in Part I, Item 1. “Business” included herein.
Our failure to comply with privacy, data protection, and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions, and damage to our reputation, which could have a material adverse effect on our business, financial condition, or results of operations. 23 Table of Contents In addition, while we have taken steps to implement and maintain privacy policies that are accurate, comprehensive and compliant with applicable laws, regulations, rules and industry standards, we cannot ensure that our privacy policies and other statements regarding our data processing practices will be sufficient to protect us from claims, proceedings, liability or adverse publicity relating to privacy or cybersecurity.
Our failure to comply with privacy, data protection, and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions, and damage to our reputation, which could have a material adverse effect on our business, financial condition, or results of operations. 25 Table of Contents In addition, while we have taken steps to implement and maintain privacy policies that are accurate, comprehensive and compliant with applicable laws, regulations, rules and industry standards, we cannot ensure that our privacy policies and other statements regarding our data processing practices will be sufficient to protect us from claims, proceedings, liability or adverse publicity relating to privacy or cybersecurity.
These events could reduce our earnings and cause volatility in its financial results for any fiscal quarter or year and have a material, adverse effect on our financial condition and/or results of operations. Climate change manifesting as physical or transition risks could adversely affect our operations, businesses and customers.
These events could reduce our earnings and cause volatility in our financial results for any fiscal quarter or year and have a material, adverse effect on our financial condition and/or results of operations. Climate change manifesting as physical or transition risks could adversely affect our operations, businesses and customers.
A failure to comply with these laws could result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity, and restrictions on expansion. In addition to actions by the U.S.
A failure to comply with these laws and regulations could result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity, and restrictions on expansion. In addition to actions by the U.S.
Operational Risks Our Company faces cybersecurity risks, including denial-of-service attacks, network intrusions, business e-mail compromise, and other malicious behavior could result in the disclosure of confidential information, adversely affect our business or reputation, and create significant legal, operational, and financial exposure.
Operational Risks Our Company faces cybersecurity risks, including denial-of-service attacks, network intrusions, business e-mail compromise, and other malicious behavior that could result in the disclosure of confidential information, adversely affect our business or reputation, and create significant legal, operational, and financial exposure.
We are reliant upon certain external vendors to provide products and services necessary to maintain our day-to-day operations and we currently outsource, or may outsource in the future, many of our major systems, such as certain data processing, loan servicing, credit card servicing, and deposit processing systems.
We are reliant upon certain external vendors to provide products and services necessary to maintain our day-to-day operations and we currently outsource, or may outsource in the future, many of our major systems, such as certain data processing, loan servicing, credit card issuance and servicing, and deposit processing systems.
The ability of our Bank to pay dividends to us is subject to, among other things, its earnings, financial condition, and need for funds, as well as federal and state governmental policies and regulations applicable to us and the Bank, which limit the amount that may be paid as dividends without prior approval. 30 Table of Contents Although we have historically paid dividends to our stockholders, we have no obligation to continue doing so and may change our dividend policy at any time without notice to our stockholders.
The ability of our Bank to pay dividends to us is subject to, among other things, its earnings, financial condition, and need for funds, as well as federal and state governmental policies and regulations applicable to us and the Bank, which limit the amount that may be paid as dividends without prior approval. 33 Table of Contents Although we have historically paid dividends to our stockholders, we have no obligation to continue doing so and may change our dividend policy at any time without notice to our stockholders.
Deterioration in economic conditions could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity, and results of operations: • demand for our products and services may decline; 18 Table of Contents • loan delinquencies, problem assets, and foreclosures may increase; • increases in the provisions for credit losses and loans and lease charge-offs; • decrease in net interest income derived from lending activities; • collateral for loans, especially real estate, may decline in value; • future borrowing power of our clients may be reduced; • the value of our securities portfolio may decline; • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and • increases in our operating expenses associated with attending to the effects of the above noted consequences.
Deterioration in economic conditions could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity, and results of operations: • demand for our products and services may decline; • loan delinquencies, problem assets, and foreclosures may increase; • increases in the provisions for credit losses and loans and lease charge-offs; • decrease in net interest income derived from lending activities; • collateral for loans, especially real estate, may decline in value; • future borrowing power of our clients may be reduced; • the value of our securities portfolio may decline; • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and • increases in our operating expenses associated with attending to the effects of the above noted consequences.
The prolonged higher borrowing costs resulting from the increases by the Federal Reserve may cause financial hardship on our borrowers, reducing the ability of borrowers to repay their current loan obligations.
Any prolonged higher borrowing costs resulting from the increases by the Federal Reserve may cause financial hardship on our borrowers, reducing the ability of borrowers to repay their current loan obligations.
Any third-party or fourth-party technology failure, cyber-attack, or other information or security breach, termination, or constraint within our ecosystem could, among other things, adversely affect our ability to effect transactions, service our clients, manage our exposure to risk, or expand our business. 22 Table of Contents In addition, we provide our clients with the ability to bank remotely, including online, through their mobile devices, and over the telephone.
Any third-party or fourth-party technology failure, cyber-attack, or other information or security breach, termination, or constraint within our ecosystem could, among other things, adversely affect our ability to effect transactions, service our clients, manage our exposure to risk, or expand our business. 24 Table of Contents In addition, we provide our clients with the ability to bank remotely, including online, through their mobile devices, and over the telephone.
The inability to attract and retain clients or to effectively compete for new business may have a material and adverse effect on our financial condition and results of operations. 28 Table of Contents The Company also experiences competition from non-bank companies inside and outside of its market area and, in some cases, from companies other than those traditionally considered financial sector participants.
The inability to attract and retain clients or to effectively compete for new business may have a material and adverse effect on our financial condition and results of operations. 31 Table of Contents The Company also experiences competition from non-bank companies inside and outside of its market area and, in some cases, from companies other than those traditionally considered financial sector participants.
Events like the recent bank failures and the related negative media that involve adverse developments affecting financial institutions, transactional counterparties or other companies in the banking industry, or the development of concerns or rumors about these or similar events, have in the past and may in the future lead to erosion of confidence in the banking system, deposit volatility, liquidity issues, stock price volatility, and other adverse developments.
Events like the 2023 bank failures and the related negative media that involve adverse developments affecting financial institutions, transactional counterparties or other companies in the banking industry, or the development of concerns or rumors about these or similar events, have in the past and may in the future lead to erosion of confidence in the banking system, deposit volatility, liquidity issues, stock price volatility, and other adverse developments.
In addition, our reputation and client relationships may be damaged as a result of our practices related to climate change, including our involvement, or our clients’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.
Further, our reputation and client relationships may be damaged as a result of our practices related to climate change, including our involvement, or our clients’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.
A major catastrophe, such as a pandemic, disease outbreak, or other natural disaster including extreme weather or other events, such as an earthquake, tornados, tsunami, flood, fire, drought, winter storms, or other type of natural disaster, could adversely affect our financial condition or results in a prolonged interruption of our business.
A major catastrophe, such as a pandemic, disease outbreak, or other natural disaster including extreme weather or other events, such as an earthquake, tornados, tsunami, flood, fire, drought, winter storms, or other type of natural disaster, could adversely affect our financial condition or result in a prolonged interruption of our business.
Any of these changes or new legislation could increase our future compliance and other operating expenses and could have a material adverse effect on our business, financial condition, and results of operation. Negative developments in the banking industry could result in increased regulatory scrutiny.
Any of these changes or new legislation could increase our future compliance and other operating expenses and could have a material adverse effect on our business, financial condition, and results of operations. Negative developments in the banking industry could result in increased regulatory scrutiny.
A flattening or inversion of the yield curve or a negative interest rate environment in the United States could create downward pressure on our net interest margin. 21 Table of Contents Changes in interest rates may have an adverse effect on the value of our investment securities.
A flattening or inversion of the yield curve or a negative interest rate environment in the United States could create downward pressure on our net interest margin. 23 Table of Contents Changes in interest rates may have an adverse effect on the value of our investment securities.
The Federal Reserve also indicated in December 2024 that there may be further interest rate decreases during 2025, although we cannot control or predict with certainty changes in interest rates.
The Federal Reserve also indicated in December 2025 that there may be further interest rate decreases during 2026, although we cannot control or predict with certainty changes in interest rates.
The CFPB has also focused on consumer data access issuing its final rule implementing Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the “open banking” rule to empower consumers and authorized third parties to access account data controlled by financial institutions.
The CFPB has also focused on consumer data access, including through its final rule implementing Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the “open banking” rule to empower consumers and authorized third parties to access account data controlled by financial institutions.
Maintaining our reputation depends, in part, on our ability to identify and address issues that may arise such as potential conflicts of interest, anti-money laundering, fair lending issues, client personal information and privacy issues, cybersecurity, employee, client and other third-party fraud, record-keeping, regulatory investigations, and any litigation that may arise from the failure or perceived failure of us to comply with legal and regulatory requirements.
Maintaining our reputation depends, in part, on our ability to identify and promptly address issues that may arise such as potential conflicts of interest, anti-money laundering concerns, fair lending issues, client personal information and privacy issues, cybersecurity, employee, client and other third-party fraud, record-keeping matters, regulatory investigations, and any litigation that may arise from the failure or perceived failure of us to comply with applicable legal and regulatory requirements.
The FDIC may further increase the assessment rates or impose additional special assessments in the future to restore and then steadily increase the DIF to these statutory target levels. Any increase in the Bank's FDIC premiums could have an adverse effect on its business, financial condition and results of operations.
The FDIC may further increase the assessment rates or impose additional special assessments in the future to restore the DIF to these statutory target levels. Any increase in the Bank's FDIC assessment rates could have an adverse effect on its business, financial condition and results of operations.
The Company’s inability to monetize liquid assets or to access short-term funding or capital markets could limit the Company’s ability to make new loans or meet existing lending commitments and could impact the Company’s liquidity and capitalization. Market Risks Changes in interest rates may have an adverse effect on demand for our products and services and on our profitability.
The Company’s inability to monetize liquid assets or to access short-term funding or capital markets could limit the Company’s ability to make new loans or meet existing lending commitments and could impact the Company’s liquidity and capitalization. 22 Table of Contents Market Risks Changes in interest rates may have an adverse effect on demand for our products and services and on our profitability.
Variability in market conditions or in key assumptions could result in impairment of goodwill, which is recorded as a non-cash adjustment to income. An impairment of goodwill could have a material adverse effect on our financial condition and results of operations. As of December 31, 2024, we had goodwill of $1,100.9 million, or 33.3% of our total stockholders’ equity.
Variability in market conditions or in key assumptions could result in impairment of goodwill, which is recorded as a non-cash adjustment to income. An impairment of goodwill could have a material adverse effect on our financial condition and results of operations. As of December 31, 2025, we had goodwill of $1,100.9 million, or 31.9% of our total stockholders’ equity.
A decline in economic conditions could reduce demand for our products and services and negatively impact the credit quality of loans, which could have an adverse effect on our results of operations. Our clients are located predominantly in Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
A decline in economic conditions could reduce demand for our products and services and negatively impact the credit quality of loans, which could have an adverse effect on our results of operations. Our clients are located predominantly in Colorado, Idaho, Iowa, Missouri, Montana, Nebraska, Oregon, South Dakota, Washington, and Wyoming.
For example, higher inflation, or volatility and uncertainty related to inflation, could reduce demand for our products, adversely affect the creditworthiness of the Company’s borrowers, or result in lower values for our investment securities and other interest-earning assets.
For example, higher inflation, or volatility and uncertainty related to inflation, could reduce demand for our products, adversely affect the creditworthiness of the Company’s borrowers, increase our operating costs, or result in lower values for our investment securities and other interest-earning assets.
We may see deposit levels decrease as clients adjust to distressed economic conditions by using the funds that would otherwise be savings. Accordingly, we may be required from time to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations.
We may experience potential stresses on liquidity management. We may see deposit levels decrease as clients adjust to distressed economic conditions by using the funds that would otherwise be savings. Accordingly, we may be required from time to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations.
Deflationary pressures, while possibly lowering our operating costs, could also have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our business, financial condition, and results of operations.
Deflationary pressures, while possibly lowering some of our operating costs, could also weaken economic activity and have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our business, financial condition, and results of operations.
FDIC insurance premiums could increase in the future in response to similar declining economic conditions. Credit Risks We may be subject to lending risks and risks associated with loan sector concentrations, which could adversely affect the Company. We take on credit risk by virtue of making loans and extending loan commitments and letters of credit.
FDIC insurance assessment rates could increase in the future in response to similar declining economic conditions. Credit Risks We may be subject to lending risks and risks associated with loan portfolio concentrations, which could adversely affect the Company. We take on credit risk by virtue of making loans and extending loan commitments and letters of credit.
Regulatory authorities have imposed cease and desist orders and significant civil money penalties against institutions found to be violating these regulations. If any of the foregoing were to come to pass, our business, financial condition, or results of operations could be materially and adversely affected. 17 Table of Contents Federal deposit insurance premiums could increase further in the future.
Regulatory authorities have imposed cease and desist orders and significant civil money penalties against institutions found to be violating these regulations. If any of the foregoing were to come to pass, our business, financial condition, or results of operations could be materially and adversely affected. Federal deposit insurance assessment rates could increase further in the future.
We maintain an ACL based upon, among other things, historical experience, delinquency trends, economic conditions, and regular reviews of loan portfolio quality. Based upon such factors, management makes various assumptions and judgments about the ultimate collectability of our loan portfolio and provides an ACL.
We maintain an allowance for credit losses based upon, among other things, historical experience, delinquency trends, economic conditions, and regular reviews of loan portfolio quality. Based upon such factors, management makes various assumptions and judgments about the ultimate collectability of our loan portfolio and provides an allowance for credit losses.
The soundness of other financial institutions could adversely affect the Company. Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties. For example, we execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients.
Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties. For example, we execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients.
In addition, changes in the makeup of the Senate and the House of Representatives may lead to new or changed laws and regulations applicable to us, and there may also be significant changes to the fiscal and monetary policies of the federal government of the United States and its agencies, including the Federal Reserve.
In addition, future changes in the presidential administration or in makeup of the Senate and the House of Representatives may lead to new or changed laws and regulations applicable to us, and there may also be significant changes to the fiscal and monetary policies of the federal government and its agencies, including the Federal Reserve.
Regional and local economic conditions, competitive pressures, and the policies of regulatory authorities, including monetary policies of the Federal Reserve and the speed of their implementation, affect interest income and interest expense. As of December 31, 2024, 40.3% of our loans were advanced to our clients on a variable or adjustable-rate basis.
Regional and local economic conditions, competitive pressures, and the policies of regulatory authorities, including monetary policies of the Federal Reserve and the speed of their implementation, affect interest income and interest expense. As of December 31, 2025, 41.1% of our loans were advanced to our clients on a variable or adjustable-rate basis.
To the extent these intangible assets are deemed unrecoverable, a non-cash impairment charge would be recorded which could have a material adverse effect on our results of operations. 24 Table of Contents The Company relies on other companies to provide certain key components of its business infrastructure.
To the extent these intangible assets are deemed unrecoverable, a non-cash impairment charge would be recorded which could have a material adverse effect on our results of operations. 26 Table of Contents The Company relies on third parties to provide certain key components of its business infrastructure.
There is an increasing concern over the risks of climate change and related environmental sustainability matters. The physical risks of climate change include discrete events, such as flooding and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.
There continues to be concern over the risks of climate change and related environmental sustainability matters. The physical risks of climate change include discrete events, such as flooding and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.
Divestitures and other transactions may involve significant uncertainty and execution complexity, which may cause us not to achieve our strategic objectives, realize expected cost savings, or obtain other benefits from such transaction.
These divestitures and planned closures and other similar strategic actions or transactions, may involve significant uncertainty and execution complexity, which may cause us not to achieve our strategic objectives, realize expected cost savings, or obtain other benefits from such transaction.
As a result, these increases in interest rates could result in increased loan defaults, foreclosures, and charge-offs and could necessitate further increases to the ACL, any of which could have a material adverse effect on our business, financial condition, or results of operations.
As a result, any increases in interest rates could result in increased loan defaults, foreclosures, and charge-offs and could necessitate further increases to the allowance for credit losses, any of which could have a material adverse effect on our business, financial condition, or results of operations.
If we are unable to maintain effective internal control over financial reporting: our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected; our liquidity, our access to capital markets, the perceptions of our creditworthiness, and our ability to complete acquisitions may be adversely affected; and we may be unable to maintain compliance with applicable securities laws and the rules and listing standards of the NASDAQ, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses which may negatively impact results of operations and financial condition, could negatively affect investor confidence in the accuracy and completeness of our financial statements, and could adversely impact our stock price. 26 Table of Contents We may not effectively implement technology-facilitated products and services or be successful in marketing these products and services to our clients, which could negatively impact our business.
If we are unable to maintain effective internal control over financial reporting, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected; our liquidity, our access to capital markets, the perceptions of our creditworthiness, and our ability to complete acquisitions may be adversely affected; and we may be unable to maintain compliance with applicable securities laws and the rules and listing standards of the NASDAQ, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses which may negatively impact results of operations and financial condition, could negatively affect investor confidence in the accuracy and completeness of our financial statements, and could adversely impact our stock price.
Tariffs and retaliatory tariffs have been imposed, and additional tariffs and retaliatory tariffs are periodically discussed. 19 Table of Contents If maintained, the newly announced tariffs and the potential escalation of trade disputes, a trade war or other governmental action related to tariffs or international trade agreements or policies, as well as potential epidemics or pandemics, have the potential to negatively impact our and/or our clients’ costs, demand for our clients’ products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect our business, financial condition, and results of operations.
If maintained, announced tariffs and the potential escalation of trade disputes, a trade war or other governmental action related to tariffs or international trade agreements or policies, as well as potential epidemics or pandemics, have the potential to negatively impact our and/or our clients’ costs, demand for our clients’ products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect our business, financial condition, and results of operations.
Damage to our reputation could undermine retention of our current clients and our ability to attract potential clients while also impairing the confidence of our counterparties and vendors, the result of which affects our ability to effect transactions.
Damage to our reputation from any of these circumstances could undermine retention of our current clients and our ability to attract potential clients while also impairing the confidence of our counterparties and vendors, the result of which could affect our ability to effect transactions.
These changes, including trade policies and tariffs affecting other countries, including China, countries comprising the European Union or Middle East, Canada, and Mexico, and retaliatory tariffs by such countries, could materially harm our business.
These changes, including trade policies and tariffs affecting other countries, including China, countries comprising the European Union or Middle East, Canada, and Mexico, and retaliatory tariffs by such countries, could materially harm our business. Tariffs and retaliatory tariffs have been imposed, and additional tariffs and retaliatory tariffs are periodically discussed.
Replacing these third-party vendors could also entail significant delay and expense. Our reputation is very important to our ability to maintain, attract and retain client relationships and if our reputation were impaired, it could have an adverse effect on the Company. Our clients expect us to deliver personalized financial services with the highest standards of performance, professionalism, compliance, and ethics.
Our reputation is very important to our ability to maintain, attract and retain client relationships and if our reputation were impaired, it could have an adverse effect on the Company. Our clients expect us to deliver personalized financial services with the highest standards of performance, professionalism, compliance, and ethics.
The unanticipated loss or unavailability of key employees could harm our ability to operate our business or execute our business strategy. The Company faces significant competition in the recruitment of highly motivated individuals who can deliver our Company’s purpose, mission, and values, which has recently intensified as a result of changes in the labor market.
The unanticipated loss or unavailability of key employees could harm our ability to operate our business or execute our business strategy. We face significant competition in the recruitment of highly motivated individuals who can deliver our Company’s vision and core principles, which has recently intensified as a result of changes in the labor market.
Additionally, a significant decline in general economic conditions caused by the economic slowdown in Europe and the United States, the impact of trade negotiations, escalating tensions with China, economic conditions in China, including the global economic impacts of the Chinese economy, China’s regulation of commerce, escalating military tensions in Europe as a result of Russia’s military action in Ukraine, and the conflict in Israel and the surrounding regions, the outbreak of other international or domestic hostilities or other unrest, a default by the United States or other governments in repaying financial obligations, a shutdown of all or part of the United States government or other governments, the effects of pandemics or other health crises, acts of terrorism, climate-related events such as prolonged drought, unemployment, or other economic and geopolitical factors beyond our control, could further impact these local economic conditions and negatively affect our business and results of operations.
Additionally, a significant decline in general economic conditions caused by the economic slowdown in Europe and the United States, the impact of trade negotiations, escalating tensions with China, economic conditions in China, including the global economic impacts of the Chinese economy, China’s regulation of commerce, escalating military tensions in Europe as a result of Russia’s military action in Ukraine, escalating military tensions in South America or other impacts related to the United States’ actions related to Venezuela, heightened geopolitical uncertainty involving Greenland, and the conflict in Israel and the surrounding regions, the outbreak of other international or domestic hostilities or other unrest, a default by the United States or other governments in repaying financial obligations, a shutdown of all or part of the United States government or other governments, the effects of pandemics or other health crises, acts of terrorism, climate-related events such as prolonged drought, unemployment, or other economic and geopolitical factors beyond our control, could further impact these local economic conditions and negatively affect our business and results of operations. 20 Table of Contents If we experience credit losses on loans in excess of estimated amounts, our earnings could be adversely affected.
Additionally, rising interest rates may increase the cost of our deposits, which are a primary source of funding. Any substantial, unexpected, or prolonged change in market interest rates could have a material, adverse effect on our cash flows, financial condition, and results of operations. Changes in interest rates can also affect the slope of the yield curve.
Accordingly, any substantial, unexpected, or prolonged change in market interest rates could have a material, adverse effect on our cash flows, financial condition, and results of operations. Changes in interest rates can also affect the slope of the yield curve.
The FDIC insures deposits at FDIC-insured financial institutions, including the Bank. The FDIC charges insured financial institutions premiums to maintain the DIF at a specific level. Historically, unfavorable economic conditions increased bank failures and these additional bank failures decreased the DIF.
The FDIC insures deposits at FDIC-insured financial institutions, including the Bank. The FDIC charges insured financial institutions assessment rates to maintain the DIF at a specific level. Historically, unfavorable economic conditions increased bank failures and these additional bank failures decreased the DIF balance. As further described in Item 1.
Defending our reputation, trademarks, and other intellectual property, including through litigation, could result in costs that could have a material adverse effect on our business, financial condition, or results of operations. The results of mainstream media and social media contagion and speculation could impact the banking system and have an adverse effect on us.
Defending our reputation, trademarks, and other intellectual property, including through litigation, could result in costs that could have a material adverse effect on our business, financial condition, or results of operations.
As of December 31, 2024, we had $12.1 billion of commercial loans, including $9.3 billion of commercial real estate loans, representing approximately 68.0% of our loans held for investment portfolio. Commercial loans may involve greater risks than our other types of lending.
As of December 31, 2025, we had $10.5 billion of commercial loans, including $8.1 billion of commercial real estate loans, representing approximately 69.1% of our loans held for investment portfolio. Commercial loans may involve greater risks than our other types of lending.
To the extent these monetary policies do not mitigate the volatility and uncertainty related to inflation and the effects of inflation, or to the extent conditions otherwise worsen, we could experience adverse effects on our business, financial condition, and results of operations.
To the extent inflationary pressures persist, monetary policy actions do not mitigate inflation, or economic conditions otherwise worsen, we could experience adverse effects on our business, financial condition, and results of operations.
As a result, we may not be able to effectively implement AI in a timely way which could adversely impact our operations. Our ability to compete with financial institutions which have greater resources to invest in such technological improvements may be adversely impacted. Ultimately, any AI we develop or use may be flawed.
Our ability to compete with financial institutions which have greater resources to invest in such technological improvements may be adversely impacted. Ultimately, any AI we develop or use may be flawed.
With the advent of efforts by the new administration to enhance regulatory efficiency, including the elimination of regulations and tailoring of regulatory proposals, cut expenditures, and restructure federal agencies, there could be a significant impact on rulemaking, supervision, examination and enforcement priorities of the federal banking agencies, including agencies like the Consumer Finance Protection Bureau.
With the advent of efforts by the current administration to enhance regulatory efficiency, including deregulation and tailoring of regulatory proposals, reducing agency budgets, and the restructure of federal agencies, there could be a significant impact on rulemaking, supervision, examination and enforcement priorities of the federal banking agencies, including agencies like the CFPB.
Deterioration in economic conditions or in the real estate market could result in increased delinquencies and foreclosures and could have an adverse effect on the collateral value for many of these loans and on the repayment ability of many of our borrowers.
If such conditions persist or recur, we could experience higher criticized or nonperforming loans and increased credit losses in these portfolios. 19 Table of Contents Deterioration in economic conditions or in the real estate market could result in increased delinquencies and foreclosures and could have an adverse effect on the collateral value for many of these loans and on the repayment ability of many of our borrowers.
While we believe we comply with all applicable tax laws, rules, and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional taxes or apply existing laws and regulations differently, which could result in a significant increase in liabilities for taxes and interest in excess of accrued liabilities and harm our business and financial condition.
While we believe we comply with all applicable tax laws, rules, and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional taxes or apply existing laws and regulations differently, which could result in a significant increase in liabilities for taxes and interest in excess of accrued liabilities and harm our business and financial condition. 17 Table of Contents New tax legislative initiatives, including changes in the corporate tax rate, may be enacted, negatively impacting our effective tax rate at the federal and state level, and potentially adversely affecting our tax positions or tax liabilities.
These and other tax related items could increase our future tax expense, could change our future intentions regarding the use of our earnings, and could have a material adverse effect on our business, financial condition and results of operations. 16 Table of Contents We may be subject to more stringent capital requirements in the future, the impact of which could have a material risk to our operations.
These and other tax related items could increase our future tax expense, could change our future intentions regarding the use of our earnings, and could have a material adverse effect on our business, financial condition and results of operations.
Any failure to comply with laws and regulations, including the Community Reinvestment Act (CRA) and fair lending laws, could lead to material penalties. We must comply with the CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations that impose non-discriminatory lending and other requirements on financial institutions.
We must comply with the CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations, as well as all other applicable laws and regulations that impose non-discriminatory lending and other requirements on financial institutions.
Clients may shift their deposits into higher-cost products, or the Company may need to raise its interest rates to remain competitive in the marketplace. Higher funding costs reduce the Company’s net interest income and net income.
Clients may shift their deposits into higher-cost products, or the Company may need to raise its interest rates to remain competitive in the marketplace. Higher funding costs reduce the Company’s net interest income and net income. We cannot be assured that unusual deposit withdrawal activity will not affect banks generally in the future or the Bank specifically.
If we fail to maintain effective operational processes, policies and procedures, and internal control over financial reporting, our ability to accurately and timely report our financial results may be impacted, which could result in a loss of investor confidence and adversely impact our stock price and our business.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material, adverse effect on our cash flows, financial condition, and results of operations. 28 Table of Contents If we fail to maintain effective operational processes, policies and procedures, and internal control over financial reporting, our ability to accurately and timely report our financial results may be impacted, which could result in a loss of investor confidence and adversely impact our stock price and our business.
In recent years, the CFPB has increased its scrutiny of fee-based business models and various fees on consumer financial products and services, including depositor, overdraft and late fee charges. For example, in March 2024, the CFPB finalized a rule that limits the amount of late fees that could be charged for late credit card payments.
In recent years, the CFPB has increased its scrutiny of fee-based business models and various fees on consumer financial products and services, including depositor, overdraft and late fee charges.
Federal and state banking regulators possess broad powers to take supervisory actions as they deem appropriate. These supervisory actions may result in higher capital requirements, higher deposit insurance premiums, and limitations on the Company’s activities that could have a material adverse effect on its business and profitability.
These supervisory actions may result in higher capital requirements, higher deposit insurance assessment rates, and limitations on the Company’s activities that could have a material adverse effect on its business and profitability.
We are subject to the USA PATRIOT Act, OFAC guidelines and requirements, the Bank Secrecy Act (“BSA”), and related Financial Crimes Enforcement Network (“FinCEN”) and Federal Financial Institutions Examination Council (“FFIEC”) Guidelines and regulations and any failure to comply with them could result in material implications that could harm our business.
Even absent formal enforcement, the costs of remediating compliance deficiencies, maintaining ongoing compliance, and defending against potential regulatory actions could divert management resources, reduce earnings, and negatively impact stockholder returns. 18 Table of Contents We are subject to the USA PATRIOT Act, OFAC guidelines and requirements, the Bank Secrecy Act (“BSA”), and related Financial Crimes Enforcement Network (“FinCEN”) and Federal Financial Institutions Examination Council (“FFIEC”) Guidelines and regulations and any failure to comply with them could result in material implications that could harm our business.
If our use of AI, or its use by third parties with which we do business or otherwise interact, is deficient, biased, or inaccurate, or compromises customer privacy or implicates other ethics issues, we could be subject to competitive harm, potential legal liability, and brand or reputational harm.
If our use of AI, or its use by third parties with which we do business or otherwise interact, is deficient, biased, or inaccurate, or compromises customer privacy or implicates other ethics issues, we could be subject to competitive harm, potential legal liability, and brand or reputational harm. 29 Table of Contents Strategic Risks Acquisitions, mergers, strategic partnerships, divestitures, and other transactions introduce a broad range of anticipated and unanticipated risks, which may prevent us from achieving the expected benefits from these transactions, investments, or relationships.
Our future success depends, in part, upon our ability to use technology to provide products and services that will satisfy clients’ demands for convenience, as well as create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements.
The effective use of technology enables financial institutions to better serve clients and perform more efficiently. Our future success depends, in part, upon our ability to use technology to provide products and services that will satisfy clients’ demands for convenience, as well as create additional efficiencies in our operations.
We may not be able to effectively implement new technology-facilitated products and services or be successful in marketing these products and services to our clients. Failure to successfully keep pace with technological change affecting the financial services industry could have a material, adverse impact on our business and, in turn, on our financial condition, and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry could have a material, adverse impact on our business and, in turn, on our financial condition, and results of operations. The development and use of AI by us or others, or our inability to effectively and timely implement its use, may adversely affect the Company.
Extraordinary growth in insured deposits during the COVID-19 pandemic caused the ratio of the DIF to total insured deposits to fall below the current statutory minimum of 1.35%. To restore the DIF to its statutorily mandated minimums, the FDIC significantly increased deposit insurance premium rates, including the Bank's premium rates, resulting in increased expenses.
Business - Government Regulation and Supervision – Deposit Insurance, extraordinary growth in insured deposits during the COVID-19 pandemic caused the ratio of the DIF to total insured deposits to fall below the current statutory minimum of 1.35%.
It could also disrupt existing business relationships, make it harder to develop new business relationships, or otherwise negatively impact the way that we operate our business. The Company may experience significant competition from new or existing competitors, which may reduce its client base or cause it to adjust prices for its products and services in order to maintain market share.
The Company may experience significant competition from new or existing competitors, which may reduce its client base or cause it to adjust prices for its products and services in order to maintain market share. There is intense competition among banks in the Company’s market areas.
The ability of borrowers to repay loans can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters, which could be exacerbated by potential climate change, and international instability.
The ability of borrowers to repay loans can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters, which could be exacerbated by potential climate change, and international instability. 21 Table of Contents Additionally, deposit levels may be affected by several factors, including rates paid by competitors, general interest rate levels, regulatory capital requirements, returns available to clients on alternative investments or other cash management, payment, or store-of-value products (including stablecoin or other digital-asset-based products offered by non-bank providers) and general economic conditions.
There is substantial competition to attract and retain talented and diverse employees in our markets. It may be difficult for us to attract and retain qualified employees at all management and staffing levels. Failure to attract and retain employees and maintain adequate staffing of qualified personnel could adversely impact our operations and our ability to execute our business strategy.
We may not be able to attract and retain qualified employees to operate our business effectively, which could have an adverse effect on our business. There is substantial competition to attract and retain talented and diverse employees in our markets. It may be difficult for us to attract and retain qualified employees at all management and staffing levels.
These assumptions and judgments are complex and difficult to determine given the significant uncertainty surrounding future conditions in the general economy and banking industry. If management’s assumptions and judgments prove to be incorrect and the ACL is inadequate, or if banking authorities or regulations require us to increase the ACL, our net income may be adversely affected.
If management’s assumptions and judgments prove to be incorrect and the allowance for credit losses is inadequate, or if banking authorities or regulations require us to increase the allowance for credit losses, our net income may be adversely affected.
For example, rising interest rates could adversely affect our mortgage banking business because higher interest rates could cause clients to apply for fewer mortgages. Similarly, rising interest rates would increase the required periodic payment for variable rate loans and may result in an increase in non-performing loans.
For example, rising interest rates could adversely affect our mortgage banking business because higher interest rates could cause clients to apply for fewer mortgages.
It also may prove impossible to achieve them at all or in their entirety as a result of unexpected factors or events.
It also may prove impossible to achieve them at all or in their entirety as a result of unexpected factors or events. As a result, any acquisition could ultimately prove dilutive to our equity and shareholders’ earnings per share, thereby adversely affecting our financial condition and results of operations.
For example, in the fourth quarter of 2024, we recognized a material partial charge-off of approximately $49.3 million relating to a single commercial and industrial loan relationship that had become impaired as a result of adverse developments impacting the borrower’s business, as further described in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
For example, in the fourth quarter of 2025, we recognized a charge-off of approximately $15.8 million relating to a commercial real estate loan that had become impaired as a result of adverse developments impacting the borrower’s business.
The development and use of AI by us or others, or in our inability to effectively and timely implement its use, may adversely affect the Company. The use of AI in the banking industry is developing and growing and ultimately, we may offer products or services incorporating AI.
The use of AI in the banking industry is developing and growing and ultimately, we may offer products or services incorporating AI. As a developing technology, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business.
Changes in commodity products prices depend on local, regional, and global events or conditions that affect supply and demand for the relevant commodity.
Changes in commodity products prices depend on local, regional, and global events or conditions that affect supply and demand for the relevant commodity. For example, in 2025 we experienced increased credit stress in certain of our grain credit relationships as lower commodity prices and elevated input costs pressured borrower cash flows.
We cannot be assured that unusual deposit withdrawal activity will not affect banks generally in the future or the Bank specifically. 20 Table of Contents Our Liquidity could be impacted by an inability to access funding, by an unforeseen outflow of cash, or by the inability to monetize liquid assets.
Our liquidity could be impacted by an inability to access funding, by an unforeseen outflow of cash, or by the inability to monetize liquid assets.
As a result, any acquisition could ultimately prove dilutive to our equity and shareholders’ earnings per share, thereby adversely affecting our financial condition and results of operations. 27 Table of Contents Acquisitions may also result in business disruptions that could cause clients to remove their accounts from us and move their business to competing financial institutions.
Acquisitions may also result in business disruptions that could cause clients to remove their accounts from us and move their business to competing financial institutions.
As a developing technology, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. To effectively make necessary investments in AI, we may need to expend significant financial, human, and other resources.
To effectively make necessary investments in AI, we may need to expend significant financial, human, and other resources. As a result, we may not be able to effectively implement AI in a timely way which could adversely impact our operations.
Transition risks, including changes in consumer preferences and additional regulatory requirements or taxes, could increase our expenses and undermine our strategies.
Transition risks, including changes in consumer preferences and additional regulatory requirements or taxes, could increase our expenses and undermine our strategies. In addition, due to divergent policies and viewpoints regarding climate change, we are at increased risk of being subject to different and potentially conflicting legal or regulatory requirements and stakeholder expectations.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-facilitated products and services. The effective use of technology enables financial institutions to better serve clients and perform more efficiently.
We may not effectively implement technology-facilitated products and services or be successful in marketing these products and services to our clients, which could negatively impact our business. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-facilitated products and services.
New tax legislative initiatives, including increases in the corporate tax rate, may be enacted, negatively impacting our effective tax rate at the federal and state level, and potentially adversely affecting our tax positions or tax liabilities. For example, the U.S. has implemented a 15% minimum tax on corporations and a 1% excise tax on certain share buybacks.
For example, the U.S. has implemented a 15% minimum tax on corporations and a 1% excise tax on certain share buybacks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhen the CIRT has determined an incident has occurred, the team is responsible for responding to such incident in a timely, cost-effective manner and reporting findings as necessary and appropriate, including communicating to other key stakeholders for the duration of such incident.
Biggest changeWhen the CIRT has determined an incident has occurred, the team is responsible for responding to such incident in a timely, cost-effective manner and reporting findings as necessary and appropriate, including communicating to other key stakeholders for the duration of such incident. • Enterprise Risk Management Committee (“ERMC”) – The ERMC is a management committee of the Bank and has primary oversight responsibility of the Company’s cybersecurity programs. • Chief Risk Officer (“CRO”) – Nathan Jones has served as our CRO and Executive Vice President since April 22, 2025.
Daugherty is responsible for establishing and monitoring the effectiveness of the Company’s cybersecurity policies and reporting the status and a summary of cybersecurity incidents to the CRO, CIO, ERMC, and Risk Committee. In this role, Mr. Daugherty serves as an intermediary between the CRO and the CIRT. Since 2002, Mr.
Serving as the CISO since 2021, Mr. Daugherty is responsible for establishing and monitoring the effectiveness of the Company’s cybersecurity policies and reporting the status and a summary of cybersecurity incidents to the CRO, CIO, ERMC, and Risk Committee. In this role, Mr. Daugherty serves as an intermediary between the CRO and the CIRT. Since 2002, Mr.
Schoolitz is responsible for reporting serious incidents to external authorities pursuant to advice from internal or external legal counsel, unless otherwise delegated. • Chief Information Officer (“CIO”) – Lori Meyer has served as our CIO since June 30, 2023, after serving in several leadership roles in the Company, including Director of Enterprise Program Management, Director of IT Business Management, Director of IT Business Relations, and Business Process Improvement Lead.
Jones is responsible for reporting serious incidents to the Risk Committee as well as external authorities pursuant to advice from internal or external legal counsel, unless otherwise delegated. 36 Table of Contents • Chief Information Officer (“CIO”) – Lori Meyer has served as our CIO since June 30, 2023, after serving in several leadership roles in the Company, including Director of Enterprise Program Management, Director of IT Business Management, Director of IT Business Relations, and Business Process Improvement Lead.
In addition, in furtherance of our fiduciary responsibility to protect and account for information and information systems that are recognized as critical bank assets, we have established policies that require, among other things, that we perform an information security risk and vulnerability assessment at least annually, and implement corresponding risk management controls; implement a defense-in-depth security architecture, which may include firewalled network segmentation, malicious software protection, and data loss prevention; leverage data loss prevention technology to assist in preventing unauthorized disclosure of non-public information; and engage independent third parties to review, audit, and test the information security control structure and program to ensure processes and controls are functioning properly.
In addition, in furtherance of our fiduciary responsibility to protect and account for information and information systems that are recognized as critical bank assets, we have established policies that require, among other things, that we perform an information security risk and vulnerability assessment at least annually, and implement corresponding risk management controls; implement a defense-in-depth security architecture, which may include firewalled network segmentation, malicious software protection, and data loss prevention; leverage data loss prevention technology to assist in preventing unauthorized disclosure of non-public information; and engage independent third parties to review, audit, and test the information security control structure and program to ensure processes and controls are functioning properly. 35 Table of Contents As part of our overall cybersecurity risk management process, employees receive annual training on incident preparedness, response, and recovery which we believe to be commensurate with their responsibilities.
The following members of Company management are tasked specifically with the responsibilities described below: • Cybersecurity Incident Response Team (“CIRT”) – The CIRT was established to provide quick, effective, and orderly responses to serious successful cybersecurity related incidents such as system and application outages, virus infections, hacker attempts, system compromises, improper disclosure of confidential information, system service interruptions, breach of personal identifiable information, or other technology related events with serious security implications or business disruptions. 32 Table of Contents The CIRT consists of various IT groups with the knowledge and expertise needed to execute the technical aspect of the Company’s cybersecurity policies and procedures, including our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”).
The following members of Company management are tasked specifically with the responsibilities described below: • Cybersecurity Incident Response Team (“CIRT”) – The CIRT was established to provide quick, effective, and orderly responses to serious successful cybersecurity related incidents such as system and application outages, virus infections, hacker attempts, system compromises, improper disclosure of confidential information, system service interruptions, breach of personal identifiable information, or other technology related events with serious security implications or business disruptions.
As CIO, Ms. Meyer is responsible for oversight of the Company’s cybersecurity policies and informing the ERMC on current computer security readiness, information security standards, procedures, regulatory compliance, data security and privacy concerns, and the remediation plans annually, or as needed. • Chief Information Security Officer (“CISO”) – Dale Daugherty has served as our CISO since 2021. As CISO, Mr.
Meyer is responsible for oversight of the Company’s cybersecurity policies and informing the ERMC on current computer security readiness, information security standards, procedures, regulatory compliance, data security and privacy concerns, and the remediation plans annually, or as needed. • Chief Information Security Officer (“CISO”) – Dale Daugherty has more than 24 years of experience in technology and information security leadership, including roles in security operations, risk, and audit, and holds multiple cybersecurity certifications.
As further described below, these officers are responsible for facilitating communications with the Risk Committee. When an incident is reported, the CIRT determines the scope, scale and severity of the event and determines if the event is an incident.
When an incident is reported, the CIRT determines the scope, scale and severity of the event and determines if the event is an incident.
Removed
As part of our overall cybersecurity risk management process, employees receive annual training on incident preparedness, response, and recovery which we believe to be commensurate with their responsibilities.
Added
The CIRT consists of various IT groups with the knowledge and expertise needed to execute the technical aspect of the Company’s cybersecurity policies and procedures, including our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”). As further described below, these officers are responsible for facilitating communications with the Risk Committee.
Removed
In general, the CIRT reports such findings to the CISO, the CISO reports the information to the Chief Risk Officer (“CRO”), and the CRO ultimately reports those findings to the Risk Committee. • Enterprise Risk Management Committee (“ERMC”) – The ERMC is a management committee of the Bank and has primary oversight responsibility of the Company’s cybersecurity programs. • Chief Risk Officer (“CRO”) – Tawnya Schoolitz is serving as our interim CRO, after serving in several leadership roles in the Company, including Chief Compliance Officer.
Added
Mr. Jones has over 25 years of experience in financial services and has experience in senior level Risk and Credit roles within regional and money center banks. As CRO, Mr.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we provided banking services at 300 locations in Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming, of which 72 properties are leased from independent third parties, one property was leased from a related entity, and 227 physical properties are owned by us.
Biggest changeAs of December 31, 2025, we provided banking services at 289 locations in Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming, of which 65 properties are leased from independent third parties, one property was leased from a related entity, and 223 physical properties are owned by us.
Item 2. Properties Our principal executive offices and one of our banking offices are anchor tenants in an 18-story commercial building located in Billings, Montana. The building is owned by a joint venture limited liability company in which FIB owns a 50.0% interest. We lease approximately 100,107 square feet of office space in the building.
Item 2. Properties Our principal executive offices and one of our banking offices are anchor tenants in an 18-story commercial building located in Billings, Montana. The building is owned by a joint venture limited liability company in which FIB owns a 50.0% interest. We lease approximately 100,000 square feet of office space in the building.
We also own a 66,112 square foot building that houses our operations center in Billings, Montana.
We also own a building with approximately 66,000 square feet that houses our operations center in Billings, Montana.
Removed
We believe each of our facilities is suitable and adequate to meet our current operational needs. 33 Table of Contents
Added
We believe each of our facilities is suitable and adequate to meet our current operational needs. As further described in Part I, Item 1. “Business,” we have entered into an agreement to sell 11 branches in Nebraska, which transaction is expected to close in the second quarter of 2026.
Added
Additionally, we opened one branch in Montana on February 2, 2026 and intend to close four additional Nebraska branches, one branch in Minnesota, and one branch in North Dakota at the end of February 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+6 added−1 removed4 unchanged
Biggest changeTotal Number of Maximum Number Shares Purchased as Part of Shares That May Total Number of Average Price of Publicly Announced Yet Be Purchased Under Period Shares Purchased (1) Paid Per Share Plans or Programs the Plans or Programs October 1, 2024 to October 31, 2024 — $ — — — November 1, 2024 to November 30, 2024 — — — — December 1, 2024 to December 31, 2024 148 34.07 — — Total 148 $ 34.07 — — (1) Stock repurchases were redemptions of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants of the Company’s 2015 Equity Compensation Plan. 34 Table of Contents Performance Graph The performance graph below compares the cumulative total shareholder return on our common stock with the cumulative total return on equity securities of companies included in the NASDAQ Composite Index, KBW NASDAQ Bank Index, and the KBW NASDAQ Regional Banking Index, measured on the last trading day of each year shown.
Biggest changeSee Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity” for additional information. 38 Table of Contents Performance Graph The performance graph below compares the cumulative total shareholder return on our common stock with the cumulative total return on equity securities of companies included in the NASDAQ Composite Index, KBW NASDAQ Bank Index, and the KBW NASDAQ Regional Banking Index, measured on the last trading day of each year shown.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to purchases made by or on behalf of us or any “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the three months ended December 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to purchases made by or on behalf of us or any “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the three months ended December 31, 2025.
The KBW NASDAQ Regional Banking Index seeks to reflect the performance of U.S. companies that do business as publicly traded regional banks or thrifts in the U.S. This graph assumes a $100 investment in our common stock on December 31, 2019, and reinvestment of dividends on the date of payment without commissions.
The KBW NASDAQ Regional Banking Index seeks to reflect the performance of U.S. companies that do business as publicly traded regional banks or thrifts in the U.S. This graph assumes a $100 investment in our common stock on December 31, 2020, and reinvestment of dividends on the date of payment without commissions.
Sales of Unregistered Securities There were no sales of equity securities by us during the year ended December 31, 2024 that were not registered under the Securities Act.
Sales of Unregistered Securities There were no sales of equity securities by us during the year ended December 31, 2025 that were not registered under the Securities Act.
Dividends It is our policy to pay a quarterly dividend to all common shareholders. On January 28, 2025, the Company declared a quarterly cash dividend amount of $0.47 per share of common stock. While we currently intend to continue paying quarterly dividends, the Board may change or eliminate the payment of future dividends.
Dividends It is our policy to pay a quarterly dividend to all common shareholders. On January 27, 2026, the Company declared a quarterly cash dividend amount of $0.47 per share of common stock. While we currently intend to continue paying quarterly dividends, the Board may change or eliminate the payment of future dividends.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “FIBK.” As of December 31, 2024, we had 1,654 record shareholders, including the Wealth Management division of FIB as trustee for 252,520 shares of common stock held on behalf of 390 individual participants in the Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc., or the Savings Plan.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “FIBK.” As of December 31, 2025, we had 1,561 record shareholders, including the Wealth Management division of FIB as trustee for 213,376 shares of common stock held on behalf of 350 individual participants in the Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc., or the Savings Plan.
Removed
Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 First Interstate BancSystem, Inc. $ 100.00 $ 103.20 $ 106.90 $ 106.06 $ 90.37 $ 102.07 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60 KBW NASDAQ Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90
Added
Total Number of Approximate Dollar Value Shares Purchased as Part of Shares That May Total Number of Average Price of Publicly Announced Yet Be Purchased Under Period Shares Purchased Paid Per Share Plans or Programs the Plans or Programs (1) October 1, 2025 to October 31, 2025 Stock Repurchase Program (1) 1,039,718 $31.48 1,039,718 $89,810,374 November 1, 2025 to November 30, 2025 Stock Repurchase Program (1) 1,237,052 31.83 1,237,052 50,429,170 December 1, 2025 to December 31, 2025 Stock Repurchase Program (1) 534,241 33.70 534,241 32,423,367 Total 2,811,011 $32.06 2,811,011 $32,423,367 ( 1) On August 28, 2025, the Board adopted a new stock repurchase program.
Added
Under the new stock repurchase program, the Company was provided authorization to repurchase up to $150.0 million of its issued and outstanding shares of common stock on or prior to March 31, 2027, which is the expiration date of the program.
Added
On January 27, 2026, the Board authorized an increase to the repurchase program of an additional $150.0 million of the Company’s issued and outstanding shares of common stock, bringing the total repurchase authorization since August 2025 to $300.0 million.
Added
Shares of common stock may be purchased through open market purchases, private transactions, block trades, authorized Rule 10b5-1 trading plans, or otherwise in accordance with applicable federal securities laws, including pursuant to Rule 10b-18 under the Exchange Act.
Added
Management’s decision to repurchase shares of common stock will depend on a number of factors, such as general market and economic conditions, the trading price of the common stock, alternative uses for capital, the Company’s financial performance, and corporate and regulatory requirements.
Added
Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 First Interstate BancSystem, Inc. $ 100.00 $ 103.58 $ 102.77 $ 87.57 $ 98.90 $ 112.22 NASDAQ Composite 100.00 122.18 82.43 119.22 154.48 187.14 KBW NASDAQ Bank Index 100.00 138.33 108.73 107.76 147.85 196.00 KBW NASDAQ Regional Banking Index 100.00 136.64 127.17 126.67 143.39 152.71

Item 7. Management's Discussion & Analysis

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

161 edited+58 added−50 removed61 unchanged
Biggest changeThe following table presents, for the periods indicated, condensed average balance sheet information using daily average balances, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest-bearing liabilities. 41 Table of Contents Average Balance Sheets, Yields, and Rates Year Ended December 31, 2024 2023 2022 (Dollars in millions) Average Balance Interest (2) Average Rate Average Balance Interest (2) Average Rate Average Balance Interest (2) Average Rate Interest earning assets: Loans (1) $ 18,182.0 $ 1,028.2 5.66 % $ 18,299.6 $ 986.0 5.39 % $ 16,802.2 $ 797.2 4.74 % Investment securities Taxable 8,261.5 243.5 2.95 9,173.1 269.1 2.93 9,729.8 213.9 2.20 Tax-exempt 186.5 3.4 1.82 199.7 3.9 1.95 243.6 5.0 2.05 Investment in FHLB and FRB stock 178.8 11.8 6.60 207.5 12.4 5.98 116.6 4.8 4.12 Interest-bearing deposits in banks 422.5 22.2 5.25 303.0 15.7 5.18 1,432.8 8.7 0.61 Federal funds sold 0.1 — — 0.5 — — 0.5 — — Total interest-earning assets 27,231.4 1,309.1 4.81 28,183.4 1,287.1 4.57 28,325.5 1,029.6 3.63 Noninterest-earning assets 2,825.0 2,951.1 2,804.2 Total assets $ 30,056.4 $ 31,134.5 $ 31,129.7 Interest-bearing liabilities: Demand deposits $ 6,224.9 $ 57.8 0.93 % $ 6,553.3 $ 47.2 0.72 % $ 7,549.8 $ 15.7 0.21 % Savings deposits 7,784.8 161.2 2.07 7,989.3 122.2 1.53 8,732.7 24.5 0.28 Time deposits 2,894.1 106.9 3.69 2,676.3 73.2 2.74 1,577.0 8.1 0.51 Repurchase agreements 687.2 6.7 0.97 940.4 6.4 0.68 1,114.5 2.5 0.22 Other borrowed funds 2,434.7 123.4 5.07 2,514.6 133.8 5.32 411.1 15.3 3.72 Long-term debt 253.4 11.8 4.66 120.8 5.8 4.80 122.2 6.0 4.91 Subordinated debentures held by subsidiary trusts 163.1 13.1 8.03 163.1 12.7 7.79 156.6 6.8 4.34 Total interest-bearing liabilities 20,442.2 480.9 2.35 20,957.8 401.3 1.91 19,663.9 78.9 0.40 Noninterest-bearing deposits 5,879.4 6,549.9 7,911.6 Other noninterest-bearing liabilities 468.8 475.9 364.7 Stockholders’ equity 3,266.0 3,150.9 3,189.5 Total liabilities and stockholders’ equity $ 30,056.4 $ 31,134.5 $ 31,129.7 Net FTE interest income (non-GAAP) (3) $ 828.2 $ 885.8 $ 950.7 Less FTE adjustments (2) (6.6) (7.0) (8.1) Net interest income from consolidated statements of income $ 821.6 $ 878.8 $ 942.6 Interest rate spread 2.46 % 2.66 % 3.23 % Net interest margin 3.02 3.12 3.33 Net FTE interest margin (non-GAAP) (3) 3.04 3.14 3.36 Cost of funds, including noninterest-bearing demand deposits (4) 1.83 1.46 0.29 (1) Average loan balances include mortgage loans held for sale and non-accrual loans.
Biggest changeFor the periods indicated, the following table presents average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest-bearing liabilities. 46 Table of Contents Average Balance Sheets, Yields, and Rates Year Ended December 31, 2025 2024 2023 (Dollars in millions) Average Balance Interest (3) (6) Average Rate Average Balance Interest (3) (6) Average Rate Average Balance Interest (3) (6) Average Rate Interest earning assets: Loans (1) $ 16,663.9 $ 940.7 5.65 % $ 18,182.0 $ 1,028.2 5.66 % $ 18,299.6 $ 986.0 5.39 % Investment securities Taxable (2) 7,303.9 199.4 2.73 8,261.5 243.5 2.95 9,173.1 269.1 2.93 Tax-exempt 180.8 3.5 1.94 186.5 3.4 1.82 199.7 3.9 1.95 Investment in FHLB and FRB stock 132.2 7.4 5.60 178.8 11.8 6.60 207.5 12.4 5.98 Interest bearing deposits in banks 759.9 32.7 4.30 422.5 22.2 5.25 303.0 15.7 5.18 Federal funds sold 0.1 — — 0.1 — — 0.5 — — Total interest earning assets 25,040.8 1,183.7 4.73 27,231.4 1,309.1 4.81 28,183.4 1,287.1 4.57 Noninterest earning assets 2,712.1 2,825.0 2,951.1 Total assets $ 27,752.9 $ 30,056.4 $ 31,134.5 Interest bearing liabilities: Demand deposits $ 6,364.3 $ 60.0 0.94 % $ 6,224.9 $ 57.8 0.93 % $ 6,553.3 $ 47.2 0.72 % Savings deposits 7,831.6 145.8 1.86 7,784.8 161.2 2.07 7,989.3 122.2 1.53 Time deposits 2,783.7 94.0 3.38 2,894.1 106.9 3.69 2,676.3 73.2 2.74 Repurchase agreements 509.3 4.7 0.92 687.2 6.7 0.97 940.4 6.4 0.68 Other borrowed funds 563.5 26.2 4.65 2,434.7 123.4 5.07 2,514.6 133.8 5.32 Long-term debt 159.6 10.7 6.70 253.4 11.8 4.66 120.8 5.8 4.80 Subordinated debentures held by subsidiary trusts 160.0 11.2 7.00 163.1 13.1 8.03 163.1 12.7 7.79 Total interest bearing liabilities 18,372.0 352.6 1.92 20,442.2 480.9 2.35 20,957.8 401.3 1.91 Noninterest bearing deposits 5,535.2 5,879.4 6,549.9 Other noninterest bearing liabilities 423.9 468.8 475.9 Stockholders’ equity 3,421.8 3,266.0 3,150.9 Total liabilities and stockholders’ equity $ 27,752.9 $ 30,056.4 $ 31,134.5 Net FTE interest income (non-GAAP) (4) $ 831.1 $ 828.2 $ 885.8 Less FTE adjustments (3) (5.7) (6.6) (7.0) Net interest income from consolidated statements of income $ 825.4 $ 821.6 $ 878.8 Interest rate spread 2.81 % 2.46 % 2.66 % Net interest margin 3.30 3.02 3.12 Net FTE interest margin (non-GAAP) (4) 3.32 3.04 3.14 Cost of funds, including noninterest-bearing demand deposits (5) 1.47 1.83 1.46 (1) Average loan balances include loans held for sale and loans held for investment, net of deferred fees and costs, which include non-accrual loans.
Changes in interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income.
Changes in interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income.
For additional information regarding modifications to borrowers experiencing financial difficulty, see “Notes to Consolidated Financial Statements—Loans Held For Investment” included in financial statements included Part IV, Item 15 of this report. Allowance for Credit Losses The Company performs a quarterly assessment of the appropriateness of its ACL in accordance with GAAP.
For additional information regarding modifications to borrowers experiencing financial difficulty, see “Notes to Consolidated Financial Statements—Loans Held For Investment” included in financial statements included Part IV, Item 15 of this report. Allowance for Credit Losses The Company performs a quarterly assessment of the appropriateness of its allowance for credit losses in accordance with GAAP.
From time to time, we have incurred, and may incur in the future, costs related to our strategic acquisitions and other transactions. Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed, adjustable, and variable rate loans.
From time to time, we have incurred, and may incur in the future, costs related to our strategic acquisitions, divestitures and other transactions. Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed, adjustable, and variable rate loans.
Our portfolio principally comprises U.S. treasury notes, U.S. government agency, U.S. government agency commercial mortgage-backed securities, U.S. government residential mortgage-backed securities, U.S. government agency collateralized mortgage obligations, corporate securities, and tax-exempt municipal securities. Debt securities rated in the highest category by nationally recognized rating agencies and debt securities backed by the U.S.
Our portfolio principally comprises U.S. treasury notes, U.S. government agency, U.S. government agency commercial mortgage-backed securities, U.S. government residential mortgage-backed securities, U.S. government agency collateralized mortgage obligations, collateralized loan obligations, corporate securities, and tax-exempt municipal securities. Debt securities rated in the highest category by nationally recognized rating agencies and debt securities backed by the U.S.
For additional information concerning leases, see “Notes to Consolidated Financial Statements—Commitments and Contingencies” included in Part IV, Item 15 of this report. The Company is a limited partner in several tax-advantaged limited partnerships that have been formed for the purpose of investing in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects.
For additional information concerning leases, see “Notes to Consolidated Financial Statements—Commitments and Contingencies” included in Part IV, Item 15 of this report. The Company is a limited partner in several tax-advantaged limited partnerships that have been formed for the purpose of investing in approved qualified affordable housing or other renovation or community revitalization projects.
The Company performed its 2024 annual goodwill impairment qualitative assessment and determined the Company’s goodwill was not considered impaired. For additional information regarding goodwill, see “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies,” included in Part IV, Item 15 of this report and “Risk Factors—Operational Risks,” included in Part I, Item 1A of this report.
The Company performed its 2025 annual goodwill impairment qualitative assessment and determined the Company’s goodwill was not considered impaired. For additional information regarding goodwill, see “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies,” included in Part IV, Item 15 of this report and “Risk Factors—Operational Risks,” included in Part I, Item 1A of this report.
Results of Operations Principal tools we use to manage and evaluate the results of our operations include tracking performance through metrics such as return on average equity, return on average assets, efficiency ratio, noninterest expense as a percent of total average assets, earnings per share, credit quality metrics, total shareholder return, net interest income, noninterest income, noninterest expense, and net income.
Results of Operations Principal tools we use to manage and evaluate the results of our operations include tracking performance through metrics such as return on average equity, return on average tangible common equity, return on average assets, efficiency ratio, noninterest expense as a percent of total average assets, earnings per share, credit quality metrics, total shareholder return, net interest income, noninterest income, noninterest expense, and net income.
State income tax applies primarily to pretax earnings generated within Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, and South Dakota. Our effective state tax rate was 5.2% for the year ended December 31, 2024 compared to 5.1% for the year ended December 31, 2023.
State income tax applies primarily to pretax earnings generated within Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, and South Dakota. Our effective state tax rate was 5.1% for the year ended December 31, 2025 compared to 5.2% for the year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025.
See the discussion under “Critical Accounting Estimates and Significant Accounting Policies — Allowance for Credit Losses” above. The ACL is increased by provisions charged against earnings and net recoveries of charged-off loans and is reduced by negative provisions credited to earnings and net loan charge-offs.
See the discussion under “Critical Accounting Estimates and Significant Accounting Policies — Allowance for Credit Losses” above. The allowance for credit losses is increased by provisions charged against earnings and net recoveries of charged-off loans and is reduced by negative provisions credited to earnings and net loan charge-offs.
These securities are carried at cost. 48 Table of Contents Loans Held for Sale Loans held for sale consist of residential mortgage loans pending sale to investors in the secondary market and loans reclassified from loans held for investment due to management’s intent and decision to sell the loans.
These securities are carried at cost. 53 Table of Contents Loans Held for Sale Loans held for sale consist of residential mortgage loans pending sale to investors in the secondary market and loans reclassified from loans held for investment due to management’s intent and decision to sell the loans.
Differences between the established amortized cost basis, and the unpaid principal balance of the asset, is considered to be a non-credit discount/premium and is accreted/amortized into interest income using the level yield interest method. Subsequent changes to the ACL are recorded through provision expense using the same methodology as other loans held for investment.
Differences between the established amortized cost basis, and the unpaid principal balance of the asset, is considered to be a non-credit discount/premium and is accreted/amortized into interest income using the level yield interest method. Subsequent changes to the allowance for credit losses are recorded through provision expense using the same methodology as other loans held for investment.
As of December 31, 2024, there were no significant concentrations of investments (greater than 10% of stockholders’ equity) in any individual security issuer, except for U.S. government or agency-backed securities.
As of December 31, 2025, there were no significant concentrations of investments (greater than 10% of stockholders’ equity) in any individual security issuer, except for U.S. government or agency-backed securities.
Additionally, the Company expects the timing of charge-offs will vary between quarters and will not necessarily correspond proportionally to changes in the ACL or changes in non-performing or collateral-dependent loans due to timing differences among the initial identification of a collateral-dependent loan, recording of a specific valuation allowance for collateral-dependent loans, and any resulting charge-off of uncollectible principal.
Additionally, the Company expects the timing of charge-offs will vary between quarters and will not necessarily correspond proportionally to changes in the allowance for credit losses or changes in non-performing or collateral-dependent loans due to timing differences among the initial identification of a collateral-dependent loan, recording of a specific valuation allowance for collateral-dependent loans, and any resulting charge-off of uncollectible principal.
An ACL is recorded for the expected credit losses over the life of the loan. Subsequent changes to the ACL are recorded through provision expense using the same methodology as other loans held for investment.
An allowance for credit losses is recorded for the expected credit losses over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense using the same methodology as other loans held for investment.
Although we have established our ACL in accordance with GAAP in the United States and we believe that the ACL is appropriate to provide for known and expected losses in the portfolio at all times, future provisions will be subject to on-going evaluations of the risks in the loan portfolio.
Although we have established our allowance for credit losses in accordance with GAAP in the United States and we believe that the allowance for credit losses is appropriate to provide for known and expected losses in the portfolio at all times, future provisions will be subject to on-going evaluations of the risks in the loan portfolio.
The ACL is maintained at an amount we believe to be sufficient to provide for estimated losses expected over the life of the loans at each balance sheet date resulting from management’s assessment of the quantitative and qualitative factors utilized to determine the ACL.
The allowance for credit losses is maintained at an amount we believe to be sufficient to provide for estimated losses expected over the life of the loans at each balance sheet date resulting from management’s assessment of the quantitative and qualitative factors utilized to determine the allowance for credit losses.
We evaluate our noninterest expense on factors that include our noninterest expense relative to our average assets, our efficiency ratio, and the trends of the individual categories of noninterest expense. 38 Table of Contents Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of similar bank holding companies on factors that include return on average assets, return on average equity, total shareholder return, and growth in earnings.
We evaluate our noninterest expense on factors that include our noninterest expense relative to our average assets, our efficiency ratio, and the trends of the individual categories of noninterest expense. 43 Table of Contents Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of similar bank holding companies on factors that include return on average assets, return on average equity, return on average tangible common equity, total shareholder return, and growth in earnings.
A similar discussion and analysis comparing fiscal year 2023 to fiscal year ended December 31, 2022 may be found in Part II, Item 7, “Financial Condition” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024, which is incorporated herein by reference.
A similar discussion and analysis comparing the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2023 may be found in Part II, Item 7, “Financial Condition” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, which is incorporated herein by reference.
Results of Operations The following discussion and analysis is intended to provide detail about the results of operations by comparing the years ended December 31, 2024 to December 31, 2023.
Results of Operations The following discussion and analysis is intended to provide detail about the results of operations by comparing the years ended December 31, 2025 to December 31, 2024.
The following table sets forth the carrying value as of December 31, 2024 and 2023, and the percentage of total investment securities and weighted average yields on investment securities as of December 31, 2024.
The following table sets forth the carrying value as of December 31, 2025 and 2024, and the percentage of total investment securities and weighted average yields on investment securities as of December 31, 2025.
Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. 47 Table of Contents December 31, 2023 December 31, 2024 Securities Maturities and Yield (Dollars in millions) Carrying Value Carrying Value % of Total Investment Securities Weighted Average FTE Yield U.S.
Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. 52 Table of Contents December 31, 2024 December 31, 2025 Securities Maturities and Yield (Dollars in millions) Carrying Value Carrying Value % of Total Investment Securities Weighted Average FTE Yield U.S.
An ACL is recognized by estimating the expected credit losses of the purchased asset and recording an adjustment to the acquisition date fair value to establish the initial amortized cost basis of the asset.
An allowance for credit losses is recognized by estimating the expected credit losses of the purchased asset and recording an adjustment to the acquisition date fair value to establish the initial amortized cost basis of the asset.
Non-GAAP Financial Measures In addition to financial measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this document contains non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position.
Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”) in the United States, this document contains non-GAAP financial measures where management believes it would be helpful to understand our results of operations or financial position.
We maintain our ACL based on an estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period at each balance sheet date. We seek to fund our assets primarily using core client deposits.
We maintain our allowance for credit losses based on an estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period as of the balance sheet date. We seek to fund our assets primarily using core client deposits.
December 31, 2024 December 31, 2023 (Dollars in billions) FHLB FRB Total FHLB FRB BTFP Total Total borrowing capacity $ 5.9 $ 1.8 $ 7.7 $ 6.2 $ 0.7 $ 2.4 $ 9.3 Borrowings outstanding 1.5 — 1.5 2.6 — — 2.6 Remaining Capacity, at period end $ 4.4 $ 1.8 $ 6.2 $ 3.6 $ 0.7 $ 2.4 $ 6.7 Cash and due from banks 0.4 0.4 Interest-bearing deposits 0.5 0.2 Total available liquidity $ 7.1 $ 7.3 58 Table of Contents Through the Bank’s relationship with the FHLB, the Bank owns $81.3 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances.
December 31, 2025 December 31, 2024 (Dollars in billions) FHLB FRB Total FHLB FRB BTFP Total Total borrowing capacity $ 5.4 $ 3.6 $ 9.0 $ 5.9 $ 1.8 $ — $ 7.7 Borrowings outstanding — — — 1.5 — — 1.5 Remaining Capacity, at period end $ 5.4 $ 3.6 $ 9.0 $ 4.4 $ 1.8 $ — $ 6.2 Cash and due from banks 0.4 0.4 Interest-bearing deposits 1.0 0.5 Total available liquidity $ 10.4 $ 7.1 Through the Bank’s relationship with the FHLB, the Bank owns $10.7 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances.
Financial Condition We manage and evaluate our financial condition by focusing on liquidity, the diversification and quality of our loans, the adequacy of our ACL, the diversification and terms of our deposits, the level of our short-term borrowings and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure, and the adequacy of our capital levels.
Financial Condition We manage and evaluate our financial condition by focusing on liquidity, the diversification and quality of our loans, the adequacy of our allowance for credit losses, the diversification and terms of our deposits, the level of our short-term borrowings and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure, and the adequacy of our capital levels.
As of December 31, 2024, the Company expects to recover its investments through the use of tax credits generated by the investments. The Company's unfunded capital commitments to these investments were $25.2 million and $32.3 million as of December 31, 2024 and 2023, respectively, reported within accounts payable and accrued expenses on the consolidated balance sheets.
As of December 31, 2025, the Company expects to recover its investments through the use of tax credits generated by the investments. The Company's unfunded capital commitments to these investments were $5.2 million and $25.2 million as of December 31, 2025 and 2024, respectively, reported within accounts payable and accrued expenses on the consolidated balance sheets.
Management monitors trends in the loan portfolio, including changes in the levels of past due, internally classified, and non-performing loans. Changes in the estimates and assumptions are possible and may have a material impact on our ACL, and as a result, on our consolidated financial statements or results of operations.
Management monitors trends in the loan portfolio, including changes in the levels of past due, internally classified, and non-performing loans. Changes in the estimates and assumptions are possible and may have a material impact on our allowance for credit losses, and as a result, on our consolidated financial statements or results of operations.
Loan charge-offs do not directly correspond with the receipt of independent appraisals or the use of observable market data if the collateral value is determined to be sufficient to repay the principal balance of the loan. If a collateral-dependent loan is adequately collateralized, a specific valuation ACL is not recorded.
Loan charge-offs do not directly correspond with the receipt of independent appraisals or the use of observable market data if the collateral value is determined to be sufficient to repay the principal balance of the loan. If a collateral-dependent loan is adequately collateralized, a specific valuation allowance for credit losses is not recorded.
Our clients participate in a wide variety of industries, including: • Agriculture • Healthcare • Professional services • Technology • Construction • Hospitality • Real Estate Development • Tourism • Education • Housing • Retail • Wholesale trade • Governmental services Our Business Our principal business activity is lending to, accepting deposits from, and conducting financial transactions for individuals, businesses, governmental entities, and other entities located in the communities we serve.
We are proud to provide financial services and products to clients that participate in a wide variety of industries, including: • Agriculture • Healthcare • Professional services • Technology • Construction • Hospitality • Real Estate Development • Tourism • Education • Housing • Retail • Wholesale trade • Governmental services 40 Table of Contents Our Business Our principal business activity is lending to, accepting deposits from, and conducting financial transactions for individuals, businesses, governmental entities, and other entities located in the communities we serve.
The balance of the ACL is based on historical loan loss rates, changes in the nature or tenure of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current environmental and economic factors, and the estimated impact of forecasted economic conditions on historical loan loss rates.
The balance of the allowance for credit losses is based on historical loan loss rates, changes in the nature or tenure of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current environmental and economic factors, and the estimated impact of forecasted economic conditions on historical loan loss rates.
Performance Ratios As of or for the year ended December 31, 2024 2023 2022 Return on average assets 0.75 % 0.83 % 0.65 % Return on average common stockholders’ equity 6.92 8.17 6.34 Efficiency ratio (1) 62.30 62.50 67.83 Common stock dividend payout ratio (2) 85.84 75.81 86.73 (1) Our efficiency ratio definition conforms with the FDIC definition for all periods presented as noninterest expense less amortization of intangible assets divided by net interest income plus noninterest income.
Performance Ratios As of or for the year ended December 31, 2025 2024 2023 Return on average assets 1.09 % 0.75 % 0.83 % Return on average common stockholders’ equity 8.83 6.92 8.17 Efficiency ratio (1) 59.19 62.30 62.50 Common stock dividend payout ratio (2) 63.73 85.84 75.81 (1) Our efficiency ratio definition conforms with the FDIC definition for all periods presented as noninterest expense less amortization of intangible assets divided by net interest income plus noninterest income.
Commercial real estate loans include loans for property and improvements used commercially by the borrower or for lease to others for the production of goods or services. Approximately 33.0% and 34.4% of our commercial real estate loans were owner occupied as of December 31, 2024 and 2023, respectively. Construction loans .
Commercial real estate loans include loans for property and improvements used commercially by the borrower or for lease to others for the production of goods or services. Approximately 33.4% and 33.0% of our commercial real estate loans were owner occupied as of December 31, 2025 and 2024, respectively. 54 Table of Contents Construction loans .
During 2024, the Company granted 43,514 restricted stock units of its common stock to directors for their annual service on the Company’s Board. The aggregate value of the units issued to directors of $1.2 million is amortized into stock-based compensation expense in the accompanying consolidated statements of changes in stockholders’ equity over a one-year service-based period.
During 2025, the Company granted 39,058 restricted stock units of its common stock to directors for their annual service on the Company’s Board. The aggregate value of the units issued to directors of $1.1 million is amortized into stock-based compensation expense in the accompanying consolidated statements of changes in stockholders’ equity over a one-year service-based period.
Based on current market interest rates, management expects approximately $12.5 million of these securities will be called in 2025. For additional information concerning investment securities, see “Notes to Consolidated Financial Statements — Investment Securities” included in Part IV, Item 15.
Based on current market interest rates, management expects approximately $50.1 million of these securities will be called in 2026. For additional information concerning investment securities, see “Notes to Consolidated Financial Statements — Investment Securities” included in Part IV, Item 15.
Loans, or portions thereof, are charged-off against the ACL when management believes the collectability of the principal is unlikely, or, with respect to consumer installment loans, according to an established delinquency schedule.
Loans, or portions thereof, are charged-off against the allowance for credit losses when management believes the collectability of the principal is unlikely, or, with respect to consumer installment loans, according to an established delinquency schedule.
In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension or a combination thereof, among other things.
Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension or a combination thereof, among other things.
For additional details in regard to the Company’s deposits see “Notes to Consolidated Financial Statements—Deposits” included in Part IV, Item 15 of this report. As of December 31, 2024, the Company had securities sold under repurchase agreements of $523.9 million due in one year or less as the agreements with our client counterparties mature on the next banking day.
For additional details in regard to the Company’s deposits see “Notes to Consolidated Financial Statements—Deposits” included in Part IV, Item 15 of this report. 62 Table of Contents As of December 31, 2025, the Company had securities sold under repurchase agreements of $479.6 million due in one year or less as the agreements with our client counterparties mature on the next banking day.
As of December 31, 2024, the carrying value of our investments in non-agency mortgage-backed securities totaled $218.1 million. All other mortgage-backed securities included in the table below were issued by U.S. government entities and sponsored entities.
As of December 31, 2025, the carrying value of our investments in non-agency, mortgage-backed securities totaled $193.9 million. All other mortgage-backed securities included in the table below were issued by U.S. government entities and sponsored entities.
Through our bank subsidiary, FIB, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, governmental entities, and others throughout our market areas.
Through our bank subsidiary, First Interstate Bank, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, government entities, and others throughout our market areas.
The ACL consists of three elements: (1) A specific valuation allowance associated with collateral-dependent and other individually evaluated loans.
The allowance for credit losses consists of three elements: (1) A specific valuation allowance associated with collateral-dependent and other individually evaluated loans.
The Company has future minimum rental commitments, exclusive of maintenance and operating costs, required under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2024 with $11.5 million due in one year or less and $34.2 million due in more than one year.
The Company has future minimum rental commitments, exclusive of maintenance and operating costs, required under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2025 with $10.2 million due in one year or less and $28.3 million due in more than one year.
If the economy declines or asset quality deteriorates, material additional provisions could be required.
If the economy declines or asset quality deteriorates more than expected, material additional provisions could be required.
While each loan we originate must meet minimum underwriting standards we establish through our credit policies, our bankers are granted limited discretion to approve and price loans within pre-approved limits which assures that we are responsive to community needs in each market area and remain competitive.
While each loan we originate must meet minimum underwriting standards we establish through our credit policies, our bankers are granted limited discretion to approve and price loans within pre-approved limits which assures that we are responsive to community needs in each market area and remain competitive. We fund our loan portfolio primarily with the core deposits from our clients.
See “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” for a description of the methodology used to determine the ACL and our policy pertaining to acquired loans. See “Notes to Consolidated Financial Statements—Loans” for a discussion on the factors driving changes in the amount of the ACL.
See “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” for a description of the methodology used to determine the allowance for credit losses and our policy pertaining to acquired loans. See “Notes to Consolidated Financial Statements—Loans Held for Investment” for a discussion on the factors driving changes in the amount of the allowance for credit losses.
As such, significant changes in collateral-dependent and non-performing loans do not necessarily correspond proportionally with changes in the specific valuation component of the ACL.
As such, significant changes in collateral-dependent and non-performing loans do not necessarily correspond proportionally with changes in the specific valuation component of the allowance for credit losses.
Significant components of these fluctuations are discussed below. Payment services revenues consist of interchange revenue that merchants pay for processing electronic payment transactions, associated fees earned from the issuance of business credit cards, consumer credit cards, and debit cards, and ATM service fees.
Significant components of these fluctuations are discussed below. Payment services revenues consist of interchange revenue that merchants pay for processing electronic payment transactions, associated fees earned from the issuance of business credit cards, consumer credit cards (prior to the outsourcing of the consumer credit card business in the second quarter of 2025), debit cards, and ATM service fees.
As of December 31, 2024 and December 31, 2023, the Company held $177.4 million and $223.2 million, respectively, in equity securities in a combination of FRB and FHLB stocks, which are restricted nonmarketable securities acquired to meet regulatory requirements.
As of December 31, 2025 and December 31, 2024, the Company held $106.3 million and $177.4 million, respectively, primarily in equity securities in a combination of FRB and FHLB stocks, which are restricted nonmarketable securities acquired to meet regulatory requirements.
Regular cash dividends paid to common shareholders during 2024 amounted to approximately $195.9 million. On January 28, 2025, we declared a quarterly dividend to common stockholders of $0.47 per share, which was paid on February 20, 2025 to shareholders of record as of February 10, 2025.
Regular cash dividends paid to common shareholders during 2025 amounted to approximately $194.3 million. On January 27, 2026, we declared a quarterly dividend to common stockholders of $0.47 per share, which was paid on February 20, 2026 to shareholders of record as of February 10, 2026.
The dividend equates to a 5.8% annual yield based on the $32.53 average closing price of the Company’s common stock as reported on NASDAQ during the fourth quarter of 2024.
The dividend equates to a 5.7% annual yield based on the $32.72 average closing price of the Company’s common stock as reported on NASDAQ during the fourth quarter of 2025.
The following table sets forth information regarding our ACL as of the dates and for the periods indicated. 53 Table of Contents Allowance for Credit Losses (Dollars in millions) As of and for the year ended December 31, 2024 2023 2022 Allowance for credit losses on loans: Beginning balance $ 227.7 $ 220.1 $ 122.3 ACL recorded on PCD loans — — 59.5 Provision for (reduction of) operating expense 80.9 31.1 68.4 Charge-offs: Real estate Commercial 25.4 7.6 11.7 Construction 13.2 10.3 9.2 Residential 1.0 0.6 0.3 Agricultural — — 0.2 Consumer 15.4 14.0 10.1 Commercial 59.4 3.4 8.1 Agricultural 0.3 — 5.4 Total charge-offs 114.7 35.9 45.0 Recoveries: Real estate Commercial 0.8 4.2 3.0 Construction 0.1 0.1 0.5 Residential 0.2 0.1 0.8 Agricultural 0.1 0.3 0.4 Consumer 4.9 4.7 5.0 Commercial 3.8 2.6 2.3 Agricultural 0.3 0.4 2.9 Total recoveries 10.2 12.4 14.9 Net charge-offs 104.5 23.5 30.1 Ending balance $ 204.1 $ 227.7 $ 220.1 Allowance for off-balance sheet credit losses: Beginning balance $ 18.4 $ 16.2 $ 3.8 (Reduction of) provision for off-balance sheet credit losses (13.2) 2.2 12.4 Ending balance $ 5.2 $ 18.4 $ 16.2 Allowance for credit losses on investment securities: Beginning balance $ 0.8 $ 1.9 $ — Provision for (reduction of) credit losses 0.1 (1.1) 1.9 Ending balance $ 0.9 $ 0.8 $ 1.9 Total allowance for credit losses $ 210.2 $ 246.9 $ 238.2 Total provision for credit losses 67.8 32.2 82.7 Loans held for investment, net of deferred fees and costs 17,844.9 18,279.6 18,099.2 Average loans 18,182.0 18,299.6 16,802.2 Net charge-offs to average loans 0.57 % 0.13 % 0.18 % Allowance to non-accrual loans 147.58 214.00 371.79 Allowance to loans held for investment 1.14 1.25 1.22 The ACL is allocated to loan categories based on the relative risk characteristics, asset classifications, and expected losses of the loan portfolio.
The following table sets forth information regarding our allowance for credit losses as of the dates and for the periods indicated. 58 Table of Contents Allowance for Credit Losses (Dollars in millions) As of and for the year ended December 31, 2025 2024 2023 Allowance for credit losses on loans: Beginning balance $ 204.1 $ 227.7 $ 220.1 Provision for (reduction of) credit losses 26.5 80.9 31.1 Charge-offs: Real estate Commercial 22.0 25.4 7.6 Construction — 13.2 10.3 Residential 1.4 1.0 0.6 Agricultural 0.2 — — Consumer 17.5 15.4 14.0 Commercial 8.9 59.4 3.4 Agricultural 5.0 0.3 — Total charge-offs 55.0 114.7 35.9 Recoveries: Real estate Commercial 5.1 0.8 4.2 Construction 1.4 0.1 0.1 Residential 0.4 0.2 0.1 Agricultural 0.7 0.1 0.3 Consumer 5.7 4.9 4.7 Commercial 2.3 3.8 2.6 Agricultural 0.2 0.3 0.4 Total recoveries 15.8 10.2 12.4 Net charge-offs 39.2 104.5 23.5 Ending balance $ 191.4 $ 204.1 $ 227.7 Allowance for off-balance sheet credit losses: Beginning balance $ 5.2 $ 18.4 $ 16.2 (Reduction of) provision for off-balance sheet credit losses 0.7 (13.2) 2.2 Ending balance $ 5.9 $ 5.2 $ 18.4 Allowance for credit losses on investment securities: Beginning balance $ 0.9 $ 0.8 $ 1.9 Provision for (reduction of) credit losses (0.4) 0.1 (1.1) Ending balance $ 0.5 $ 0.9 $ 0.8 Total allowance for credit losses $ 197.8 $ 210.2 $ 246.9 Total provision for credit losses 26.8 67.8 32.2 Loans held for investment, net of deferred fees and costs 15,201.6 17,844.9 18,279.6 Average loans 16,663.9 18,182.0 18,299.6 Net charge-offs to average loans 0.24 % 0.57 % 0.13 % Allowance to non-accrual loans 143.37 147.58 214.00 Allowance to loans held for investment 1.26 1.14 1.25 The allowance for credit losses is allocated to loan categories based on the relative risk characteristics, asset classifications, and expected losses of the loan portfolio.
Analysis of Interest Changes Due To Volume and Rates Year Ended December 31, 2024 compared with December 31, 2023 Year Ended December 31, 2023 compared with December 31, 2022 Year Ended December 31, 2022 compared with December 31, 2021 (Dollars in millions) Volume Rate Net Volume Rate Net Volume Rate Net Interest earning assets: Loans (1) $ (6.3) $ 48.5 $ 42.2 $ 71.0 $ 117.8 $ 188.8 $ 308.6 $ 57.4 $ 366.0 Investment Securities (1) (26.9) 0.8 (26.1) (13.2) 67.3 54.1 61.9 83.1 145.0 Investment in FHLB and FRB Stock (1.7) 1.1 (0.6) 3.7 3.9 7.6 1.2 2.6 3.8 Interest bearing deposits in banks 6.2 0.3 6.5 (6.9) 13.9 7.0 (0.7) 6.8 6.1 Total change (28.7) 50.7 22.0 54.6 202.9 257.5 371.0 149.9 520.9 Interest bearing liabilities: Demand deposits (2.4) 13.0 10.6 (2.1) 33.6 31.5 1.2 12.7 13.9 Savings deposits (3.1) 42.1 39.0 (2.1) 99.8 97.7 1.2 21.8 23.0 Time deposits 6.0 27.7 33.7 5.6 59.5 65.1 2.7 0.6 3.3 Repurchase agreements (1.7) 2.0 0.3 (0.4) 4.3 3.9 — 2.1 2.1 Other borrowed funds (4.3) (6.1) (10.4) 78.3 40.2 118.5 — 15.3 15.3 Long-term debt 6.4 (0.4) 6.0 (0.1) (0.1) (0.2) 0.5 (0.5) — Subordinated debentures held by subsidiary trusts — 0.4 0.4 0.3 5.6 5.9 2.2 1.8 4.0 Total change 0.9 78.7 79.6 79.5 242.9 322.4 7.8 53.8 61.6 Increase in FTE net interest income (1) $ (29.6) $ (28.0) $ (57.6) $ (24.9) $ (40.0) $ (64.9) $ 363.2 $ 96.1 $ 459.3 (1) Interest income and average rates for tax exempt loans and securities are presented on a FTE basis.
Analysis of Interest Changes Due To Volume and Rates Year Ended December 31, 2025 compared with December 31, 2024 Year Ended December 31, 2024 compared with December 31, 2023 Year Ended December 31, 2023 compared with December 31, 2022 (Dollars in millions) Volume Rate Net Volume Rate Net Volume Rate Net Interest earning assets: Loans (1) $ (85.9) $ (1.6) $ (87.5) $ (6.3) $ 48.5 $ 42.2 $ 71.0 $ 117.8 $ 188.8 Investment Securities (1) (28.1) (15.9) (44.0) (26.9) 0.8 (26.1) (13.2) 67.3 54.1 Investment in FHLB and FRB Stock (2) (3.1) (1.3) (4.4) (1.7) 1.1 (0.6) 3.7 3.9 7.6 Interest bearing deposits in banks 17.7 (7.2) 10.5 6.2 0.3 6.5 (6.9) 13.9 7.0 Total change (99.4) (26.0) (125.4) (28.7) 50.7 22.0 54.6 202.9 257.5 Interest bearing liabilities: Demand deposits 1.3 0.9 2.2 (2.4) 13.0 10.6 (2.1) 33.6 31.5 Savings deposits 1.0 (16.4) (15.4) (3.1) 42.1 39.0 (2.1) 99.8 97.7 Time deposits (4.1) (8.8) (12.9) 6.0 27.7 33.7 5.6 59.5 65.1 Repurchase agreements (1.7) (0.3) (2.0) (1.7) 2.0 0.3 (0.4) 4.3 3.9 Other borrowed funds (94.9) (2.3) (97.2) (4.3) (6.1) (10.4) 78.3 40.2 118.5 Long-term debt (4.4) 3.3 (1.1) 6.4 (0.4) 6.0 (0.1) (0.1) (0.2) Subordinated debentures held by subsidiary trusts (0.2) (1.7) (1.9) — 0.4 0.4 0.3 5.6 5.9 Total change (103.0) (25.3) (128.3) 0.9 78.7 79.6 79.5 242.9 322.4 Increase in FTE net interest income (1) $ 3.6 $ (0.7) $ 2.9 $ (29.6) $ (28.0) $ (57.6) $ (24.9) $ (40.0) $ (64.9) (1) Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
Approximately 74.0% and 74.2% of our tax-exempt securities were general obligation securities as of December 31, 2024 and 2023, respectively, of which 29.8% and 31.1%, respectively, were issued by political subdivisions or agencies within the states we operate, including Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
Approximately 73.6% and 74.0% of our tax-exempt securities were general obligation securities as of December 31, 2025 and 2024, respectively, of which 28.3% and 29.8%, respectively, were issued by political subdivisions or agencies within the states we operated in during 2025 and 2024, including Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
The following table provides a summary of the allocation of the ACL for specific loan categories as of the dates indicated.
The following table provides a summary of the allocation of the allowance for credit losses for specific loan categories as of the dates indicated.
Net interest income included interest accretion related to the fair value of acquired loans of $24.6 million during 2024 as compared to $20.4 million in 2023, of which $7.2 million was the result of early loan payoffs during 2024, as compared to $2.5 million in 2023.
Net interest income included interest accretion related to the fair value of acquired loans of $15.0 million during 2025 as compared to $24.6 million in 2024, of which $3.0 million was the result of early loan payoffs during 2025, as compared to $7.2 million in 2024.
Stockholders’ equity increased $76.5 million, or 2.4%, to $3,304.0 million as of December 31, 2024 from $3,227.5 million as of December 31, 2023, due to changes in accumulated other comprehensive loss related to unrealized gains on available-for-sale securities, stock-based compensation expense, and retention of earnings, which are partially offset by stock repurchases of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants, and cash dividends paid.
Stockholders’ equity increased $143.0 million, or 4.3%, to $3,447.0 million as of December 31, 2025 from $3,304.0 million as of December 31, 2024, due to changes in accumulated other comprehensive loss related to unrealized gains on available-for-sale securities, stock-based compensation expense, and retention of earnings, which are partially offset by stock repurchases of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants, stock purchases pursuant to the stock repurchase program as further discussed below, and cash dividends paid.
The following table presents the composition of our noninterest expense as of the dates indicated: Noninterest expense Year Ended December 31, $ Change % Change (Dollars in millions) 2024 2023 2022 2024 vs 2023 2023 vs 2022 2024 vs 2023 2023 vs 2022 Salaries and wages $ 270.9 $ 263.1 $ 282.1 $ 7.8 $ (19.0) 3.0 % (6.7) % Employee benefits 76.4 75.3 77.5 1.1 (2.2) 1.5 (2.8) Outsourced technology services 56.2 59.0 54.3 (2.8) 4.7 (4.7) 8.7 Occupancy, net 48.7 48.0 44.0 0.7 4.0 1.5 9.1 Furniture and equipment 20.7 22.1 23.4 (1.4) (1.3) (6.3) (5.6) OREO expense, net 4.1 1.5 2.3 2.6 (0.8) 173.3 NM Professional fees 21.6 19.1 19.1 2.5 — 13.1 — FDIC insurance premiums 24.0 31.5 14.0 (7.5) 17.5 (23.8) NM Other intangibles amortization 14.6 15.7 15.9 (1.1) (0.2) (7.0) (1.3) Other expenses 100.2 121.5 114.5 (21.3) 7.0 (17.5) 6.1 Acquisition related expenses — — 118.9 — (118.9) — NM Total noninterest expense $ 637.4 $ 656.8 $ 766.0 $ (19.4) $ (109.2) (3.0) (14.3) Salaries and wages expense primarily consist of salaries, severance, commissions, overtime, bonus accrual, and temporary employee expenses.
The following table presents the composition of our noninterest expense for the periods indicated: Noninterest expense Year Ended December 31, $ Change % Change (Dollars in millions) 2025 2024 2023 2025 vs 2024 2024 vs 2023 2025 vs 2024 2024 vs 2023 Salaries and wages $ 274.6 $ 270.9 $ 263.1 $ 3.7 $ 7.8 1.4 % 3.0 % Employee benefits 74.6 76.4 75.3 (1.8) 1.1 (2.4) 1.5 Outsourced technology services 57.5 56.2 59.0 1.3 (2.8) 2.3 (4.7) Occupancy expense, net 54.8 48.7 48.0 6.1 0.7 12.5 1.5 Furniture and equipment 20.6 20.7 22.1 (0.1) (1.4) (0.5) (6.3) OREO expense, net 0.5 4.1 1.5 (3.6) 2.6 (87.8) 173.3 Professional fees 23.7 21.6 19.1 2.1 2.5 9.7 13.1 FDIC insurance premiums 14.4 24.0 31.5 (9.6) (7.5) (40.0) (23.8) Other intangibles amortization 13.6 14.6 15.7 (1.0) (1.1) (6.8) (7.0) Other expenses 106.0 100.2 121.5 5.8 (21.3) 5.8 (17.5) Total noninterest expense $ 640.3 $ 637.4 $ 656.8 $ 2.9 $ (19.4) 0.5 (3.0) Salaries and wages expense primarily consist of salaries, severance, commissions, overtime, bonus accrual, and temporary employee expenses.
As of December 31, 2024 there were approximately $56.9 million of non-accrual loans for which there was no related ACL, as these loans had sufficient collateral securing the loan for repayment. Loans contractually past due 90 days or more and still accruing interest .
As of December 31, 2025 there were approximately $59.8 million of non-accrual loans for which there was no related allowance for credit losses, as these loans had sufficient collateral securing the loan for repayment. Loans contractually past due 90 days or more and still accruing interest .
At December 31, 2024 and December 31, 2023, the Company had no ACL on available-for-sale securities and an ACL on held-to maturity securities classified as corporate and municipal securities of $0.9 million and $0.8 million, respectively.
At December 31, 2025 and December 31, 2024, the Company had no allowance for credit losses on available-for-sale securities and an allowance for credit losses on held-to maturity securities classified as corporate and municipal securities of $0.5 million and $0.9 million, respectively.
As of December 31, 2024 and 2023, we had certificate of deposits of $12.5 million and $26.6 million, respectively, through IntraFi Network Deposits, or Intrafi. We had no brokered deposits as of December 31, 2024 and 2023.
As of December 31, 2025 and 2024, we had certificate of deposits of $13.4 million and $12.5 million, respectively, through IntraFi Network Deposits, or Intrafi. We had no brokered deposits as of December 31, 2025 and 2024.
(2) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company’s performance as a comparison of the returns between a tax-free investment and a taxable alternative.
(4) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company’s performance as a comparison of the returns between a tax-free investment and a taxable alternative. Net FTE interest income and net FTE interest margin are non-GAAP financial measures.
Our net FTE interest margin ratio, a non-GAAP financial measure, decreased 10 basis points to 3.04% during 2024, as compared to 3.14% in 2023. Exclusive of the impact of interest accretion on acquired loans, our 2024 net FTE interest margin ratio decreased 12 basis points over our similarly calculated net interest margin ratio in 2023.
Our net FTE interest margin ratio, a non-GAAP financial measure, increased 28 basis points to 3.32% during 2025, as compared to 3.04% in 2024. Exclusive of the impact of interest accretion on acquired loans, our 2025 net FTE interest margin ratio increased 31 basis points over our similarly calculated net interest margin ratio in 2024.
We record OREO at fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate acquired, is recorded as a charge against the ACL. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified.
Any excess of loan carrying value over the fair value of the real estate at the time it is acquired, is recorded as a charge against the allowance for credit losses. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified.
The following table presents the composition of our noninterest income as of the dates indicated: Noninterest Income Year Ended December 31, $ Change % Change (Dollars in millions) 2024 2023 2022 2024 vs 2023 2023 vs 2022 2024 vs 2023 2023 vs 2022 Payment services revenues $ 73.6 $ 76.4 $ 74.1 $ (2.8) $ 2.3 (3.7) % 3.1 % Mortgage banking revenues 6.6 8.4 18.7 (1.8) (10.3) (21.4) (55.1) Wealth management revenues 38.8 35.3 34.3 3.5 1.0 9.9 2.9 Service charges on deposit accounts 25.7 23.0 24.6 2.7 (1.6) 11.7 (6.5) Other service charges, commissions and fees 9.0 9.5 15.5 (0.5) (6.0) (5.3) (38.7) Investment securities losses, net — (23.5) (24.4) 23.5 0.9 (100.0) (3.7) Other income 24.4 17.9 20.4 6.5 (2.5) 36.3 (12.3) Total noninterest income $ 178.1 $ 147.0 $ 163.2 $ 31.1 $ (16.2) 21.2 (9.9) Noninterest income increased $31.1 million in 2024 as compared to the same period in 2023.
The following table presents the composition of our noninterest income for the periods indicated: Noninterest Income Year Ended December 31, $ Change % Change (Dollars in millions) 2025 2024 2023 2025 vs 2024 2024 vs 2023 2025 vs 2024 2024 vs 2023 Payment services revenues $ 67.9 $ 73.6 $ 76.4 $ (5.7) $ (2.8) (7.7) % (3.7) % Mortgage banking revenues 5.8 6.6 8.4 (0.8) (1.8) (12.1) (21.4) Wealth management revenues 40.6 38.8 35.3 1.8 3.5 4.6 9.9 Service charges on deposit accounts 27.0 25.7 23.0 1.3 2.7 5.1 11.7 Other service charges, commissions and fees 8.8 9.0 9.5 (0.2) (0.5) (2.2) (5.3) Investment securities losses, net — — (23.5) — 23.5 — NM* Other income 83.3 24.4 17.9 58.9 6.5 NM* 36.3 Total noninterest income $ 233.4 $ 178.1 $ 147.0 $ 55.3 $ 31.1 31.0 21.2 * NM - not meaningful Noninterest income increased $55.3 million in 2025 as compared to 2024.
We provide interim construction and permanent financing for both single-family and multi-unit properties, medium-term loans for commercial, agricultural and industrial property and/or buildings and equity lines of credit secured by real estate. Commercial real estate loans .
The remaining decline in loan balances is due to paydowns and maturities. Real Estate Loans. We provide interim construction and permanent financing for both single-family and multi-unit properties, medium-term loans for commercial, agricultural and industrial property and/or buildings and equity lines of credit secured by real estate. Commercial real estate loans .
As of December 31, 2024, our construction loan portfolio was divided among the following categories: approximately $216.9 million, or 17.4%, residential construction; approximately $738.7 million, or 59.4%, commercial construction; and approximately $289.0 million, or 23.2%, land acquisition and development. Residential real estate loans . Residential real estate loans are typically secured by first liens on the financed property.
As of December 31, 2025, our construction loan portfolio was divided among the following categories: approximately $169.4 million, or 20.2%, residential construction; approximately $450.9 million, or 53.9%, commercial construction; and approximately $216.9 million, or 25.9%, land acquisition and development. Residential real estate loans . Residential real estate loans are typically secured by first liens on the financed property.
As of December 31, 2024, we had 300 banking offices in operation, including branches and detached drive-up facilities, in communities across Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
As of December 31, 2025, we operated 289 banking offices, including branches and detached drive-up facilities, in communities across twelve states— Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
For the Year Ended (In millions, except % and per share data) Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Net interest income (A) $ 821.6 $ 878.8 $ 942.6 FTE interest income 6.6 7.0 8.1 Net FTE interest income (B) 828.2 885.8 950.7 Average interest-earning assets (C) $ 27,231.4 $ 28,183.4 $ 28,325.5 Net interest margin (GAAP) (A) / (C) 3.02 3.12 3.33 Net interest margin (FTE) (Non-GAAP) (B) / (C) 3.04 3.14 3.36 Provision for (reduction of) Credit Losses Fluctuations in the provision for credit losses reflect charge-offs and recoveries as well as management’s estimate of possible credit losses based upon the composition of our loan portfolio, evaluation of the borrowers’ ability to repay, collateral value underlying loans, loan loss trends, and estimated effects of current and forecasted economic conditions on our loans held for investment and investment securities portfolios. 43 Table of Contents During 2024, the Company recorded a provision for credit losses of $67.8 million, as compared to a $32.2 million provision for credit losses in 2023.
For the Year Ended (In millions, except % and per share data) Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Net interest income (A) $ 825.4 $ 821.6 $ 878.8 FTE interest income 5.7 6.6 7.0 Net FTE interest income (Non-GAAP) (B) 831.1 828.2 885.8 Less purchase accounting accretion 15.0 24.6 20.4 Adjusted net FTE interest income (Non-GAAP) (C) $ 816.1 $ 803.6 $ 865.4 Average interest earning assets (D) $ 25,040.8 $ 27,231.4 $ 28,183.4 Net interest margin (GAAP) (A) / (D) 3.30 % 3.02 % 3.12 % Net interest margin (FTE) (Non-GAAP) (B) / (D) 3.32 3.04 3.14 Adjusted net interest margin (FTE) (Non-GAAP) (C) / (D) 3.26 2.95 3.07 48 Table of Contents Provision for (reduction of) Credit Losses Fluctuations in the provision for credit losses reflect charge-offs and recoveries as well as management’s estimate of possible credit losses based upon the composition of our loan portfolio, evaluation of the borrowers’ ability to repay, collateral value of underlying loans, loan loss trends, and estimated effects of current and forecasted economic conditions on our loans held for investment and investment securities portfolios.
Loans Held for Investment, Net of Deferred Fees and Costs The following table presents the composition of our loan portfolio as of the dates indicated: Loans Outstanding (Dollars in millions) As of December 31, 2024 Percent 2023 Percent 2022 Percent Real estate: Commercial $ 9,263.2 51.9 % $ 8,869.2 48.4 % $ 8,528.6 47.1 % Construction 1,244.6 7.0 1,826.5 10.0 1,944.4 10.8 Residential 2,191.6 12.3 2,244.3 12.3 2,188.3 12.1 Agricultural 701.1 3.9 716.8 3.9 794.9 4.4 Total real estate 13,400.5 75.1 13,656.8 74.6 13,456.2 74.4 % Consumer: Indirect 725.0 4.0 740.9 4.1 829.7 4.6 Direct 134.0 0.7 141.6 0.8 152.9 0.8 Credit card 77.6 0.4 76.5 0.4 75.9 0.4 Total consumer 936.6 5.1 959.0 5.3 1,058.5 5.8 Commercial 2,829.4 15.9 2,906.8 15.9 2,882.6 15.9 Agricultural 687.9 3.9 769.4 4.2 708.3 3.9 Other, including overdrafts 1.6 — 0.1 — 9.2 — Loans held for investment 17,856.0 100.0 % 18,292.1 100.0 % 18,114.8 100.0 % Deferred loan fees and costs (11.1) (12.5) (15.6) Loans held for investment, net of deferred fees and costs 17,844.9 18,279.6 18,099.2 Allowance for credit losses (204.1) (227.7) (220.1) Net loans held for investment $ 17,640.8 $ 18,051.9 $ 17,879.1 Allowance for credit losses to loans held for investment 1.14 % 1.25 % 1.22 % Loans held for investment, net of deferred fees and costs, decreased $434.7 million, or 2.4%, to $17,844.9 million as of December 31, 2024, as compared to $18,279.6 million as of December 31, 2023, Real Estate Loans.
Loans Held for Investment, Net of Deferred Fees and Costs The following table presents the composition and comparison of our loans held for investment for the periods indicated: Loans Outstanding (Dollars in millions) As of December 31, 2025 Percent 2024 Percent 2023 Percent Real estate: Commercial $ 8,144.4 53.6 % $ 9,263.2 51.9 % $ 8,869.2 48.4 % Construction 837.2 5.5 1,244.6 7.0 1,826.5 10.0 Residential 2,108.8 13.9 2,191.6 12.3 2,244.3 12.3 Agricultural 629.0 4.1 701.1 3.9 716.8 3.9 Total real estate 11,719.4 77.1 13,400.5 75.1 13,656.8 74.6 Consumer: Indirect 477.5 3.1 725.0 4.0 740.9 4.1 Direct 131.5 0.9 134.0 0.7 141.6 0.8 Credit card — — 77.6 0.4 76.5 0.4 Total consumer 609.0 4.0 936.6 5.1 959.0 5.3 Commercial 2,359.6 15.5 2,829.4 15.9 2,906.8 15.9 Agricultural 520.2 3.4 687.9 3.9 769.4 4.2 Other, including overdrafts 1.7 — 1.6 — 0.1 — Loans held for investment 15,209.9 100.0 % 17,856.0 100.0 % 18,292.1 100.0 % Deferred loan fees and costs (8.3) (11.1) (12.5) Loans held for investment, net of deferred fees and costs 15,201.6 17,844.9 18,279.6 Allowance for credit losses (191.4) (204.1) (227.7) Net loans held for investment $ 15,010.2 $ 17,640.8 $ 18,051.9 Allowance for credit losses to loans held for investment 1.26 % 1.14 % 1.25 % Loans held for investment, net of deferred fees and costs, decreased $2,643.3 million, or 14.8%, to $15,201.6 million as of December 31, 2025, as compared to $17,844.9 million as of December 31, 2024.
Significant fluctuations in balance sheet accounts are discussed below. Investment Securities We manage our investment portfolio to obtain the highest yield possible while meeting our risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements.
Investment Securities We manage our investment portfolio to obtain the highest yield possible while meeting our credit and interest rate risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements.
The Company’s cost of funds decreased to 1.72% during the three months ended December 31, 2024, from 1.86% during the three months ended September 30, 2024, and was stable compared to the three months ended December 31, 2023.
The Company’s cost of funds decreased to 1.35% during the three months ended December 31, 2025, from 1.45% during the three months ended September 30, 2025, and decreased from 1.72% during the three months ended December 31, 2024.
Primary Factors Used in Evaluating Our Business As a banking institution, we manage and evaluate our financial condition and our results of operations. We monitor and evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as various financial ratios that are commonly used in our industry.
We monitor and evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as the various financial ratios that are commonly used in our industry.
The Company also has an unused line of credit with the FRB for borrowings up to $1,813.6 million secured by government and agency backed securities and a blanket pledge of agricultural and commercial loans and has an unused $50.0 million revolving line of credit with another third party.
The Company also has an unused line of credit with the FRB for borrowings up to $3,585.5 million secured by government and agency backed securities and a blanket pledge of agricultural and commercial loans.
In addition, our management is not aware of any regulatory recommendations regarding liquidity, which if implemented, would have a material adverse effect on us.
Our management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources, or operations. In addition, our management is not aware of any regulatory recommendations regarding liquidity, which if implemented, would have a material adverse effect on us.
The Company had deposits without a stated maturity of $20,125.1 million and time deposits of $2,658.5 million, due in one year or less in addition to time deposits due in more than one year of $232.0 million as of December 31, 2024.
The Company had deposits without a stated maturity of $19,450.0 million and time deposits of $2,530.5 million, due in one year or less in addition to time deposits due in more than one year of $107.8 million as of December 31, 2025.
Decreases in the ACL are recorded through net income as a reversal of provision for credit loss expense. Loans are charged-off against the ACL when management confirms the uncollectibility of a loan balance. Expected recoveries recorded do not exceed the aggregate of loan amounts previously charged-off.
Increases in the allowance for credit losses are recorded through net income as a provision for credit loss expense. Decreases in the allowance for credit losses are recorded through net income as a reversal of provision for credit loss expense. Loans are charged-off against the allowance for credit losses when management confirms the uncollectibility of a loan balance.
The following table summarizes our deposits as of the dates indicated: Deposits (Dollars in millions) As of December 31, 2024 Percent 2023 Percent 2022 Percent Noninterest bearing demand $ 5,797.6 25.2 % $ 6,029.6 25.9 % $ 7,560.0 30.2 % Interest bearing: Demand 6,495.2 28.2 6,507.8 27.9 7,205.9 28.7 Savings 7,832.3 34.0 7,775.8 33.3 8,379.3 33.4 Time, $250k or more 825.0 3.6 811.6 3.5 438.0 1.8 Time, other 2,065.5 9.0 2,198.3 9.4 1,490.4 5.9 Total interest bearing 17,218.0 74.8 17,293.5 74.1 17,513.6 69.8 Total deposits $ 23,015.6 100.0 % $ 23,323.1 100.0 % $ 25,073.6 100.0 % For additional information concerning client deposits, including the use of repurchase agreements, see “Business—Community Banking—Deposit Products,” included in Part I, Item 1 and “Notes to Consolidated Financial Statements—Deposits,” included in Part IV, Item 15 of this report.
The following table summarizes our deposits as of the dates indicated: Deposits (Dollars in millions) As of December 31, 2025 Percent 2024 Percent 2023 Percent Noninterest bearing demand $ 5,286.8 23.9 % $ 5,797.6 25.2 % $ 6,029.6 25.9 % Interest bearing: Demand 6,319.7 28.6 6,495.2 28.2 6,507.8 27.9 Savings 7,843.5 35.5 7,832.3 34.0 7,775.8 33.3 Time, $250k or more 792.9 3.6 825.0 3.6 811.6 3.5 Time, other 1,845.4 8.4 2,065.5 9.0 2,198.3 9.4 Total interest bearing 16,801.5 76.1 17,218.0 74.8 17,293.5 74.1 Total deposits $ 22,088.3 100.0 % $ 23,015.6 100.0 % $ 23,323.1 100.0 % For additional information concerning client deposits, including the use of repurchase agreements, see “Business—Community Banking—Deposit Products,” included in Part I, Item 1 and “Notes to Consolidated Financial Statements—Deposits,” included in Part IV, Item 15 of this report. 60 Table of Contents Securities Sold Under Repurchase Agreements Under repurchase agreements with commercial and municipal depositors, client deposit balances are invested in U.S. government agency securities overnight and are then repurchased the following day.
Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices, and any relevant qualitative or environmental factors impacting loans.
Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices, and any relevant qualitative or environmental factors impacting loans. 57 Table of Contents (2) A collective valuation allowance based on loan loss experience and future expectations for similar loans with similar characteristics and trends.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+4 added−4 removed10 unchanged
Biggest changeNet Interest Income Sensitivity We believe net interest income sensitivity provides the best perspective of how day-to-day decisions affect our interest rate risk profile. We monitor net interest income sensitivity by utilizing an income simulation model to subject 12- and 24- month net interest income to various rate movements.
Biggest changeInterest sensitivity is a measure of the extent to which net interest income will be affected by market interest rates over a period. 64 Table of Contents Net Interest Income Sensitivity We believe net interest income sensitivity provides the best perspective of how day-to-day decisions affect our interest rate risk profile.
Asset liability management is governed by policies, goals, and objectives adopted and reviewed by the Bank’s Board. Development of asset liability management strategies and monitoring of interest rate risk are the responsibility of the Asset Liability Committee, or ALCO, which is composed of members of senior management.
Asset liability management is governed by policies, goals, and objectives adopted and reviewed by the Bank’s board of directors. Development of asset liability management strategies and monitoring of interest rate risk are the responsibility of the Asset Liability Committee, or ALCO, which is composed of members of senior management.
The ability to optimize net interest income is largely dependent upon the achievement of an interest rate spread that can be managed during periods of fluctuating interest rates. Interest sensitivity is a measure of the extent to which net interest income will be affected by market interest rates over a period of time.
The ability to optimize net interest income is largely dependent upon the achievement of an interest rate spread that can be managed during periods of fluctuating interest rates.
Based on the December 31, 2024 deposit balance composition, the deposit beta assumption is 31% for up- and down- rate scenarios. Actual changes to deposit pricing may vary significantly from this assumption due to management actions, customer behavior, and market forces, which may have significant impacts to our net interest income.
In down-rate scenarios, the total deposit beta is 29% over the 12-month simulation with the pricing change occurring in the first month of the net interest income simulation horizon. Actual changes to deposit pricing may vary significantly from this simulation due to management actions, customer behavior, and market forces, which may have significant impacts to our net interest income.
The net interest income simulations at December 31, 2024 project that interest-bearing liabilities reprice faster than our interest earning assets. 59 Table of Contents Change in Interest Rate Percent Change in Net Interest Income (basis points) December 31, 2024 +200 (4.24)% +100 (2.04)% -100 1.65% -200 3.05% The preceding interest rate sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
Change in Interest Rate Percent Change in Net Interest Income (basis points) December 31, 2025 +200 0.49% +100 0.36 -100 (0.64) -200 (1.49) The preceding interest rate sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
The active two interest rate collars and one remaining swap designated as cash flow hedges were effective with a total notional amount of $600.0 million. Recent Accounting Pronouncements The expected impact of accounting standards recently issued but not yet adopted are discussed in “Notes to Consolidated Financial Statements—Authoritative Accounting Guidance” included in Part IV, Item 15 of this report.
Recent Accounting Pronouncements The expected impact of accounting standards recently issued but not yet adopted are discussed in “Notes to Consolidated Financial Statements—Recent Authoritative Accounting Guidance” included in Part IV, Item 15 of this report. 65 Table of Contents
The net interest income simulation also uses a deposit beta modeling assumption which is an estimate of the change in interest-bearing deposit pricing for a given change in market interest rates. The deposit beta assumption is derived from empirical analysis and may vary over time depending on the composition of deposit balances.
The net interest income simulation also uses a “deposit beta” modeling assumption which is an estimate of the change in total deposit pricing for a given change in market interest rates. In up-rate scenarios, the total deposit beta is 30% over the 12-month simulation with the pricing change occurring in the first month of the net interest income simulation horizon.
Simulations modeled quarterly include scenarios where market rates change instantaneously up or down in a parallel or non-parallel manner.
We monitor net interest income sensitivity by utilizing an income simulation model to subject 12- and 24- month net interest income to various rate movements. Simulations modeled quarterly include scenarios where market rates change instantaneously up or down in a parallel or non-parallel manner.
Removed
As part of the Company’s overall asset and liability management strategy, the Company previously entered into two interest rate collars related to variable-rate loans that were designated as cash flow hedges with a total notional amount of $300.0 million and entered into four swaps, two of which were related to variable-rate loans and two that were related to variable-rate securities that were designated as cash flow hedges with a total notional amount of $850.0 million.
Added
The net interest income simulations at December 31, 2025 indicate a balanced repricing dynamic between interest earning assets and interest-bearing liabilities.
Removed
The collars designated as cash flow hedges synthetically fix the interest income received by the Company when the interest index falls below a floor rate on a rate reset and when the interest index exceeds the cap rate on a rate reset. Each of the swaps designated as cash flow hedges synthetically fixes the interest income received by the Company.
Added
The Company’s objectives in using interest rate derivatives are to add stability to interest income (expense) and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy.
Removed
During 2024, the Company voluntarily terminated three swaps, two of which were related to variable-rate loans and one related to variable-rate securities that were designated as cash flow hedges with a total notional amount of $550.0 million.
Added
As of December 31, 2025, the Company does not have any active interest rate derivatives designated as cash flow hedges. Amounts previously deferred in AOCI will be reclassified to income over time as the previously hedged, forecasted transactions remain probable of occurring.
Removed
The termination of the cash flow hedges resulted in a net loss of $0.2 million being captured in accumulated other comprehensive income, net of tax, and reclassified to interest income over the period the forecasted transactions affect earnings.
Added
The Company continues to monitor its interest rate risk exposure and may enter into new derivative contracts in the future as part of its ongoing risk management activities. Refer to “Note – Derivatives and Hedging Activities” in the accompanying “Notes to Consolidated Financial Statements” included in this report for further discussion on how we manage interest rate risk.

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