Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. All of such forward-looking statements are expressly qualified by reference to the cautionary statements provided under the caption “Cautionary Note Regarding Forward-Looking Statements” included on page 1 in Part I of this report. Furthermore, a number of known and unknown factors may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. Therefore, you are encouraged to read in its entirety the information provided under the caption “Risk Factors” included under Item 1A in Part I of this report for a discussion of risk factors that may negatively impact our expected results, performance, or achievements discussed below.
Non-GAAP Financial Measures
In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”) in the United States, this document contains non-GAAP financial measures where management believes it would be helpful to understand our results of operations or financial position. The Company’s management believes that the non-GAAP financial measures provide additional information about ongoing operations and enhance comparability of results of operations with prior periods by presenting financial results without the impact of items or events that may obscure trends in the Company’s underlying performance. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.
Fully-Taxable Equivalent Basis. The Company adjusts its net interest income to include its interest income on a fully-taxable equivalent (FTE) basis and further adjusts to exclude purchase accounting interest accretion on acquired loans. Interest income, yields, and ratios on an FTE basis are considered non-GAAP financial measures. Net interest margin (FTE) is calculated as annualized net interest income on an FTE basis divided by average earning assets. Management believes net interest income on an FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent. These measures are considered standard measures of comparison within the banking industry. We encourage readers to consider the Consolidated Financial Statements and other financial information contained in this Form 10-K in their entirety, and not to rely on any single financial measure. See Non-GAAP Financial Measures included herein for a reconciliation to the most directly comparable GAAP financial measures.
Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that other companies might calculate these measures differently. These non-GAAP disclosures should not be considered an alternative to the Company’s GAAP results.
Executive Overview
We are a financial and bank holding company headquartered in Billings, Montana. As of December 31, 2025, we had consolidated assets of $26.6 billion, deposits of $22.1 billion, loans held for investment of $15.2 billion, and total stockholders’ equity of $3.4 billion.
As of December 31, 2025, we operated 289 banking offices, including branches and detached drive-up facilities, in communities across twelve states— Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming. Through our bank subsidiary, First Interstate Bank, we deliver a comprehensive range of banking products and services—including online and mobile banking—to individuals, businesses, government entities, and others throughout our market areas. We are proud to provide financial services and products to clients that participate in a wide variety of industries, including:
• Agriculture
• Healthcare
• Professional services
• Technology
• Construction
• Hospitality
• Real Estate Development
• Tourism
• Education
• Housing
• Retail
• Wholesale trade
• Governmental services
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Our Business
Our principal business activity is lending to, accepting deposits from, and conducting financial transactions for individuals, businesses, governmental entities, and other entities located in the communities we serve. We derive our income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on fixed income investments. We also derive income from noninterest sources such as: (i) fees received in connection with various lending and deposit services; (ii) wealth management services, such as trust, employee benefit, investment, and insurance services; (iii) mortgage loan originations, sales, and servicing; (iv) merchant and electronic banking services; and (v) from time-to-time, gains on sales of assets and securities.
Our principal expenses include: (i) interest expense on deposit accounts and other borrowings; (ii) salaries and employee benefits; (iii) information technology and communication costs primarily associated with maintaining loan and deposit functions; (iv) furniture, equipment, and occupancy expenses for maintaining our facilities; (v) professional fees, including FDIC insurance assessments; (vi) income tax expense; (vii) provisions for credit losses; (viii) intangible amortization; (ix) other real estate owned expenses; and (x) other segment expenses including advertising and promotion, donations, credit card rewards expense, fees associated with originating and closing loans, insurance, and other expenses necessary to support our employees and service our clients. From time to time, we have incurred, and may incur in the future, costs related to our strategic acquisitions, divestitures and other transactions.
Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed, adjustable, and variable rate loans. Our real estate loans comprise commercial real estate, construction (including residential, commercial, and land development construction loans), residential, agricultural, and other real estate loans. Fluctuations in the loan portfolio are directly related to the economies of the communities we serve. While each loan we originate must meet minimum underwriting standards we establish through our credit policies, our bankers are granted limited discretion to approve and price loans within pre-approved limits which assures that we are responsive to community needs in each market area and remain competitive. We fund our loan portfolio primarily with the core deposits from our clients. Historically, we have not relied on brokered deposits as a source of funding. We have also utilized wholesale funding sources to a limited extent. For additional information about our underwriting standards and loan approval process, see “Business—Lending Activities,” included in Part I, Item 1 of this report.
Recent Trends and Developments
Our community banking footprint spans across the Rocky Mountain, Pacific Northwest, and Midwest regions of the U.S.
Indirect Loans
In January 2025, we announced our plans to stop originating indirect loans as of February 28, 2025. Under our indirect lending program, indirect loans were created when we purchased consumer loan contracts advanced for the purchase of automobiles, boats, recreational vehicles, and other consumer goods from the consumer product dealer network within the market areas we serve. At December 31, 2025, indirect loans represented approximately 3.1% of loan balances and 78.4% of our consumer loan portfolio.
Sale of Arizona and Kansas Branches
On October 10, 2025, the Bank closed the previously disclosed transaction with Enterprise Bank & Trust (“Enterprise Bank”), a wholly-owned subsidiary of Enterprise Financial Services Corp, pursuant to which Enterprise Bank acquired twelve branches from the Bank, including approximately $641.6 million in deposits and certain commercially-oriented loans with outstanding balances of $291.5 million, and the owned real estate and fixed and other assets associated with the branches. The branches included all of the Bank’s Kansas and Arizona locations, with ten branches in Arizona and two branches in Kansas.
Consumer Credit Card Outsourcing
In June 2025, we completed the outsourcing of our consumer credit card portfolio resulting in the sale of $74.2 million of consumer credit card loans and recognition of a $4.3 million gain, net of the related consumer credit card rewards liability.
2020 Subordinated Notes Redemption
On August 15, 2025, the Company redeemed in full the outstanding $100.0 million of aggregate principal amount of its 5.25% fixed-to-floating rate subordinated notes due 2030 (the “2020 Subordinated Notes”) without any prepayment penalty, at a redemption price of 100% of the principal amount plus accrued and unpaid interest to, but excluding, August 15, 2025.
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Redemption of Trust Preferred Securities
On October 7, 2025, the Company redeemed in full the trust securities of HF Financial Capital Trust III (“Trust XI”) at a redemption price of 100% of the principal amount of the issued and outstanding debt securities plus accrued and unpaid interest through October 6, 2025. The redemption included all of the outstanding debt securities ($5.2 million aggregate principal amount) which obligated the issuer trust to concurrently redeem all of the outstanding trust securities ($5.0 million capital securities and $0.2 million common securities).
On October 8, 2025, the Company redeemed in full the trust securities of HF Trust IV (“Trust XII”) at a redemption price of 100% of the principal amount of the issued and outstanding debt securities plus accrued and unpaid interest through October 7, 2025. The redemption included all of the outstanding debt securities ($7.2 million aggregate principal amount) which obligated the issuer trust to concurrently redeem all of the outstanding trust securities ($7.0 million capital securities and $0.2 million common securities).
Pending Sale of Certain Nebraska Branches
As previously disclosed, on October 16, 2025, the Bank entered into a Purchase and Assumption Agreement with Security First Bank (“Security First”) pursuant to which Security First will acquire eleven Nebraska branches from the Bank. The Purchase and Assumption Agreement provides for the transfer by the Bank to Security First of the facilities and other associated assets of the branches, consisting of approximately $72.5 million in loans and $303.5 million of deposits at December 31, 2025. Consummation of the transaction is subject to regulatory approvals and other customary conditions to closing. It is currently anticipated that the closing of the transaction will take place in the second quarter of 2026.
Closure of Four Nebraska Branches
As previously announced, following a strategic review as discussed in Part I, Item 1. “Business”, the Company intends to close four additional branches in Nebraska at the end of February 2026. These branch closures are intended to enhance operational efficiency and better position the Company for long-term success. Subsequent to the pending sale of eleven Nebraska branches and the pending closure of these four branches, the Company will have 29 branches remaining in Nebraska.
Closure and Exit of North Dakota and Minnesota Branches; Branch Opening in Montana
As previously announced, following a strategic review, as discussed in Part I, Item 1. “Business”, the Company intends to exit the States of North Dakota and Minnesota at the end of February 2026, by closing the single branch location in each of those states. One branch in Billings, Montana opened in February 2026.
Economic Conditions
The Company has ample liquidity, and its capital ratios exceed all regulatory requirements to be deemed “well-capitalized” as of December 31, 2025. Our deposit base is diversified, including by depositor, which includes individuals, businesses across multiple industries, governmental units, and other entities, as well as geographically, across the communities we serve.
As of December 31, 2025, our FDIC insured deposits were 63.8% of total deposits, including accounts eligible for pass-through insurance. As of February 19, 2026, the Bank had available borrowing capacity of $5.0 billion with the Federal Home Loan Bank (“FHLB”) and $3.9 billion with the Federal Reserve Bank (“FRB”) based on pledged investment securities and loan collateral.
With general inflationary pressures easing since July 2023, the Federal Reserve had paused any further changes to short-term interest rates until September 2024 and then decreased them by a total of 100 basis points in 2024 and an additional 75 basis points in 2025.
The Company’s quarterly yield on interest earning assets decreased to 4.67% as of December 31, 2025 from 4.73% as of September 30, 2025, and decreased from 4.86% as of December 31, 2024.
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The recent declines in short-term interest rates have benefited the Company’s cost of funds, primarily resulting in reduced rates on variable rate debt and deposits. The Company’s cost of funds decreased to 1.35% during the three months ended December 31, 2025, from 1.45% during the three months ended September 30, 2025, and decreased from 1.72% during the three months ended December 31, 2024. During the fourth quarter of 2025, the changes in the mix and cost of funds was partially offset by the change in the mix and yield on earning assets, resulting in an increase of the Company’s net interest margin during the three months ended December 31, 2025 to 3.36% from 3.34% during the three months ended September 30, 2025 and from 3.18% for the three months ended December 31, 2024. The Company’s FTE net interest margin, a non-GAAP financial measure, increased to 3.38% during the three months ended December 31, 2025, from 3.36% during the three months ended September 30, 2025, and increased from 3.20% during the three months ended December 31, 2024. For annual comparisons refer to “Results of Operations – Net Interest Income” included in this report below.
The Company expects to see continued volatility in the economic markets, which may include recessionary signs in the economy resulting from, among other things, uncertain conditions due to changes in U.S. policies like the implementation of new tariffs, retaliatory tariffs, and other trade policies. These uncertain conditions could have adverse impacts on the balance sheet and income statement of the Company during 2026.
A slowdown, downturn, or recession in the U.S. economy or changes in U.S. trade policies could impact the Company by impacting the level of deposits held by our clients, whether through a higher volume of withdrawals or through a lower volume of deposits. Client deposits are one of the Company’s primary lending sources. The credit quality of the Company’s loans may also be impacted if clients must weather adverse economic conditions which could result in an increase in credit losses or other related expenses. In the fourth quarter of 2025, criticized assets improved as compared to the third quarter. For additional information regarding criticized assets, see “Note – Loans Held for Investment – Credit Quality Indicators” in the accompanying “Notes to Consolidated Financial Statements” included in this report.
Primary Factors Used in Evaluating Our Business
As a banking institution, we manage and evaluate our financial condition and our results of operations. We monitor and evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as the various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against both our own historical levels as well as the financial condition and performance of comparable banking institutions in our region and nationally.
Results of Operations
Principal tools we use to manage and evaluate the results of our operations include tracking performance through metrics such as return on average equity, return on average tangible common equity, return on average assets, efficiency ratio, noninterest expense as a percent of total average assets, earnings per share, credit quality metrics, total shareholder return, net interest income, noninterest income, noninterest expense, and net income.
Net interest income is affected by a number of factors such as the level of interest rates, changes in interest rates, the speed of changes in interest rates, and changes in the volume and composition of interest earning assets and interest-bearing liabilities. Changes in interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income. Other factors like volume of loans, investment securities, and other interest earning assets, compared to the volume of interest-bearing deposits, short-term borrowings, and other indebtedness, also cause changes in our net interest income between periods. Noninterest-bearing sources of funds, such as demand deposits and stockholders’ equity, help support earning assets.
The impact of funding, including noninterest-bearing deposit sources, is captured in the net interest margin, which is calculated as net interest income divided by average earning assets. We evaluate our net interest income by assessing the yields on our loans and other earning assets, the costs of our deposits and other funding sources, and the levels of our net interest spread and net interest margin.
We seek to increase our noninterest income over time, and we evaluate our noninterest income relative to the trends of the individual types of noninterest income in view of changes in the regulatory environment and prevailing market conditions. We manage our noninterest expenses in consideration of growth opportunities and our community banking model that emphasizes client service and responsiveness. We evaluate our noninterest expense on factors that include our noninterest expense relative to our average assets, our efficiency ratio, and the trends of the individual categories of noninterest expense.
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Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of similar bank holding companies on factors that include return on average assets, return on average equity, return on average tangible common equity, total shareholder return, and growth in earnings.
Financial Condition
We manage and evaluate our financial condition by focusing on liquidity, the diversification and quality of our loans, the adequacy of our allowance for credit losses, the diversification and terms of our deposits, the level of our short-term borrowings and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure, and the adequacy of our capital levels. We seek to maintain sufficient levels of cash and investment securities to meet potential payment and funding obligations, and we evaluate our liquidity on factors that include the levels of cash and highly liquid assets relative to our liabilities, the quality and maturities of our investment securities, the ratio of loans held for investment to deposits, and any reliance on brokered certificates of deposit or other wholesale funding sources.
We seek to maintain a diverse and high-quality loan portfolio and evaluate our asset quality on factors that include the allocation of our loans among loan types, credit exposure to any single borrower or industry type, non-performing assets as a percentage of loans held for investment and other real estate owned (“OREO”), and loan charge-offs as a percentage of average loans. We maintain our allowance for credit losses based on an estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period as of the balance sheet date.
We seek to fund our assets primarily using core client deposits. We evaluate our deposit and funding mix on factors that include the allocation of our deposits among deposit types, the level of our noninterest-bearing deposits, the ratio of our core deposits (i.e. excluding time deposits above $250,000) to our total deposits, and our reliance on brokered deposits or other wholesale funding sources. We seek to manage the mix, maturities, and re-pricing characteristics of our assets and liabilities to mitigate the impact of a changing interest rate environment on our net interest margin, and we evaluate our asset-liability management using models to evaluate the changes to our net interest income under different interest rate scenarios.
Finally, we seek to maintain adequate capital levels to absorb unforeseen operating losses and to help support the growth of our balance sheet. We evaluate our capital adequacy using the regulatory and financial capital ratios including tangible common equity to tangible assets, leverage capital ratio, tier 1 common capital to total risk-weighted assets, tier 1 risk-based capital ratio, and total risk-based capital ratio.
Critical Accounting Estimates and Significant Accounting Policies
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States and follow practices prescribed within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant accounting policies we follow are summarized in “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” included in Part IV, Item 15 of this report.
Our critical accounting estimates are summarized below. Management considers an accounting estimate to be critical if: (1) the accounting estimate requires management to make particularly difficult, subjective, and/or complex judgments about matters that are inherently uncertain, and (2) changes in the estimate that are reasonably likely to occur from period to period, or the use of different estimates that management could have reasonably used in the current period, would have a material impact on our consolidated financial statements, results of operations, or liquidity.
Allowance for Credit Losses
The allowance for credit losses represents our estimate of credit losses expected over the life of loans, which is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Increases in the allowance for credit losses are recorded through net income as a provision for credit loss expense. Decreases in the allowance for credit losses are recorded through net income as a reversal of provision for credit loss expense. Loans are charged-off against the allowance for credit losses when management confirms the uncollectibility of a loan balance. Expected recoveries recorded do not exceed the aggregate of loan amounts previously charged-off. The allowance for credit losses represents management’s estimate of expected credit losses in the loans held for investment portfolio over the life of the loan, including the incorporation of a two-year forecast period with one-year reversion period for economic conditions.
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We perform a quarterly assessment of the risks inherent in our loan portfolio, as well as a detailed review of each significant loan we have assessed to have weaknesses that does not share common risk characteristics with other loans. Based on this analysis, we record a provision for credit losses in order to maintain the allowance for credit losses at appropriate levels. In determining the allowance for credit losses, management estimates the allowance for credit losses balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
Historical credit loss experience provides the basis for the estimation of expected credit losses. The qualitative valuation allowance represents adjustments to historical loss information and segment-specific multipliers based on asset quality trends, industry concentrations, environmental risks, changes in portfolio composition, and other qualitative risk factors, both internal and external to the Company. Other qualitative factors, including changes in loan and lending policies, collateral quality, underwriting standards and personnel, credit review quality, and model imprecision, are also considered. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist.
The allowance for credit losses incorporates macroeconomic information provided by a third‑party forecasting service. The baseline forecast used in the estimate includes stable to slightly increasing expected GDP, a lower probability of recession, and steady unemployment. To illustrate the sensitivity of the allowance to alternative macroeconomic conditions, management performed a hypothetical analysis using the provider’s severe forecast, which assumes a higher probability of recession and higher unemployment, among other assumptions. Use of the severe forecast increased the allowance for credit losses by approximately $41.1 million. This analysis is intended solely to demonstrate model sensitivity and does not reflect management's judgments or assumptions as of December 31, 2025.
The allowance for credit losses is maintained at an amount we believe to be sufficient to provide for estimated losses expected over the life of the loans at each balance sheet date resulting from management’s assessment of the quantitative and qualitative factors utilized to determine the allowance for credit losses. Management monitors trends in the loan portfolio, including changes in the levels of past due, internally classified, and non-performing loans. Changes in the estimates and assumptions are possible and may have a material impact on our allowance for credit losses, and as a result, on our consolidated financial statements or results of operations.
See “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies” for a description of the methodology used to determine the allowance for credit losses and our policy pertaining to acquired loans. See “Notes to Consolidated Financial Statements—Loans Held for Investment” for a discussion on the factors driving changes in the amount of the allowance for credit losses. See also Part I, Item 1A, “Risk Factors—Credit Risks.”
Goodwill
The excess purchase price over the fair value of net assets from acquisitions, or goodwill, is evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates it is likely impairment has occurred. Goodwill impairment is determined by comparing the fair value of a reporting unit to its carrying amount. In any given year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If it is not more likely than not that the fair value of the reporting unit is in excess of the carrying value, or if the Company elects to bypass the qualitative assessment, a quantitative impairment test is performed. In performing a quantitative test for impairment, the fair value of net assets is estimated based on analyses of the Company’s market value, discounted cash flows, and peer values. The determination of goodwill impairment is sensitive to market-based economics and other key assumptions used in determining or allocating fair value. Variability in the market and changes in assumptions or subjective measurements used to estimate fair value are reasonably possible and may have a material impact on our consolidated financial statements or results of operations.
Our annual goodwill impairment test is performed each year as of July 1. The Company performed its 2025 annual goodwill impairment qualitative assessment and determined the Company’s goodwill was not considered impaired.
For additional information regarding goodwill, see “Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies,” included in Part IV, Item 15 of this report and “Risk Factors—Operational Risks,” included in Part I, Item 1A of this report.
Results of Operations
The following discussion and analysis is intended to provide detail about the results of operations by comparing the years ended December 31, 2025 to December 31, 2024. A similar discussion and analysis that compares the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2023, may be found in Part II, Item 7, “Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, which is incorporated herein by reference.
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Net Income
Net income increased $76.1 million, or 33.7%, to $302.1 million, or $2.94 per diluted share, in 2025, compared to $226.0 million, or $2.19 per diluted share, in 2024, primarily as a result of the $62.7 million pre-tax gain from the sale of the Arizona and Kansas branches, which transaction closed on October 10, 2025, a decrease in provision for credit losses, and lower FDIC insurance assessment rates, partially offset by lower payment services revenues and higher income tax expense.
Performance Ratios
As of or for the year ended December 31,
Return on average assets
Return on average common stockholders’ equity
Efficiency ratio (1)
Common stock dividend payout ratio (2)
(1) Our efficiency ratio definition conforms with the FDIC definition for all periods presented as noninterest expense less amortization of intangible assets divided by net interest income plus noninterest income.
(2) Common stock dividend payout ratio represents dividends per common share divided by basic earnings per common share.
Net Interest Income
Net interest income, the largest source of our operating income, is derived from interest, dividends, and fees received on interest earning assets, less interest expense incurred on interest bearing liabilities. Interest earning assets primarily include loans and investment securities. Interest bearing liabilities include deposits, short-term borrowings, and various other forms of indebtedness. Net interest income is affected by the level of interest rates, changes in interest rates, the speed of changes to interest rates, and changes in the volume and composition of interest earning assets and interest-bearing liabilities. Changes in interest rate spread, which is the difference between interest earned on assets and interest paid on liabilities, has the most significant impact on net interest income. Other factors like volume of loans, investment securities, and other interest earning assets compared to the volume of interest-bearing deposits, short-term borrowings, and other indebtedness also cause changes in our net interest income between periods. Noninterest-bearing sources of funds, such as demand deposits and stockholders’ equity, help to support earning assets.
Net interest income increased $3.8 million during 2025, as compared to 2024, primarily due to lower costs of funds as a result of decreased interest expense due to lower average other borrowed funds balances and decreased interest expense as a result of lower rates on savings and time deposits, which was partially offset by lower interest and dividends on investment securities and loans as a result of a decrease in average balances during the comparable periods.
Net interest income included interest accretion related to the fair value of acquired loans of $15.0 million during 2025 as compared to $24.6 million in 2024, of which $3.0 million was the result of early loan payoffs during 2025, as compared to $7.2 million in 2024.
Included within net interest income were recoveries of $5.6 million and $5.5 million in recoveries of previously charged-off loan interest in 2025 and 2024, respectively.
Our net interest margin ratio increased 28 basis points to 3.30% during 2025, as compared to 3.02% in 2024. Our net FTE interest margin ratio, a non-GAAP financial measure, increased 28 basis points to 3.32% during 2025, as compared to 3.04% in 2024. Exclusive of the impact of interest accretion on acquired loans, our 2025 net FTE interest margin ratio increased 31 basis points over our similarly calculated net interest margin ratio in 2024.
For the periods indicated, the following table presents average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest-bearing liabilities.
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Average Balance Sheets, Yields, and Rates
Year Ended December 31,
(Dollars in millions)
Average
Balance
Interest (3) (6)
Average
Rate
Average
Balance
Interest (3) (6)
Average
Rate
Average
Balance
Interest (3) (6)
Average
Rate
Interest earning assets:
Loans (1)
Investment securities
Taxable (2)
Tax-exempt
Investment in FHLB and FRB stock
Interest bearing deposits in banks
Federal funds sold
Total interest earning assets
Noninterest earning assets
Total assets
Interest bearing liabilities:
Demand deposits
Savings deposits
Time deposits
Repurchase agreements
Other borrowed funds
Long-term debt
Subordinated debentures held by subsidiary trusts
Total interest bearing liabilities
Noninterest bearing deposits
Other noninterest bearing liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
Net FTE interest income (non-GAAP) (4)
Less FTE adjustments (3)
Net interest income from consolidated statements of income
Interest rate spread
Net interest margin
Net FTE interest margin (non-GAAP) (4)
Cost of funds, including noninterest-bearing demand deposits (5)
(1) Average loan balances include loans held for sale and loans held for investment, net of deferred fees and costs, which include non-accrual loans. Interest income includes amortization of deferred loan fees net of deferred loan costs, which is not material for the periods presented.
(2) Includes average balance of unsettled trades on investment securities.
(3) The Company adjusts interest income and average rates for tax exempt loans and securities to an FTE basis utilizing the statutory tax rate of 21.00% for the periods presented.
(4) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company’s performance as a comparison of the returns between a tax-free investment and a taxable alternative. Net FTE interest income and net FTE interest margin are non-GAAP financial measures. See “Non-GAAP Reconciliations” included herein for a reconciliation to the most directly comparable GAAP financial measures.
(5) Calculated by dividing total annualized interest on interest-bearing liabilities by the sum of total interest-bearing liabilities plus non-interest-bearing deposits.
(6) Dividends on FHLB and FRB stock.
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The table below sets forth, for the periods indicated, a summary of the changes in interest income and interest expense resulting from estimated changes in average asset and liability balances (volume) and estimated changes in average interest rates (rate). Changes which are not due solely to volume or rate have been allocated to these categories based on the respective percent changes in average volume and average rate as they compare to each other.
Analysis of Interest Changes Due To Volume and Rates
Year Ended December 31, 2025
compared with
December 31, 2024
Year Ended December 31, 2024
compared with
December 31, 2023
Year Ended December 31, 2023
compared with
December 31, 2022
(Dollars in millions)
Volume
Rate
Net
Volume
Rate
Net
Volume
Rate
Net
Interest earning assets:
Loans (1)
Investment Securities (1)
Investment in FHLB and FRB Stock (2)
Interest bearing deposits in banks
Total change
Interest bearing liabilities:
Demand deposits
Savings deposits
Time deposits
Repurchase agreements
Other borrowed funds
Long-term debt
Subordinated debentures held by subsidiary trusts
Total change
Increase in FTE net interest income (1)
(1) Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
(2) Dividends on FHLB and FRB stock is used to determine the rate.
Non-GAAP Reconciliation
The table below provides a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure.
For the Year Ended
(In millions, except % and per share data)
Dec 31, 2025
Dec 31, 2024
Dec 31, 2023
Net interest income
FTE interest income
Net FTE interest income (Non-GAAP)
Less purchase accounting accretion
Adjusted net FTE interest income (Non-GAAP)
Average interest earning assets
Net interest margin (GAAP)
Net interest margin (FTE) (Non-GAAP)
Adjusted net interest margin (FTE) (Non-GAAP)
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Provision for (reduction of) Credit Losses
Fluctuations in the provision for credit losses reflect charge-offs and recoveries as well as management’s estimate of possible credit losses based upon the composition of our loan portfolio, evaluation of the borrowers’ ability to repay, collateral value of underlying loans, loan loss trends, and estimated effects of current and forecasted economic conditions on our loans held for investment and investment securities portfolios.
During 2025, the Company recorded a provision for credit losses of $26.8 million, as compared to a $67.8 million provision for credit losses in 2024. The 2025 provision includes a provision for credit losses of $26.5 million related to loans held for investment and $0.7 million related to unfunded commitments, and a reduction of credit losses of $0.4 million related to held-to-maturity securities. The provision incorporated the impact of credit movement during the year, changes in loan balances, the attributes of the current portfolio, asset quality metrics, a review of the current economic outlook, and net charge-offs. Net charge-offs for 2025 were $39.2 million, or 0.24% of average loans outstanding compared to $104.5 million, or 0.57% of average loans outstanding in 2024.
For information regarding our non-performing loans, see “Non-Performing Assets” included herein. For more information on our allowance for credit losses, see “Financial Condition—Allowance for Credit Losses” included herein.
Noninterest Income
Noninterest income also contributes to our operating results with fee-based revenues such as payment services, mortgage banking and wealth management revenues, service charges on deposit accounts, and other service charges, commissions, and fees. The following table presents the composition of our noninterest income for the periods indicated:
Noninterest Income
Year Ended December 31,
$ Change
% Change
(Dollars in millions)
Payment services revenues
Mortgage banking revenues
Wealth management revenues
Service charges on deposit accounts
Other service charges, commissions and fees
Investment securities losses, net
Other income
Total noninterest income
* NM - not meaningful
Noninterest income increased $55.3 million in 2025 as compared to 2024. Significant components of these fluctuations are discussed below.
Payment services revenues consist of interchange revenue that merchants pay for processing electronic payment transactions, associated fees earned from the issuance of business credit cards, consumer credit cards (prior to the outsourcing of the consumer credit card business in the second quarter of 2025), debit cards, and ATM service fees. Payment services revenues decreased $5.7 million in 2025 as compared to 2024, mainly related to the outsourcing of consumer credit cards in the second quarter of 2025.
Wealth management revenues are principally comprised of fees earned for management of trust assets and investment services. Wealth management revenues increased $1.8 million in 2025 as compared to 2024, mainly as a result of an increase in estate and trust services. The Company had $8.7 billion of assets under management at December 31, 2025 compared to $8.1 billion at December 31, 2024.
Service charge fees primarily consist of treasury services and overdraft charges on deposit accounts. These service charges increased $1.3 million in 2025, as compared to 2024. The increase in 2025 is mainly driven by increases in ACH, wire, sweep, and healthcare treasury service fees.
Other income primarily includes company-owned life insurance revenues, check printing income, agency stock dividends, and gains on sales of miscellaneous assets. Other income increased $58.9 million in 2025 as compared to 2024, primarily due to the $62.7 million gain from the sale of the Arizona and Kansas branches, which transaction closed on October 10, 2025, partially offset by a gain-on-sale of assets decrease of $4.5 million during the 2025 period.
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Noninterest expense
Noninterest expense increased $2.9 million in 2025 as compared to 2024. The increase was primarily a result of increases to occupancy, net, other expenses, professional fees, and salaries and wages, partially offset by decreases in special FDIC insurance assessment fees, OREO expense, and employee benefits. Significant components of noninterest expense are discussed below.
The following table presents the composition of our noninterest expense for the periods indicated:
Noninterest expense
Year Ended December 31,
$ Change
% Change
(Dollars in millions)
Salaries and wages
Employee benefits
Outsourced technology services
Occupancy expense, net
Furniture and equipment
OREO expense, net
Professional fees
FDIC insurance premiums
Other intangibles amortization
Other expenses
Total noninterest expense
Salaries and wages expense primarily consist of salaries, severance, commissions, overtime, bonus accrual, and temporary employee expenses. Salaries and wages expense increased $3.7 million in 2025 as compared to 2024, primarily as a result of higher severance and salaries and wages, which were partially offset by lower short-term incentive accruals related to the Company’s performance and lower deferred loan costs in 2025.
Employee benefits include payroll taxes, medical insurance, long term incentive, and 401K plans. Employee benefits expense decreased $1.8 million in 2025 as compared to 2024, primarily due to lower health insurance costs, which were partially offset by higher long term incentive accruals and higher payroll tax costs in 2025.
Outsourced technology services primarily include technology services related to the core system platform, software as a service, automated teller machines, technology equipment and software maintenance. Outsourced technology services expense increased $1.3 million in 2025 as compared to 2024, primarily due to higher software maintenance costs, which were partially offset by lower core processing costs in 2025.
Occupancy expense, net includes building expenses such as lease, depreciation, rent, maintenance and repairs, property taxes, snow removal, utility and janitorial, and insurance. Occupancy expense, net increased $6.1 million in 2025 as compared to 2024, primarily due to increased costs in 2025 related to maintenance and repairs, janitorial services, and snow removal costs in addition to an increase in charges related to the 2025 branch sales and expected February 2026 branch closures.
OREO expense, net includes expenses and income, gain or loss on sale, and valuation adjustments on property acquired through foreclosure on defaulted loans. OREO expense, net decreased $3.6 million in 2025 as compared to 2024 as a result of downward valuation adjustments in 2024 partially offset by an increase to gains on sale during the same period.
Professional fee expense is comprised of legal fees, audit and tax fees, consultant fees, and outside services. Professional fee expense increased $2.1 million in 2025 as compared to 2024, primarily related to an increase in legal fees in 2025.
The FDIC insures deposits at FDIC-insured financial institutions and charges insured financial institutions assessment rates to maintain the DIF at a specific level. FDIC insurance premiums decreased $9.6 million in 2025 as compared to 2024, primarily attributable to lower FDIC assessment rates in 2025 due to lower average assets and as a result of the reduction in the special assessment accrual to cover the losses incurred by the DIF in response to the 2023 bank failures, including the reversal of $1.6 million during 2025 related to the 2025 interim rule collection updates released by the FDIC.
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Other expenses primarily include advertising and public relations costs; office supply, postage, freight, telephone, and travel expenses; donations expense; debit and credit card expenses; board of director fees; and other operational losses. Other expenses increased $5.8 million in 2025 as compared to 2024, primarily resulting from increases of $4.0 million in donation expense and $1.0 million in advertising expense in 2025.
Income Tax Expense
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law and contains numerous tax provisions. There was no significant financial statement impact resulting from the OBBBA reflected in 2025. The Company will continue, however, to evaluate and apply the provisions of the OBBBA, but it does not expect any material impact on the consolidated financial statements for the foreseeable future.
Our effective federal tax rate was 17.8% for the year ended December 31, 2025 compared to 18.1% for the year ended December 31, 2024. Fluctuations in effective federal income tax rates are primarily driven by changes in actual and forecasted pre-tax income.
State income tax applies primarily to pretax earnings generated within Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, and South Dakota. Our effective state tax rate was 5.1% for the year ended December 31, 2025 compared to 5.2% for the year ended December 31, 2024.
Financial Condition
The financial condition discussion below is based upon our Consolidated Balance Sheet in Part IV, Item 15 of this Report. A similar discussion and analysis comparing the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2023 may be found in Part II, Item 7, “Financial Condition” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, which is incorporated herein by reference.
Total Assets
Total assets decreased $2,496.8 million, or 8.6%, to $26,640.6 million as of December 31, 2025, from $29,137.4 million as of December 31, 2024, primarily due to decreases in investment securities and loans, the funds from which were partially used to pay down debt. Significant fluctuations in balance sheet accounts are discussed below.
Investment Securities
We manage our investment portfolio to obtain the highest yield possible while meeting our credit and interest rate risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements. Our portfolio principally comprises U.S. treasury notes, U.S. government agency, U.S. government agency commercial mortgage-backed securities, U.S. government residential mortgage-backed securities, U.S. government agency collateralized mortgage obligations, collateralized loan obligations, corporate securities, and tax-exempt municipal securities.
Debt securities rated in the highest category by nationally recognized rating agencies and debt securities backed by the U.S. Government and government sponsored agencies, both on a direct and indirect basis, represented approximately 95.1% and 94.2% of the investment portfolio’s available-for-sale and held-to-maturity segments, respectively, at December 31, 2025.
Federal funds sold and interest-bearing deposits in the Bank are additional investments that are classified as cash equivalents rather than as investment securities. Investment securities classified as available-for-sale are recorded at fair value, while investment securities classified as held-to-maturity are recorded at amortized cost. Unrealized gains or losses, net of the deferred tax effect, on available-for-sale securities are reported as increases or decreases in accumulated other comprehensive income or loss, a component of stockholders’ equity.
Investment securities decreased $114.4 million, or 1.5%, to $7,630.2 million as of December 31, 2025, from $7,744.6 million as of December 31, 2024. The decrease was primarily resulting from called securities and normal pay-downs and maturities, partially offset by purchases of investment securities and a $187.8 million increase in fair market values during the period. See “Notes to Consolidated Financial Statements — Investment Securities” included in Part IV, Item 15 of this report for additional details.
As of December 31, 2025, the estimated duration of our investment portfolio was 3.3 years, as compared to 3.7 years as of December 31, 2024. The weighted average yield on investment securities decreased 21 basis point to 2.71% in 2025, from 2.92% in 2024.
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As of December 31, 2025, investment securities with amortized costs and fair values of $2,983.6 million and $2,781.2 million, respectively, were pledged to secure public deposits, derivatives, and securities sold under repurchase agreements, as compared to $3,460.2 million and $3,092.6 million, respectively, as of December 31, 2024. For additional information concerning securities sold under repurchase agreements, see “Securities Sold Under Repurchase Agreements” included herein.
Mortgage-backed securities and, to a limited extent other securities, have uncertain cash flow characteristics that present additional interest rate risk in the form of prepayment or extension risk primarily caused by changes in market interest rates. This additional risk is generally rewarded in the form of higher yields. Maturities of mortgage-backed securities presented below are included in maturity categories based on their stated maturity date. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. As of December 31, 2025, the carrying value of our investments in non-agency, mortgage-backed securities totaled $193.9 million. All other mortgage-backed securities included in the table below were issued by U.S. government entities and sponsored entities. As of December 31, 2025, there were no significant concentrations of investments (greater than 10% of stockholders’ equity) in any individual security issuer, except for U.S. government or agency-backed securities.
Approximately 73.6% and 74.0% of our tax-exempt securities were general obligation securities as of December 31, 2025 and 2024, respectively, of which 28.3% and 29.8%, respectively, were issued by political subdivisions or agencies within the states we operated in during 2025 and 2024, including Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
As of December 31, 2025, we had $5,645.8 million of investment securities that had been in a continuous loss position for more than twelve months. Gross unrealized losses on these securities totaled $443.2 million as of December 31, 2025, and were attributable to changes in interest rates. At December 31, 2025 and December 31, 2024, the Company had no allowance for credit losses on available-for-sale securities and an allowance for credit losses on held-to maturity securities classified as corporate and municipal securities of $0.5 million and $0.9 million, respectively.
The following table sets forth the carrying value as of December 31, 2025 and 2024, and the percentage of total investment securities and weighted average yields on investment securities as of December 31, 2025. Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%.
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December 31, 2024
December 31, 2025
Securities Maturities and Yield
(Dollars in millions)
Carrying
Value
Carrying
Value
% of Total Investment Securities
Weighted Average FTE Yield
U.S. Treasury securities
Maturing within one year
Maturing in one to five years
Mark-to-market adjustments on securities available-for-sale
Total
U.S. government agency securities
Maturing within one year
Maturing in one to five years
Maturing in five to ten years
Maturing after ten years
Mark-to-market adjustments on securities available-for-sale
Total
Mortgage-backed securities
Maturing within one year
Maturing in one to five years
Maturing in five to ten years
Maturing after ten years
Mark-to-market adjustments on securities available-for-sale
Total
Collateralized loan obligation securities
Maturing in one to five years
Maturing in five to ten years
Maturing after ten years
Mark-to-market adjustments on securities available-for-sale
Total
Municipal securities
Maturing within one year
Maturing in one to five years
Maturing in five to ten years
Maturing after ten years
Mark-to-market adjustments on securities available-for-sale
Total
Corporate securities
Maturing within one year
Maturing in one to five years
Maturing in five to ten years
Mark-to-market adjustments on securities available-for-sale
Total
Total
Maturities of the 2025 securities noted above reflect $603.6 million of investment securities at their final maturities, which have call provisions within the next year. Based on current market interest rates, management expects approximately $50.1 million of these securities will be called in 2026. For additional information concerning investment securities, see “Notes to Consolidated Financial Statements — Investment Securities” included in Part IV, Item 15.
Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) Stock
The Bank is a member of the FHLB of Des Moines and the Minneapolis FRB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. As of December 31, 2025 and December 31, 2024, the Company held $106.3 million and $177.4 million, respectively, primarily in equity securities in a combination of FRB and FHLB stocks, which are restricted nonmarketable securities acquired to meet regulatory requirements. These securities are carried at cost.
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Loans Held for Sale
Loans held for sale consist of residential mortgage loans pending sale to investors in the secondary market and loans reclassified from loans held for investment due to management’s intent and decision to sell the loans. Loans held for sale increased $72.7 million to $73.6 million as of December 31, 2025, compared to $0.9 million as of December 31, 2024, primarily due to loans held for investment that were transferred to loans held-for-sale related to the pending sale of the 11 Nebraska branches, which transaction is expected to close in the second quarter of 2026.
Loans Held for Investment, Net of Deferred Fees and Costs
The following table presents the composition and comparison of our loans held for investment for the periods indicated:
Loans Outstanding
(Dollars in millions)
As of December 31,
Percent
Percent
Percent
Real estate:
Commercial
Construction
Residential
Agricultural
Total real estate
Consumer:
Indirect
Direct
Credit card
Total consumer
Commercial
Agricultural
Other, including overdrafts
Loans held for investment
Deferred loan fees and costs
Loans held for investment, net of deferred fees and costs
Allowance for credit losses
Net loans held for investment
Allowance for credit losses to loans held for investment
Loans held for investment, net of deferred fees and costs, decreased $2,643.3 million, or 14.8%, to $15,201.6 million as of December 31, 2025, as compared to $17,844.9 million as of December 31, 2024. The Company discontinued accepting applications to originate indirect loans during the first quarter of 2025, which resulted in $202.7 million of amortization for the indirect portfolio in 2025. See “—Indirect Loans” above for additional information. The Company sold $74.2 million of consumer credit card loans in the second quarter of 2025. See “—Consumer Credit Card Outsourcing” above for additional information. The Company sold $291.5 million of loans during the fourth quarter of 2025. See “—Sale of Arizona and Kansas Branches” above for additional information regarding the transaction. Additionally, as of December 31, 2025, the Company transferred $72.5 million of loans held for investment to loans held for sale related to the pending sale of the 11 Nebraska branches, which transaction is expected to close in the second quarter of 2026. See “—Pending Sale of Certain Nebraska Branches” above for additional information regarding the transaction. The remaining decline in loan balances is due to paydowns and maturities.
Real Estate Loans. We provide interim construction and permanent financing for both single-family and multi-unit properties, medium-term loans for commercial, agricultural and industrial property and/or buildings and equity lines of credit secured by real estate.
Commercial real estate loans . Commercial real estate loans include loans for property and improvements used commercially by the borrower or for lease to others for the production of goods or services. Approximately 33.4% and 33.0% of our commercial real estate loans were owner occupied as of December 31, 2025 and 2024, respectively.
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Construction loans . Construction loans are primarily to commercial builders for residential lot development and the construction of single-family residences and commercial real estate properties. Construction loans are generally underwritten pursuant to pre-approved permanent financing. As of December 31, 2025, our construction loan portfolio was divided among the following categories: approximately $169.4 million, or 20.2%, residential construction; approximately $450.9 million, or 53.9%, commercial construction; and approximately $216.9 million, or 25.9%, land acquisition and development.
Residential real estate loans . Residential real estate loans are typically secured by first liens on the financed property. Included in residential real estate loans were home equity loans and lines of credit of $583.9 million, or 27.7%, and $557.0 million, or 25.4%, as of December 31, 2025 and 2024, respectively.
Agricultural real estate loans . Agricultural real estate loans are secured by farmland or ranchland consisting of short, intermediate, and long-term structures to experienced agriculturalists who have demonstrated management capabilities, established production and historical financial performance.
Consumer Loans. Our consumer loans include direct personal loans; credit card loans and lines of credit; and indirect loans created when we purchase consumer loan contracts advanced for the purchase of automobiles, boats, and other consumer goods from the consumer product dealer network within the market areas we serve. Personal loans and indirect dealer loans are generally secured by automobiles, recreational vehicles, boats, and other types of personal property and are made on an installment basis. In January 2025, we announced our plans to no longer originate indirect loans as of February 28, 2025, as further discussed above (see “—Recent Trends and Developments—Indirect Loans”). Credit cards are offered to clients in our market areas. The Company outsourced consumer credit card loans in the second quarter of 2025, as further discussed above (see “—Recent Trends and Developments—Consumer Credit Card Outsourcing”). Lines of credit are generally floating rate loans that are unsecured or secured by personal property. Approximately 78.4% and 77.4% of our consumer loans as of December 31, 2025 and 2024, respectively, were indirect consumer loans.
Commercial Loans. We provide a mix of variable and fixed rate commercial loans. The loans are typically made to small- and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions. Commercial loans generally include lines of credit, business credit cards, and loans with maturities of five years or less and outstanding balances tend to be cyclical in nature. The loans are generally made with business operations as the primary source of repayment and are typically collateralized by inventory, accounts receivable, equipment, and/or personal guarantees.
Agricultural Loans. Our agricultural loans generally consist of short- and medium-term loans and lines of credit that are primarily used for crops, livestock, equipment, and general operations. Agricultural loans are ordinarily secured by assets such as livestock or equipment and are repaid from the operations of the farm or ranch. Agricultural loans generally have maturities of five years or less, with operating lines for one production season.
The following table presents the contractual maturity distribution and interest rates of our loan portfolio as of December 31, 2025. The amounts provided below do not reflect scheduled repayment or prepayment assumptions related to the loan portfolio. The within one year category includes loans overdrafts and loans with no stated maturity.
Maturities and Interest Rate Sensitivities
Contractual Maturity Range
Maturing After One Year
(Dollars in millions)
Within
One Year
One Year to
Five Years
Five Years to
Fifteen Years
After
Fifteen Years
Total
Fixed Interest Rate
Floating/Variable Interest Rate
Real estate
Consumer
Commercial
Agricultural
Other
Loans held for investment
Non-Performing Assets
Non-performing assets include non-performing loans and OREO.
Non-performing loans . Non-performing loans include non-accrual loans and loans contractually past due 90 days or more and still accruing interest.
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Non-accrual loans . We generally place loans on non-accrual status when they become 90 days past due, unless they are well secured and in the process of collection, or if the collection of principal and interest is in doubt. When a loan is placed on non-accrual status, any interest previously accrued but not collected is reversed from income. Non-accrual loans decreased $4.8 million, to $133.5 million, as of December 31, 2025, from $138.3 million as of December 31, 2024, primarily due to a decrease of $11.8 million of commercial loans, partially offset by an increase of $1.5 million of real estate loans and $3.7 million of agricultural loans. As of December 31, 2025 there were approximately $59.8 million of non-accrual loans for which there was no related allowance for credit losses, as these loans had sufficient collateral securing the loan for repayment.
Loans contractually past due 90 days or more and still accruing interest . Loans past due 90 days or more accruing interest decreased $1.6 million, or 53.3%, to $1.4 million as of December 31, 2025, from $3.0 million as of December 31, 2024.
Other Real Estate Owned (OREO) . OREO consists of real property acquired through foreclosure on the collateral underlying defaulted loans. We record OREO at fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate at the time it is acquired, is recorded as a charge against the allowance for credit losses. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified. The fair values of OREO properties are estimated using appraisals and management estimates of current market conditions. OREO properties are appraised every 18-24 months unless deterioration in local market conditions indicates the need to obtain new appraisals sooner.
OREO properties are evaluated by management quarterly to determine if additional write-downs are appropriate or necessary based on current market conditions. Quarterly evaluations include a review of the most recent appraisal of the property as well as changes in the market conditions from the prior quarter. Commercial and agricultural OREO properties are listed with unrelated third party professional real estate agents or brokers local to the areas where the marketed properties are located. Residential properties are typically listed with local realtors, after any redemption period has expired. We rely on these local real estate agents and/or brokers to list the properties on the local multiple listing system, to provide marketing materials and advertisements for the properties, and to conduct open houses.
OREO decreased to $3.4 million as of December 31, 2025, from $4.3 million as of December 31, 2024, primarily attributable to dispositions. As of December 31, 2025, 8.4% of our OREO balance was related to a 1-4 residential property, 79.6% was related to commercial properties, and 12.0% was related to construction properties.
The following table sets forth information regarding non-performing assets as of the dates indicated:
Non-Performing Assets
(Dollars in millions)
As of December 31,
Non-performing loans:
Non-accrual loans
Accruing loans past due 90 days or more
Total non-performing loans
OREO
Total non-performing assets
Non-accrual loans to loans held for investment
Non-performing assets to loans held for investment and OREO
Non-performing assets to total assets
Allowance for credit losses to non-performing loans
For additional information regarding non-performing loans, see “Notes to Consolidated Financial Statements—Loans Held For Investment” included in financial statements included Part IV, Item 15 of this report.
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Non-Performing Loans by Loan Type
(Dollars in millions)
As of December 31,
Percent
Percent
Percent
Real estate:
Commercial
Construction
Residential
Agricultural
Total real estate
Consumer:
Indirect
Direct
Credit card
Total consumer
Commercial
Agricultural
Total non-performing loans
Collateral-dependent loans . Collateral-dependent loans rely solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with a loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of protection provided by the cash flow and value of any underlying collateral. A loan may become collateral-dependent when foreclosure is probable or the borrower is experiencing financial difficulty and its source of repayment becomes inadequate over time. At such time, the Company develops an expectation that repayment will be provided substantially through the operation or sale of the collateral. Collateral-dependent loans increased to $102.1 million as of December 31, 2025, from $97.6 million as of December 31, 2024.
Modifications to borrowers experiencing financial difficulty . Modifications of loans are made in the ordinary course of business and are completed on a case-by-case basis through negotiation with the borrower in connection with the ongoing loan collection processes. Loan modifications are made to provide borrowers payment relief. From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension or a combination thereof, among other things.
For additional information regarding modifications to borrowers experiencing financial difficulty, see “Notes to Consolidated Financial Statements—Loans Held For Investment” included in financial statements included Part IV, Item 15 of this report.
Allowance for Credit Losses
The Company performs a quarterly assessment of the appropriateness of its allowance for credit losses in accordance with GAAP. The allowance for credit losses is established through a provision for credit losses based on our evaluation of quantitative and qualitative risk factors in our loan portfolio at each balance sheet date. In determining the allowance for credit losses, we estimate losses on specific loans, or groups of loans, where the expected loss can be identified and reasonably determined over the life of the loans. The balance of the allowance for credit losses is based on historical loan loss rates, changes in the nature or tenure of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current environmental and economic factors, and the estimated impact of forecasted economic conditions on historical loan loss rates. See the discussion under “Critical Accounting Estimates and Significant Accounting Policies — Allowance for Credit Losses” above.
The allowance for credit losses is increased by provisions charged against earnings and net recoveries of charged-off loans and is reduced by negative provisions credited to earnings and net loan charge-offs. The allowance for credit losses consists of three elements:
(1) A specific valuation allowance associated with collateral-dependent and other individually evaluated loans. Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices, and any relevant qualitative or environmental factors impacting loans.
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(2) A collective valuation allowance based on loan loss experience and future expectations for similar loans with similar characteristics and trends. The Company applies open pool methodologies for all portfolio segments. The open pool methodology averages quarterly loss rates by modeling segment, calculated as quarter-to-date net charge off balance divided by the end of period balance. Loss rates are recalculated quarterly with recoveries captured in the quarter a loan was charged off, are averaged across a look back period from 2009 to the current period, and are annualized. Macroeconomic-conditioned historical loss rates are applied to loan-level cash flows. Expected future principal and interest cash flows are calculated using contractual repayment terms and prepayment, utilization, interest rate, and probability of default assumptions. Macroeconomic sensitivity models calculate segment-specific multipliers using third party forecast data. The multipliers condition the annual loss rates over the 2-year forecast period, followed by a 1-year straight-line reversion to the unadjusted historical average loss rates. The unadjusted loss rates then apply for the remaining life of the loan. Estimated losses are totaled and aggregated to the segment level.
(3) A qualitative valuation allowance determined based on asset quality trends, industry concentrations, environmental risks, changes in portfolio composition, and other qualitative risk factors, both internal and external to the Company. Other qualitative factors, including changes in loan and lending policies, collateral quality, underwriting standards and personnel, credit review quality, and model imprecision, are also considered.
Based on the assessment of the appropriateness of the allowance for credit losses, the Company records provisions for credit losses to maintain the allowance for credit losses at appropriate levels.
Loans acquired in business combinations are initially recorded at fair value as adjusted for credit risk. For loans with no significant evidence of credit deterioration since origination, the difference between the fair value and the unpaid principal balance of the loan at the acquisition date is amortized into interest income using the effective interest method over the remaining period to contractual maturity. An allowance for credit losses is recorded for the expected credit losses over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense using the same methodology as other loans held for investment.
For loans acquired in business combinations with evidence of deterioration in credit quality since origination, the Company determines the fair value of the loans by estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. An allowance for credit losses is recognized by estimating the expected credit losses of the purchased asset and recording an adjustment to the acquisition date fair value to establish the initial amortized cost basis of the asset. Differences between the established amortized cost basis, and the unpaid principal balance of the asset, is considered to be a non-credit discount/premium and is accreted/amortized into interest income using the level yield interest method. Subsequent changes to the allowance for credit losses are recorded through provision expense using the same methodology as other loans held for investment.
Loans, or portions thereof, are charged-off against the allowance for credit losses when management believes the collectability of the principal is unlikely, or, with respect to consumer installment loans, according to an established delinquency schedule. Generally, loans are charged-off when (1) there has been no material principal reduction within the previous 90 days and there is no pending sale of collateral or other assets, (2) there is no significant or pending event which will result in principal reduction within the upcoming 90 days, (3) it is clear that we will not be able to collect all or a portion of the loan, or (4) foreclosure or repossession actions are pending. Loan charge-offs do not directly correspond with the receipt of independent appraisals or the use of observable market data if the collateral value is determined to be sufficient to repay the principal balance of the loan.
If a collateral-dependent loan is adequately collateralized, a specific valuation allowance for credit losses is not recorded. As such, significant changes in collateral-dependent and non-performing loans do not necessarily correspond proportionally with changes in the specific valuation component of the allowance for credit losses. Additionally, the Company expects the timing of charge-offs will vary between quarters and will not necessarily correspond proportionally to changes in the allowance for credit losses or changes in non-performing or collateral-dependent loans due to timing differences among the initial identification of a collateral-dependent loan, recording of a specific valuation allowance for collateral-dependent loans, and any resulting charge-off of uncollectible principal.
Our allowance for credit losses on loans was $191.4 million, or 1.26% of loans held for investment as of December 31, 2025, as compared to $204.1 million, or 1.14% of loans held for investment, as of December 31, 2024.
Although we have established our allowance for credit losses in accordance with GAAP in the United States and we believe that the allowance for credit losses is appropriate to provide for known and expected losses in the portfolio at all times, future provisions will be subject to on-going evaluations of the risks in the loan portfolio. If the economy declines or asset quality deteriorates more than expected, material additional provisions could be required. The following table sets forth information regarding our allowance for credit losses as of the dates and for the periods indicated.
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Allowance for Credit Losses
(Dollars in millions)
As of and for the year ended December 31,
Allowance for credit losses on loans:
Beginning balance
Provision for (reduction of) credit losses
Charge-offs:
Real estate
Commercial
Construction
Residential
Agricultural
Consumer
Commercial
Agricultural
Total charge-offs
Recoveries:
Real estate
Commercial
Construction
Residential
Agricultural
Consumer
Commercial
Agricultural
Total recoveries
Net charge-offs
Ending balance
Allowance for off-balance sheet credit losses:
Beginning balance
(Reduction of) provision for off-balance sheet credit losses
Ending balance
Allowance for credit losses on investment securities:
Beginning balance
Provision for (reduction of) credit losses
Ending balance
Total allowance for credit losses
Total provision for credit losses
Loans held for investment, net of deferred fees and costs
Average loans
Net charge-offs to average loans
Allowance to non-accrual loans
Allowance to loans held for investment
The allowance for credit losses is allocated to loan categories based on the relative risk characteristics, asset classifications, and expected losses of the loan portfolio. The following table provides a summary of the allocation of the allowance for credit losses for specific loan categories as of the dates indicated. The allocations presented should not be interpreted as an indication that charges to the allowance for credit losses will be incurred in these amounts or proportions, or that the portion of the allowance for credit losses allocated to each loan category represents the total amount available for future losses that may occur within these categories.
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Allocation of the Allowance for Credit Losses
(Dollars in millions)
As of December 31,
Allocated
Reserves
Allocated Reserves %
% of Loan
Category to Loans
Allocated
Reserves
Allocated Reserves %
% of Loan
Category to Loans
Allocated
Reserves
Allocated Reserves %
% of Loan
Category to Loans
Real estate
Consumer
Commercial
Agricultural
Totals
Deferred Tax Asset
The net deferred tax asset decreased $58.8 million, to $59.6 million as of December 31, 2025, from $118.4 million as of December 31, 2024, primarily due to a decrease in deferred tax assets related to the unrealized fair value of investment securities.
Total Liabilities
Total liabilities decreased $2,639.8 million, or 10.2%, to $23,193.6 million as of December 31, 2025, from $25,833.4 million as of December 31, 2024, primarily due to decreases of $927.3 million in deposits and $1,567.5 million in other borrowed funds. Significant fluctuations in liability accounts are discussed below.
Deposits
Total deposits decreased $927.3 million, to $22,088.3 million as of December 31, 2025, from $23,015.6 million as of December 31, 2024, primarily due to decreases in all deposit categories except for savings deposits, driven by the Arizona and Kansas branch sales which consisted of $641.6 million of deposits.
As of December 31, 2025 and 2024, we had certificate of deposits of $13.4 million and $12.5 million, respectively, through IntraFi Network Deposits, or Intrafi. We had no brokered deposits as of December 31, 2025 and 2024.
Total demand deposits as of December 31, 2025 include $538.8 million in ICS reciprocal deposits, compared to $380.1 million as of December 31, 2024.
The following table summarizes our deposits as of the dates indicated:
Deposits
(Dollars in millions)
As of December 31,
Percent
Percent
Percent
Noninterest bearing demand
Interest bearing:
Demand
Savings
Time, $250k or more
Time, other
Total interest bearing
Total deposits
For additional information concerning client deposits, including the use of repurchase agreements, see “Business—Community Banking—Deposit Products,” included in Part I, Item 1 and “Notes to Consolidated Financial Statements—Deposits,” included in Part IV, Item 15 of this report.
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Securities Sold Under Repurchase Agreements
Under repurchase agreements with commercial and municipal depositors, client deposit balances are invested in U.S. government agency securities overnight and are then repurchased the following day. All outstanding repurchase agreements are due in one day and balances fluctuate in the normal course of business. Repurchase agreement balances decreased $44.3 million, or 8.5%, to $479.6 million as of December 31, 2025, from $523.9 million as of December 31, 2024.
The following table sets forth certain information regarding securities sold under repurchase agreements as of the dates indicated:
Securities Sold Under Repurchase Agreements
(Dollars in millions)
As of and for the year ended December 31,
Securities sold under repurchase agreements:
Balance at period end
Average balance
Maximum amount outstanding at any month-end
Average interest rate:
During the year
At period end
Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses decreased $92.1 million, to $286.8 million as of December 31, 2025, from $378.9 million as of December 31, 2024, primarily attributable to a decrease in derivative liabilities of $56.5 million and a decrease in tax credit obligations of $20.0 million.
Other Borrowed Funds
Other borrowed funds are composed of variable-rate, overnight and fixed-rate borrowings with remaining contractual tenors of up to one year through the Federal Home Loan Bank, to address short-term funding needs. Other borrowed funds decreased $1,567.5 million, to zero as of December 31, 2025 compared to $1,567.5 million at December 31, 2024.
Capital Resources and Liquidity
Capital Resources
Stockholders’ equity is influenced primarily by earnings, dividends, sales and redemptions of common stock, and changes in the unrealized holding gains or losses, net of taxes, on available-for-sale investment securities. Stockholders’ equity increased $143.0 million, or 4.3%, to $3,447.0 million as of December 31, 2025 from $3,304.0 million as of December 31, 2024, due to changes in accumulated other comprehensive loss related to unrealized gains on available-for-sale securities, stock-based compensation expense, and retention of earnings, which are partially offset by stock repurchases of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants, stock purchases pursuant to the stock repurchase program as further discussed below, and cash dividends paid. Regular cash dividends paid to common shareholders during 2025 amounted to approximately $194.3 million.
On January 27, 2026, we declared a quarterly dividend to common stockholders of $0.47 per share, which was paid on February 20, 2026 to shareholders of record as of February 10, 2026. The dividend equates to a 5.7% annual yield based on the $32.72 average closing price of the Company’s common stock as reported on NASDAQ during the fourth quarter of 2025.
On August 28, 2025, the board of directors of the Company adopted a new stock repurchase program, pursuant to which the Company has been authorized to repurchase up to $150.0 million worth of its issued and outstanding shares of common stock on or prior to March 31, 2027, which is the expiration date of the program. On January 27, 2026, the board of directors authorized an increase to the repurchase program of an additional $150.0 million, bringing the total repurchase authorization since August 2025 to $300.0 million. Any repurchased shares will be returned to authorized but unissued shares of common stock, as permitted under applicable Delaware law. For additional information regarding the repurchases, see below and “Notes to Consolidated Financial Statements—Capital Stock and Dividend Restrictions” included in Part IV, Item 15 of this report.
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During 2025, the Company repurchased and retired 3,653,914 shares of common stock under the stock repurchase program at a total cost of $117.6 million or a weighted average price of $32.18 per share. As of December 31, 2025, following these repurchases, approximately $32.4 million remained available for future purchases under the program at December 31, 2025. From January 1, 2026 to February 20, 2026, the Company purchased approximately 600 thousand shares of common stock, for a total repurchase of approximately $23.0 million. As of February 20, 2026, following these 2026 repurchases and the increase in the authorized aggregate dollar value of shares to be repurchased under the repurchase program, approximately $159.4 million remained available for future purchases under the program.
During 2025, the Company granted 39,058 restricted stock units of its common stock to directors for their annual service on the Company’s Board. The aggregate value of the units issued to directors of $1.1 million is amortized into stock-based compensation expense in the accompanying consolidated statements of changes in stockholders’ equity over a one-year service-based period.
As a bank holding company, the Company must comply with the capital requirements established by the Federal Reserve, and our subsidiary Bank must comply with the capital requirements established by the FDIC. The current risk-based guidelines applicable to us and our Bank are based on the Basel III framework, as implemented by the federal bank regulators. As of December 31, 2025 and 2024, the Company had capital levels that, in all cases, exceeded the guidelines to be deemed “well-capitalized.”
For additional information regarding our capital levels, see “Notes to Consolidated Financial Statements—Regulatory Capital,” included in Part IV, Item 15 of this report.
Liquidity
Liquidity measures our ability to meet current and future cash flow needs on a timely basis and at a reasonable cost. We manage our liquidity position to meet the daily cash flow needs of clients, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders. Our liquidity position is supported by management of liquid assets and liabilities and access to alternative sources of funds. Liquid assets include cash, interest bearing deposits in banks, federal funds sold, available-for-sale investment securities, and maturing or prepaying balances in our held-to-maturity investment and loan portfolios. Liquid liabilities include core deposits, federal funds purchased, securities sold under repurchase agreements, and borrowings. Other sources of liquidity include the sale of loans, the ability to acquire additional national market funds through non-core deposits, the issuance of additional collateralized borrowings such as FHLB advances, the issuance of debt securities, additional borrowings through the Federal Reserve’s discount window, and the issuance of preferred or common securities.
The primary effect of inflation on our operations is reflected in increased operating costs. In our management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of inflation, the influence of general and local economic conditions, and the monetary and fiscal policies of the United States government, its agencies, and various other governmental regulatory authorities.
In the ordinary course of business, we have entered into contractual obligations and have made other commitments to make future payments. Our short-term and long-term liquidity requirements are primarily to fund on-going operations, including payment of interest on deposits and debt, extensions of credit to borrowers, capital expenditures, and shareholder dividends. These liquidity requirements are met primarily through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios, debt financing, and increases in client deposits. For the year ended December 31, 2025, net cash provided by operating activities was $305.6 million, net cash provided by investing activities was $2,311.6 million and net cash used in financing activities was $2,204.1 million. Major outflows of cash were $285.7 million in deposits, and $1,567.5 million in repayment of other borrowed funds. Major inflows of cash included $2,159.9 million in net loan activity and $1,739.8 million in investment security maturities and paydowns. Total cash and cash equivalents were $1,309.7 million as of December 31, 2025, compared to $896.6 million as of December 31, 2024. For additional information regarding our operating, investing and financing cash flows, see “Consolidated Financial Statements—Consolidated Statements of Cash Flows,” included in Part IV, Item 15 of this report.
The Company had deposits without a stated maturity of $19,450.0 million and time deposits of $2,530.5 million, due in one year or less in addition to time deposits due in more than one year of $107.8 million as of December 31, 2025. For additional details in regard to the Company’s deposits see “Notes to Consolidated Financial Statements—Deposits” included in Part IV, Item 15 of this report.
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As of December 31, 2025, the Company had securities sold under repurchase agreements of $479.6 million due in one year or less as the agreements with our client counterparties mature on the next banking day.
As of December 31, 2025, the Company had no FHLB borrowings due in less than one year, $122.3 million of fixed-to-floating rate subordinated notes issued in 2025 and due in more than one year, and available borrowing capacity of $5,402.7 million with the FHLB. The Company has unused federal fund lines of credit with third parties amounting to $235.0 million, subject to funds availability. These lines are subject to cancellation without notice. The Company also has an unused line of credit with the FRB for borrowings up to $3,585.5 million secured by government and agency backed securities and a blanket pledge of agricultural and commercial loans. For additional information concerning long-term debt, see “Notes to Consolidated Financial Statements—Long Term Debt and Other Borrowed Funds” included in Part IV, Item 15 of this report.
The 2020 Subordinated Notes were scheduled to mature on May 15, 2030 and bore interest equal to a benchmark rate, which was Three-Month Term SOFR (as defined in the indenture governing the 2020 Subordinated Notes) plus a spread of 518.0 basis points, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, commencing on August 15, 2025. On August 15, 2025, we redeemed in full the 2020 Subordinated Notes, without any prepayment penalty, at a redemption price of 100% of the principal amount plus accrued and unpaid interest to, but excluding, August 15, 2025.
The Company guarantees the distribution and payment for redemption or liquidation of capital trust preferred securities issued by our wholly owned subsidiary business trusts to the extent of funds held by the trusts. Although the guarantees are not separately recorded, the obligations underlying the guarantees are fully reflected on our consolidated balance sheets as subordinated debentures held by subsidiary trusts. The subordinated debentures currently qualify as tier 2 capital under the Federal Reserve capital adequacy guidelines. As of December 31, 2025, the Company had subordinated debentures held by subsidiary trusts of $149.8 million due in more than one year. For additional information concerning the subordinated debentures, see “Notes to Consolidated Financial Statements—Subordinated Debentures Held by Subsidiary Trusts” included in Part IV, Item 15 of this report.
The Company has future minimum rental commitments, exclusive of maintenance and operating costs, required under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2025 with $10.2 million due in one year or less and $28.3 million due in more than one year. For additional information concerning leases, see “Notes to Consolidated Financial Statements—Commitments and Contingencies” included in Part IV, Item 15 of this report.
The Company is a limited partner in several tax-advantaged limited partnerships that have been formed for the purpose of investing in approved qualified affordable housing or other renovation or community revitalization projects. As of December 31, 2025, the Company expects to recover its investments through the use of tax credits generated by the investments. The Company's unfunded capital commitments to these investments were $5.2 million and $25.2 million as of December 31, 2025 and 2024, respectively, reported within accounts payable and accrued expenses on the consolidated balance sheets.
The Company has entered into various arrangements not reflected on the consolidated balance sheet that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, or liquidity. As of December 31, 2025, the Company had commitments to extend credit of $2,638.8 million and standby letters of credit of $60.4 million. Included in the $2,638.8 million in credit commitments outstanding, $602.6 million are related to home equity and home equity lines of credit, $1,336.7 million are related to traditional working capital commercial lines, and $146.8 million are unfunded commitments for current or future construction projects. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For additional information regarding our off-balance sheet arrangements, see “Notes to Consolidated Financial Statements—Financial Instruments with Off-Balance Sheet Risk” included in Part IV, Item 15 of this report.
As a bank holding company, we are a corporation separate and apart from our subsidiary Bank and, therefore, we provide for our own liquidity. Our primary sources of funding include management fees and dividends declared and paid by the Bank and access to capital markets. There are statutory, regulatory, and debt covenant limitations that affect the ability of our Bank to pay dividends to us. Management believes that such limitations will not impact our ability to meet our ongoing short-term cash obligations. For additional information regarding dividend restrictions, see “Financial Condition—Capital Resources and Liquidity” above, “Business—Government Regulation and Supervision—Dividends and Restrictions on Transfers of Funds” included in Part I, Item 1 of this report, and “Risk Factors—Liquidity Risks” and “Risk Factors—Regulatory and Compliance Risks” included in Part I, Item 1A of this report.
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Company management continuously monitors our liquidity position and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Our management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources, or operations. In addition, our management is not aware of any regulatory recommendations regarding liquidity, which if implemented, would have a material adverse effect on us.
The Bank satisfies incremental liquidity needs with either liquid assets or external funding sources. Available liquidity includes cash, FHLB advances and FRB borrowings through the discount window. The Bank has pledged its investment securities portfolio to access wholesale funding as needed and does not intend to sell or restructure securities at this time.
December 31, 2025
December 31, 2024
(Dollars in billions)
FHLB
FRB
Total
FHLB
FRB
BTFP
Total
Total borrowing capacity
Borrowings outstanding
Remaining Capacity, at period end
Cash and due from banks
Interest-bearing deposits
Total available liquidity
Through the Bank’s relationship with the FHLB, the Bank owns $10.7 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Bank’s borrowing capacity is dependent upon the amount of collateral the Bank places at the FHLB.
