NATIONAL BANK HOLDINGS CORP

March 31, 2025

Losses from fair value changes

Individually evaluated loans

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35654

NATIONAL BANK HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		27-0563799
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7800 East Orchard Road, Suite 300, Greenwood Village, Colorado 80111

(Address of principal executive offices) (Zip Code)

Registrant’s telephone, including area code: (303) 892-8715

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


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Class A Common Stock, Par Value $0.01	NBHC	NYSE

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

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

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


Large accelerated filer	⌧	Accelerated filer	◻
Non-accelerated filer	◻	Smaller reporting company	☐
		Emerging growth company	☐

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 25, 2025, the registrant had outstanding 38,094,318 shares of Class A voting common stock, each with $0.01 par value per share, excluding 409,528 shares of restricted Class A common stock issued but not yet vested.

6
		Page
Part I. Financial Information

Item 1.	Financial Statements (Unaudited)	6

	Consolidated Statements of Financial Condition as of March 31, 2025 and December 31, 2024	6

	Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024	7

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025 and 2024	8

	Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2025 and 2024	9

	Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	10

	Notes to Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	72

Item 4.	Controls and Procedures	72

Part II. Other Information

Item 1.	Legal Proceedings	73

Item 1A.	Risk Factors	73

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73

Item 5.	Other Information	73

Item 6.	Exhibits	74

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GLOSSARY OF ACRONYMS, ABBREVIATIONS AND TERMS


2023 Plan	2023 Omnibus Incentive Plan	GAAP	Generally accepted accounting principles
ACL	Allowance for credit losses	GDP	Gross domestic product
AFS	Available-for-sale	GNMA	Government National Mortgage Association
AIR	Accrued interest receivable	GSE	Government sponsored enterprises
AOCI	Accumulated other comprehensive income (loss)	HPI	Home price index
ASC	Accounting Standards Codification	HTM	Held-to-maturity
BOJH	Bank of Jackson Hole	ISDA	International Swaps and Derivative Association
BOJHT	Bank of Jackson Hole Trust	MBS	Mortgage-backed securities
Cambr	Cambr Solutions, LLC	MSR	Mortgage servicing right
CECL	Current expected credit loss	NBHC or the Company	National Bank Holdings Corporation
CRE	Commercial real estate	NCO	Net charge-offs
CSA	Credit Support Annexes	OREO	Other real estate owned
DCF	Discounted cash flow	PSU	Performance stock unit
ESPP	Employee Stock Purchase Plan	ROTA	Return on tangible assets
FDIC	Federal Deposit Insurance Corporation	SBA	Small Business Administration
FHA	Federal Housing Administration	SEC	Securities and Exchange Commission
FHLB	Federal Home Loan Bank	SOFR	Secured overnight financing rate
FHLMC	Federal Home Loan Mortgage Corporation	TDMs	Troubled debt modifications
Fintech	Financial technology	The Banks	NBH Bank and Bank of Jackson Hole Trust
FNMA	Federal National Mortgage Association	Transaction deposits	Demand, savings, and money market deposits
FRB	Federal Reserve Bank	TSR	Total shareholder return
FTE	Fully taxable equivalent

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not discuss historical facts but instead relate to expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend,” “goal,” “focus,” “maintains,” “future,” “ultimately, ” “likely,” “ensure,” “strategy,” “objective,” and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties. We have based these statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, liquidity, results of operations, business strategy and growth prospects.

Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements and, therefore, you are cautioned not to place undue reliance on such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

●

business and economic conditions along with external events both generally and in the financial services industry;

●

susceptibility to credit risk and fluctuations in the value of real estate and other collateral securing a significant portion of our loan portfolio, including with regards to real estate acquired through foreclosure, and the accuracy of appraisals related to such real estate;

●

the allowance for credit losses and fair value adjustments may be insufficient to absorb losses in our loan portfolio;

●

our ability to maintain sufficient liquidity to meet the requirements of deposit withdrawals and other business needs;

●

changes and uncertainty impacting monetary supply and the businesses of our clients and counterparties, including levels of market interest rates, inflation, currency values, monetary and fiscal policies, and the volatility of trading markets;

●

changes in the fair value of our investment securities and the ability of companies in which we invest to commercialize their technology or product concepts;

●

the loss of certain executive officers and key personnel;

●

any service interruptions, cyber incidents or other breaches relating to our technology systems, security systems or infrastructure or those of our third-party providers;

●

the occurrence of fraud or other financial crimes within our business;

●

competition from other financial institutions and financial services providers and the effects of disintermediation within the banking business including consolidation within the industry;

●

changes and uncertainty with respect to federal government lending programs like the SBA’s Preferred Lender Program and the FHA’s insurance programs, including the impact of a government shutdown on such programs;

●

impairment of our mortgage servicing rights, disruption in the secondary market for mortgage loans, declines in real estate values, or being required to repurchase mortgage loans or reimburse investors;

●

developments in technology, such as artificial intelligence, the success of our digital growth strategy, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our clients’ expectations for convenience and security;

●

our ability to execute our organic growth and acquisition strategies;

●

the accuracy of projected operating results for assets and businesses we acquire as well as our ability to drive organic loan growth to replace loans in our existing portfolio with comparable loans as loans are paid down;

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●

changes and uncertainty with respect to federal, state and local laws, regulations, and policies along with executive orders applicable to our business, including tax laws, tariff policies, and Federal Reserve interest rate policies;

●

our ability to comply with and manage costs related to extensive government regulation and supervision, including current and future regulations affecting bank holding companies and depository institutions;

●

the application of any increased assessment rates imposed by the FDIC;

●

claims or legal action brought against us by third parties or government agencies; and

●

other factors, risks, trends and uncertainties described under “Part I, Item 1. Business,” “Part I, Item 1A. Risk Factors,” “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our other filings with the SEC.

Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

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PART I: FINANCIAL INFORMATION

Item 1: FINANCIAL STATEMENTS.

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition (Unaudited)

(In thousands, except share and per share data)


	March 31, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	246,298	$	127,848
Investment securities available-for-sale (at fair value)		634,376		527,547
Investment securities held-to-maturity (fair value of $636,805 and $451,386 at March 31, 2025 and December 31, 2024, respectively)		706,912		533,108
Non-marketable securities		76,203		76,462
Loans		7,646,296		7,751,143
Allowance for credit losses		(90,192)		(94,455)
Loans, net		7,556,104		7,656,688
Loans held for sale		11,885		24,495
Other real estate owned		615		662
Premises and equipment, net		204,567		196,773
Goodwill		306,043		306,043
Intangible assets, net		54,489		58,432
Other assets		301,378		299,635
Total assets	$	10,098,870	$	9,807,693
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing demand deposits	$	2,215,313	$	2,213,685
Interest bearing demand deposits		1,337,905		1,411,860
Savings and money market		3,812,312		3,592,312
Time deposits		1,058,677		1,020,036
Total deposits		8,424,207		8,237,893
Securities sold under agreements to repurchase		20,749		18,895
Long-term debt, net		54,588		54,511
Federal Home Loan Bank advances		80,000		50,000
Other liabilities		190,018		141,319
Total liabilities		8,769,562		8,502,618
Shareholders’ equity:
Common stock, par value $0.01 per share: 400,000,000 shares authorized; 51,487,888 and 51,487,888 shares issued; 38,094,105 and 38,054,482 shares outstanding at March 31, 2025 and December 31, 2024, respectively		515		515
Additional paid-in capital		1,168,433		1,167,431
Retained earnings		521,939		508,864
Treasury stock of 13,106,084 and 13,141,392 shares at March 31, 2025 and December 31, 2024, respectively, at cost		(301,531)		(301,694)
Accumulated other comprehensive loss, net of tax		(60,048)		(70,041)
Total shareholders’ equity		1,329,308		1,305,075
Total liabilities and shareholders’ equity	$	10,098,870	$	9,807,693

See accompanying notes to the consolidated interim financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

(In thousands, except share and per share data)


	For the three months ended
	March 31,
	2025		2024
Interest and dividend income:
Interest and fees on loans	$	120,207	$	123,736
Interest and dividends on investment securities		8,737		6,617
Dividends on non-marketable securities		480		616
Interest on interest bearing bank deposits		539		763
Total interest and dividend income		129,963		131,732
Interest expense:
Interest on deposits		41,267		43,998
Interest on borrowings		2,005		3,704
Total interest expense		43,272		47,702
Net interest income before provision for credit losses		86,691		84,030
Provision for credit loss expense		10,200		—
Net interest income after provision for credit losses		76,491		84,030
Non-interest income:
Service charges		4,118		4,391
Bank card fees		4,194		4,578
Mortgage banking income		3,315		2,655
Bank-owned life insurance income		764		733
Other non-interest income		2,985		5,337
Total non-interest income		15,376		17,694
Non-interest expense:
Salaries and benefits		34,362		36,520
Occupancy and equipment		10,837		9,941
Data processing		4,401		4,066
Marketing and business development		946		962
FDIC deposit insurance		1,326		1,345
Bank card expenses		1,103		1,349
Professional fees		1,423		1,646
Other non-interest expense		5,642		4,997
Other intangible assets amortization		1,977		2,008
Total non-interest expense		62,017		62,834
Income before income taxes		29,850		38,890
Income tax expense		5,619		7,499
Net income	$	24,231	$	31,391
Earnings per share—basic	$	0.63	$	0.82
Earnings per share—diluted		0.63		0.82
Common stock dividend		0.29		0.27
Weighted average number of common shares outstanding:
Basic		38,068,455		38,031,358
Diluted		38,229,869		38,188,480

See accompanying notes to the consolidated interim financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)


	For the three months ended
	March 31,
	2025		2024
Net income	$	24,231	$	31,391
Other comprehensive income (loss), net of tax:
Securities available-for-sale:
Net unrealized gains (losses) arising during the period, net of tax (expense) benefit of ($3,033) and $985 for the three months ended March 31, 2025 and 2024, respectively		9,716		(3,090)
Less: amortization of net unrealized holding gains to income, net of tax benefit of $3 and $8 for the three months ended March 31, 2025 and 2024, respectively		(8)		(25)
Cash flow hedges:
Net unrealized gains arising during the period, net of tax expense of $474 and $48 for the three months ended March 31, 2025 and 2024, respectively		1,554		203
Less: reclassification for gains included in net income, net of tax expense of $385 and $269 for the three months ended March 31, 2025 and 2024, respectively		(1,269)		(896)
Other comprehensive income (loss)		9,993		(3,808)
Comprehensive income	$	34,224	$	27,583

See accompanying notes to the consolidated interim financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Three months ended March 31, 2025 and 2024

(In thousands, except share and per share data)


									Accumulated
			Additional						other
	Common		paid-in		Retained		Treasury		comprehensive
	stock		capital		earnings		stock		(loss) income, net		Total
Balance, December 31, 2023	$	515	$	1,162,269	$	433,126	$	(306,702)	$	(76,401)	$	1,212,807
Net income		—		—		31,391		—		—		31,391
Stock-based compensation		—		1,576		—		—		—		1,576
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $369, net		—		(72)		—		242		—		170
Cash dividends declared ($0.27 per share)		—		—		(10,306)		—		—		(10,306)
Other comprehensive loss		—		—		—		—		(3,808)		(3,808)
Balance, March 31, 2024	$	515	$	1,163,773	$	454,211	$	(306,460)	$	(80,209)	$	1,231,830
Balance, December 31, 2024	$	515	$	1,167,431	$	508,864	$	(301,694)	$	(70,041)	$	1,305,075
Net income		—		—		24,231		—		—		24,231
Stock-based compensation		—		1,704		—		—		—		1,704
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $1,374, net		—		(702)		—		163		—		(539)
Cash dividends declared ($0.29 per share)		—		—		(11,156)		—		—		(11,156)
Other comprehensive income		—		—		—		—		9,993		9,993
Balance, March 31, 2025	$	515	$	1,168,433	$	521,939	$	(301,531)	$	(60,048)	$	1,329,308

See accompanying notes to the consolidated interim financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	For the three months ended March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	24,231	$	31,391
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit loss expense		10,200		—
Depreciation and amortization		6,328		6,021
Change in current income tax receivable		4,281		7,485
Change in deferred income taxes		4,560		(1,277)
Discount accretion, net of premium amortization on securities		(483)		(202)
Gain on sale of mortgages, net		(2,338)		(2,162)
Origination of loans held for sale, net of repayments		(72,646)		(62,542)
Proceeds from sales of loans held for sale		87,571		69,160
Originations of mortgage servicing rights		(62)		(115)
Proceeds from sales of mortgage servicing rights		2,360		—
Gain on sale of mortgage servicing rights		(646)		—
Gain on sale of fixed assets		(5)		(637)
Stock-based compensation		1,704		1,576
Operating lease payments		(1,625)		(1,637)
Change in other assets		(11,600)		(24,527)
Change in other liabilities		(12,205)		7,423
Net cash provided by operating activities		39,625		29,957
Cash flows from investing activities:
Proceeds from non-marketable securities		15,700		27,114
Proceeds from maturities and paydowns of investment securities available-for-sale		48,436		45,662
Proceeds from maturities and paydowns of investment securities held-to-maturity		17,027		14,367
Proceeds from sales of other real estate owned		—		21
Purchases of non-marketable securities		(15,904)		(10,302)
Purchases of investment securities available-for-sale		(142,245)		(106,554)
Purchases of investment securities held-to-maturity		(190,624)		—
Purchases of premises and equipment, net		(10,166)		(5,482)
Net decrease in loans		138,351		128,793
Proceeds from the sale of loans		11,941		—
Net cash (used in) provided by investing activities		(127,484)		93,619
Cash flows from financing activities:
Net increase in deposits		186,312		327,260
Net increase (decrease) in repurchase agreements and other short-term borrowings		1,854		(50)
Net advances from (payments to) the Federal Home Loan Bank		30,000		(340,000)
Issuance of stock under purchase and equity compensation plans		(583)		131
Proceeds from exercise of stock options		10		—
Payment of dividends		(11,284)		(10,312)
Net cash provided by (used in) financing activities		206,309		(22,971)
Increase in cash and cash equivalents		118,450		100,605
Cash and cash equivalents at beginning of the year		127,848		192,326
Cash and cash equivalents at end of period	$	246,298	$	292,931
Supplemental disclosure of cash flow information during the period:
Cash paid for interest	$	42,858	$	45,172
Net tax (refunds) payments		(95)		76
Supplemental schedule of non-cash activities:
Increase in loans purchased but not settled	$	60,350	$	—
Loans transferred from loans held for sale to loans		23		333

See accompanying notes to the consolidated interim financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2025

Note 1 Basis of Presentation

National Bank Holdings Corporation is a bank holding company that was incorporated in the State of Delaware in 2009. The Company is headquartered in Greenwood Village, Colorado, and its primary operations are conducted through its wholly owned subsidiaries NBH Bank and BOJHT. NBH Bank is a Colorado state-chartered bank and a member of the Federal Reserve System, and BOJHT is a Wyoming state-chartered bank and a member of the Federal Reserve System. The Company provides a variety of banking products to both commercial and consumer clients through a network of over 90 banking centers, as of March 31, 2025, located primarily in Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho, as well as through online and mobile banking products and services.

The accompanying interim unaudited consolidated financial statements serve to update the National Bank Holdings Corporation Annual Report on Form 10-K for the year ended December 31, 2024 and include the accounts of the Company and its wholly owned subsidiaries, NBH Bank, BOJHT and 2UniFi, LLC. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP and, where applicable, with general practices in the banking industry or guidelines prescribed by bank regulatory agencies. However, they may not include all information and notes necessary to constitute a complete set of financial statements under GAAP applicable to annual periods and accordingly should be read in conjunction with the financial information contained in the Company’s most recent Form 10-K. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results presented. All such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications of prior years’ amounts are made whenever necessary to conform to current period presentation. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the full year or any other interim period. All amounts are in thousands, except share data, or as otherwise noted.

GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and disclosures of contingent assets and liabilities. By their nature, estimates are based on judgment and available information. Management has made significant estimates in certain areas, such as the fair values of financial instruments, contingent liabilities and the ACL. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.

The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in note 2 of the audited financial statements and notes for the year ended December 31, 2024 and are contained in the Company’s Annual Report on Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2024.

Note 2 Recent Accounting Pronouncements

The Company has not adopted any recent accounting pronouncements in addition to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, except for the following:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update requires public business entities to disclose specific categories related to rate reconciliation. It also requires more detailed information for reconciling items, provided certain quantitative thresholds are met. The amendments in this update will be applied on a prospective basis and are effective for fiscal years beginning after December 15, 2024. The update will not have a material impact on its financial statements apart from the inclusion of additional disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. This update improves GAAP by adding an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether a profit interest award should be accounted for in accordance with Topic 718. The amendments in this update are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company adopted ASU 2024-01 on January 1, 2025 with no material impact to its financial statements.

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Note 3 Investment Securities

The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.3 billion at March 31, 2025 and included $0.6 billion of available-for-sale securities and $0.7 billion of held-to-maturity securities. At December 31, 2024, investment securities totaled $1.0 billion and included $0.5 billion of available-for-sale securities and $0.5 billion of held-to-maturity securities.

Available-for-sale

Available-for-sale securities are summarized as follows as of the dates indicated:


	March 31, 2025
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
U.S. Treasury securities	$	72,507	$	756	$	—	$	73,263
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		228,732		588		(25,075)		204,245
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		408,063		927		(54,821)		354,169
Corporate debt		2,000		—		(27)		1,973
Other securities		726		—		—		726
Total investment securities available-for-sale	$	712,028	$	2,271	$	(79,923)	$	634,376


	December 31, 2024
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
U.S. Treasury securities	$	24,958	$	—	$	(84)	$	24,874
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		164,785		53		(29,793)		135,045
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		425,476		432		(60,970)		364,938
Corporate debt		2,000		—		(38)		1,962
Other securities		728		—		—		728
Total investment securities available-for-sale	$	617,947	$	485	$	(90,885)	$	527,547

During the three months ended March 31, 2025 and 2024, purchases of available-for-sale securities totaled $142.2 million and $106.6 million, respectively. Maturities and paydowns of available-for-sale securities during the three months ended March 31, 2025 and 2024 totaled $48.4 million and $45.7 million, respectively. There were no sales of available-for-sale securities during the three months ended March 31, 2025 or 2024.

At March 31, 2025 and December 31, 2024, the Company’s available-for-sale investment portfolio was primarily comprised of U.S. Treasury securities and mortgage-backed securities. All mortgage-backed securities were backed by GSE collateral such as FHLMC and FNMA and the government-owned agency GNMA.

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The tables below summarize the available-for-sale securities with unrealized losses as of the dates shown, along with the length of the impairment period:


	March 31, 2025
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises	$	10,802	$	(43)	$	133,239	$	(25,032)	$	144,041	$	(25,075)
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		9,951		(6)		261,676		(54,815)		271,627		(54,821)
Corporate debt		—		—		1,973		(27)		1,973		(27)
Total	$	20,753	$	(49)	$	396,888	$	(79,874)	$	417,641	$	(79,923)


	December 31, 2024
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
U.S. Treasury securities	$	—	$	—	$	24,874	$	(84)	$	24,874	$	(84)
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		—		—		132,935		(29,793)		132,935		(29,793)
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		41,426		(95)		264,621		(60,875)		306,047		(60,970)
Corporate debt		—		—		1,963		(38)		1,963		(38)
Total	$	41,426	$	(95)	$	424,393	$	(90,790)	$	465,819	$	(90,885)

Management regularly monitors the investment securities portfolio in its entirety and further evaluates all of the available-for-sale securities in an unrealized loss position at each reporting period. The portfolio included 176 securities, which were in an unrealized loss position at March 31, 2025, compared to 180 securities at December 31, 2024. The unrealized losses in the Company’s investment portfolio at March 31, 2025 were caused by changes in interest rates. The Company has no intention to sell these securities and believes it will not be required to sell the securities before the recovery of their amortized cost. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.

Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the FRB, if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $245.4 million and $238.6 million at March 31, 2025 and at December 31, 2024, respectively. The Company may also pledge available-for-sale investment securities as collateral for FHLB advances. No securities were pledged for this purpose at March 31, 2025 or December 31, 2024.

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A summary of the available-for-sale securities by maturity is shown in the following table as of March 31, 2025. Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments and are therefore not included in the table below. Additionally, the Company holds other available-for-sale securities with an amortized cost and fair value of $0.7 million as of March 31, 2025 that have no stated contractual maturity date.


	March 31, 2025
					Weighted
	Amortized cost		Fair value		average yield
U.S. Treasury securities
After one but within five years	$	72,507	$	73,263	4.35%
Corporate debt
After five but within ten years		2,000		1,973	5.78%

As of March 31, 2025 and December 31, 2024, AIR from available-for-sale investment securities totaled $1.6 million and $1.3 million, respectively, and was included within other assets in the consolidated statements of financial condition.

Held-to-maturity

Held-to-maturity investment securities are summarized as follows as of the dates indicated:


	March 31, 2025
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
U.S. Treasury securities	$	49,715	$	—	$	(284)	$	49,431
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		262,594		148		(30,602)		232,140
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		394,603		1,448		(40,817)		355,234
Total investment securities held-to-maturity	$	706,912	$	1,596	$	(71,703)	$	636,805


	December 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
U.S. Treasury securities	$	49,639	$	—	$	(480)	$	49,159
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		271,105		51		(36,870)		234,286
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		212,364		—		(44,423)		167,941
Total investment securities held-to-maturity	$	533,108	$	51	$	(81,773)	$	451,386

During the three months ended March 31, 2025, purchases of held-to-maturity securities totaled $190.6 million. There were no purchases of held-to-maturity securities during the three months ended March 31, 2024. Maturities and paydowns of held-to-maturity securities totaled $17.0 million and $14.4 million during the three months ended March 31, 2025 and 2024, respectively.

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The held-to-maturity portfolio included 140 securities which were in an unrealized loss position as of March 31, 2025, compared to 160 securities at December 31, 2024. The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:


	March 31, 2025
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
U.S. Treasury securities	$	—	$	—	$	49,431	$	(284)	$	49,431	$	(284)
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		29,190		(258)		184,104		(30,344)		213,294		(30,602)
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		26,868		(45)		162,392		(40,772)		189,260		(40,817)
Total	$	56,058	$	(303)	$	395,927	$	(71,400)	$	451,985	$	(71,703)


	December 31, 2024
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
U.S. Treasury securities	$	—	$	—	$	49,159	$	(480)	$	49,159	$	(480)
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		45,427		(880)		185,558		(35,990)		230,985		(36,870)
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		2,818		(51)		165,123		(44,372)		167,941		(44,423)
Total	$	48,245	$	(931)	$	399,840	$	(80,842)	$	448,085	$	(81,773)

The Company does not measure expected credit losses on a financial asset, or group of financial assets, in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Management evaluated held-to-maturity securities noting they are backed by loans guaranteed by either U.S. government agencies or U.S. government sponsored entities, and management believes that default is highly unlikely given this governmental backing and long history without credit losses. Additionally, management notes that yields on which the portfolio generally trades are based upon market views of prepayment and liquidity risk and not credit risk. The Company has no intention to sell any held-to-maturity securities and believes it will not be required to sell any held-to-maturity securities before the recovery of their amortized cost.

The table below summarizes the credit quality indicators, by amortized cost, of held-to-maturity securities as of the dates shown:


	March 31, 2025		December 31, 2024
	AA+		AA+
U.S. Treasury securities	$	49,715	$	49,639
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		262,594		271,105
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		394,603		212,364
Total investment securities held-to-maturity	$	706,912	$	533,108

Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the FRB, if needed. The carrying value of held-to-maturity investment securities pledged as collateral totaled $539.8 million and $500.5 million at March 31, 2025 and December 31, 2024, respectively. The Company may also pledge held-to-maturity investment securities as collateral for FHLB advances. No held-to-maturity investment securities were pledged for this purpose at March 31, 2025 or December 31, 2024.

Table of Contents

A summary of the held-to-maturity securities by maturity is shown in the following table as of March 31, 2025. Actual maturities of mortgage-backed securities may differ from scheduled maturities depending on the repayment characteristics and experience of the underlying financial instruments and are therefore not included in the table below.


	March 31, 2025
					Weighted
	Amortized cost		Fair value		average yield
U.S. Treasury securities
Within one year	$	24,993	$	24,970	3.18%
After one but within five years		24,722		24,461	3.10%
Total	$	49,715	$	49,431	3.14%

As of March 31, 2025 and December 31, 2024, AIR from held-to-maturity investment securities totaled $2.0 million and $0.9 million, respectively, and was included within other assets in the consolidated statements of financial condition.

Note 4 Non-marketable Securities

The carrying balance of non-marketable securities are summarized as follows as of the dates indicated:


	March 31, 2025		December 31, 2024
Federal Reserve Bank stock	$	24,062	$	24,062
Federal Home Loan Bank stock		3,625		3,922
Convertible preferred stock		20,508		20,508
Equity method investments		28,008		27,970
Total	$	76,203	$	76,462

Non-marketable securities included FRB stock, FHLB stock, convertible preferred stock and equity method investments. During the three months ended March 31, 2025, purchases of non-marketable securities totaled $15.9 million, and proceeds from redemptions and sales of non-marketable securities totaled $15.7 million. During the three months ended March 31, 2024, purchases of non-marketable securities totaled $10.3 million, and proceeds from non-marketable securities totaled $27.1 million. Purchases consisted primarily of FHLB stock, and proceeds consisted primarily of redemptions of FHLB stock. Changes in the Company’s FHLB stock holdings were directly correlated to FHLB line of credit advances and paydowns.

FRB and FHLB stock

At March 31, 2025 and December 31, 2024, the Company held FRB stock and FHLB stock for regulatory or debt facility purposes. These are restricted securities which, lacking a market, are carried at cost. There have been no identified events or changes in circumstances that may have an adverse effect on the FRB and FHLB stock carried at cost.

Convertible preferred stock

Non-marketable securities includes convertible preferred stock without a readily determinable fair value. During the three months ended March 31, 2025 and 2024, the Company purchased zero and $0.4 million, respectively, of convertible preferred stock.

Equity method investments

Non-marketable securities also include equity method investments totaling $26.2 million at March 31, 2025 and December 31, 2024 and equity method investments without a readily determinable fair value totaling $1.8 million at March 31, 2025 and December 31, 2024. Purchases of equity method investments during the three months ended March 31, 2025 and 2024 totaled $0.5 million and $0.6 million, respectively. During the three months ended March 31, 2025 and 2024, the Company recorded net unrealized losses on equity method investments totaling $0.3 million and $0.1 million, respectively. These gains and losses were recorded in other non-interest income in the Company’s consolidated statements of operations. Carrying values of equity method investments without a readily determinable fair value are updated periodically and impairments may be taken to reflect a new basis. The Company recorded no impairment related to equity method investments without a readily determinable fair value for the three months ended March 31, 2025 or the year ended December 31, 2024.

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Note 5 Loans

The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions. The tables below show the loan portfolio composition including carrying value by segment as of the dates shown. The carrying value of loans is net of discounts, fees, costs and fair value marks of $27.5 million and $30.1 million as of March 31, 2025 and December 31, 2024, respectively.


	March 31, 2025
	Total loans		% of total
Commercial	$	4,603,771	60.2%
Commercial real estate non-owner occupied		1,795,856	23.5%
Residential real estate		1,233,649	16.1%
Consumer		13,020	0.2%
Total	$	7,646,296	100.0%


	December 31, 2024
	Total loans		% of total
Commercial	$	4,670,430	60.2%
Commercial real estate non-owner occupied		1,812,338	23.4%
Residential real estate		1,253,838	16.2%
Consumer		14,537	0.2%
Total	$	7,751,143	100.0%

Information about delinquent and non-accrual loans is shown in the following tables at March 31, 2025 and December 31, 2024:


	March 31, 2025
			Greater
	30-89 days		than 90 days				Total past
	past due and		past due and		Non-accrual		due and
	accruing		accruing		loans		non-accrual		Current		Total loans
Commercial:
Commercial and industrial	$	8,408	$	912	$	24,224	$	33,544	$	1,943,250	$	1,976,794
Municipal and non-profit		—		—		—		—		1,116,995		1,116,995
Owner occupied commercial real estate		2,813		—		3,641		6,454		1,218,576		1,225,030
Food and agribusiness		3,687		—		587		4,274		280,678		284,952
Total commercial		14,908		912		28,452		44,272		4,559,499		4,603,771
Commercial real estate non-owner occupied:
Construction		—		—		—		—		250,106		250,106
Acquisition/development		—		—		—		—		75,864		75,864
Multifamily		—		—		—		—		332,739		332,739
Non-owner occupied		196		—		—		196		1,136,951		1,137,147
Total commercial real estate non-owner occupied		196		—		—		196		1,795,660		1,795,856
Residential real estate:
Senior lien		1,304		—		5,781		7,085		1,140,574		1,147,659
Junior lien		572		100		352		1,024		84,966		85,990
Total residential real estate		1,876		100		6,133		8,109		1,225,540		1,233,649
Consumer		23		—		35		58		12,962		13,020
Total loans	$	17,003	$	1,012	$	34,620	$	52,635	$	7,593,661	$	7,646,296

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	March 31, 2025
	Non-accrual loans		Non-accrual loans
	with a related		with no related
	allowance for		allowance for		Non-accrual
	credit loss		credit loss		loans
Commercial:
Commercial and industrial	$	13,049	$	11,175	$	24,224
Owner occupied commercial real estate		3,641		—		3,641
Food and agribusiness		1		586		587
Total commercial		16,691		11,761		28,452
Commercial real estate non-owner occupied:
Non-owner occupied		—		—		—
Total commercial real estate non-owner occupied		—		—		—
Residential real estate:
Senior lien		3,348		2,433		5,781
Junior lien		352		—		352
Total residential real estate		3,700		2,433		6,133
Consumer		35		—		35
Total loans	$	20,426	$	14,194	$	34,620


	December 31, 2024
			Greater
	30-89 days		than 90 days				Total past
	past due and		past due and		Non-accrual		due and
	accruing		accruing		loans		non-accrual		Current		Total loans
Commercial:
Commercial and industrial	$	20,290	$	5,492	$	21,950	$	47,732	$	1,948,093	$	1,995,825
Municipal and non-profit		—		—		—		—		1,107,142		1,107,142
Owner occupied commercial real estate		1,611		9,447		195		11,253		1,252,891		1,264,144
Food and agribusiness		—		—		587		587		302,732		303,319
Total commercial		21,901		14,939		22,732		59,572		4,610,858		4,670,430
Commercial real estate non-owner occupied:
Construction		—		—		—		—		250,335		250,335
Acquisition/development		—		—		—		—		82,862		82,862
Multifamily		—		—		—		—		320,781		320,781
Non-owner occupied		158		—		5,971		6,129		1,152,231		1,158,360
Total commercial real estate non-owner occupied		158		—		5,971		6,129		1,806,209		1,812,338
Residential real estate:
Senior lien		952		—		6,747		7,699		1,161,568		1,169,267
Junior lien		133		—		505		638		83,933		84,571
Total residential real estate		1,085		—		7,252		8,337		1,245,501		1,253,838
Consumer		20		1		39		60		14,477		14,537
Total loans	$	23,164	$	14,940	$	35,994	$	74,098	$	7,677,045	$	7,751,143


	December 31, 2024
	Non-accrual loans		Non-accrual loans
	with a related		with no related
	allowance for		allowance for		Non-accrual
	credit loss		credit loss		loans
Commercial:
Commercial and industrial	$	12,746	$	9,204	$	21,950
Owner occupied commercial real estate		195		—		195
Food and agribusiness		1		586		587
Total commercial		12,942		9,790		22,732
Commercial real estate non-owner occupied:
Non-owner occupied		5,971		—		5,971
Total commercial real estate non-owner occupied		5,971		—		5,971
Residential real estate:
Senior lien		3,319		3,428		6,747
Junior lien		505		—		505
Total residential real estate		3,824		3,428		7,252
Consumer		39		—		39
Total loans	$	22,776	$	13,218	$	35,994

Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans to borrowers experiencing financial difficulties may be modified. Modified loans are discussed in more detail below. There was no interest income recognized from non-accrual loans during the three months ended March 31, 2025 or 2024.

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The Company’s internal risk rating system uses a series of grades, which reflect our assessment of the credit quality of loans based on an analysis of the borrower’s financial condition, liquidity and ability to meet contractual debt service requirements and are categorized as “Pass,” “Special mention,” “Substandard” and “Doubtful”. For a description of the general characteristics of the risk grades, refer to note 2 Summary of Significant Accounting Policies in our audited consolidated financial statements in our 2024 Annual Report on Form 10-K.

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The amortized cost basis and current period gross charge-offs for all loans as determined by the Company’s internal risk rating system and year of origination are shown in the following tables as of and for the three months ended March 31, 2025 and the year ended December 31, 2024:


	March 31, 2025
													Revolving		Revolving
													loans		loans
	Origination year												amortized		converted
	2025		2024		2023		2022		2021		Prior		cost basis		to term		Total
Commercial:
Commercial and industrial:
Pass	$	95,838	$	424,705	$	156,189	$	316,781	$	193,923	$	137,872	$	424,386	$	4,489	$	1,754,183
Special mention		—		2,262		28,767		8,911		14,030		14,355		39,494		305		108,124
Substandard		—		16,206		35,716		8,764		22,306		4,450		21,988		301		109,731
Doubtful		—		—		1,159		2,158		137		1,302		—		—		4,756
Total commercial and industrial		95,838		443,173		221,831		336,614		230,396		157,979		485,868		5,095		1,976,794
Gross charge-offs: Commercial and industrial		—		3,042		7,075		—		—		—		—		—		10,117
Municipal and non-profit:
Pass		2,497		117,890		151,450		140,903		216,874		454,396		32,985		—		1,116,995
Total municipal and non-profit		2,497		117,890		151,450		140,903		216,874		454,396		32,985		—		1,116,995
Owner occupied commercial real estate:
Pass		10,128		269,728		201,724		203,221		128,324		289,044		24,750		17		1,126,936
Special mention		—		17,761		1,664		8,892		16,228		15,383		—		—		59,928
Substandard		—		—		—		20,213		10,926		5,072		848		—		37,059
Doubtful		—		—		—		691		—		416		—		—		1,107
Total owner occupied commercial real estate		10,128		287,489		203,388		233,017		155,478		309,915		25,598		17		1,225,030
Gross charge-offs: Owner occupied commercial real estate		—		—		2,266		883		—		303		—		—		3,452
Food and agribusiness:
Pass		295		14,124		9,421		64,934		6,180		33,492		144,709		293		273,448
Special mention		—		—		—		3,947		2,750		189		—		—		6,886
Substandard		—		—		—		—		774		3,430		414		—		4,618
Total food and agribusiness		295		14,124		9,421		68,881		9,704		37,111		145,123		293		284,952
Total commercial		108,758		862,676		586,090		779,415		612,452		959,401		689,574		5,405		4,603,771
Gross charge-offs: Commercial		—		3,042		9,341		883		—		303		—		—		13,569
Commercial real estate non-owner occupied:
Construction:
Pass		1,461		62,035		61,141		49,548		28,793		888		35,069		11,171		250,106
Total construction		1,461		62,035		61,141		49,548		28,793		888		35,069		11,171		250,106
Acquisition/development:
Pass		568		16,572		4,000		25,689		19,229		8,452		(14)		—		74,496
Special mention		—		—		—		1,077		—		—		—		—		1,077
Substandard		—		—		—		—		—		291		—		—		291
Total acquisition/development		568		16,572		4,000		26,766		19,229		8,743		(14)		—		75,864
Multifamily:
Pass		—		1,343		22,745		153,168		70,366		76,027		796		—		324,445
Special mention		—		—		—		8,294		—		—		—		—		8,294
Total multifamily		—		1,343		22,745		161,462		70,366		76,027		796		—		332,739
Non-owner occupied
Pass		7,967		67,949		119,351		304,412		138,453		418,168		10,952		—		1,067,252
Special mention		—		5,245		1,295		33,039		12,709		16,932		(1)		—		69,219
Substandard		—		—		—		—		—		676		—		—		676
Total non-owner occupied		7,967		73,194		120,646		337,451		151,162		435,776		10,951		—		1,137,147
Gross charge-offs: Non-owner occupied		—		—		—		—		1,467		—		—		—		1,467
Total commercial real estate non-owner occupied		9,996		153,144		208,532		575,227		269,550		521,434		46,802		11,171		1,795,856
Gross charge-offs: Commercial real estate non-owner occupied		—		—		—		—		1,467		—		—		—		1,467
Residential real estate:
Senior lien
Pass		13,349		65,103		68,624		409,594		275,567		265,255		42,780		663		1,140,935
Special mention		—		—		—		—		—		15		—		—		15
Substandard		—		64		662		2,529		689		2,593		—		—		6,537
Doubtful		—		—		—		172		—		—		—		—		172
Total senior lien		13,349		65,167		69,286		412,295		276,256		267,863		42,780		663		1,147,659
Junior lien
Pass		706		8,426		3,387		4,565		1,747		6,943		58,850		816		85,440
Special mention		—		—		—		—		—		27		—		—		27
Substandard		—		42		—		99		—		212		170		—		523
Total junior lien		706		8,468		3,387		4,664		1,747		7,182		59,020		816		85,990
Total residential real estate		14,055		73,635		72,673		416,959		278,003		275,045		101,800		1,479		1,233,649

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Consumer
Pass		1,129		4,062		1,613		1,176		752		589		2,906		758		12,985
Substandard		—		—		—		—		—		35		—		—		35
Total consumer		1,129		4,062		1,613		1,176		752		624		2,906		758		13,020
Gross charge-offs: Consumer		201		10		—		—		—		—		4		—		215
Total loans	$	133,938	$	1,093,517	$	868,908	$	1,772,777	$	1,160,757	$	1,756,504	$	841,082	$	18,813	$	7,646,296
Gross charge-offs: Total loans		201		3,052		9,341		883		1,467		303		4		—		15,251

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	December 31, 2024
													Revolving		Revolving
													loans		loans
	Origination year												amortized		converted
	2024		2023		2022		2021		2020		Prior		cost basis		to term		Total
Commercial:
Commercial and industrial:
Pass	$	445,993	$	181,920	$	332,246	$	215,561	$	51,902	$	92,115	$	468,752	$	2,614	$	1,791,103
Special mention		8,005		32,319		13,753		17,496		12,915		5,552		16,146		651		106,837
Substandard		13,417		34,320		8,909		21,575		3,011		2,020		8,982		387		92,621
Doubtful		1,250		1,159		1,490		17		975		373		—		—		5,264
Total commercial and industrial		468,665		249,718		356,398		254,649		68,803		100,060		493,880		3,652		1,995,825
Gross charge-offs: Commercial and industrial		—		2,028		—		26		155		156		—		—		2,365
Municipal and non-profit:
Pass		116,551		152,183		137,249		217,362		73,399		378,561		29,747		—		1,105,052
Special mention		—		—		—		170		1,920		—		—		—		2,090
Total municipal and non-profit		116,551		152,183		137,249		217,532		75,319		378,561		29,747		—		1,107,142
Owner occupied commercial real estate:
Pass		269,810		205,119		225,766		131,547		83,791		232,653		20,912		8,990		1,178,588
Special mention		430		1,664		13,798		23,482		268		12,744		—		—		52,386
Substandard		—		7,180		15,266		3,397		1,243		4,759		847		—		32,692
Doubtful		—		—		—		—		—		478		—		—		478
Total owner occupied commercial real estate		270,240		213,963		254,830		158,426		85,302		250,634		21,759		8,990		1,264,144
Gross charge-offs: Owner occupied commercial real estate		—		—		13		—		—		—		—		—		13
Food and agribusiness:
Pass		14,727		9,884		68,909		6,587		5,940		33,081		156,113		344		295,585
Special mention		—		—		4,045		2,898		—		204		—		—		7,147
Substandard		—		—		—		586		—		1		—		—		587
Total food and agribusiness		14,727		9,884		72,954		10,071		5,940		33,286		156,113		344		303,319
Gross charge-offs: Food and agribusiness		—		—		—		—		—		2,704		—		—		2,704
Total commercial		870,183		625,748		821,431		640,678		235,364		762,541		701,499		12,986		4,670,430
Gross charge-offs: Commercial		—		2,028		13		26		155		2,860		—		—		5,082
Commercial real estate non-owner occupied:
Construction:
Pass		55,139		59,137		54,735		33,859		917		—		46,548		—		250,335
Total construction		55,139		59,137		54,735		33,859		917		—		46,548		—		250,335
Acquisition/development:
Pass		16,645		4,038		31,028		20,412		1,079		8,110		184		—		81,496
Special mention		—		—		1,072		—		—		—		—		—		1,072
Substandard		—		—		—		—		—		294		—		—		294
Total acquisition/development		16,645		4,038		32,100		20,412		1,079		8,404		184		—		82,862
Multifamily:
Pass		1,363		16,470		138,872		70,419		45,700		31,034		853		—		304,711
Special mention		4,159		—		8,091		3,820		—		—		—		—		16,070
Total multifamily		5,522		16,470		146,963		74,239		45,700		31,034		853		—		320,781
Non-owner occupied
Pass		68,192		143,857		303,998		143,085		125,374		304,162		11,018		—		1,099,686
Special mention		5,246		1,298		17,272		12,184		—		16,009		—		—		52,009
Substandard		—		—		—		5,516		—		694		—		—		6,210
Doubtful		—		—		—		455		—		—		—		—		455
Total non-owner occupied		73,438		145,155		321,270		161,240		125,374		320,865		11,018		—		1,158,360
Gross charge-offs: Non-owner occupied		—		—		293		—		—		4,422		—		—		4,715
Total commercial real estate non-owner occupied		150,744		224,800		555,068		289,750		173,070		360,303		58,603		—		1,812,338
Gross charge-offs: Commercial real estate non-owner occupied		—		—		293		—		—		4,422		—		—		4,715
Residential real estate:
Senior lien
Pass		66,465		77,136		415,279		280,209		100,990		174,830		46,053		583		1,161,545
Special mention		—		—		—		—		—		16		—		—		16
Substandard		64		663		3,422		700		394		2,270		—		—		7,513
Doubtful		—		—		172		—		—		21		—		—		193
Total senior lien		66,529		77,799		418,873		280,909		101,384		177,137		46,053		583		1,169,267
Junior lien
Pass		6,870		3,498		4,614		1,789		1,964		5,488		59,331		311		83,865
Special mention		—		—		—		—		—		27		—		—		27
Substandard		44		—		240		—		89		134		172		—		679
Total junior lien		6,914		3,498		4,854		1,789		2,053		5,649		59,503		311		84,571
Total residential real estate		73,443		81,297		423,727		282,698		103,437		182,786		105,556		894		1,253,838
Consumer
Pass		4,557		1,994		1,443		942		528		169		4,795		71		14,499
Substandard		—		—		—		—		—		38		—		—		38
Total consumer		4,557		1,994		1,443		942		528		207		4,795		71		14,537
Gross charge-offs: Consumer		877		23		30		3		—		48		—		—		981

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Total loans		$	1,098,927		$	933,839		$	1,801,669		$	1,214,068		$	512,399		$	1,305,837		$	870,453		$	13,951		$	7,751,143
Gross charge-offs: Total loans			877			2,051			336			29			155			7,330			—			—			10,778

Loans evaluated individually

We evaluate loans individually when they no longer share risk characteristics with pooled loans. These loans include loans on non-accrual status, loans in bankruptcy, and modified loans as described below. If a specific allowance is warranted based on the borrower’s overall financial condition, the specific allowance is calculated based on discounted expected cash flows using the loan’s initial contractual effective interest rate or the fair value of the collateral less selling costs for collateral-dependent loans.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Management individually evaluates collateral-dependent loans with an amortized cost basis of $250 thousand or more and includes collateral-dependent loans less than $250 thousand within the general allowance population. The amortized cost basis of collateral-dependent loans over $250 thousand was as follows at March 31, 2025 and December 31, 2024:


	March 31, 2025
					Total amortized
	Real property		Business assets		cost basis
Commercial:
Commercial and industrial	$	5,414	$	6,728	$	12,142
Owner occupied commercial real estate		6,034		949		6,983
Food and agribusiness		586		—		586
Total commercial		12,034		7,677		19,711
Residential real estate:
Senior lien		3,634		—		3,634
Junior lien		222		—		222
Total residential real estate		3,856		—		3,856
Total loans	$	15,890	$	7,677	$	23,567


	December 31, 2024
					Total amortized
	Real property		Business assets		cost basis
Commercial:
Commercial and industrial	$	6,281	$	4,924	$	11,205
Owner occupied commercial real estate		1,343		—		1,343
Food and agribusiness		586		—		586
Total commercial		8,210		4,924		13,134
Commercial real estate non-owner occupied:
Non-owner occupied		5,971		—		5,971
Total commercial real estate non-owner occupied		5,971		—		5,971
Residential real estate:
Senior lien		5,075		—		5,075
Junior lien		222		—		222
Total residential real estate		5,297		—		5,297
Total loans	$	19,478	$	4,924	$	24,402

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Loan modifications

The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. The Company considers loans to borrowers experiencing financial difficulties, where such a concession is utilized, to be TDMs. TDMs may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof.

The following schedules present, by loan class, the amortized cost basis for loans to borrowers experiencing financial difficulty that remain outstanding and were modified and during the three months ended March 31, 2025 and 2024:


	As of and for the three months ended March 31, 2025
	Payment delay
	Amortized		% of loan
	cost basis		class
Commercial:
Commercial and industrial	$	3,526	0.2%
Owner occupied commercial real estate		2,195	0.2%
Total commercial		5,721	0.1%
Total loans	$	5,721	0.1%


	As of and for the three months ended March 31, 2024
							Combination - interest rate			Combination - term extension
	Term extension			Payment Delay			reduction and term extension			and payment delay
	Amortized		% of loan	Amortized		% of loan	Amortized		% of loan	Amortized		% of loan
	cost basis		class	cost basis		class	cost basis		class	cost basis		class
Commercial:
Commercial and industrial	$	—	0.0%	$	8,561	0.4%	$	—	0.0%	$	—	0.0%
Municipal and non-profit		—	0.0%		1,664	0.1%		—	0.0%		—	0.0%
Total commercial		—	0.0%		10,225	0.2%		—	0.0%		—	0.0%
Commercial real estate non-owner occupied:
Non-owner occupied		18,770	1.8%		—	0.0%		—	0.0%		—	0.0%
Total commercial real estate non-owner occupied		18,770	1.0%		—	0.0%		—	0.0%		—	0.0%
Residential real estate:
Senior lien		—	0.0%		869	0.1%		651	0.1%		382	0.0%
Total residential real estate		—	0.0%		869	0.1%		651	0.0%		382	0.0%
Total loans	$	18,770	0.2%	$	11,094	0.1%	$	651	0.0%	$	382	0.0%

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The following schedules present, by loan class, the payment status of loans that have been modified in the last twelve months as of the dates presented on an amortized cost basis:


	March 31, 2025
	Current		30-89 days past due		90+ days past due		Non-accrual
Commercial:
Commercial and industrial	$	5,014	$	7,454	$	—	$	1,602
Owner occupied commercial real estate		2,195		—		—		—
Total commercial		7,209		7,454		—		1,602
Commercial real estate non-owner occupied:
Non-owner occupied		158		—		—		—
Total commercial real estate non-owner occupied		158		—		—		—
Residential real estate:
Senior lien		20		—		—		—
Junior lien		—		—		—		42
Total residential real estate		20		—		—		42
Total loans	$	7,387	$	7,454	$	—	$	1,644


	March 31, 2024
	Current		30-89 days past due		90+ days past due		Non-accrual
Commercial:
Commercial and industrial	$	3,129	$	—	$	—	$	5,354
Owner occupied commercial real estate		1,664						—
Total commercial		4,793		—		—		5,354
Commercial real estate non-owner occupied:
Non-owner occupied		5,298		—		—		13,472
Total commercial real estate non-owner occupied		5,298		—		—		13,472
Residential real estate:
Senior lien		651		—		—		1,251
Total loans	$	10,742	$	—	$	—	$	20,077

Accrual of interest is resumed on loans that were previously on non-accrual only after the loan has performed sufficiently for a period of time. During the three months ended March 31, 2025, the Company had one TDM with an amortized cost totaling $1.6 million that was modified within the past 12 months, utilizing a payment delay, that defaulted on its modified terms. During the three months ended March 31, 2024, the Company had four TDMs with amortized costs totaling $18.8 million that were modified within the past 12 months, utilizing a term extension and payment delays, that defaulted on their modified terms. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due on principal or interest. The allowance for credit losses related to TDMs on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as TDMs.

The following schedules present the financial effect of the modifications made to borrowers experiencing financial difficulty as of and for the periods indicated:


		As of and for the three months ended March 31, 2025
		Financial Effect
		Payment delay
Commercial:
Commercial and industrial		Delayed payments for a weighted average of 0.4 years
Owner occupied commercial real estate		Delayed payments for a weighted average of 0.3 years

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	As of and for the three months ended March 31, 2024
	Financial effect
	Term extension	Payment delay	Combination - Interest rate reduction and Term extension	Combination - Term extension and Payment delay
Commercial:
Commercial and industrial		Delayed payments for a weighted average of 0.5 years
Owner occupied commercial real estate		Delayed payments for a weighted average of 0.5 years
Commercial real estate non-owner occupied:
Non-owner occupied	Extended a weighted average of 0.3 years to the life of loans
Residential real estate:
Senior lien		Delayed payments for a weighted average of 0.3 years	Reduced weighted average contractual interest rate by 2.5% and extended a weighted average life of 30 years	Extended a weighted average of 0.7 years to the life of loans and delayed payments for a weighted average of 0.7 years

Note 6 Allowance for Credit Losses

The tables below detail the Company’s allowance for credit losses as of the dates shown:


	Three months ended March 31, 2025
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	48,552	$	26,136	$	19,426	$	341	$	94,455
Charge-offs		(13,569)		(1,467)		—		(215)		(15,251)
Recoveries		56		17		28		37		138
Provision expense (release) for credit losses		13,019		(1,192)		(1,147)		170		10,850
Ending balance	$	48,058	$	23,494	$	18,307	$	333	$	90,192


	Three months ended March 31, 2024
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	45,304	$	32,665	$	19,550	$	428	$	97,947
Charge-offs		(24)		—		—		(254)		(278)
Recoveries		116		—		6		66		188
Provision expense (release) for credit losses		919		(1,827)		544		114		(250)
Ending balance	$	46,315	$	30,838	$	20,100	$	354	$	97,607

In evaluating the loan portfolio for an appropriate ACL level, excluding loans evaluated individually, loans were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of developing the underlying data used within the discounted cash flow model including, but not limited to, prepayment and recovery rates as well as loss rates tied to macro-economic conditions within management’s reasonable and supportable forecast. The ACL also includes subjective adjustments based upon qualitative risk factors including asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

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in the CECL model’s underlying macro-economic forecast. During the three months ended March 31, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $10.2 million, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded zero provision expense for credit losses on funded loans and unfunded loan commitments during the first quarter of 2024. Net charge-offs on loans during the three months ended March 31, 2025 and 2024 totaled $15.1 million and $0.1 million, respectively.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of March 31, 2025 and December 31, 2024, AIR from loans totaled $44.3 million and $41.5 million, respectively.

Note 7 Goodwill and Intangible Assets

Goodwill and other intangible assets

In connection with our acquisitions, the Company’s goodwill was $306.0 million as of March 31, 2025. Goodwill is measured as the excess of the fair value of consideration paid over the fair value of net assets acquired. No goodwill impairment was recorded during the three months ended March 31, 2025 or the year ended December 31, 2024.

The gross carrying amount of other intangible assets and the associated accumulated amortization at March 31, 2025 and December 31, 2024, are presented as follows:


	March 31, 2025						December 31, 2024
	Gross				Net		Gross				Net
	carrying		Accumulated		carrying		carrying		Accumulated		carrying
	amount		amortization		amount		amount		amortization		amount
Core deposit intangible	$	91,566	$	(56,747)	$	34,819	$	91,566	$	(55,417)	$	36,149
Customer relationship intangible		17,000		(4,556)		12,444		17,000		(4,024)		12,976
Acquired technology intangible		2,300		(805)		1,495		2,300		(690)		1,610
Total	$	110,866	$	(62,108)	$	48,758	$	110,866	$	(60,131)	$	50,735

The Company is amortizing intangibles from acquisitions over a weighted average period of 9.8 years from the date of the respective acquisitions. The core deposit and customer relationship intangibles are being amortized over a weighted average period of 10 years, and the acquired technology intangible is being amortized over a weighted average period of five years. The Company recognized other intangible assets amortization expense of $2.0 million during the three months ended March 31, 2025 and 2024.

The following table shows the estimated future amortization expense during the next five years for other intangible assets as of March 31, 2025:


Years ending December 31,		Amount
For the nine months ending December 31, 2025	$	5,809
For the year ending December 31, 2026		7,664
For the year ending December 31, 2027		7,542
For the year ending December 31, 2028		6,142
For the year ending December 31, 2029		5,790

Servicing Rights

Mortgage servicing rights

MSRs represent rights to service loans originated by the Company and sold to government-sponsored enterprises including FHLMC, FNMA, GNMA and FHLB and are included in other assets in the consolidated statements of financial condition. Mortgage loans serviced for others were $0.3 billion and $0.9 billion at March 31, 2025 and 2024, respectively.

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Below are the changes in the MSRs for the periods presented:


	For the three months ended March 31,
	2025		2024
Beginning balance	$	4,835	$	4,911
Originations		62		115
Sales		(1,811)		—
Amortization		(132)		(114)
Ending balance		2,954		4,912
Fair value of mortgage servicing rights	$	4,457	$	7,523

During the three months ended March 31, 2025, the Company sold rights to service loans totaling $203.7 million in unpaid principal balances from our mortgage servicing rights portfolio. As a result of the sale, the book value of our mortgage servicing rights intangible decreased $1.8 million and generated a pre-tax gain of $0.6 million included in mortgage banking income in the consolidated statements of operations.

The fair value of MSRs was determined based upon a discounted cash flow analysis. The cash flow analysis included assumptions for discount rates and prepayment speeds. Discount rates ranged from 10.0% to 10.5% and the constant prepayment speed ranged from 6.3% to 12.4% for the March 31, 2025 valuation. The discount rate ranged from 10.0% to 10.5%, and the constant prepayment speed ranged from 6.2% to 13.3% for the March 31, 2024 valuation. Included in mortgage banking income in the consolidated statements of operations was servicing income of $0.9 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.

MSRs are evaluated and impairment is recognized to the extent fair value is less than the carrying amount. The Company evaluates impairment by stratifying MSRs based on the predominant risk characteristics of the underlying loans, including loan type and loan term. The Company is amortizing the MSRs in proportion to and over the period of the estimated net servicing income of the underlying loans.

The following table shows the estimated future amortization expense during the next five years for the MSRs as of March 31, 2025:


Years ending December 31,		Amount
For the nine months ending December 31, 2025	$	253
For the year ending December 31, 2026		309
For the year ending December 31, 2027		273
For the year ending December 31, 2028		242
For the year ending December 31, 2029		215

SBA servicing asset

The SBA servicing asset represents the value associated with servicing small business real estate loans that have been sold to outside investors with servicing retained. The SBA servicing asset is evaluated and impairment is recognized to the extent fair value is less than the carrying amount. The Company evaluates impairment by stratifying the SBA servicing asset based on the predominant risk characteristics of the underlying loans, including loan type and loan term. The Company is amortizing the SBA servicing asset in proportion to and over the period of the estimated net servicing income of the underlying loans. The Company serviced $125.0 million and $132.0 million of SBA loans that have been sold into the secondary market as of March 31, 2025 and December 31, 2024, respectively. For the three months ended March 31, 2025 and 2024, the Company recognized SBA servicing asset fee income totaling $0.2 million and $0.1 million, respectively.

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Below are the changes in the SBA servicing asset for the periods presented:


	For the three months ended March 31,
	2025		2024
Beginning balance	$	2,862	$	2,440
Originations		42		266
Disposals		(68)		(102)
Recovery		90		104
Amortization		(149)		(74)
Ending balance		2,777		2,634
Fair value of SBA servicing asset	$	2,777	$	2,634

The Company uses assumptions and estimates in determining the fair value of SBA loan servicing rights. These assumptions include prepayment speeds, discount rates, and other assumptions. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. For the three months ended March 31, 2025 and 2024, the key assumptions used to determine the fair value of the Company’s SBA loan servicing rights included weighted average lifetime constant prepayment rates equal to 15.7% and 15.8%, respectively, and weighted average discount rates equal to 9.3% and 10.2%, respectively.

The following table shows the estimated future amortization expense during the next five years for the SBA servicing asset as of March 31, 2025:


Years ending December 31,		Amount
For the nine months ending December 31, 2025	$	250
For the year ending December 31, 2026		304
For the year ending December 31, 2027		267
For the year ending December 31, 2028		235
For the year ending December 31, 2029		207

Note 8 Borrowings

Borrowings consist of securities sold under agreements to repurchase, long-term debt and FHLB advances.

Securities sold under agreements to repurchase

The Company enters into repurchase agreements to facilitate the needs of its clients. As of March 31, 2025 and December 31, 2024, the Company sold securities under agreements to repurchase totaling $20.7 million and $18.9 million, respectively. The Company pledged mortgage-backed securities with a fair value of approximately $31.4 million and $31.3 million as of March 31, 2025 and December 31, 2024, respectively, for these agreements. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. As of March 31, 2025 and December 31, 2024, the Company had $10.6 million and $12.4 million, respectively, of excess collateral pledged for repurchase agreements.

Federal Home Loan Bank advances

As a member of the FHLB, the Banks have access to a line of credit and term financing from the FHLB with total available credit of $1.7 billion at March 31, 2025. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At March 31, 2025 and December 31, 2024, NBH Bank had $80.0 million and $50.0 million, respectively, of outstanding borrowings from the FHLB. The Banks may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged for FHLB advances at March 31, 2025 or December 31, 2024. Loans pledged were $2.5 billion and $2.6 billion at March 31, 2025 and December 31, 2024, respectively. The Company incurred $1.1 million and $3.2 million of interest expense related to FHLB advances and other short-term borrowings for the three months ended March 31, 2025 and 2024, respectively.

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Long-term debt

The Company holds a subordinated note purchase agreement to issue and sell a fixed-to-floating rate note totaling $40.0 million. The balance on the note at March 31, 2025 and December 31, 2024, net of long-term debt issuance costs totaling $0.2 million, totaled $39.8 million. During the three months ended March 31, 2025 and 2024, interest expense totaling $0.3 million was recorded in the consolidated statements of operations.

The note is subordinated, unsecured and matures on November 15, 2031. Payments consist of interest only. Interest expense on the note is payable semi-annually in arrears and will bear interest at 3.00% per annum until November 15, 2026 (or any earlier redemption date). From November 15, 2026 until November 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.

As part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinate note purchase agreements to issue and sell fixed-to-floating rate notes totaling $15.0 million. The balance on the notes at March 31, 2025 and December 31, 2024, net of the fair value adjustment from the acquisition of $0.3 million, totaled $14.7 million. Interest expense related to the notes totaling $0.1 million was recorded in the consolidated statements of operations during the three months ended March 31, 2025 and 2024.

The three notes, containing similar terms, are subordinated, unsecured and mature on June 15, 2031. Payments consist of interest only. Interest expense on the notes is payable semi-annually in arrears and will bear interest at 3.75% per annum until June 15, 2026 (or any earlier redemption date). From June 15, 2026 until June 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 306 basis points. Prior to June 15, 2026, the Company may redeem the notes only under certain limited circumstances. Beginning on June 15, 2026 through maturity, the notes may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the notes being redeemed, together with any accrued and unpaid interest on the notes being redeemed up to but excluding the date of redemption. The notes are not subject to redemption at the option of the holder.

Note 9 Regulatory Capital

As a bank holding company that has elected to be treated as a financial holding company, the Company, NBH Bank and BOJHT are subject to regulatory capital adequacy requirements implemented by the Federal Reserve, in addition to those implemented by the FDIC for NBH Bank and BOJHT, including maintaining capital positions at the “well-capitalized” level. The federal banking agencies have risk based capital adequacy regulations intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations. Under these regulations, assets are assigned to one of several risk categories, and nominal dollar amounts of assets and credit equivalent amounts of off-balance-sheet items are multiplied by a risk adjustment percentage for the category. Regulatory authorities can initiate certain mandatory actions if the Company, NBH Bank or BOJHT fail to meet the minimum capital requirements, which could have a material effect on our financial statements.

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Under the Basel III requirements, at March 31, 2025 and December 31, 2024, the Company and the Banks met all capital requirements, including the capital conservation buffer of 2.5%. The Company and the Banks had regulatory capital ratios in excess of the levels established for well-capitalized institutions, as detailed in the tables below:


	March 31, 2025
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized⁽¹⁾
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	10.9%	$	1,053,193	N/A		N/A	4.0%	$	386,678
NBH Bank	9.9%		949,171	5.0%	$	481,570	4.0%		385,256
Bank of Jackson Hole Trust	31.4%		12,656	5.0%		2,013	4.0%		1,610
Common equity tier 1 risk based capital:
Consolidated	13.6%	$	1,053,193	N/A		N/A	7.0%	$	541,814
NBH Bank	12.3%		949,171	6.5%	$	500,762	7.0%		539,282
Bank of Jackson Hole Trust	73.7%		12,656	6.5%		1,116	7.0%		1,202
Tier 1 risk based capital ratio:
Consolidated	13.6%	$	1,053,193	N/A		N/A	8.5%	$	657,917
NBH Bank	12.3%		949,171	8.0%	$	616,322	8.5%		654,842
Bank of Jackson Hole Trust	73.7%		12,656	8.0%		1,373	8.5%		1,459
Total risk based capital ratio:
Consolidated	15.5%	$	1,199,042	N/A		N/A	10.5%	$	812,720
NBH Bank	13.5%		1,040,004	10.0%	$	770,402	10.5%		808,922
Bank of Jackson Hole Trust	73.8%		12,672	10.0%		1,717	10.5%		1,803


	December 31, 2024
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized⁽¹⁾
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	10.7%	$	1,037,550	N/A		N/A	4.0%	$	388,278
NBH Bank	9.5%		921,509	5.0%	$	483,533	4.0%		386,826
Bank of Jackson Hole Trust	31.0%		12,461	5.0%		2,013	4.0%		1,611
Common equity tier 1 risk based capital:
Consolidated	13.2%	$	1,037,550	N/A		N/A	7.0%	$	550,074
NBH Bank	11.8%		921,509	6.5%	$	508,418	7.0%		547,528
Bank of Jackson Hole Trust	77.2%		12,461	6.5%		1,049	7.0%		1,129
Tier 1 risk based capital ratio:
Consolidated	13.2%	$	1,037,550	N/A		N/A	8.5%	$	667,947
NBH Bank	11.8%		921,509	8.0%	$	625,746	8.5%		664,855
Bank of Jackson Hole Trust	77.2%		12,461	8.0%		1,291	8.5%		1,371
Total risk based capital ratio:
Consolidated	15.1%	$	1,187,514	N/A		N/A	10.5%	$	825,111
NBH Bank	13.0%		1,016,471	10.0%	$	782,182	10.5%		821,291
Bank of Jackson Hole Trust	77.3%		12,462	10.0%		1,613	10.5%		1,694


(1)		Includes the capital conservation buffer of 2.5%.

Note 10 Revenue from Contracts with Clients

Revenue is recognized when obligations under the terms of a contract with clients are satisfied. Below is the detail of the Company’s revenue from contracts with clients, including service charges and other deposit account related fees, bank card fees and other non-interest income. Other non-interest income includes trust and wealth management fees and Cambr fee income.

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Service charges and other account-related fees

Service charge fees are primarily comprised of monthly service fees, check orders and other deposit account related fees. Other fees include revenue from processing wire transfers, bill pay service, cashier’s checks and other services. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account-related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to clients’ accounts.

Bank card fees

Bank card fees are primarily comprised of debit card income, ATM fees, merchant services income and other fees. Debit card income is primarily comprised of interchange fees earned whenever the Company’s debit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Bank cardholder uses a non-Bank ATM or a non-Bank cardholder uses a Bank ATM. Merchant services income mainly represents fees charged to merchants to process their debit card transactions. The Company’s performance obligation for bank card fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Other non-interest income

Trust and wealth management fees

The trust and wealth management business offers separately managed investment account solutions and trustee services to clients. Services may include custody of securities, trust investments and wealth management services, directed trusts or fixed income portfolio management and irrevocable life insurance trusts. The Company charges an asset-based fee earned for personal and corporate accounts. Additional fees may include minimum annual fees, fees for additional tax reporting and preparation for irrevocable trust returns or annual flat fees for certain trusts. The performance obligations related to this revenue include items such as performing investment advisory services, custody and record-keeping services, and fund administrative and accounting services. The performance obligations are satisfied upon completion of service and fees are generally a fixed flat rate or based on a percentage of the account’s market value per the contract with the client. These fees are recorded within other non-interest income in the consolidated statements of operations.

Cambr fee income

Cambr operates a deposit acquisition and processing platform that generates core deposits from accounts offered through third-party embedded finance companies. Cambr’s platform facilitates the movement of embedded finance companies’ client deposits into FDIC-insured accounts at banks within Cambr’s network. Cambr generates fee income by charging a percentage-based fee of the client’s deposit balance placed into the Cambr network. The performance obligation is satisfied upon completion of service, and Cambr fee income is recorded within other non-interest income in the consolidated statements of operations.

Other non-interest expense

Included within other non-interest expense are gains and losses from OREO sales, which are recognized when the Company meets its performance obligation to transfer title to the buyer. The gain or loss is measured as the excess of the proceeds received compared to the OREO carrying value. Sales proceeds are received in cash at the time of transfer.

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The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of FASB ASC Topic 606 (“Topic 606”), and non-interest expense in-scope of Topic 606 for the three months ended March 31, 2025 and 2024:


	For the three months ended March 31,
	2025		2024
Non-interest income
In-scope of Topic 606:
Service charges and other account-related fees	$	5,232	$	5,283
Bank card fees		4,194		4,578
Other non-interest income		1,396		1,147
Non-interest income (in-scope of Topic 606)		10,822		11,008
Non-interest income (out-of-scope of Topic 606)		4,554		6,686
Total non-interest income	$	15,376	$	17,694
Non-interest expense
In-scope of Topic 606:
Other non-interest expense	$	—	$	(2)
Total revenue in-scope of Topic 606	$	10,822	$	11,006

Contract acquisition costs

The Company utilizes the practical expedient which allows entities to expense immediately contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. The Company has not capitalized any contract acquisition costs.

Note 11 Stock-based Compensation and Benefits

The Company provides stock-based compensation in accordance with shareholder-approved plans.

To date, the Company has issued stock options, restricted stock and performance stock units under the plans. The Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of stock at the date of grant.

Stock options

At March 31, 2025, the Company had 560,386 stock options outstanding at a weighted average exercise price of $32.93. No stock options were granted during the three months ended March 31, 2025. Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $42.9 thousand and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, there was $0.1 million of total unrecognized compensation cost related to non-vested stock options granted under the plans. The cost is expected to be recognized over a weighted average period of 1.0 years.

Restricted stock awards

The Company issues primarily time-based restricted stock awards that vest over a range of a 1-3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.

Performance stock units

The Company grants PSUs which represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares to be awarded at the end of the performance period will range from 0% - 150% of the initial target awards. For PSU components granted in 2024, one-third of the award is based on the Company’s cumulative earnings per share (EPS target), one-third is based on the Company’s relative ROTA, and one-third is based on the Company’s cumulative TSR during the performance period. On the vesting date, the Company’s annual ROTA will be compared to the respective ROTAs of companies comprising the S&P 600 Regional Banks group. The Company’s ranking will be averaged over the measurement period to determine the shares awarded. The fair value of the ROTA award was determined based on the closing stock price of the Company’s common stock on the grant date. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the S&P 600 Regional Banks group at the grant date to determine the shares awarded. The fair value of the TSR target portion of the award was determined

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using a Monte Carlo Simulation at the grant date. The fair value of the EPS target portion of the award was determined based on the closing stock price of the Company’s common stock on the grant date.

The weighted-average grant date fair value per unit for the awards granted during the year ended December 31, 2024 of the EPS target portion, ROTA target portion and TSR target portion were $35.41, $35.41, and $34.91, respectively. The initial weighted-average performance price for the TSR target portion granted during 2024 was $36.72. During the three months ended March 31, 2025, the Company awarded an additional 3,723 units due to final performance results related to performance stock units granted in 2022.

The following table summarizes restricted stock and performance stock unit activity during the three months ended March 31, 2025:


		Weighted			Weighted
	Restricted	average grant-		Performance	average grant-
	stock shares	date fair value		stock units	date fair value
Unvested at December 31, 2024	292,014	$	34.43	198,264	$	34.31
Granted	3,817		41.89	—		—
Adjustment due to performance	—		—	3,723		55.54
Vested	—		—	(51,658)		39.63
Forfeited	(8,132)		34.74	(2,374)		33.59
Unvested at March 31, 2025	287,699	$	34.52	147,955	$	33.00

As of March 31, 2025, the total unrecognized compensation cost related to the non-vested restricted stock awards and performance stock units totaled $3.8 million and $2.7 million, respectively, and is expected to be recognized over a weighted average period of approximately 1.8 years and 1.7 years, respectively. Expense related to non-vested restricted stock awards totaled $1.1 million and $1.0 million during the three months ended March 31, 2025 and 2024, respectively. Expense related to non-vested performance stock units totaled $0.5 million during the three months ended March 31, 2025 and 2024. Expense related to non-vested restricted stock awards and units is a component of salaries and benefits expense in the Company’s consolidated statements of operations.

Employee stock purchase plan

The 2014 ESPP is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ESPP. Under the ESPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 206,431 was available for issuance at March 31, 2025.

Under the ESPP, employees purchased 8,099 shares and 11,620 shares during the three months ended March 31, 2025 and 2024, respectively.

Note 12 Common Stock

The Company had 38,094,105 and 38,054,482 shares of Class A common stock outstanding at March 31, 2025 and December 31, 2024, respectively. Additionally, the Company had 287,699 and 292,014 shares outstanding at March 31, 2025 and December 31, 2024, respectively, of restricted Class A common stock issued but not yet vested under the 2023 Plan that are not included in shares outstanding until such time that they are vested; however, these shares do have voting and certain dividend rights during the vesting period.

On May 9, 2023, the Company’s Board of Directors authorized a program to repurchase up to $50.0 million of the Company’s stock from time to time in either the open market or through privately negotiated transactions. The remaining authorization under the current program as of March 31, 2025 was $50.0 million.

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Note 13 Earnings Per Share

The Company calculates earnings per share under the two-class method, as certain non-vested share awards contain non-forfeitable rights to dividends. As such, these awards are considered securities that participate in the earnings of the Company. Non-vested shares are discussed further in note 11.

The Company had 38,094,105 and 37,806,148 shares of Class A common stock outstanding as of March 31, 2025 and 2024, respectively, exclusive of issued non-vested restricted shares. Certain stock options and non-vested restricted shares are potentially dilutive securities, but are not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive for the three months ended March 31, 2025 and 2024.

The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:


	For the three months ended March 31,
	2025		2024
Net income	$	24,231	$	31,391
Less: income allocated to participating securities		(182)		(64)
Income allocated to common shareholders	$	24,049	$	31,327
Weighted average shares outstanding for basic earnings per common share		38,068,455		38,031,358
Dilutive effect of equity awards		161,414		157,122
Weighted average shares outstanding for diluted earnings per common share		38,229,869		38,188,480
Basic earnings per share	$	0.63	$	0.82
Diluted earnings per share		0.63		0.82

The Company had 560,386 and 749,123 outstanding stock options to purchase common stock at weighted average exercise prices of $32.93 and $30.94 per share at March 31, 2025 and 2024, respectively, which have time-vesting criteria, and as such, any dilution is derived only for the timeframe in which the vesting criteria had been met and where the inclusion of those stock options is dilutive. The Company had 147,955 and 148,538 unvested performance stock units issued as of March 31, 2025 and 2024, respectively, which have performance, market and/or time-vesting criteria, and as such, any dilution is derived only for the timeframe in which the vesting criteria had been met and where the inclusion of those units is dilutive.

Note 14 Derivatives

Risk management objective of using derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company has established policies stipulating that neither carrying value nor fair value at risk should exceed established guidelines. The Company has designed strategies to confine these risks within the established limits and identify appropriate trade-offs in the financial structure of its balance sheet. These strategies include the use of derivative financial instruments to help achieve the desired balance sheet repricing structure while meeting the desired objectives of its clients. Currently, the Company employs certain interest rate swaps that are designated as fair value hedges, cash flow hedges and economic hedges. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

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Fair values of derivative instruments on the balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated statements of financial condition as of March 31, 2025 and December 31, 2024. Information about the valuation methods used to measure fair value is provided in note 16.


		Asset derivatives fair value					Liability derivatives fair value
	Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,		December 31,
	location	2025		2024		location	2025		2024
Derivatives designated as hedging instruments:
Interest rate products	Other assets	$	25,082	$	31,864	Other liabilities	$	2,250	$	1,296
Total derivatives designated as hedging instruments		$	25,082	$	31,864		$	2,250	$	1,296

Derivatives not designated as hedging instruments:
Interest rate products	Other assets	$	8,629	$	7,773	Other liabilities	$	8,638	$	7,780
Interest rate lock commitments	Other assets		683		282	Other liabilities		—		—
Forward contracts	Other assets		1		104	Other liabilities		85		10
Total derivatives not designated as hedging instruments		$	9,313	$	8,159		$	8,723	$	7,790

Cash flow hedges

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses floors and collars as part of its interest rate risk management strategy. Interest rate floors designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates fall below the strike rate on the contract in exchange for an up-front premium. Interest rate collars designated as cash flow hedges involve the payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and receipt of variable-rate amounts if interest rates fall below the floor strike rate on the contract.

For derivatives that qualify and are designated as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest income in the same periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis. The earnings recognition of excluded components is included in interest income. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate assets. As of March 31, 2025, the Company had cash flow hedges with a notional amount of $200.0 million. The Company expects to reclassify $0.9 million from AOCI as a reduction to interest income during the next 12 months.

Fair value hedges

Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of March 31, 2025 and December 31, 2024, the Company had interest rate swaps with a notional amount of $346.7 million and $348.5 million, respectively, which were designated as fair value hedges of interest rate risk.

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For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. The following table presents the Company’s fixed-rate loans associated with the interest rate swaps and the loss included in loans receivable in the statements of financial condition as of the dates shown:

Cumulative amount of fair value

hedging adjustment included in the

Carrying amount of hedged assets

carrying amount of hedged assets⁽¹⁾

Line item in the consolidated statements of financial

March 31,

December 31,

March 31,

December 31,

condition in which the hedged item is included

2025

2024

2025

2024

Loans receivable

455,388

456,098

(22,372)

(28,698)


(1)		Fair value hedge adjustments included basis adjustments on terminated positions to be amortized through the contractual maturity date of each respective hedged item. Excluding those terminated positions, the fair value hedge adjustments consisted of losses totaling $24.7 million and $31.2 million as of March 31, 2025 and December 31, 2024, respectively.

Non-designated hedges

Derivatives not designated as hedges are not speculative and consist of interest rate swaps with commercial banking clients that facilitate their respective risk management strategies. Interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client swaps and the offsetting swaps are recognized directly in earnings. As of March 31, 2025 and December 31, 2024, the Company had matched interest rate swap transactions with an aggregate notional amount of $867.0 million and $840.9 million, respectively, related to this program. Derivative fee income from non-designated hedges totaled $0.2 million and $0.9 million for the three months ended March 31, 2025 and 2024, respectively.

As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the clients have locked into that interest rate. The Company then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Fair value changes of certain loans under interest rate lock commitments are hedged with forward sales contracts of MBS. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in non-interest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying assets. The fair value of the underlying assets is impacted by current interest rates, remaining origination fees, costs of production to be incurred and the probability that the interest rate lock commitments will close or will be funded.

Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Company does not expect any counterparty to any MBS contract to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Company fails to deliver the loans subject to interest rate risk lock commitments, it will still be obligated to “pair off” MBS to the counterparty. Should this be required, the Company could incur significant costs in acquiring replacement loans and such costs could have an adverse effect on the consolidated financial statements.

The fair value of the mortgage banking derivative is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.

The Company had interest rate lock commitments with a notional value of $38.9 million and forward contracts with a notional value of $38.2 million at March 31, 2025. At December 31, 2024, the Company had interest rate lock commitments with a notional value of $20.0 million and forward contracts with a notional value of $29.2 million.

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Effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive income

The tables below present the effect of the Company’s derivative financial instruments in the consolidated statements of operations for the three months ended March 31, 2025 and 2024:


	Location of gain (loss)	Amount of (loss) gain recognized in income on derivatives
	recognized in income on	For the three months ended March 31,
Derivatives in hedging relationships	derivatives	2025		2024
Fair value hedging relationships - Interest rate products	Interest and fees on loans	$	(4,843)	$	9,093
Cash flow hedging relationships - Interest rate products	Interest and fees on loans		(355)		(513)
Total		$	(5,198)	$	8,580


	Location of gain (loss)	Amount of gain (loss) recognized in income on derivatives
	recognized in income on	For the three months ended March 31,
Hedged items	hedged items	2025		2024
Interest rate products	Interest and fees on loans	$	6,326	$	(6,548)


	Location of gain (loss)	Amount of (loss) gain recognized in income on derivatives
Derivatives not designated	recognized in income on	For the three months ended March 31,
as hedging instruments	derivatives	2025		2024
Interest rate products	Other non-interest expense	$	(2)	$	(232)
Interest rate lock commitments	Mortgage banking income		534		332
Forward contracts	Mortgage banking income		(178)		44
Total		$	354	$	144

The tables below present the effect of cash flow hedge accounting on AOCI as of the dates presented.


	For the three months ended March 31, 2025
	Gain recognized in OCI on derivatives		Gain recognized in OCI included component		Gain recognized in OCI excluded component		Location of loss recognized from AOCI into income	Loss reclassified from AOCI into income		Loss reclassified from AOCI into income included component		Loss reclassified from AOCI into income excluded component
Derivatives in cash flow hedging relationships:
Interest rate products	$	19	$	15	$	4	Interest income	$	(355)	$	(239)	$	(116)


	For the three months ended March 31, 2024
	Loss recognized in OCI on derivatives		Loss recognized in OCI included component		Loss recognized in OCI excluded component		Location of loss recognized from AOCI into income	Loss reclassified from AOCI into income		Loss reclassified from AOCI into income included component		Loss reclassified from AOCI into income excluded component
Derivatives in cash flow hedging relationships:
Interest rate products	$	(1,428)	$	(1,002)	$	(426)	Interest income	$	(513)	$	(395)	$	(118)

Credit-risk-related contingent features

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness for reasons other than an error or omission of an administrative or operational nature, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty has the right to terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of March 31, 2025, the termination value of derivatives in a net liability position related to these agreements was zero. The Company has minimum collateral posting thresholds with certain of its derivative counterparties and, as of March 31, 2025, the Company had met these thresholds. If the Company had breached any of these provisions at March 31, 2025, it could have been required to settle its obligations under the agreements at the termination value.

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Note 15 Commitments and Contingencies

In the normal course of business, the Company enters into various off-balance sheet commitments to help meet the financing needs of clients. These financial instruments include commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. The same credit policies are applied to these commitments as the loans in the consolidated statements of financial condition; however, these commitments involve varying degrees of credit risk in excess of the amount recognized in the consolidated statements of financial condition. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon. However, the contractual amount of these commitments, offset by any additional collateral pledged, represents the Company’s potential credit loss exposure.

Total unfunded commitments at March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024
Commitments to fund loans	$	563,568	$	663,859
Unfunded commitments under lines of credit		743,862		752,861
Commercial and standby letters of credit		12,561		10,760
Total unfunded commitments	$	1,319,991	$	1,427,480

Commitments to fund loans—Commitments to fund loans are legally binding agreements to lend to clients in accordance with predetermined contractual provisions provided there have been no violations of any conditions specified in the contract. These commitments are generally at variable interest rates and are for specific periods or contain termination clauses and may require the payment of a fee. The total amounts of unused commitments are not necessarily representative of future credit exposure or cash requirements, as commitments often expire without being drawn upon.

Unfunded commitments under lines of credit—In the ordinary course of business, the Company extends revolving credit to its clients. These arrangements may require the payment of a fee.

Commercial and standby letters of credit—The Company routinely issues commercial and standby letters of credit, which may be financial standby letters of credit or performance standby letters of credit. These are various forms of “back-up” commitments to guarantee the performance of a client to a third party. While these arrangements represent a potential cash outlay for the Company, the majority of these letters of credit will expire without being drawn upon. Letters of credit are subject to the same underwriting and credit approval process as traditional loans, and as such, many of them have various forms of collateral securing the commitment, which may include real estate, personal property, receivables or marketable securities.

Contingencies

Mortgage loans sold to investors may be subject to repurchase or indemnification in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company established a reserve liability for expected losses related to these representations and warranties based upon management’s evaluation of actual and historical loss history, delinquency trends or other documentation or deficiency findings in the portfolio and economic conditions. Charges against the reserve during the three months ended March 31, 2025 and 2024 totaling $45 thousand and $26 thousand, respectively, were primarily driven by early payoffs and repurchases. The repurchase reserve is included in other liabilities in the consolidated statements of financial condition.

The following table summarizes mortgage repurchase reserve activity for the periods presented:


	For the three months ended March 31,
	2025		2024
Beginning balance	$	1,000	$	1,198
Provision released from operating expense, net		(90)		—
Charge-offs		(45)		(26)
Ending balance	$	865	$	1,172

In the ordinary course of business, the Company and NBH Bank may be subject to litigation. Based upon the available information and advice from the Company’s legal counsel, management does not believe that any potential, threatened or pending litigation to which it is a party will have a material adverse effect on the Company’s liquidity, financial condition or results of operations.

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Note 16 Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For disclosure purposes, the Company groups its financial and non-financial assets and liabilities into three different levels based on the nature of the instrument and the availability and reliability of the information that is used to determine fair value. The three levels are defined as follows:

●

Level 1—Includes assets or liabilities in which the valuation methodologies are based on unadjusted quoted prices in active markets for identical assets or liabilities.

●

Level 2—Includes assets or liabilities in which the inputs to the valuation methodologies are based on similar assets or liabilities in inactive markets, quoted prices for identical or similar assets or liabilities in inactive markets, and inputs other than quoted prices that are observable, such as interest rates, yield curves, volatilities, prepayment speeds and other inputs obtained from observable market input.

●

Level 3—Includes assets or liabilities in which the inputs to the valuation methodology are based on at least one significant assumption that is not observable in the marketplace. These valuations may rely on management’s judgment and may include internally-developed model-based valuation techniques.

Level 1 inputs are considered to be the most transparent and reliable and level 3 inputs are considered to be the least transparent and reliable. The Company assumes the use of the principal market to conduct a transaction of each particular asset or liability being measured and then considers the assumptions that market participants would use when pricing the asset or liability. Whenever possible, the Company first looks for quoted prices for identical assets or liabilities in active markets (level 1 inputs) to value each asset or liability. However, when inputs from identical assets or liabilities on active markets are not available, the Company utilizes market observable data for similar assets and liabilities. The Company maximizes the use of observable inputs and limits the use of unobservable inputs to occasions when observable inputs are not available. The need to use unobservable inputs generally results from the lack of market liquidity of the actual financial instrument or of the underlying collateral. While third-party price indications may be available in those cases, limited trading activity can challenge the observability of those inputs.

Changes in the valuation inputs used for measuring the fair value of financial instruments may occur due to changes in current market conditions or other factors. Such changes may necessitate a transfer of the financial instruments to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfer occurs. During the three months ended March 31, 2025 and 2024, there were no transfers of financial instruments between the hierarchy levels.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of each instrument under the valuation hierarchy:

Fair Value of Financial Instruments Measured on a Recurring Basis

Investment securities available-for-sale—Investment securities available-for-sale are carried at fair value on a recurring basis. To the extent possible, observable quoted prices in an active market are used to determine fair value and, as such, these securities are classified as level 1. When quoted market prices in active markets for identical assets or liabilities are not available, quoted prices of securities with similar characteristics, discounted cash flows or other pricing characteristics are used to estimate fair values and the securities are then classified as level 2.

Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The portfolio consists primarily of fixed-rate residential mortgage loans that are sold within 45 days. The Company estimates fair value based on quoted market prices for similar loans in the secondary market and are classified as level 2.

Interest rate swap derivatives—The Company’s derivative instruments are limited to interest rate swaps that may be accounted for as fair value hedges or non-designated hedges. The fair values of the swaps incorporate credit valuation adjustments in order to appropriately reflect nonperformance risk in the fair value measurements. The credit valuation adjustment is the dollar amount of the fair value adjustment related to credit risk and utilizes a probability weighted calculation to quantify the potential loss over the life of the trade. The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying the respective counterparties’ credit spreads to the

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exposure offset by marketable collateral posted, if any. Certain derivative transactions are executed with counterparties who are large financial institutions, or dealers. ISDA Master Agreements and CSA are employed for all contracts with dealers. These contracts contain bilateral collateral arrangements. The fair value inputs of these financial instruments are determined using discounted cash flow analysis through the use of third-party models whose significant inputs are readily observable market parameters, primarily yield curves, with appropriate adjustments for liquidity and credit risk, and are classified as level 2.

Mortgage banking derivatives—The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale includes grouping the interest rate lock commitments by interest rate and terms, applying an average 86.2% estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.

The tables below present the financial instruments measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 in the consolidated statements of financial condition utilizing the hierarchy structure described above:


	March 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale
U.S. Treasuries	$	73,263	$	—	$	—	$	73,263
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		—		204,245		—		204,245
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		—		354,169		—		354,169
Corporate debt		—		1,973		—		1,973
Loans held for sale		—		11,885		—		11,885
Interest rate swap derivatives		—		33,711		—		33,711
Mortgage banking derivatives		—		—		684		684
Total assets at fair value	$	73,263	$	605,983	$	684	$	679,930
Liabilities:
Interest rate swap derivatives	$	—	$	10,888	$	—	$	10,888
Mortgage banking derivatives		—		—		85		85
Total liabilities at fair value	$	—	$	10,888	$	85	$	10,973

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	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale
U.S. Treasuries	$	24,874	$	—	$	—	$	24,874
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		—		135,045		—		135,045
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		—		364,938		—		364,938
Corporate debt		—		1,962		—		1,962
Loans held for sale		—		24,495		—		24,495
Interest rate swap derivatives		—		39,637		—		39,637
Mortgage banking derivatives		—		—		386		386
Total assets at fair value	$	24,874	$	566,077	$	386	$	591,337
Liabilities:
Interest rate swap derivatives	$	—	$	9,076	$	—	$	9,076
Mortgage banking derivatives		—		—		10		10
Total liabilities at fair value	$	—	$	9,076	$	10	$	9,086

The table below details the changes in level 3 financial instruments during the three months ended March 31, 2025:


	Mortgage banking
	derivatives, net
Balance at December 31, 2024	$	376
Gain included in earnings, net		356
Fees and (costs) included in earnings, net		(133)
Balance at March 31, 2025	$	599

Fair Value of Financial Instruments Measured on a Non-recurring Basis

Certain assets may be recorded at fair value on a non-recurring basis as conditions warrant. These non-recurring fair value measurements typically result from the application of lower of cost or fair value accounting or a write-down occurring during the period.

Individually evaluated loans—The Company records individually evaluated loans based on the fair value of the collateral when it is probable that the Company will be unable to collect all contractual amounts due in accordance with the terms of the loan agreement. The Company relies on third-party appraisals and internal assessments, utilizing a discount rate in the range of 6% - 32% with a weighted average discount rate of 10.8%, in determining the estimated fair values of these loans. The inputs used to determine the fair values of loans are considered level 3 inputs in the fair value hierarchy. At March 31, 2025, the Company maintained a specific reserve of $6.0 million related to 16 loans with a carrying balance of $22.1 million. At March 31, 2024, the Company maintained a specific reserve of $9.8 million related to 13 loans with a carrying balance of $38.2 million.

Mortgage servicing rights—MSRs represent the value associated with servicing residential real estate loans that have been sold to outside investors with servicing retained. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes a discount rate and weighted average rate ranging from 10.0% to 10.5% at March 31, 2025 and prepayment speed assumption ranges of 6.3% to 12.4% with a weighted average rate of 6.4% at March 31, 2025. The weighted average MSRs are subject to impairment testing. The carrying values of these MSRs are reviewed quarterly for impairment based upon the calculation of fair value. For purposes of measuring impairment, the MSRs are stratified into certain risk characteristics including note type and note term. If the valuation model reflects a value less than the carrying value, MSRs are adjusted to fair value through a valuation allowance and the adjustment is included in mortgage banking income in the consolidated statements of operations. There was no MSR impairment during the three months ended March 31, 2025 or 2024. The inputs used to determine the fair values of MSRs are considered level 3 inputs in the fair value hierarchy.

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SBA servicing asset—The SBA servicing asset represents the value associated with servicing small business real estate loans that have been sold to outside investors with servicing retained. The fair value for the SBA servicing asset is determined through a discounted cash flow analysis and utilizes a weighted average discount rate of 9.3% and a weighted average lifetime constant prepayment rate of 15.7%. The SBA servicing asset is amortized over the period of the estimated future net servicing life of the underlying assets, and it is evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the SBA servicing asset. The Company recorded no impairment for the three months ended March 31, 2025 or 2024.

The Company may be required to record fair value adjustments on other available-for-sale and municipal securities valued at par on a non-recurring basis.

The tables below provide information regarding losses from the assets recorded at fair value on a non-recurring basis during the three months ended March 31, 2025 and 2024:

The Company did not record any liabilities measured at fair value on a non-recurring basis during the three months ended March 31, 2025 or 2024.

Note 17 Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is determined based upon quoted market prices to the extent possible; however, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques that may be significantly impacted by the assumptions used, including the discount rate and estimates of future cash flows. Changes in any of these assumptions could significantly affect the fair value estimates. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies and are based on the exit price concept within ASC Topic 825 and applied to this disclosure on a prospective basis. Considerable judgment is required to interpret market data in order to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange.

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The fair value of financial instruments at March 31, 2025 and December 31, 2024 are set forth below:


	Level in fair value	March 31, 2025				December 31, 2024
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	246,298	$	246,298	$	127,848	$	127,848
U.S. Treasury securities - AFS	Level 1		73,263		73,263		24,874		24,874
U.S. Treasury securities - HTM	Level 1		49,715		49,431		49,639		49,159
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale	Level 2		204,245		204,245		135,045		135,045
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale	Level 2		354,169		354,169		364,938		364,938
Municipal securities available-for-sale	Level 2		—		—		—		—
Corporate debt available-for-sale	Level 2		1,973		1,973		1,962		1,962
Other available-for-sale securities	Level 3		726		726		728		728
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity	Level 2		262,594		232,140		271,105		234,286
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity	Level 2		394,603		355,234		212,364		167,941
FHLB and FRB stock	Level 2		27,687		27,687		27,984		27,984
Loans receivable	Level 3		7,646,296		7,480,541		7,751,143		7,535,875
Loans held for sale	Level 2		11,885		11,885		24,495		24,495
Accrued interest receivable	Level 2		47,925		47,925		43,469		43,469
Interest rate swap derivatives	Level 2		33,711		33,711		39,637		39,637
Mortgage banking derivatives	Level 3		684		684		386		386
LIABILITIES
Deposit transaction accounts	Level 2		7,365,530		7,365,530		7,217,857		7,217,857
Time deposits	Level 2		1,058,677		1,060,390		1,020,036		1,021,763
Securities sold under agreements to repurchase	Level 2		20,749		20,749		18,895		18,895
Long-term debt	Level 2		55,000		52,141		55,000		49,168
Federal Home Loan Bank advances	Level 2		80,000		80,000		50,000		50,000
Accrued interest payable	Level 2		15,183		15,183		15,146		15,146
Interest rate swap derivatives	Level 2		10,888		10,888		9,076		9,076
Mortgage banking derivatives	Level 3		85		85		10		10

Note 18 Business Segment

The Company has aligned its operations into one reportable segment. Key metrics used to evaluate the segment include consolidated net income and its major components. Revenue and expenses are consistent with the consolidated statement of operations, and the measure of segment assets is consistent with total consolidated assets on the balance sheet.

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Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the three months ended March 31, 2025, and with our annual report on Form 10-K (file number 001-35654), which includes our audited consolidated financial statements and related notes as of and for the years ended December 31, 2024, 2023 and 2022. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” located elsewhere in this quarterly report and in Item 1A“Risk Factors” in the annual report on Form 10-K, referenced above, and should be read herewith.

All amounts are in thousands, except share and per share data, or as otherwise noted.

Overview

Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services to our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, we are innovating and building strategic fintech partnerships with the goal of delivering a comprehensive digital financial ecosystem for our clients. We are focused on providing small and medium-sized businesses with alternative digital access to address borrowing, depository and cash management needs, while also providing information management and access to digital payment tools, under the safety of a regulated bank. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho, as well as our ongoing investment in digital solutions and strategic acquisitions position us well for growth opportunities. As of March 31, 2025, we had $10.1 billion in assets, $7.6 billion in loans, $8.4 billion in deposits, $1.3 billion in equity and $1.0 billion in assets under management in our trust and wealth management business.

Operating Highlights

Profitability and returns


●		Net income totaled $24.2 million, or $0.63 per diluted share, for the three months ended March 31, 2025, compared to net income of $31.4 million, or $0.82 per diluted share, for the three months ended March 31, 2024. The decrease was largely driven by higher provision expense of $10.2 million for the three months ended March 31, 2025 recorded primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower.
●		The return on average tangible assets was 1.09% for the three months ended March 31, 2025, compared to 1.39% for the three months ended March 31, 2024.
●		The return on average tangible common equity was 10.64% for the three months ended March 31, 2025, compared to 15.14% for the three months ended March 31, 2024.

Strategic execution



●		Continued to invest in digital solutions for our clients through our financial eco-system, 2UniFi, for small and medium-sized businesses that we believe will increase access to financial services while reducing the costs of banking. In conjunction with the continued investment in the 2UniFi buildout, the Company incurred $3.4 million and $2.6 million of non-interest expense during the three months ended March 31, 2025 and 2024, respectively, primarily within salaries and benefits, occupancy and equipment, and professional fees.
●		The Company prudently manages liquidity and maintains a profile focused on core deposits and stable, long-term and diversified funding sources, including access to Cambr platform deposits. The investment securities portfolio has a short average duration, and, at March 31, 2025, the Company’s interest rate risk model indicated a fairly neutral position in terms of interest rate sensitivity.
●		FTE pre-provision net revenue increased $1.4 million to $42.0 million during the three months ended March 31, 2025, compared to the same period in the prior year.

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Loan portfolio


●		Total loans ended the quarter at $7.6 billion, compared to $7.8 billion at December 31, 2024.
●		The Company generated loan fundings totaling $255.7 million, during the three months ended March 31, 2025, with a weighted average new loan origination rate of 7.3%.
●		The Company maintained a conservatively structured loan portfolio represented by diverse industries and concentrations with most industry sector concentrations at 15% or less of total loans and all concentration levels remain well below our self-imposed limits.
●		Non-owner occupied CRE loans were 149.7% of the Company’s risk based capital, or 23.5% of total loans, and no specific property type comprised more than 10.0% of total loans at March 31, 2025.
●		The Company maintains little exposure to non-owner occupied CRE retail properties and office properties, comprising 2.0% and 1.3% of total loans, respectively, at March 31, 2025.
●		Multifamily loans totaled $333.8 million, or 4.4% of total loans at March 31, 2025.
●		We do not originate high-dollar non-amortizing or balloon payment mortgage loans to our clients.

Credit quality


●		Allowance for credit losses totaled 1.18% of total loans at March 31, 2025, compared to 1.22% at December 31, 2024.
●		The Company recorded provision expense for credit losses totaling $10.2 million, during the three months ended March 31, 2025. The elevated net charge-offs were driven by one credit as a result of suspected fraudulent activity by the borrower, which the Company believes is an isolated circumstance within the loan portfolio. There was no provision expense recorded during the three months ended March 31, 2024.
●		Non-performing loans (comprised of non-accrual loans and non-accrual modified loans) totaled 0.45% of total loans at March 31, 2025, decreasing one basis point compared to December 31, 2024.
●		Net charge-offs of $15.1 million and $0.1 million were recorded during the three months ended March 31, 2025 and 2024, respectively, and annualized net charge-offs to average total loans totaled 0.80% and zero for the three months ended March 31, 2025 and 2024, respectively.

Client deposit funded balance sheet

		.9
●		Average total deposits for the three months ended March 31, 2025 increased $41.5 million to $8.3 billion, compared to $8.2 billion for the three months ended March 31, 2024.
●		Average transaction deposits for the three months ended March 31, 2025 and 2024 totaled $7.2 billion.
●		The mix of transaction deposits to total deposits was 87.4% and 88.3% at March 31, 2025 and 2024, respectively.
●		Cost of deposits improved 12 basis points to 2.03% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, as a result of our disciplined deposit pricing over the last year as the Fed lowered rates.
●		Approximately 78% of our deposits were FDIC insured at March 31, 2025.

Liquidity

		.9
●		On-balance sheet liquidity totaled $802.5 million at March 31, 2025 and was comprised of $246.3 million of cash and $556.2 million of unencumbered investments.
●		Liquidity is monitored and managed to ensure that sufficient funds are available on-demand to meet our business needs. At March 31, 2025, the Company’s available secured and committed borrowing capacity at the FHLB and Federal Reserve totaled $2.5 billion. The Company also accesses a variety of other short-term and long-term unsecured funding sources, which includes access to Cambr platform deposits, multiple brokered deposit platform options and lines of credit.
●		Our investment securities portfolio has a short average duration and is largely backed by U.S. government or government sponsored entities giving us confidence we will not realize material losses. Regarding the fair value of investment securities, our accumulated other comprehensive loss does not have a material impact on our capital position. Our tangible common equity capital ratio, which includes the accumulated other comprehensive loss, totaled 10.1% at March 31, 2025, compared to 10.2% at December 31, 2024.

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Revenues


●		FTE net interest income increased 3.4% to $88.6 million during the three months ended March 31, 2025, compared to $85.7 million during the same period in the prior year.
●		The FTE net interest margin widened 15 basis points to 3.93% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, as an 18 basis point improvement in the cost of funds outpaced a three basis point decrease in earning asset yields. The cost of funds totaled 2.07% for the three months ended March 31, 2025, compared to 2.25% during the three months ended March 31, 2024.
●		Non-interest income totaled $15.4 million during the three months ended March 31, 2025, compared to $17.7 million for the three months ended March 31, 2024, primarily due to a $2.4 million decrease in other non-interest income driven by timing of SBA loan gain on sales and swap fee income activity and a $0.6 million gain from the sale of a banking center building included in the first quarter of 2024.

Expenses


●		Non-interest expense decreased $0.8 million to $62.0 million during the three months ended March 31, 2025, compared to the same period in the prior year. Salaries and benefits decreased $2.2 million primarily due to payroll tax credits realized during the first quarter of 2025. Data processing and occupancy and equipment increased $1.2 million, driven by investments in technology.
●		During the three months ended March 31, 2025, the FTE efficiency ratio, excluding other intangible assets amortization, improved 108 basis points to 57.74%, compared to the same period in the prior year.
●		Income tax expense totaled $5.6 million during the three months ended March 31, 2025, compared to $7.5 million during the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2025 was 18.8%, compared to 18.2% for the full year 2024.

Strong capital position


●		Capital ratios continue to be well in excess of federal bank regulatory agency “well capitalized” thresholds. At March 31, 2025, our consolidated tier 1 leverage ratio was 10.89%, and our consolidated common equity tier 1 and tier 1 risk based capital ratios were 13.61%.
●		At March 31, 2025, common book value per share was $34.90. Tangible common book value per share increased $0.66 to $25.94, driven by the quarter’s earnings after covering the quarterly dividend and a $0.26 improvement in accumulated other comprehensive loss.

Key Challenges

Macroeconomic pressures, including uncertainty in tariff policies, have resulted in volatility and uncertainty in the banking industry and many other industries. The sustained higher-interest rate environment, declines in the fair value of securities, lack of available funding, uninsured deposits, wait-and-see attitudes of clients, and risk from concentrations in loan and deposit segments along with declines in commercial real estate property values are drawing increased scrutiny on financial institutions. Liquidity within the financial services sector has tightened, and we expect the intense competition for deposits throughout our markets to continue. While these are widespread challenges for the banking industry, the Company has not experienced a material impact to our financial condition, operations, client base, liquidity, capital position or risk profile.

Additionally, we face continual challenges implementing our business strategy. These include growing our assets, particularly loans, and deposits amidst intense competition, changing interest rates, adhering to changes in the regulatory environment and identifying and consummating disciplined acquisition and other expansionary opportunities in a very competitive and inflationary environment. In connection with our digital growth strategy and our digital solution 2UniFi, we have made and will continue to make investments in and also partner with third-party fintech companies. The innovations these companies develop for utilization by 2UniFi may prove difficult to successfully integrate into our existing operations and may require additional operational and control systems to manage fraud, cybersecurity, operational, legal and compliance risks.

Future growth in our interest income will ultimately be dependent on our ability to originate high-quality loans and source other high-quality earning assets such as investment securities as well as our ability to access liquidity and manage our cost of funds. During the years ended December 31, 2023 and 2022, the Federal Reserve increased prevailing interest rates by a total of 100 and 425 basis

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points, respectively. In the second half of 2024, the Federal Reserve decreased the prevailing interest rates by a total of 100 basis points. While further cuts in 2025 remain unclear, our future earnings will be impacted by the Federal Reserve’s future interest rate policy decisions. Management employs risk management policies to monitor and limit exposure to changes in market rates, which is discussed in more detail in the Asset/Liability Management and Interest Rate Risk section of Management’s Discussion and Analysis.

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Performance Overview

In evaluating our consolidated statements of financial condition and results of operations financial statement line items, we evaluate and manage our performance based on key earnings indicators, balance sheet ratios, asset quality metrics and regulatory capital ratios, among others. The table below presents some of the primary performance indicators that we use to analyze our business on a regular basis for the periods indicated:

Key Metrics⁽¹⁾


	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Return on average assets		0.99%		1.13%		1.28%
Return on average tangible assets⁽²⁾		1.09%		1.23%		1.39%
Return on average tangible assets, adjusted⁽²⁾⁽³⁾		1.09%		1.44%		1.39%
Return on average equity		7.42%		8.59%		10.30%
Return on average tangible common equity⁽²⁾		10.64%		12.31%		15.14%
Return on average tangible common equity, adjusted⁽²⁾⁽³⁾		10.64%		14.40%		15.14%
Loan to deposit ratio (end of period)⁽⁴⁾		90.77%		94.09%		88.86%
Non-interest bearing deposits to total deposits (end of period)		26.30%		26.87%		26.92%
Net interest margin⁽⁵⁾		3.85%		3.91%		3.70%
Net interest margin FTE^(2)(5)(6)		3.93%		3.99%		3.78%
Interest rate spread FTE^(2)(6)(7)		3.05%		3.06%		2.81%
Yield on earning assets⁽⁸⁾		5.77%		5.90%		5.80%
Yield on earning assets FTE^(2)(6)(8)		5.85%		5.98%		5.88%
Cost of funds		2.07%		2.15%		2.25%
Cost of deposits		2.03%		2.12%		2.15%
Non-interest income to total revenue FTE⁽⁶⁾⁽⁹⁾		14.79%		10.78%		17.11%
Efficiency ratio		60.76%		63.75%		61.77%
Efficiency ratio excluding other intangible assets amortization, adjusted FTE^(2)(3)(6)		57.74%		57.03%		58.82%
Pre-provision net revenue	$	40,050	$	36,704	$	38,890
Pre-provision net revenue FTE⁽²⁾⁽⁶⁾		41,960		38,578		40,582
Pre-provision net revenue FTE, adjusted^(2)(3)(6)		41,960		45,160		40,582

Total Loans Asset Quality Data^(4)(10)(11)
Non-performing loans to total loans		0.45%		0.46%		0.47%
Non-performing assets to total loans and OREO		0.46%		0.47%		0.53%
Allowance for credit losses to total loans		1.18%		1.22%		1.29%
Allowance for credit losses to non-performing loans		260.52%		262.42%		272.52%
Net charge-offs to average loans		0.80%		0.11%		0.00%


(1)		Ratios are annualized.
(2)		Represents a non-GAAP financial measure. See non-GAAP reconciliations below.
(3)		Ratios are adjusted for loss on security sales in Q4 2024. See non-GAAP reconciliation below.
(4)		Total loans are net of unearned discounts and fees.
(5)		Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(6)		Presented on an FTE basis using the statutory rate of 21% for all periods presented. The taxable equivalent adjustments included above are $1,910, $1,874 and $1,692 for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
(7)		Interest rate spread represents the difference between the weighted average yield on interest earning assets, including FTE income, and the weighted average cost of interest bearing liabilities. Ratio represents non-GAAP financial measure.
(8)		Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
(9)		Non-interest income to total revenue represents non-interest income divided by the sum of net interest income FTE and non-interest income. Ratio represents a non-GAAP financial measure.
(10)		Non-performing loans consist of non-accruing loans and modified loans on non-accrual.
(11)		Non-performing assets include non-performing loans and OREO.

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About Non-GAAP Financial Measures

Certain financial measures and ratios we present, including “tangible assets,” “average tangible assets,” “return on average tangible assets,” “tangible common equity,” “tangible common equity to tangible assets,” “return on average tangible common equity,” “tangible common book value,” “tangible common book value per share,” “tangible common equity to tangible assets,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “adjusted net income,” “adjusted earnings per share – diluted,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” “efficiency ratio excluding other intangible assets amortization FTE, adjusted for the loss on security sales,” “pre-provision net revenue,” “pre-provision net revenue FTE,” “pre-provision net revenue FTE, adjusted for the loss on security sales,” “non-interest income adjusted for the loss on security sales,” “non-interest expense excluding other intangible assets amortization,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on an FTE basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

A reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures is as follows:

Tangible Common Book Value Ratios


	March 31,		December 31,		March 31,
	2025		2024		2024
Total shareholders’ equity	$	1,329,308	$	1,305,075	$	1,231,830
Less: goodwill and other intangible assets, net		(354,800)		(356,777)		(362,709)
Add: deferred tax liability related to goodwill		13,638		13,535		12,539
Tangible common equity (non-GAAP)	$	988,146	$	961,833	$	881,660

Total assets	$	10,098,870	$	9,807,693	$	9,967,476
Less: goodwill and other intangible assets, net		(354,800)		(356,777)		(362,709)
Add: deferred tax liability related to goodwill		13,638		13,535		12,539
Tangible assets (non-GAAP)	$	9,757,708	$	9,464,451	$	9,617,306

Tangible common equity to tangible assets calculations:
Total shareholders’ equity to total assets		13.16%		13.31%		12.36%
Less: impact of goodwill and other intangible assets, net		(3.03)%		(3.15)%		(3.19)%
Tangible common equity to tangible assets (non-GAAP)		10.13%		10.16%		9.17%

Tangible common book value per share calculations:
Tangible common equity (non-GAAP)	$	988,146	$	961,833	$	881,660
Divided by: ending shares outstanding		38,094,105		38,054,482		37,806,148
Tangible common book value per share (non-GAAP)	$	25.94	$	25.28	$	23.32

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Return on Average Tangible Assets and Return on Average Tangible Equity


	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Net income	$	24,231	$	28,184	$	31,391
Add: adjustments, after tax (non-GAAP)⁽¹⁾		—		5,048		—
Net income adjusted for the loss on security sales, after tax (non-GAAP)⁽¹⁾	$	24,231	$	33,232	$	31,391

Net income	$	24,231	$	28,184	$	31,391
Add: impact of other intangible assets amortization expense, after tax		1,516		1,516		1,534
Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP)	$	25,747	$	29,700	$	32,925

Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP)	$	25,747	$	29,700	$	32,925
Add: adjustments, after tax (non-GAAP)⁽¹⁾		—		5,048		—
Net income excluding the impact of other intangible assets amortization expense, adjusted for the loss on security sales, after tax (non-GAAP)⁽¹⁾	$	25,747	$	34,748	$	32,925

Average assets	$	9,916,023	$	9,957,195	$	9,888,261
Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill		(342,425)		(344,417)		(351,383)
Average tangible assets (non-GAAP)	$	9,573,598	$	9,612,778	$	9,536,878

Average shareholders’ equity	$	1,323,915	$	1,304,629	$	1,226,283
Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill		(342,425)		(344,417)		(351,383)
Average tangible common equity (non-GAAP)	$	981,490	$	960,212	$	874,900

Return on average assets		0.99%		1.13%		1.28%
Adjusted return on average assets (non-GAAP)		0.99%		1.33%		1.28%
Return on average tangible assets (non-GAAP)		1.09%		1.23%		1.39%
Adjusted return on average tangible assets (non-GAAP)⁽¹⁾		1.09%		1.44%		1.39%
Return on average equity		7.42%		8.59%		10.30%
Adjusted return on average equity (non-GAAP)		7.42%		10.13%		10.30%
Return on average tangible common equity (non-GAAP)		10.64%		12.31%		15.14%
Adjusted return on average tangible common equity (non-GAAP)⁽¹⁾		10.64%		14.40%		15.14%

(1) Adjustments:
Loss on security sales (non-GAAP)	$	—	$	6,582	$	—
Tax benefit impact		—		(1,534)		—
Total adjustments after tax (non-GAAP)	$	—	$	5,048	$	—

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Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin


	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Interest income	$	129,963	$	136,086	$	131,732
Add: impact of taxable equivalent adjustment		1,910		1,874		1,692
Interest income FTE (non-GAAP)	$	131,873	$	137,960	$	133,424

Net interest income	$	86,691	$	90,131	$	84,030
Add: impact of taxable equivalent adjustment		1,910		1,874		1,692
Net interest income FTE (non-GAAP)	$	88,601	$	92,005	$	85,722

Average earning assets	$	9,139,904	$	9,177,840	$	9,127,330
Yield on earning assets		5.77%		5.90%		5.80%
Yield on earning assets FTE (non-GAAP)		5.85%		5.98%		5.88%
Net interest margin		3.85%		3.91%		3.70%
Net interest margin FTE (non-GAAP)		3.93%		3.99%		3.78%

Efficiency Ratio and Pre-Provision Net Revenue


	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Net interest income	$	86,691	$	90,131	$	84,030
Add: impact of taxable equivalent adjustment		1,910		1,874		1,692
Net interest income FTE (non-GAAP)	$	88,601	$	92,005	$	85,722

Non-interest income	$	15,376	$	11,119	$	17,694
Add: loss on security sales (non-GAAP)		—		6,582		—
Non-interest income adjusted for the loss on security sales (non-GAAP)	$	15,376	$	17,701	$	17,694

Non-interest expense	$	62,017	$	64,546	$	62,834
Less: other intangible assets amortization		(1,977)		(1,977)		(2,008)
Non-interest expense excluding other intangible assets amortization (non-GAAP)	$	60,040	$	62,569	$	60,826

Efficiency ratio		60.76%		63.75%		61.77%
Efficiency ratio excluding other intangible assets amortization, adjusted for the loss on security sales FTE (non-GAAP)		57.74%		57.03%		58.82%
Pre-provision net revenue (non-GAAP)	$	40,050	$	36,704	$	38,890
Pre-provision net revenue, FTE (non-GAAP)		41,960		38,578		40,582
Pre-provision net revenue FTE, adjusted for the loss on security sales (non-GAAP)		41,960		45,160		40,582

Adjusted Net Income and Earnings Per Share


	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Adjustments to net income:
Net income	$	24,231	$	28,184	$	31,391
Add: loss on security sales, after tax (non-GAAP)		—		5,048		—
Adjusted net income (non-GAAP)	$	24,231	$	33,232	$	31,391

Adjustments to earnings per share:
Earnings per share - diluted	$	0.63	$	0.73	$	0.82
Add: loss on security sales, after tax (non-GAAP)		—		0.13		—
Adjusted earnings per share - diluted (non-GAAP)	$	0.63	$	0.86	$	0.82

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Application of Critical Accounting Policies and Significant Estimates

We use accounting principles and methods that conform to GAAP and general banking practices. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. The most significant of these estimates relate to the determination of the ACL.

Allowance for credit losses

The determination of the ACL, which represents management’s estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date, involves a high degree of judgment and complexity. The Company estimates the ACL by first disaggregating the loan portfolio into segments based upon broad characteristics such as primary use and underlying collateral. Within these segments, the portfolio is further disaggregated into classes of loans with similar attributes and risk characteristics. The ACL is determined at the class level, analyzing loss history based upon specific loss drivers and risk factors affecting each loan class. The Company utilizes a DCF model developed within a third-party software tool that incorporates forecasts of certain national macroeconomic factors (reasonable and supportable forecasts) which drive the losses predicted in establishing the Company’s ACL. Management accounts for the inherent uncertainty of the underlying economic forecast by reviewing and weighting alternate forecast scenarios. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis. Additionally, the ACL calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition.

Future Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. The update requires public business entities to disclose specific components of certain expense categories. This includes expense categories such as employee compensation, depreciation, and intangible asset amortization. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and are to be applied on a prospective basis with an option for retrospective application. Early adoption is permitted. The Company is evaluating the impact from ASU 2024-03, and does not expect the adoption of this pronouncement to have a material impact on its financial statements apart from the inclusion of additional disclosures.

Financial Condition

Total assets were $10.1 billion at March 31, 2025, increasing $291.2 million, or 3.0%, from December 31, 2024. Cash and cash equivalents increased $118.5 million from December 31, 2024, and investment securities increased $280.6 million. Loans totaled $7.6 billion and $7.8 billion at March 31, 2025 and December 31, 2024, respectively, and the allowance for credit losses totaled $90.2 million and $94.5 million at March 31, 2025 and December 31, 2024, respectively. During the three months ended March 31, 2025, lower-cost transaction deposits increased $147.7 million to $7.4 billion, compared to December 31, 2024. Total deposits increased $186.3 million to $8.4 billion at March 31, 2025, compared to December 31, 2024.

Investment securities

Available-for-sale

Total investment securities available-for-sale were $634.4 million at March 31, 2025, compared to $527.5 million at December 31, 2024. During the three months ended March 31, 2025 and 2024, purchases of available-for-sale securities totaled $142.2 million and $106.6 million, respectively. Paydowns and maturities totaled $48.4 million and $45.7 million during the three months ended March 31, 2025 and 2024, respectively.

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Available-for-sale investment securities are summarized in the following table as of the dates indicated. The weighted average yield was calculated based on amortized cost. Yields on tax-exempt securities have not been adjusted for tax-exempt status.


	March 31, 2025						December 31, 2024
						Weighted						Weighted
	Amortized		Fair		Percent of	average	Amortized		Fair		Percent of	average
	cost		value		portfolio	yield	cost		value		portfolio	yield
Treasury securities	$	72,507	$	73,263	11.6%	4.35%	$	24,958	$	24,874	4.7%	2.55%
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		228,732		204,245	32.2%	2.51%		164,785		135,045	25.6%	1.48%
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		408,063		354,169	55.8%	2.47%		425,476		364,938	69.2%	2.52%
Corporate debt		2,000		1,973	0.3%	5.78%		2,000		1,962	0.4%	5.86%
Other securities		726		726	0.1%	0.00%		728		728	0.1%	0.00%
Total investment securities available-for-sale	$	712,028	$	634,376	100.0%	2.69%	$	617,947	$	527,547	100.0%	2.25%

As of March 31, 2025 and December 31, 2024, nearly all of the available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed-rate and adjustable-rate FHLMC, FNMA and GNMA securities. The other mortgage-backed securities are comprised of securities backed by FHLMC, FNMA and GNMA securities.

Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 4.8 years and 5.3 years at March 31, 2025 and December 31, 2024, respectively. This estimate is based on assumptions and actual results may differ. At March 31, 2025 and December 31, 2024, the duration of the total available-for-sale investment portfolio was 4.0 years and 4.3 years, respectively.

At March 31, 2025 and December 31, 2024, adjustable-rate securities comprised 12.5% and 5.9%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed-rate amortizing securities with 10- to 30-year contractual maturities, with a weighted average coupon of 2.41% per annum and 2.31% per annum at March 31, 2025 and December 31, 2024, respectively.

The available-for-sale investment portfolio included $79.9 million of unrealized losses and $2.3 million of unrealized gains at March 31, 2025. At December 31, 2024, the available-for-sale investment portfolio included $90.9 million of unrealized losses and $0.5 million of unrealized gains. We believe any unrealized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were impaired. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.

Our investment security portfolio consists of high-quality securities, which are largely backed by either U.S. government agencies or U.S. government sponsored entities. We regularly model liquidity stress scenarios to assess potential liquidity issues.

Held-to-maturity

Held-to-maturity investment securities totaled $706.9 million at March 31, 2025, compared to $533.1 million at December 31, 2024, an increase of $173.8 million, or 32.6%. Purchases during the three months ended March 31, 2025 totaled $190.6 million. There were no purchases of held-to-maturity securities during the three months ended March 31, 2024. Maturities and paydowns of held-to-maturity securities totaled $17.0 million and $14.4 million during the three months ended March 31, 2025 and 2024, respectively.

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Held-to-maturity investment securities are summarized as follows as of the dates indicated:


	March 31, 2025						December 31, 2024
						Weighted						Weighted
	Amortized		Fair		Percent of	average	Amortized		Fair		Percent of	average
	cost		value		portfolio	yield	cost		value		portfolio	yield
Treasury securities	$	49,715	$	49,431	7.0%	3.14%	$	49,639	$	49,159	9.3%	3.14%
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises		262,594		232,140	37.2%	2.30%		271,105		234,286	50.9%	2.31%
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises		394,603		355,234	55.8%	3.25%		212,364		167,941	39.8%	1.58%
Total investment securities held-to-maturity	$	706,912	$	636,805	100.0%	2.89%	$	533,108	$	451,386	100.0%	2.10%

The residential mortgage pass-through and other residential MBS held-to-maturity investment portfolios are comprised of fixed-rate FHLMC, FNMA and GNMA securities.

The fair value of the held-to-maturity investment portfolio included $71.7 million of unrealized losses and $1.6 million of unrealized gains at March 31, 2025. At December 31, 2024, the held-to-maturity investment portfolio included $81.8 million of unrealized losses and $51 thousand of unrealized gains.

The Company does not measure expected credit losses on a financial asset, or groups of financial assets, in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Management evaluated held-to-maturity securities noting they are backed by loans guaranteed by either U.S. government agencies or U.S. government sponsored entities, and management believes that default is highly unlikely given this governmental backing and long history without credit losses. Additionally, management notes that yields on which the portfolio generally trades are based upon market views of prepayment and liquidity risk and not credit risk. The Company has no intention to sell the securities and believes it will not be required to sell the securities before the recovery of their amortized cost.

Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of March 31, 2025 and December 31, 2024 was 4.7 years and 5.6 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 3.8 years and 4.4 years as of March 31, 2025 and December 31, 2024, respectively.

Non-marketable securities

The carrying balances of non-marketable securities are summarized as follows as of the dates indicated:


	March 31, 2025		December 31, 2024
Federal Reserve Bank stock	$	24,062	$	24,062
Federal Home Loan Bank stock		3,625		3,922
Convertible preferred stock		20,508		20,508
Equity method investments		28,007		27,970
Total	$	76,203	$	76,462

Non-marketable securities included FRB stock, FHLB stock, convertible preferred stock and equity method investments. During the three months ended March 31, 2025, purchases of non-marketable securities totaled $15.9 million, and proceeds from redemptions and sales of non-marketable securities totaled $15.7 million. During the three months ended March 31, 2024, purchases of non-marketable securities totaled $10.3 million, and proceeds from redemptions and sales of non-marketable securities totaled $27.1 million. Changes in the Company’s FHLB stock holdings were directly correlated to FHLB line of credit advances and paydowns.

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FRB and FHLB stock

Convertible preferred stock

Non-marketable securities include convertible preferred stock without a readily determinable fair value. During the three months ended March 31, 2025 and 2024, the Company purchased zero and $0.4 million of convertible preferred stock, respectively.

Equity method investments

Non-marketable securities also include equity method investments totaling $26.2 million at March 31, 2025 and December 31, 2024 and equity method investments without a readily determinable fair value totaling $1.8 million at March 31, 2025 and December 31, 2024. Purchases of equity method investments during the three months ended March 31, 2025 and 2024 totaled $0.5 million and $0.6 million, respectively. During the three months ended March 31, 2025 and 2024, the Company recorded net unrealized losses totaling $0.3 million and $0.1 million, respectively, on equity method investments. These gains and losses were recorded in other non-interest income in the Company’s consolidated statements of operations. Carrying values of equity method investments without a readily determinable fair value are updated periodically and impairments may be taken to reflect a new basis. The Company recorded no impairment related to equity method investments without a readily determinable fair value for the three months ended March 31, 2025 or the year ended December 31, 2024.

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Loans overview

At March 31, 2025, our loan portfolio was comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.

The table below shows the loan portfolio composition at the respective dates:


					March 31, 2025 vs.
					December 31, 2024
	March 31, 2025		December 31, 2024		% Change
Originated:
Commercial:
Commercial and industrial	$	1,871,301	$	1,881,570	(0.5)%
Municipal and non-profit		1,116,724		1,106,865	0.9%
Owner-occupied commercial real estate		1,026,692		1,048,481	(2.1)%
Food and agribusiness		251,120		266,332	(5.7)%
Total commercial		4,265,837		4,303,248	(0.9)%
Commercial real estate non-owner occupied		1,136,176		1,123,718	1.1%
Residential real estate		915,139		922,328	(0.8)%
Consumer		11,955		12,773	(6.4)%
Total originated		6,329,107		6,362,067	(0.5)%

Acquired:
Commercial:
Commercial and industrial		105,493		114,255	(7.7)%
Municipal and non-profit		271		277	(2.2)%
Owner-occupied commercial real estate		198,338		215,663	(8.0)%
Food and agribusiness		33,832		36,987	(8.5)%
Total commercial		337,934		367,182	(8.0)%
Commercial real estate non-owner occupied		659,680		688,620	(4.2)%
Residential real estate		318,510		331,510	(3.9)%
Consumer		1,065		1,764	(39.6)%
Total acquired		1,317,189		1,389,076	(5.2)%
Total loans	$	7,646,296	$	7,751,143	(1.4)%

The Company maintains a granular and well-diversified loan portfolio with self-imposed concentration limits. At March 31, 2025, loans totaled $7.6 billion, compared to $7.8 billion at December 31, 2024.

Our commercial and industrial loan portfolio is highly diversified across industry sectors and geography. At March 31, 2025, there were no industry sectors representing more than 15.0% of our total loan portfolio. Key sectors included government/non-profit loans of $827.9 million, or 10.8% of total loans, and health care/hospital loans of $577.5 million, or 7.6% of total loans. The commercial and industrial portfolio also includes loans to companies that operate in the transportation industry. The transportation industry, trucking in particular, has experienced recent economic challenges. As a result of these industry challenges, some of the transportation loans may be subject to higher credit risk. The Company’s exposure to this industry is small, consisting of $186.6 million, or 2.4% of total loans, at March 31, 2025.

Non-owner occupied CRE loans were 149.7% of the Company’s risk based capital, or 23.5% of total loans, and no specific property type comprised more than 10.0% of total loans. The Company maintains little exposure to non-owner occupied CRE retail properties and office properties, comprising 2.0% and 1.3% of total loans, respectively. Multifamily loans totaled $333.8 million, or 4.4% of total loans, as of March 31, 2025.

The agriculture industry continues to be impacted by volatile commodity prices and generally by higher input costs, combining to stress margins. Our food and agribusiness portfolio is 3.7% of total loans and is well-diversified across food production, crop and livestock types. Crop and livestock loans represent 0.9% of total loans. We have maintained relationships with food and agribusiness clients that generally possess low leverage and, correspondingly, low bank debt to assets, minimizing any potential credit losses in the future.

New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan fundings totaled $1.6 billion over the trailing 12 months, led by commercial loan

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fundings of $1.1 billion. Fundings are defined as closed-end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of fundings to better approximate the impact of fundings on loans outstanding and ultimately net interest income.

The following table represents new loan fundings for the periods presented:


	First quarter		Fourth quarter		Third quarter		Second quarter		First quarter
	2025		2024		2024		2024		2024
Commercial:
Commercial and industrial	$	108,594	$	146,600	$	93,711	$	241,910	$	53,978
Municipal and non-profit		12,506		49,175		35,677		28,785		14,564
Owner occupied commercial real estate		37,762		117,850		70,517		102,615		35,128
Food and agribusiness		1,338		15,796		19,205		11,040		(7,204)
Total commercial		160,200		329,421		219,110		384,350		96,466
Commercial real estate non-owner occupied		65,254		119,132		91,809		83,184		73,789
Residential real estate		29,300		30,750		47,322		36,124		29,468
Consumer		970		726		1,010		1,547		234
Total	$	255,724	$	480,029	$	359,251	$	505,205	$	199,957

Included in fundings are net fundings (paydowns) under revolving lines of credit totaling $21,752, $64,375, $16,302, $19,281 and $(59,523) for the dates noted in the table above, respectively.

The tables below show the contractual maturities of our total loans for the dates indicated:


	March 31, 2025
	Due within		Due after 1 but		Due after 5 but		Due after
	1 year		within 5 years		within 15 years		15 years		Total
Commercial:
Commercial and industrial	$	248,744	$	1,402,953	$	314,927	$	10,170	$	1,976,794
Municipal and non-profit		41,842		158,105		617,438		299,610		1,116,995
Owner occupied commercial real estate		154,818		528,869		451,016		90,327		1,225,030
Food and agribusiness		132,032		49,886		88,845		14,189		284,952
Total commercial		577,436		2,139,813		1,472,226		414,296		4,603,771
Commercial real estate non-owner occupied		527,482		850,960		406,721		10,693		1,795,856
Residential real estate		29,979		195,358		282,075		726,237		1,233,649
Consumer		4,630		6,869		1,521		—		13,020
Total loans	$	1,139,527	$	3,193,000	$	2,162,543	$	1,151,226	$	7,646,296


	December 31, 2024
	Due within		Due after 1 but		Due after 5 but		Due after
	1 year		within 5 years		within 15 years		15 years		Total
Commercial:
Commercial and industrial	$	252,560	$	1,415,682	$	316,882	$	10,701	$	1,995,825
Municipal and non-profit		37,020		150,070		619,109		300,943		1,107,142
Owner occupied commercial real estate		117,650		571,133		483,754		91,607		1,264,144
Food and agribusiness		156,834		41,751		90,363		14,371		303,319
Total commercial		564,064		2,178,636		1,510,108		417,622		4,670,430
Commercial real estate non-owner occupied		501,501		860,890		437,674		12,273		1,812,338
Residential real estate		23,654		199,339		291,077		739,768		1,253,838
Consumer		4,967		7,418		2,152		—		14,537
Total loans	$	1,094,186	$	3,246,283	$	2,241,011	$	1,169,663	$	7,751,143

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The stated interest rate (which excludes the effects of non-refundable loan origination and commitment fees, net of costs and the accretion of fair value marks) of total loans with maturities over one year is as follows at the dates indicated:


	March 31, 2025
	Fixed			Variable			Total
			Weighted			Weighted			Weighted
	Balance		average rate	Balance		average rate	Balance		average rate
Commercial:
Commercial and industrial	$	474,316	5.34%	$	1,253,734	7.18%	$	1,728,050	6.67%
Municipal and non-profit⁽¹⁾		1,078,078	4.07%		19,448	5.32%		1,097,526	4.17%
Owner occupied commercial real estate		284,457	4.87%		785,755	7.25%		1,070,212	6.72%
Food and agribusiness		28,655	6.55%		124,265	8.51%		152,920	8.14%
Total commercial		1,865,506	4.62%		2,183,202	7.26%		4,048,708	6.08%
Commercial real estate non-owner occupied		459,963	4.68%		808,411	6.21%		1,268,374	5.66%
Residential real estate		485,494	4.26%		718,176	5.42%		1,203,670	4.95%
Consumer		6,169	6.63%		2,221	7.55%		8,390	6.88%
Total loans with > 1 year maturity	$	2,817,132	4.57%	$	3,712,010	6.68%	$	6,529,142	5.79%


	December 31, 2024
	Fixed			Variable			Total
			Weighted			Weighted			Weighted
	Balance		average rate	Balance		average rate	Balance		average rate
Commercial:
Commercial and industrial	$	513,847	5.62%	$	1,229,419	7.40%	$	1,743,266	6.88%
Municipal and non-profit⁽¹⁾		1,079,285	4.05%		19,535	5.42%		1,098,820	4.19%
Owner occupied commercial real estate		336,279	4.98%		810,215	7.34%		1,146,494	6.77%
Food and agribusiness		31,291	6.65%		115,193	8.49%		146,484	8.10%
Total commercial		1,960,702	4.73%		2,174,362	7.42%		4,135,064	6.19%
Commercial real estate non-owner occupied		476,661	4.71%		834,175	6.29%		1,310,836	5.71%
Residential real estate		501,738	4.27%		728,446	5.32%		1,230,184	4.89%
Consumer		6,917	6.49%		2,654	7.39%		9,571	6.74%
Total loans with > 1 year maturity	$	2,946,018	4.65%	$	3,739,637	6.76%	$	6,685,655	5.86%


(1)		Included in municipal and non-profit fixed-rate loans are loans totaling $346,650 and $348,473 that have been swapped to variable rates at current market pricing at March 31, 2025 and December 31, 2024, respectively. Included in the municipal and non-profit segment are tax-exempt loans totaling $916,820 and $920,425 with an FTE weighted average rate of 4.81% and 4.68% at March 31, 2025 and December 31, 2024, respectively.

Asset quality

Asset quality is fundamental to our success and remains a strong point, driven by our disciplined adherence to our self-imposed concentration limits across industry sector and real estate property type. Accordingly, for the origination of loans, we have established a credit policy that allows for responsive, yet controlled lending with credit approval requirements that are scaled to loan size. Within the scope of the credit policy, each prospective loan is reviewed in order to determine the appropriateness and the adequacy of the loan characteristics and the security or collateral prior to making a loan. We have established underwriting standards and loan origination procedures that require appropriate documentation, including financial data and credit reports. For loans secured by real property, we require property appraisals, title insurance or a title opinion, hazard insurance and flood insurance, in each case where appropriate.

Additionally, we have implemented procedures to timely identify loans that may become problematic in order to ensure the most beneficial resolution for the Company. Asset quality is monitored by our credit risk management department and evaluated based on quantitative and subjective factors such as the timeliness of contractual payments received. Additional factors that are considered, particularly with commercial loans over $500,000, include the financial condition and liquidity of individual borrowers and guarantors, if any, and the value of our collateral. To facilitate the oversight of asset quality, loans are categorized based on the number of days past due and on an internal risk rating system, and both are discussed in more detail below.

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loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Such modified loans are considered TDMs. TDMs may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof. TDMs are discussed further in note 5 of our consolidated financial statements. Assets that have been foreclosed on or acquired through deed-in-lieu of foreclosure are classified as OREO until sold, and are carried at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ACL and any subsequent declines in carrying value charged to impairments on OREO.

Non-performing assets and past due loans

Non-performing assets consist of non-accrual loans and OREO. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during the three months ended March 31, 2025 and 2024 was $0.7 million and $0.6 million, respectively.

Past due status is monitored as an indicator of credit deterioration. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans that are 90 days or more past due are put on non-accrual status unless the loan is well secured and in the process of collection.

The following table sets forth the non-performing assets and past due loans as of the dates presented:


	March 31, 2025		December 31, 2024
Non-accrual loans:
Non-accrual loans, excluding modified loans	$	30,162	$	32,556
Modified loans on non-accrual		4,458		3,438
Non-performing loans		34,620		35,994
OREO		615		662
Total non-performing assets	$	35,235	$	36,656

Loans 30-89 days past due and still accruing interest	$	17,003	$	23,164
Loans 90 days or more past due and still accruing interest		1,012		14,940
Non-accrual loans		34,620		35,994
Total past due and non-accrual loans	$	52,635	$	74,098
Accruing modified loans	$	17,998	$	15,282
Allowance for credit losses		90,192		94,455
Non-performing loans to total loans		0.45%		0.46%
Total 90 days past due and still accruing interest and non-accrual loans to total loans		0.47%		0.66%
Total non-performing assets to total loans and OREO		0.46%		0.47%
ACL to non-performing loans		260.52%		262.42%

During the three months ended March 31, 2025, total non-performing loans decreased $1.4 million, or 3.8%, from December 31, 2024. Loans 30-89 days past due and still accruing interest improved eight basis points to 0.22% of total loans at March 31, 2025, compared to December 31, 2024. Loans 90 days or more past due and still accruing interest improved 18 basis points to 0.01% of total loans at March 31, 2025, compared to December 31, 2024.

Allowance for credit losses

The ACL represents the amount that we believe is necessary to absorb estimated lifetime credit losses inherent in the loan portfolio at the balance sheet date and involves a high degree of judgment and complexity. The Company utilizes a DCF model developed within a third-party software tool to establish expected lifetime credit losses for the loan portfolio. The ACL is calculated as the difference between the amortized cost basis and the projections from the DCF analysis. The DCF model allows for individual lifetime loan cash flow modeling, excluding extensions and renewals, using loan-specific interest rates and repayment schedules including estimated prepayment rates and loss recovery timing delays. The model incorporates forecasts of certain national macro-economic factors, including unemployment rates, HPI, retail sales and GDP, which drive correlated loss rates. The determination and application of the

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ACL accounting policy involves judgments, estimates and uncertainties that are subject to change. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis.

We measure expected credit losses for groups of loans included in segments with similar risk characteristics. We have identified four primary loan segments within the ACL model that are further stratified into 11 loan classes to provide more granularity in analyzing loss history and to allow for more definitive qualitative adjustments based upon specific risk factors affecting each loan class. Generally, the underlying risk of loss for each of these loan segments will follow certain norms/trends in various economic environments. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Following are the loan classes within each of the four primary loan segments:


	Non-owner occupied
Commercial	commercial real estate	Residential real estate	Consumer
Commercial and industrial	Construction	Senior lien	Consumer
Owner occupied commercial real estate	Acquisition and development	Junior lien
Food and agribusiness	Multifamily
Municipal and non-profit	Non-owner occupied

Loans on non-accrual, in bankruptcy and TDMs with a balance greater than $250 thousand are excluded from the pooled analysis and are evaluated individually. If management determines that foreclosure is probable, expected credit losses are evaluated based on the criteria listed below, adjusted for selling costs as appropriate. Typically, these loans consist of commercial, commercial real estate and agriculture loans and exclude homogeneous loans such as residential real estate and consumer loans. Specific allowances are determined by collectively analyzing:


●		the borrower’s resources, ability and willingness to repay in accordance with the terms of the loan agreement;
●		the likelihood of receiving financial support from any guarantors;
●		the adequacy and present value of future cash flows, less disposal costs, of any collateral; and
●		the impact current economic conditions may have on the borrower’s financial condition and liquidity or the value of the collateral.

The resulting ACL for loans is calculated as the sum of the general reserves, specific reserves on individually evaluated loans, and qualitative factor adjustments. While these amounts are calculated by individual loan or by segment and class, the entire ACL is available for any loan that, in our judgment, should be charged off. The determination and application of the ACL accounting policy involves judgments, estimates, and uncertainties that are subject to change. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition, liquidity or results of operations.

At March 31, 2025 and December 31, 2024, the allowance for credit losses totaled $90.2 million and $94.5 million, respectively. The decrease during the three months ended March 31, 2025 was primarily driven by the resolution of non-performing loans and changes in the CECL model’s underlying macro-economic forecast. Specific reserves on loans totaled $6.0 million at March 31, 2025, compared to $6.4 million at December 31, 2024.

Net charge-offs on loans during the three months ended March 31, 2025 totaled $15.1 million and were elevated due to an $8.9 million net charge-off from one credit due to suspected fraud by the borrower, which the Company believes is an isolated circumstance within the loan portfolio. The ratio of annualized net charge-offs to average total loans totaled 0.80%. Net charge-offs on loans during the three months ended March 31, 2024 totaled $0.1 million, and the ratio of annualized net charge-offs to average total loans was minimal.

The Company has elected to exclude AIR from the ACL calculation. As of March 31, 2025 and December 31, 2024, AIR from loans totaled $44.3 million and $41.5 million, respectively. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income.

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Total ACL

After considering the above-mentioned factors, we believe that the ACL of $90.2 million is adequate to cover estimated lifetime losses inherent in the loan portfolio at March 31, 2025. However, it is likely that future adjustments to the ACL will be necessary. Any changes to the underlying assumptions, circumstances or estimates, including but not limited to changes in the underlying macro-economic forecast, used in determining the ACL, could negatively or positively affect the Company’s results of operations, liquidity or financial condition.

The following schedules present, by class stratification, the changes in the ACL during the periods listed:


	As of and for the three months ended
	March 31, 2025			March 31, 2024
	Total ACL		% NCOs⁽¹⁾	Total ACL		% NCOs⁽¹⁾
Beginning allowance for credit losses	$	94,455		$	97,947
Charge-offs:
Commercial		(13,569)	0.72%		(24)	0.00%
Commercial real estate non owner-occupied		(1,467)	0.08%		—	0.00%
Residential real estate		—	0.00%		—	0.00%
Consumer		(215)	0.01%		(254)	0.01%
Total charge-offs		(15,251)			(278)
Recoveries		138			188
Net charge-offs		(15,113)	0.80%		(90)	0.00%
Provision expense for credit losses		10,850			(250)
Ending allowance for credit losses	$	90,192		$	97,607
Ratio of ACL to total loans outstanding at period end		1.18%			1.29%
Ratio of ACL to total non-performing loans at period end		260.52%			272.52%
Total loans	$	7,646,296		$	7,569,052
Average total loans outstanding during the period		7,660,974			7,632,635
Non-performing loans		34,620			35,817


(1)		Ratio of annualized net charge-offs to average total loans.

During the three months ended March 31, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $10.2 million, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded zero provision expense for credit losses on funded loans and unfunded loan commitments during the first quarter of 2024.

The following tables present the allocation of the ACL and the percentage of the total amount of loans in each loan category listed as of the dates presented:


	March 31, 2025
						ACL as a %
	Total loans		% of total loans	Related ACL		of total ACL
Commercial	$	4,603,771	60.2%	$	48,058	53.3%
Commercial real estate non-owner occupied		1,795,856	23.5%		23,494	26.0%
Residential real estate		1,233,649	16.1%		18,307	20.3%
Consumer		13,020	0.2%		333	0.4%
Total	$	7,646,296	100.0%	$	90,192	100.0%

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	December 31, 2024
						ACL as a %
	Total loans		% of total loans	Related ACL		of total ACL
Commercial	$	4,670,430	60.2%	$	48,552	51.4%
Commercial real estate non-owner occupied		1,812,338	23.4%		26,136	27.7%
Residential real estate		1,253,838	16.2%		19,426	20.5%
Consumer		14,537	0.2%		341	0.4%
Total	$	7,751,143	100.0%	$	94,455	100.0%

Deposits

Deposits from banking clients serve as a primary funding source for our banking operations, and our ability to gather and manage deposit levels is critical to our success. Deposits not only provide a lower-cost funding source for our loans, but also provide a foundation for the client relationships that are critical to future loan growth. We maintain a granular and well diversified deposit base with no exposure to venture capital or crypto deposits. The following table presents information regarding our deposit composition at March 31, 2025 and December 31, 2024:


							Increase (decrease)
	March 31, 2025			December 31, 2024			Amount		% Change
Non-interest bearing demand deposits	$	2,215,313	26.3%	$	2,213,685	26.9%	$	1,628	0.1%
Interest bearing demand deposits		1,337,905	15.9%		1,411,860	17.1%		(73,955)	(5.2)%
Savings accounts		620,987	7.4%		619,365	7.5%		1,622	0.3%
Money market accounts		3,191,325	37.9%		2,972,947	36.1%		218,378	7.3%
Total transaction deposits		7,365,530	87.5%		7,217,857	87.6%		147,673	2.0%
Time deposits < $250,000		760,390	9.0%		731,710	8.9%		28,680	3.9%
Time deposits ≥ $250,000		298,287	3.5%		288,326	3.5%		9,961	3.5%
Total time deposits		1,058,677	12.5%		1,020,036	12.4%		38,641	3.8%
Total deposits	$	8,424,207	100.0%	$	8,237,893	100.0%	$	186,314	2.3%

The following table shows uninsured time deposits by scheduled maturity as of March 31, 2025:


	March 31, 2025
Three months or less	$	54,698
Over 3 months through 6 months		36,519
Over 6 months through 12 months		97,816
Thereafter		46,348
Total uninsured time deposits	$	235,381

At March 31, 2025 and December 31, 2024, time deposits that were scheduled to mature within 12 months totaled $814.7 million and $822.6 million, respectively. Of the time deposits scheduled to mature within 12 months at March 31, 2025, $250.8 million were in denominations of $250 thousand or more, and $563.9 million were in denominations less than $250 thousand. Approximately 78% of our total deposits were FDIC insured at March 31, 2025. Additionally, the Company participates in the IntraFi Cash Service program, which allows depositors to receive reciprocal FDIC insurance coverage. The Company had $0.9 billion and $1.0 billion of deposits in the program as of March 31, 2025 and December 31, 2024, respectively.

Long-term debt

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and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.

As part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinate note purchase agreements to issue and sell fixed-to-floating rates totaling $15.0 million. The balance on the notes at March 31, 2025 and December 31, 2024, net of a fair value adjustment related to the acquisition totaling $0.3 million, totaled $14.7 million. Interest expense related to the notes totaling $0.1 million was recorded in the consolidated statements of operations during the three months ended March 31, 2025 and 2024.

Other borrowings

As of March 31, 2025 and December 31, 2024, the Company sold securities under agreements to repurchase totaling $20.7 million and $18.9 million, respectively. In addition, as a member of the FHLB, the Company has access to a line of credit and term financing from the FHLB with total available credit of $1.7 billion at March 31, 2025. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At March 31, 2025 and December 31, 2024, NBH Bank had $80.0 million and $50.0 million, respectively, of outstanding borrowings with the FHLB. The Company may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged at March 31, 2025 or December 31, 2024. Loans pledged were $2.5 billion and $2.6 billion at March 31, 2025 and December 31, 2024, respectively. The Company incurred $1.1 million and $3.2 million of interest expense related to FHLB advances or other short-term borrowings for the three months ended March 31, 2025 and 2024, respectively.

Regulatory Capital

Our subsidiary banks and the holding company are subject to the regulatory capital adequacy requirements of the Federal Reserve Board and the FDIC, as applicable. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly further discretionary actions by regulators that could have a material adverse effect on us. At March 31, 2025 and December 31, 2024, our subsidiary banks and the consolidated holding company exceeded all capital ratio requirements under prompt corrective action and other regulatory requirements, as further detailed in note nine of our consolidated financial statements.

Results of Operations

Our net income depends largely on net interest income, which is the difference between interest income from interest earning assets and interest expense on interest bearing liabilities. Our results of operations are also affected by provisions for credit losses and non-interest income, such as service charges, bank card income, swap fee income, and gain on sale of mortgages. Our primary operating expenses, aside from interest expense, consist of salaries and benefits, occupancy costs, telecommunications data processing expense, FDIC deposit insurance and intangible assets amortization. Any expenses related to the resolution of problem assets are also included in non-interest expense.

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Overview of results of operations

Net income totaled $24.2 million and $31.4 million, or $0.63 and $0.82 per diluted share, during the three months ended March 31, 2025 and 2024, respectively. The decrease compared to the prior year was largely driven by higher provision expense of $10.2 million recorded during the first quarter of 2025 as a result of suspected fraud by the borrower. Fully taxable equivalent pre-provision net revenue increased $1.4 million to $42.0 million. The return on average tangible assets was 1.09% and 1.39% during the three months ended March 31, 2025 and 2024, respectively, and the return on average tangible common equity was 10.64% and 15.14%, respectively.

Net interest income

We regularly review net interest income metrics to provide us with indicators of how the various components of net interest income are performing. We regularly review: (i) our loan mix and the yield on loans; (ii) the investment portfolio and the related yields; (iii) our deposit mix and the cost of deposits; and (iv) net interest income simulations for various forecast periods.

The effects of trade-date accounting of investment securities for which the cash had not settled are not considered interest earning assets and are excluded from this presentation for timeframes prior to their cash settlement, as are the market value adjustments on the investment securities available-for-sale and loans.

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The table below presents the components of net interest income on an FTE basis for the three months ended March 31, 2025 and 2024.


	For the three months ended					For the three months ended
	March 31, 2025					March 31, 2024
	Average balance		Interest		Average rate	Average balance		Interest		Average rate
Interest earning assets:
Originated loans FTE^(1)(2)(3)	$	6,335,931	$	102,221	6.54%	$	6,046,849	$	100,914	6.71%
Acquired loans		1,351,726		19,547	5.86%		1,611,521		24,289	6.06%
Loans held for sale		19,756		349	7.16%		12,017		225	7.53%
Investment securities available-for-sale		716,938		4,617	2.58%		751,168		4,103	2.18%
Investment securities held-to-maturity		635,961		4,120	2.59%		579,160		2,514	1.74%
Other securities		31,386		480	6.12%		35,036		616	7.03%
Interest earning deposits		48,206		539	4.53%		91,579		763	3.35%
Total interest earning assets FTE⁽²⁾	$	9,139,904	$	131,873	5.85%	$	9,127,330	$	133,424	5.88%
Cash and due from banks	$	77,237				$	102,583
Other assets		794,374					756,230
Allowance for credit losses		(95,492)					(97,882)
Total assets	$	9,916,023				$	9,888,261
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits	$	5,027,052	$	32,511	2.62%	$	4,947,811	$	36,413	2.96%
Time deposits		1,035,983		8,756	3.43%		990,041		7,584	3.08%
Federal Home Loan Bank advances		107,151		1,105	4.18%		228,236		3,181	5.61%
Other borrowings⁽⁴⁾		50,277		382	3.08%		18,929		6	0.13%
Long-term debt, net		54,539		518	3.85%		54,229		518	3.84%
Total interest bearing liabilities	$	6,275,002	$	43,272	2.80%	$	6,239,246	$	47,702	3.07%
Demand deposits	$	2,197,300				$	2,280,997
Other liabilities		119,806					141,735
Total liabilities		8,592,108					8,661,978
Shareholders’ equity		1,323,915					1,226,283
Total liabilities and shareholders’ equity	$	9,916,023				$	9,888,261
Net interest income FTE⁽²⁾			$	88,601				$	85,722
Interest rate spread FTE⁽²⁾					3.05%					2.81%
Net interest earning assets	$	2,864,902				$	2,888,084
Net interest margin FTE⁽²⁾					3.93%					3.78%
Average transaction deposits	$	7,224,352				$	7,228,808
Average total deposits		8,260,335					8,218,849
Ratio of average interest earning assets to average interest bearing liabilities		145.66%					146.29%


(1)		Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)		Presented on an FTE basis using the statutory tax rate of 21% for all periods presented. The taxable equivalent adjustments included above are $1,910 and $1,692 for the three months ended March 31, 2025 and 2024, respectively.
(3)		Loan fees included in interest income totaled $3,323 and $2,951 for the three months ended March 31, 2025 and 2024, respectively.
(4)		Other borrowings includes securities sold under agreements to repurchase and cash collateral received from counterparties in connection with derivative swap agreements.

Net interest income totaled $86.7 million and $84.0 million during the three months ended March 31, 2025 and 2024, respectively. Net interest income on an FTE basis totaled $88.6 million and $85.7 million during the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, the FTE net interest margin widened 15 basis points to 3.93%, compared to the three months ended March 31, 2024 as a result of our disciplined loan and deposit pricing over the last twelve months as the Fed lowered rates. The yield on earning assets decreased three basis points, driven by a decrease in loan yields. During the three months ended March 31, 2025, the cost of funds improved 18 basis points to 2.07%, compared to the three months ended March 31, 2024.

Average loans comprised $7.7 billion, or 84%, of total average interest earning assets during the three months ended March 31, 2025, and 2024.

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Average investment securities comprised 14.8% and 14.6% of total interest earning assets during the three months ended March 31, 2025 and 2024, respectively. Average interest bearing cash balances totaled $48.2 million during the three months ended March 31, 2025, compared to $91.6 million for the same period in the prior year.

Average interest bearing liabilities increased $35.8 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was primarily driven by higher interest bearing demand, savings and money market deposits totaling $79.2 million, other borrowings totaling $31.3 million and time deposits totaling $45.9 million. The increase was partially offset by decreases in FHLB advances totaling $121.1 million.

The following table summarizes the changes in net interest income on an FTE basis by major category of interest earning assets and interest bearing liabilities, identifying changes related to volume and changes related to rates for the three months ended March 31, 2025, compared to the three months ended March 31, 2024:


	Three months ended March 31, 2025
	compared to
	Three months ended March 31, 2024
	Increase (decrease) due to
	Volume		Rate		Net
Interest income:
Originated loans FTE^(1)(2)(3)	$	4,664	$	(3,357)	$	1,307
Acquired loans		(3,757)		(985)		(4,742)
Loans held for sale		137		(13)		124
Investment securities available-for-sale		(220)		734		514
Investment securities held-to-maturity		368		1,238		1,606
Other securities		(56)		(80)		(136)
Interest earning deposits		(485)		261		(224)
Total interest income	$	651	$	(2,202)	$	(1,551)
Interest expense:
Interest bearing demand, savings and money market deposits	$	512	$	(4,414)	$	(3,902)
Time deposits		388		784		1,172
Other borrowings⁽⁴⁾		238		138		376
Long-term debt, net		3		(3)		—
Federal Home Loan Bank advances		(1,249)		(827)		(2,076)
Total interest expense		(108)		(4,322)		(4,430)
Net change in net interest income	$	759	$	2,120	$	2,879


(1)		Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)		Presented on an FTE basis using the statutory tax rate of 21% for all periods presented. The taxable equivalent adjustments included above are $1,910 and $1,692 for the three months ended March 31, 2025 and 2024, respectively.
(3)		Loan fees included in interest income totaled $3,323 and $2,951 for the three months ended March 31, 2025 and 2024, respectively.
(4)		Other borrowings includes securities sold under agreements to repurchase and cash collateral received from counterparties in connection with derivative swap agreements.

Below is a breakdown of average deposits and the average rates paid during the periods indicated:


	For the three months ended
	March 31, 2025			March 31, 2024
			Average			Average
	Average		rate	Average		rate
	balance		paid	balance		paid
Non-interest bearing demand	$	2,197,300	0.00%	$	2,280,997	0.00%
Interest bearing demand		1,356,864	2.41%		1,417,972	2.99%
Money market accounts		3,044,138	3.04%		2,873,648	3.42%
Savings accounts		626,050	1.04%		656,191	0.86%
Time deposits		1,035,983	3.43%		990,041	3.08%
Total average deposits	$	8,260,335	2.03%	$	8,218,849	2.15%

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Provision for credit losses

The provision for credit losses represents the amount of expense that is necessary to bring the ACL to a level that we deem appropriate to absorb estimated lifetime losses inherent in the loan portfolio and estimated losses inherent in unfunded loans as of the balance sheet date. The determination of the ACL, and the resultant provision for credit losses, is subjective and involves significant estimates and assumptions.

The Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $10.2 million for the three months ended March 31, 2025, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. During the three months ended March 31, 2024, the Company recorded zero provision expense for credit losses on funded loans and unfunded loan commitments. The allowance for credit losses totaled 1.18% and 1.29% of total loans at March 31, 2025 and 2024.

Non-interest income

The table below details the components of non-interest income for the periods presented:


	For the three months ended March 31,				2025 vs 2024
					Increase (decrease)
	2025		2024		Amount		% Change
Service charges	$	4,118	$	4,391	$	(273)	(6.2)%
Bank card fees		4,194		4,578		(384)	(8.4)%
Mortgage banking income		3,315		2,655		660	24.9%
Bank-owned life insurance income		764		733		31	4.2%
Other non-interest income		2,985		5,337		(2,352)	(44.1)%
Total non-interest income	$	15,376	$	17,694	$	(2,318)	(13.1)%

Non-interest income totaled $15.4 million for the three months ended March 31, 2025, compared to $17.7 million for the three months ended March 31, 2024. The decrease was primarily due to $2.4 million lower other non-interest income driven by timing on SBA gain on loan sales, swap fee income activity and a $0.6 million gain from the sale of a banking center building included in the first quarter of 2024.

Non-interest expense

The table below details the components of non-interest expense for the periods presented:


	For the three months ended March 31,				Three months
					Increase (decrease)
	2025		2024		Amount		% Change
Salaries and benefits	$	34,362	$	36,520	$	(2,158)	(5.9)%
Occupancy and equipment		10,837		9,941		896	9.0%
Data processing		4,401		4,066		335	8.2%
Marketing and business development		946		962		(16)	(1.7)%
FDIC deposit insurance		1,326		1,345		(19)	(1.4)%
Bank card expenses		1,103		1,349		(246)	(18.2)%
Professional fees		1,423		1,646		(223)	(13.5)%
Other non-interest expense		5,642		4,997		645	12.9%
Other intangible assets amortization		1,977		2,008		(31)	(1.5)%
Total non-interest expense	$	62,017	$	62,834	$	(817)	(1.3)%

During the three months ended March 31, 2025, non-interest expense decreased $0.8 million, or 1.3%, compared to the three months ended March 31, 2024. Salaries and benefits decreased $2.2 million primarily due to payroll tax credits realized during the first quarter of 2025, which was partially offset by increases in occupancy and equipment and data processing totaling $1.2 million, driven by investments in technology.

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Income taxes

Income tax expense totaled $5.6 million and $7.5 million for the three months ended March 31, 2025 and 2024, respectively. The decrease over the prior period was driven by lower pre-tax income. The effective tax rate for the three months ended March 31, 2025 and 2024 was 18.8% and 19.3%, respectively.

Additional information regarding income taxes can be found in note 19 of our audited consolidated financial statements in our 2024 Annual Report on Form 10-K.

Liquidity and Capital Resources

Liquidity

Liquidity risk management is an important element in our asset/liability management. The Company maintains a robust liquidity profile at its holding company and the Banks collectively as well as separately. The Company is prudently managing liquidity in the current environment and maintains a liquidity profile focused on core deposits and stable long-term funding sources. Liquidity is supplemented with a variety of secured and unsecured wholesale funding sources across the maturity spectrum, which allows for the effective management of concentration and rollover risk. The Company’s corporate treasury team measures liquidity needs through daily cash monitoring, weekly cash projections and monthly liquidity measures reviewed in conjunction with Board-approved liquidity policy limits. The Company also regularly conducts stress tests to its Board-approved contingency funding plan to assess potential liquidity outflows or funding concerns resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into the contingency funding plan, which provides the basis for the identification of our liquidity needs and are monitored monthly by our Asset and Liability Committee.

The Company’s primary sources of funds include revenue from interest income and noninterest income as well as cash flows from loan repayments, payments from securities related to maturities and amortization, the sale of loans, and funds generated by core deposits, in addition to the use of private debt offerings.

On-balance sheet liquidity is represented by our cash and cash equivalents, and unencumbered investment securities, and is detailed in the table below as of March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
Cash and due from banks	$	246,298	$	127,848
Unencumbered investment securities, at fair value		556,176		319,949
Total	$	802,474	$	447,797

Total on-balance sheet liquidity increased $354.7 million at March 31, 2025, compared to December 31, 2024, due to higher unencumbered investment securities of $236.2 million and higher cash and due from banks of $118.5 million. As of March 31, 2025, approximately $714.1 million of investment securities were pledged to secure client deposits and repurchase agreements.

The Company’s investment portfolio remains positioned in liquid and readily marketable instruments and is a significant source of on-balance sheet collateral to secure borrowing capacity. Our investment securities portfolio is evaluated under established Asset and Liability Committee objectives and is structured as a liquidity portfolio, and only security fair values are used for the liquidity assessment. The fair value of total investment securities was $1.3 billion at March 31, 2025, compared to $1.0 billion at December 31, 2024. As of March 31, 2025, the fair value was inclusive of pre-tax net unrealized losses of $79.9 million on the available-for-sale securities portfolio. Additionally, our held-to-maturity securities portfolio had $71.7 million of pre-tax net unrealized losses. The gross unrealized gains and losses are detailed in note 3 of our consolidated financial statements. As of March 31, 2025, our investment securities portfolio consisted primarily of MBS, all of which were issued or guaranteed by U.S. government agencies or sponsored enterprises. The anticipated repayments and marketability of these securities offer substantial resources and flexibility to meet new loan demand, reinvest in the investment securities portfolio, or provide optionality for reductions in our deposit funding base. At March 31, 2025, the duration of the investment securities portfolio was 3.9 years and the weighted average life was 4.7 years.

As part of its liquidity management activities, the Company pledges collateral at its secured funding providers to ensure immediate availability of funding, which includes maintaining borrowing capacity at both the FHLB and the Federal Reserve. The Company does

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not consider borrowing capacity at the Federal Reserve a primary source of funding; however, it could be used as a potential source of funds in a stressed environment or during a market disruption. The amount of available contingent secured borrowing capacity may fluctuate based on the level of borrowings outstanding and level of assets pledged. The table below details those amounts as of the dates shown:


	March 31, 2025		December 31, 2024
Available FHLB borrowing capacity	$	1,652,991	$	1,697,259
Federal Reserve Bank discount window		808,616		880,892
Total off-balance sheet funds available	$	2,461,607	$	2,578,151

The Company had pledged $2.5 billion and $2.6 billion of loans as collateral to the FHLB at March 31, 2025 and December 31, 2024, respectively. FHLB borrowing capacity totaled $1.7 billion at March 31, 2025 and December 31, 2024. At March 31, 2025, outstanding FHLB borrowings totaled $80.0 million, leaving undrawn borrowing capacity of $1.7 billion. At December 31, 2024, the Company had $50.0 million of outstanding borrowings with the FHLB, leaving undrawn borrowing capacity of $1.7 billion. At March 31, 2025, the Company’s available secured and committed borrowing capacity at the FHLB and Federal Reserve totaled $2.5 billion, compared to $2.6 billion at December 31, 2024.

In addition to core deposit and secured funding, the Company also accesses a variety of other short-term and long-term unsecured funding sources, which includes access to Cambr platform deposits, multiple brokered deposit platform options and lines of credit. Management does not rely on any one source of liquidity and manages availability in response to changing balance sheet needs, as well as within prudently defined concentration and policy limits. The Company executes periodic test trades to assess the level of access and operational processes associated with its secured and unsecured funding sources.

We anticipate that the sources of funds discussed above will provide adequate funding and liquidity for at least a 12-month period and the foreseeable future, and we may utilize any combination of these funding sources for long-term liquidity needs if deemed prudent.

Our primary uses of funds are loan fundings, investment security purchases, withdrawals of deposits, capital expenditures, operating expenses, and share repurchases.

At present, financing activities primarily consist of changes in deposits and repurchase agreements, and advances from the FHLB, in addition to the payment of dividends and the repurchase of our common stock. Maturing time deposits represent a potential use of funds. As of March 31, 2025, $814.7 million of time deposits were scheduled to mature within 12 months. Based on the current interest rate environment and market conditions, our consumer banking strategy is to focus on attracting and maintaining both lower-cost transaction accounts and time deposits.

During 2021, the Company entered into a subordinated note purchase agreement to issue and sell a fixed-to-floating note. The Company deployed the net proceeds from the sale of the note for general corporate purposes. The note is not subject to redemption at the option of the holder. Additionally, as part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinated note purchase agreements to issue and sell fixed-to-floating rate notes. The balance on all subordinated notes totaled $54.6 million at March 31, 2025. At December 31, 2024, the balance on the notes, totaled $54.5 million.

Capital

Under the Basel III requirements, at March 31, 2025, the Company, NBH Bank and BOJHT met all capital adequacy requirements, and the Banks had regulatory capital ratios in excess of the levels established for well-capitalized institutions. For more information on regulatory capital, see note 9 in our consolidated financial statements.

Our shareholders’ equity is impacted by earnings, changes in unrealized gains and losses on securities, net of tax, stock-based compensation activity, share repurchases, shares issued in connection with acquisitions and the payment of dividends.

The Board of Directors has from time to time authorized multiple programs to repurchase shares of the Company’s common stock either in open market or in privately negotiated transactions in accordance with applicable regulations of the SEC. On May 9, 2023, the Company’s Board of Directors authorized a new program to repurchase up to $50.0 million of the Company’s stock. The remaining authorization under the program as of March 31, 2025 was $50.0 million.

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On April 30, 2025, our Board of Directors declared a quarterly dividend of $0.30 per common share, payable on June 13, 2025 to shareholders of record at the close of business on May 30, 2025.

Asset/Liability Management and Interest Rate Risk

The Board of Directors meets as often as necessary, but no less than quarterly, to review financial statements, public filings, significant accounting policy changes, liquidity, interest rate risk and asset and liability management. The Board also oversees the performance of our internal audit function as well as serves as an independent and objective body to monitor and assess our compliance with legal and regulatory requirements as well as internal control systems. Management and the Board of Directors are responsible for managing interest rate risk and employing risk management policies that monitor and limit this exposure. Interest rate risk is measured using net interest income simulations and market value of portfolio equity analyses. These analyses use various assumptions, including the nature and timing of interest rate changes, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, and reinvestment/replacement of asset and liability cash flows.

Interest rate risk results from the following:


●		Repricing risk — timing differences in the repricing and maturity of interest-earning assets and interest bearing liabilities;
●		Option risk — changes in the expected maturities of assets and liabilities, such as borrowers’ ability to prepay loans at any time and depositors’ ability to redeem certificates of deposit before maturity;
●		Yield curve risk — changes in the yield curve where interest rates increase or decrease in a nonparallel fashion; and
●		Basis risk — changes in spread relationships between different yield curves.

The Asset Liability Committee, a cross-functional committee comprised of executive management and senior leaders, meets monthly to review, among other things, the sensitivity of the Company’s assets and liabilities to interest rate changes, local and national market conditions and interest rates. The Asset Liability Committee also reviews the liquidity, capital, deposit mix, loan mix and investment positions of the Company. The Company’s principal objective regarding asset and liability management is to evaluate interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while preserving adequate levels of liquidity and capital.

Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in net interest margin. These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and utilize various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows.

We also analyze the economic value of equity as a secondary measure of interest rate risk. This is a complementary measure to net interest income where the calculated value is the result of the market value of assets less the market value of liabilities. The economic value of equity is a longer term view of interest rate risk because it measures the present value of the future cash flows. The impact of changes in interest rates on this calculation is analyzed for the risk to our future earnings and is used in conjunction with the analyses on net interest income.

Our interest rate risk model indicated that the Company was in a fairly neutral position in terms of interest rate sensitivity at March 31, 2025. The table below illustrates the impact of an immediate and sustained 200 and 100 basis point increase and a 100 and 200 basis point decrease in interest rates on net interest income based on the interest rate risk model at March 31, 2025 and December 31, 2024:


Hypothetical
shift in interest	% change in projected net interest income
rates (in bps)	March 31, 2025	December 31, 2024
200	2.27%	1.72%
100	1.17%	0.87%
(100)	(1.48)%	(1.05)%
(200)	(2.93)%	(2.11)%

Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve. The computations of interest rate risk shown above do not include actions that management may undertake to manage the risks

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in response to anticipated changes in interest rates and actual results may also differ due to any actions taken in response to the changing rates.

As part of the asset/liability management strategy to manage primary market risk exposures expected to be in effect in future reporting periods, management has executed interest rate derivatives primarily using floors and collars. For further discussion of the Company’s derivative contracts refer to note 14. The strategy with respect to liabilities has been to continue to emphasize transaction deposit growth, particularly non-interest or low interest bearing non-maturing deposit accounts while building long-term client relationships. Non-maturing deposit accounts totaled 87.4% of total deposits at March 31, 2025, compared to 87.6% at December 31, 2024.

Impact of Inflation and Changing Prices

An inflationary environment may impact our financial performance and may impact our clients, including but not limited to impacts on assets, earnings, capital levels and growth opportunities. While we plan to continue our disciplined approach to expense management, an inflationary environment may cause wage pressures and general increases in our cost of doing business, which may increase our non-interest expense.

Unlike most industrial companies, virtually all of our assets and liabilities are monetary in nature. As a result, changes in interest rates have a more significant impact on our performance than do changes in the general rate of inflation and changes in prices. Interest rate changes do not necessarily move in the same direction, nor have the same magnitude, as changes in the prices of goods and services.

Off-Balance Sheet Activities

In the normal course of business, we are a party to various contractual obligations, commitments and other off-balance sheet activities that contain credit, market, and operational risk that are not required to be reflected in our consolidated financial statements. The most significant of these are the loan commitments that we enter into to meet the financing needs of clients, including commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. As of March 31, 2025 and December 31, 2024, we had loan commitments totaling $1.3 billion and $1.4 billion, respectively, and standby letters of credit totaling $12.6 million and $10.8 million, respectively. Unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information called for by this item is provided under the caption Asset/Liability Management and Interest Rate Risk in Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

Item 4. CONTROLS AND PROCEDURES.

Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as of March 31, 2025. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.

During the most recently completed fiscal quarter, there were no changes made in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

From time to time, we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.

Item 1A. RISK FACTORS.

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


					Maximum
				Total number of	approximate dollar
				shares purchased	value of shares
				as part of publicly	that may yet be
	Total number	Average price		announced plans	purchased under the
Period	of shares purchased	paid per share		or programs	plans or programs⁽²⁾
February 1 - February 28, 2025⁽¹⁾	817	$	42.57	—		50,000,000
March 1 - March 31, 2025⁽¹⁾	20,974		41.87	—		50,000,000
Total	21,791		41.90	—


(1)		Represents shares purchased other than through publicly announced plans purchased pursuant to the Company’s stock incentive plans at the then current market value in satisfaction of stock option exercise prices, settlements of restricted stock and tax withholdings.
(2)		On May 9, 2023, the Company’s Board of Directors authorized a new program to repurchase up to $50.0 million of the Company’s stock from time to time in either the open market or through privately negotiated transactions. The remaining authorization under the program as of March 31, 2025 was $50.0 million.

Item 5. OTHER INFORMATION.

None.

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Item 6. EXHIBITS.


3.1		Second Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our Form S-1 Registration Statement (Registration No. 333-177971), filed August 22, 2012)

3.2		Second Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, filed November 7, 2014)

10.1		Employment Agreement, dated January 22, 2025, by and between Daniel Sznewajs and National Bank Holdings Corporation (filed herewith)

31.1		Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certifications of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation

101.DEF		XBRL Taxonomy Extension Definition

101.LAB		XBRL Taxonomy Extension Labels

101.PRE		XBRL Taxonomy Extension Presentation

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

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

National Bank Holdings Corporation



By	/s/ Nicole Van Denabeele
	Nicole Van Denabeele
	Chief Financial Officer
	(principal financial officer)

Date: April 30, 2025