UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-35654
NATIONAL BANK HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
27-0563799
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
7800 East Orchard Road, Suite 300, Greenwood Village, Colorado 80111
(Address of principal executive offices) (Zip Code)
Registrant’s telephone, including area code: (303) 892-8715
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Trading Symbol
Name of each exchange on which registered:
Class A Common Stock, Par Value $0.01
NBHC
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
⌧
Accelerated filer
◻
Non-accelerated filer
◻
Smaller reporting company
☐
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of May 1, 2026, the registrant had outstanding 44,790,822 shares of Class A voting common stock, each with $0.01 par value per share, excluding 808,262 shares of restricted Class A common stock issued but not yet vested.
6
Page
Part I. Financial Information
Item 1.
Financial Statements (Unaudited)
Consolidated Statements of Financial Condition as of March 31, 2026 and December 31, 2025
Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025
7
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025
8
Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2026 and 2025
9
Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025
10
Notes to Consolidated Financial Statements
11
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
47
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
75
Item 4.
Controls and Procedures
Part II. Other Information
Legal Proceedings
77
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
Other Information
Item 6.
Exhibits
Table of Contents
GLOSSARY OF ACRONYMS, ABBREVIATIONS AND TERMS
ACL
Allowance for credit losses
GDP
Gross domestic product
The acquisition
The acquisition of Vista Bancshares, Inc.
GNMA
Government National Mortgage Association
AFS
Available-for-sale
GSE
Government sponsored entity
AIR
Accrued interest receivable
HPI
Home price index
AOCI
Accumulated other comprehensive income (loss)
HTM
Held-to-maturity
ASC
Accounting Standards Codification
Inducement Plan
National Bank Holdings Corporation 2026 Inducement Plan
ASPP
Associate Stock Purchase Plan
ISDA
International Swaps and Derivative Association
ASU
Accounting Standards Update
MBS
Mortgage-backed securities
ATM
Automated Teller Machine
MSR
Mortgage servicing right
Banks
NBH Bank and Bank of Jackson Hole Trust, collectively
NBHC or the Company
National Bank Holdings Corporation and all affiliates
BOJH
Bank of Jackson Hole
NCO
Net charge-offs
BOJHT
Bank of Jackson Hole Trust
OCI
National Bank Holdings Corporation 2023 Omnibus Incentive Plan, as amended, restated, other otherwise supplemented
Cambr
Cambr Solutions, LLC
Omnibus Plan
2023 Omnibus Incentive Plan
CECL
Current expected credit loss
OREO
Other real estate owned
CEO
Chief Executive Officer
PCD
Purchased credit deteriorated
Common stock
Class A common stock, par value $0.01 per share
PD
Probability of Default
CRE
Commercial real estate
PSL
Purchased seasoned loans
DCF
Discounted cash flow
PSU
Performance stock unit
EPS
Earnings Per Share
Repurchase
Repurchase the mortgage loans with identified defects, indemnify the investor or insurer, or reimburse the investor for credit loss incurred on the loan
Exchange Act
The Securities Exchange Act of 1934
ROTA
Return on tangible assets
FASB
Financial Accounting Standards Board
S&P
Standard and Poor’s
FDIC
Federal Deposit Insurance Corporation
SBA
Small Business Administration
Federal Reserve
Federal Reserve System
SBA Preferred Lender
An approved participant in the SBA Preferred Lender’s Program
FHA
Federal Housing Administration
SEC
Securities and Exchange Commission
FHLB
Federal Home Loan Bank
SOFR
Secured overnight financing rate
FHLMC
Federal Home Loan Mortgage Corporation
Topic 606
FASB ASC Topic 606
Fintech
Financial technology company
Transaction deposits
Demand, savings, and money market deposits
FNMA
Federal National Mortgage Association
TSR
Total shareholder return
FRB
Federal Reserve Bank
Vista
Vista Bancshares, Inc.
FTE
Fully taxable equivalent
Vista Equity Plan
Vista Bank Equity Incentive Plan
GAAP
Generally accepted accounting principles
3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not discuss historical facts but instead relate to expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend,” “goal,” “focus,” “maintains,” “future,” “ultimately, ” “likely,” “ensure,” “strategy,” “objective,” and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties. We have based these statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, liquidity, results of operations, business strategy and growth prospects.
Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors, including, but are not limited to:
4
Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.
5
PART I: FINANCIAL INFORMATION
Item 1: FINANCIAL STATEMENTS.
NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition (Unaudited)
(In thousands, except share and per share data)
March 31, 2026
December 31, 2025
ASSETS
Cash and cash equivalents
$
472,791
417,058
Investment securities available-for-sale (at fair value)
605,167
528,639
Investment securities held-to-maturity (fair value of $699,014 and $597,449 at March 31, 2026 and December 31, 2025, respectively)
757,350
651,732
Other securities
90,457
80,634
Loans
9,611,486
7,433,356
(113,477)
(87,415)
Loans, net
9,498,009
7,345,941
Loans held for sale
24,905
25,695
3,821
1,674
Premises and equipment, net
235,666
214,554
Goodwill
454,672
306,043
Intangible assets, net
67,375
48,337
Other assets
404,195
263,211
Total assets
12,614,408
9,883,518
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing demand deposits
2,573,213
2,204,241
Interest bearing demand deposits
1,546,569
1,237,006
Savings and money market
5,044,181
3,701,616
Time deposits
1,294,881
1,149,771
Total deposits
10,458,844
8,292,634
Securities sold under agreements to repurchase
16,991
17,350
Long-term debt, net
202,138
54,540
Other liabilities
271,560
133,880
Total liabilities
10,949,533
8,498,404
Shareholders’ equity:
Common stock, par value $0.01 per share: 400,000,000 shares authorized; 58,851,591 and 51,487,888 shares issued; and 44,692,472 and 37,772,516 shares outstanding at March 31, 2026 and December 31, 2025, respectively
588
515
Additional paid-in capital
1,454,100
1,171,581
Retained earnings
578,522
572,461
Treasury stock of 13,206,656 and 13,412,216 shares at March 31, 2026 and December 31, 2025, respectively, at cost
(320,269)
(315,397)
Accumulated other comprehensive loss, net of tax
(48,066)
(44,046)
Total shareholders’ equity
1,664,875
1,385,114
Total liabilities and shareholders’ equity
See accompanying notes to the consolidated interim financial statements.
Consolidated Statements of Operations (Unaudited)
For the three months ended
March 31,
2026
2025
Interest and dividend income:
Interest and fees on loans
144,975
120,207
Interest and dividends on investment securities
10,151
8,737
Dividends on other securities
516
480
Interest on interest bearing bank deposits
3,509
539
Total interest and dividend income
159,151
129,963
Interest expense:
Interest on deposits
48,369
41,267
Interest on borrowings
1,980
2,005
Total interest expense
50,349
43,272
Net interest income before provision for credit losses
108,802
86,691
Provision for credit loss expense
4,000
10,200
Net interest income after provision for credit losses
104,802
76,491
Non-interest income:
Service charges
4,192
4,118
Bank card fees
4,334
4,194
Mortgage banking income
2,742
3,315
Bank-owned life insurance income
887
764
Other non-interest income
5,578
2,985
Gain on security sales
246
—
Total non-interest income
17,979
15,376
Non-interest expense:
Salaries and benefits
56,970
34,362
Occupancy and equipment
15,834
10,837
Data processing
7,653
4,401
Marketing and business development
1,504
946
FDIC deposit insurance
1,358
1,326
Bank card expenses
1,078
1,103
Professional fees
2,232
1,423
Other non-interest expense
7,744
5,642
Other intangible assets amortization
2,464
1,977
Total non-interest expense
96,837
62,017
Income before income taxes
25,944
29,850
Income tax expense
5,151
5,619
Net income
20,793
24,231
Earnings per share—basic
0.46
0.63
Earnings per share—diluted
Common stock dividend
0.32
0.29
Weighted average number of common shares outstanding:
Basic
44,439,788
38,068,455
Diluted
44,610,511
38,229,869
Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
Other comprehensive (loss) income, net of tax:
Securities available-for-sale:
Net unrealized (losses) gains arising during the period, net of tax benefit (expense) of $955 and ($3,033) for the three months ended March 31, 2026 and 2025, respectively
(3,904)
9,716
Less: reclassification adjustment for gain on security sales realized in net income, net of tax expense of $57 and $0 for the three months ended March 31, 2026 and 2025, respectively.
(189)
Less: amortization of net unrealized holding losses to income, net of tax benefit of $0 and $3 for the three months ended March 31, 2026 and 2025, respectively
(8)
Cash flow hedges:
Net unrealized gains arising during the period, net of tax expense of $292 and $474 for the three months ended March 31, 2026 and 2025, respectively
1,554
Less: reclassification for gains included in net income, net of tax expense of $267 and $385 for the three months ended March 31, 2026 and 2025, respectively
(873)
(1,269)
Other comprehensive (loss) income
(4,020)
9,993
Comprehensive income
16,773
34,224
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
For the three months ended March 31,
Accumulated
Additional
other
Common
paid-in
Retained
Treasury
comprehensive
stock
capital
earnings
income (loss), net
Total
Balance, December 31, 2024
1,167,431
508,864
(301,694)
(70,041)
1,305,075
Stock-based compensation
1,704
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $1,374, net
(702)
163
(539)
Cash dividends declared ($0.29 per share)
(11,156)
Other comprehensive income
Balance, March 31, 2025
1,168,433
521,939
(301,531)
(60,048)
1,329,308
Balance, December 31, 2025
6,349
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $12,469, net
(12,416)
11,240
(1,176)
Issuance of common stock of 7,305,975 for acquisition of Vista
73
288,586
288,659
Repurchase of 401,869 shares
(16,112)
Cash dividends declared ($0.32 per share)
(14,732)
Other comprehensive loss
Balance, March 31, 2026
Consolidated Statements of Cash Flows (Unaudited)
Cash flows from operating activities:
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization
8,955
6,328
Change in current income tax receivable
(6,318)
4,281
Change in deferred income taxes
(6,043)
4,560
Discount accretion, net of premium amortization on securities
(1,191)
(483)
Gain on sale of mortgages, net
(2,417)
(2,338)
Origination of loans held for sale, net of repayments
(80,076)
(72,646)
Proceeds from sales of loans held for sale
83,283
87,571
Originations of mortgage servicing rights
(92)
(62)
Proceeds from sales of mortgage servicing rights
2,360
Gain on sale of mortgage servicing rights
(646)
(246)
Operating lease payments
(1,884)
(1,625)
Change in other assets
(79,069)
(11,605)
Change in other liabilities
(2,873)
(12,205)
Net cash (used in) provided by operating activities
(56,829)
39,625
Cash flows from investing activities:
Proceeds from maturities and paydowns of other securities
2,214
Proceeds from maturities and paydowns of investment securities available-for-sale
33,287
48,436
Proceeds from maturities and paydowns of investment securities held-to-maturity
32,763
17,027
Proceeds from sales of other securities
10,383
15,700
Proceeds from sales of investment securities available-for-sale
176,945
Proceeds from sales of other real estate owned
6,032
Purchases of other securities
(12,667)
(15,904)
Purchases of investment securities available-for-sale
(144,764)
(142,245)
Purchases of investment securities held-to-maturity
(137,863)
(190,624)
Purchases of premises and equipment, net
(5,491)
(10,166)
Net (increase) decrease in loans
(164,366)
138,351
Proceeds from the sale of loans
11,941
Net cash activity for acquisitions
250,074
Net cash provided by (used in) investing activities
46,547
(127,484)
Cash flows from financing activities:
Net (decrease) increase in deposits
(38,808)
186,312
Net (decrease) increase in repurchase agreements and other short-term borrowings
(359)
1,854
Proceeds from long-term debt issuance
150,000
Payment of long-term debt issuance costs
(2,752)
Net (payments to) advances from the FHLB
(10,000)
30,000
Issuance of stock under purchase and equity compensation plans
(1,762)
(583)
Proceeds from exercise of stock options
552
Payment of dividends
(14,744)
(11,284)
Repurchase of common stock
Net cash provided by financing activities
66,015
206,309
Increase in cash and cash equivalents
55,733
118,450
Cash and cash equivalents at beginning of the year
127,848
Cash and cash equivalents at end of period
246,298
Supplemental disclosure of cash flow information during the period:
Cash paid for interest
47,973
42,858
Net tax payments (refunds)
176
(95)
Supplemental schedule of non-cash activities:
Loans transferred to other real estate owned at fair value
1,645
Increase in loans purchased but not settled
129,588
60,350
Loans transferred from loans held for sale to loans
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 Basis of Presentation
National Bank Holdings Corporation is a bank holding company that has elected financial holding company status and was incorporated in the State of Delaware in 2009. The Company is headquartered in Greenwood Village, Colorado, and its primary operations are conducted through its wholly owned subsidiaries NBH Bank and BOJHT. NBH Bank is a Colorado state-chartered bank and a member of the Federal Reserve, and BOJHT is a Wyoming state-chartered bank and a member of the Federal Reserve. The Company provides a variety of banking products to both commercial and consumer clients through a network of over 100 banking centers, as of March 31, 2026, located primarily in Colorado, the greater Kansas City region, Texas, Utah, Wyoming, New Mexico, Idaho and Palm Beach, Florida, as well as through online and mobile banking products and services.
The accompanying interim unaudited consolidated financial statements serve to update the National Bank Holdings Corporation Annual Report on Form 10-K for the year ended December 31, 2025 and include the accounts of the Company and its wholly owned subsidiaries, NBH Bank, BOJHT and 2UniFi, LLC. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP and, where applicable, with general practices in the banking industry or guidelines prescribed by bank regulatory agencies. However, they may not include all information and notes necessary to constitute a complete set of financial statements under GAAP applicable to annual periods and accordingly should be read in conjunction with the financial information contained in the Company’s most recent Form 10-K. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results presented. All such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications of prior years’ amounts are made whenever necessary to conform to current period presentation. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the full year or any other interim period. All amounts are in thousands, except share data, or as otherwise noted.
GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and disclosures of contingent assets and liabilities. By their nature, estimates are based on judgment and available information. Management has made significant estimates in certain areas, such as the fair values of financial instruments, contingent liabilities and the ACL. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.
The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in note 2 of the audited financial statements and notes for the year ended December 31, 2025 and are contained in the Company’s Annual Report on Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2025, except for the following:
Acquisition activities—The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets acquired exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. Fair values are subject to refinement for up to a maximum of one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Adjustments recorded to the acquired assets and liabilities assumed are applied prospectively in accordance with ASC Topic 805. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss with an ACL established on Day 1 through a gross-up adjustment to the amortized cost basis of the loans.
Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). The depositor relationship related to deposit liabilities, the client relationship related to assets under management, acquired technology intangibles and the trade name intangible (known as the core deposit, client relationship, acquired technology intangible assets and trade name intangible, respectively) may be exchanged in observable exchange transactions. As a result, these intangible assets are considered identifiable, because the separability criterion has been met.
Note 2 Recent Accounting Pronouncements
The Company has not adopted any recent accounting pronouncements in addition to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, except for the following:
In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans. The update amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the new guidance, the initial recognition of the ACL for purchased loans that meet the criteria to be deemed purchased seasoned loans is aligned with the treatment for PCD loans. Specifically, an ACL is established for the initial estimate of expected credit losses as of the acquisition date and recorded through a gross-up adjustment to the amortized cost basis of the loans. The Company elected to adopt ASU 2025-08 early, as permitted by the guidance, as of January 1, 2026. The update impacted purchase accounting entries related to loans from the Vista acquisition as described below in note 3.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Topic 350): Targeted Improvements to the Accounting for Internal-Use Software. The update eliminates the accounting consideration of software project development stages and enhances the guidance around the threshold for cost capitalization. The Company adopted ASU 2025-06 early as of January 1, 2026, using a prospective transition approach. The update did not have a material impact to the financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The update is related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC Topic 606. It allows all entities to elect a practical expedient that assumes current conditions as of the balance sheet date do not change for the remaining life of the asset. The update also allows for an accounting policy election, which is not applicable to public business entities. The Company adopted ASU 2025-05 as of January 1, 2026, on a prospective basis, and elected to use the practical expedient. The guidance did not have a material impact on the Company’s financial statements.
Note 3 Acquisition Activities
On January 7, 2026, the Company completed its acquisition of Vista Bancshares, Inc., the bank holding company of Texas-based Vista Bank. Pursuant to the merger agreement executed in September 2025, the Company paid $89.0 million of cash consideration and issued 7.3 million shares of the Company’s common stock in exchange for all of the outstanding common stock of Vista Bancshares, Inc. The transaction was valued at $377.7 million in the aggregate, based on the Company’s closing price of $39.51 on January 6, 2026. In addition, the Company held $45.0 million in debt of Vista that was effectively settled upon closing. The acquisition added 12 banking centers, including 11 within the Dallas/Ft. Worth, Austin and Lubbock regions of Texas and one banking center in Palm Beach, Florida. Acquisition-related costs of $14.3 million, pre-tax, were included in the Company’s consolidated statements of operations for the three months ended March 31, 2026. The financial results as of and for the three months ended March 31, 2026 include activity of the combined entity. The Company has made the determination of fair values using the best information available at the time; however, purchase accounting is not complete and the assumptions used are subject to change and, if changed, could have a material effect on the Company's financial position and results of operations.
The Company determined that this acquisition constitutes a business combination as defined in ASC Topic 805, Business Combinations. Accordingly, as of the date of the acquisition, the Company has recorded the assets acquired and liabilities assumed at fair value. The Company determined fair values in accordance with the guidance provided in ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is established by discounting the expected future cash flows with a market discount rate for like maturities and risk instruments. The estimation of expected future cash flows, market conditions, other future events and actual results could differ materially from the original estimates. The determination of the fair values of fixed assets, loans, OREO and core deposit intangible involves a high degree of judgment and complexity.
12
The table below summarizes net assets acquired (at fair value) and consideration transferred in connection with the Vista acquisition. The fair value of the acquired assets and liabilities noted in the table may change during the provisional period, which may last up to twelve months subsequent to the acquisition date. The Company may obtain additional information to refine the valuation of the acquired assets and liabilities and adjust the recorded fair value.
January 7, 2026
Assets:
Cash and due from banks
339,112
Investment securities available-for-sale
145,509
10,397
1,907,944
6,548
Premises and equipment
21,306
Core deposit and trade name intangible
21,547
50,156
Total assets acquired
2,502,519
2,205,031
23,420
Total liabilities assumed
2,228,451
Identifiable net assets acquired
274,068
Consideration:
NBHC common stock paid at January 7, 2026, closing price of $39.51
Cash
89,038
Purchase price paid
377,697
Effective settlement of pre-existing debt (1)
45,000
422,697
Estimated goodwill created
148,629
(1)
The Company held $45.0 million in debt of Vista. The debt was effectively settled.
In connection with the Vista acquisition, the Company recorded $148.6 million of goodwill. The amount of goodwill recorded reflects the expanded market presence, synergies and operational efficiencies that are expected to result from the acquisition. The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above:
Cash and due from banks—The carrying amount of these assets was deemed a reasonable estimate of fair value based on the short-term nature of these assets.
Investment securities available-for-sale— The investment securities portfolio fair value was determined utilizing third-party pricing services.
Loans, net—The fair value of loans were based on a discounted cash flow methodology that considered the loans’ underlying characteristics including account type, remaining terms of loan, annual interest rates or coupon, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan to value ratios, loss exposure and remaining balance. The discount rates applied were based upon a build-up approach considering the alternative cost of funds, capital charges, servicing costs, and a liquidity premium. Loans were aggregated according to similar characteristics when applying the valuation method.
Core deposit and other intangibles—The Company recorded a core deposit intangible asset of $20.5 million and a trade name intangible of $1.0 million. The core deposit intangible was valued utilizing a discounted cash flow methodology based upon assumptions regarding retained balances, such as account retention rate and growth rates, interest expense including maintenance costs, and alternative costs of funding. The discount rate applied is consistent to that applied to loans above. The trade name intangible
13
was valued using the relief‑from‑royalty method, which estimates fair value based on projected revenues, an assumed market‑based royalty rate, and a discount rate applied to the resulting cash flows.
The core deposit intangible and trade name intangible will be amortized straight-line over ten years.
Deposits—By definition, the fair value of demand and saving deposits equals the amount payable. For time deposits acquired, the Company utilized an income approach, discounting the contractual cash flows on the instruments over their remaining contractual lives at prevailing market rates.
Accounting for acquired loans
The Company adopted ASU 2025-08 as of January 1, 2026, which impacted the accounting for acquired loans. The Company grouped acquired loans according to similar characteristics. Loans that reflected a more-than-insignificant deterioration of credit were categorized as purchased credit deteriorated loans, and all other loans were categorized as purchased seasoned loans. For both PSLs and PCD loans, the initial estimate of expected credit losses was included in the balance of loans with an offsetting amount recorded to the ACL as of the date of acquisition.
The following table provides a summary of loans purchased as part of the Vista acquisition as of the acquisition date:
Unpaid principal balance
Allowance for credit loss at acquisition
Net premium/(discount) on acquired loans
Fair value
1,897,010
(21,323)
(3,107)
1,872,580
PCD Loans
50,142
(8,139)
(6,639)
35,364
Total acquired loans
1,947,152
(29,462)
(9,746)
Unaudited Pro forma information
The following unaudited pro forma information combines the historical results of Vista and the Company. The pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors. If the Vista acquisition had been completed on January 1, 2025, pro forma total revenue for the Company would have been approximately $126.8 million and $137.9 million for the three months ended March 31, 2026 and 2025, respectively. Pro forma net income for the Company would have been approximately $31.8 million and $20.7 million for the three months ended March 31, 2026 and 2025, respectively. Pro forma basic and dilutive earnings per share for the Company would have been $0.71 and $0.70 for the three months ended March 31, 2026, respectively, and $0.45 and $0.45 for the three months ended March 31, 2025, respectively. For the three months ended March 31, 2026, the pro forma information reflects adjustments made to exclude acquisition-related expenses of the Company totaling $14.3 million. Adjustments also included estimated net accretion of loan and investment marks of $1.4 million and estimated amortization of acquired identifiable intangibles of $0.5 million for the three months ended March 31, 2025.
The unaudited pro forma information is theoretical in nature and not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations which would have resulted had the Company acquired Vista during the periods presented.
Note 4 Investment Securities
The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.4 billion at March 31, 2026 and included $0.6 billion of available-for-sale securities and $0.8 billion of held-to-maturity securities. During 2026, the Company acquired available-for-sale securities with a fair value of $145.5 million related to the acquisition of Vista. At December 31, 2025, investment securities totaled $1.2 billion and included $0.5 billion of available-for-sale securities and $0.7 billion of held-to-maturity securities.
14
Available-for-sale securities are summarized as follows as of the dates indicated:
Amortized
Gross
cost
unrealized gains
unrealized losses
U.S. Treasury securities
53,341
341
(5)
53,677
Mortgage-backed securities:
Residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises
218,308
268
(17,605)
200,971
Other residential MBS issued or guaranteed by U.S. government agencies or sponsored enterprises
395,618
205
(45,555)
350,268
251
Total investment securities available-for-sale
667,518
814
(63,165)
73,144
1,082
74,226
173,308
1,248
(16,891)
157,665
338,768
563
(43,305)
296,026
722
585,942
2,893
(60,196)
During the three months ended March 31, 2026 and 2025, purchases of available-for-sale securities totaled $144.8 million and $142.2 million, respectively. Maturities and paydowns of available-for-sale securities during the three months ended March 31, 2026 and 2025 totaled $33.3 million and $48.4 million, respectively. During the three months ended March 31, 2026, the Company sold $176.9 million of available-for-sale securities, primarily related to Vista securities. There were no sales of available-for-sale securities during the three months ended March 31, 2025.
At March 31, 2026 and December 31, 2025, the Company’s available-for-sale investment portfolio was primarily comprised of U.S. Treasury securities and mortgage-backed securities. All mortgage-backed securities were backed by GSE collateral such as FHLMC and FNMA and the government-owned agency GNMA.
The tables below summarize the available-for-sale securities with unrealized losses, along with the length of time they have been in an unrealized loss position, as of the dates shown:
Less than 12 months
12 months or more
Fair
Unrealized
value
losses
4,909
77,802
(675)
94,268
(16,930)
172,070
76,350
(556)
224,836
(44,999)
301,186
159,061
(1,236)
319,104
(61,929)
478,165
15
96,937
2,546
232,742
(43,300)
235,288
329,679
(60,191)
332,225
Management regularly monitors the investment securities portfolio in its entirety and further evaluates all of the available-for-sale securities in an unrealized loss position at each reporting period. The portfolio included 89 securities, which were in an unrealized loss position at March 31, 2026, compared to 84 securities at December 31, 2025. The unrealized losses in the Company’s investment portfolio at March 31, 2026 were caused by changes in interest rates. The Company has no intention to sell these securities and believes it will not be required to sell the securities before the recovery of their amortized cost. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.
Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the FRB, if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $158.8 million and $102.4 million at March 31, 2026 and at December 31, 2025, respectively. The Company may also pledge available-for-sale investment securities as collateral for FHLB advances. No securities were pledged for this purpose at March 31, 2026 or December 31, 2025.
A summary of the available-for-sale securities by maturity is shown in the following table as of March 31, 2026. Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments and are therefore not included in the table below. The Company holds other available-for-sale securities with an amortized cost and fair value of $0.3 million as of March 31, 2026 that have no stated contractual maturity date.
Weighted
Amortized cost
average yield
Within one year
29,891
30,031
4.23%
After one but within five years
23,450
23,646
4.30%
As of March 31, 2026 and December 31, 2025, AIR from available-for-sale investment securities totaled $1.5 million and $1.9 million, respectively, and was included within other assets in the consolidated statements of financial condition.
16
Held-to-maturity investment securities are summarized as follows as of the dates indicated:
unrealized
gains
24,958
(28)
24,930
244,697
315
(23,592)
221,420
487,695
959
(35,990)
452,664
Total investment securities held-to-maturity
1,274
(59,610)
699,014
24,900
(49)
24,851
236,535
666
(23,227)
213,974
390,297
2,310
(33,983)
358,624
2,976
(57,259)
597,449
During the three months ended March 31, 2026 and 2025, purchases of held-to-maturity securities totaled $137.9 million and $190.6 million, respectively. Maturities and paydowns of held-to-maturity securities totaled $32.8 million and $17.0 million during the three months ended March 31, 2026 and 2025, respectively.
The held-to-maturity portfolio included 99 securities which were in an unrealized loss position as of March 31, 2026, compared to 92 securities at December 31, 2025. The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:
24,931
26,946
(228)
158,774
(23,364)
185,720
128,248
(1,077)
139,367
(34,913)
267,615
155,194
(1,305)
323,072
(58,305)
478,266
17
24,850
1,174
169,340
(23,226)
170,514
144,208
338,398
(57,258)
339,572
The Company does not measure expected credit losses on a financial asset, or group of financial assets, in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Management evaluated held-to-maturity securities noting they are backed by loans guaranteed by either U.S. government agencies or GSEs, and management believes that default is highly unlikely given this governmental backing and long history without credit losses. Additionally, management notes that yields on which the portfolio generally trades are based upon market views of prepayment and liquidity risk and not credit risk. The Company has no intention to sell any held-to-maturity securities and believes it will not be required to sell any held-to-maturity securities before the recovery of their amortized cost.
The table below summarizes the credit quality indicators, by amortized cost, of held-to-maturity securities as of the dates shown:
AA+
Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the FRB, if needed. The carrying value of held-to-maturity investment securities pledged as collateral totaled $586.7 million and $604.0 million at March 31, 2026 and December 31, 2025, respectively. The Company may also pledge held-to-maturity investment securities as collateral for FHLB advances. No held-to-maturity investment securities were pledged for this purpose at March 31, 2026 or December 31, 2025.
A summary of the held-to-maturity securities by maturity is shown in the following table as of March 31, 2026. Actual maturities of mortgage-backed securities may differ from scheduled maturities depending on the repayment characteristics and experience of the underlying financial instruments and are therefore not included in the table below.
3.10%
As of March 31, 2026 and December 31, 2025, AIR from held-to-maturity investment securities totaled $2.0 million and $1.4 million, respectively, and was included within other assets in the consolidated statements of financial condition.
18
Note 5 Other Securities
The carrying balances of other securities are summarized as follows as of the dates indicated:
FRB, FHLB and correspondent bank stock
35,479
24,641
Convertible preferred stock
18,508
Equity method investments
36,103
32,426
Equity securities with readily determinable fair values
367
5,059
Other securities included FRB stock, FHLB stock, correspondent bank stock, convertible preferred stock, equity method investments and equity securities with readily determinable fair values. During the three months ended March 31, 2026, purchases of other securities totaled $12.7 million, proceeds from maturities and paydowns of other securities totaled $2.2 million, and proceeds from sales totaled $10.4 million. During the three months ended March 31, 2025, purchases of other securities totaled $15.9 million, and proceeds from other securities totaled $15.7 million. Purchases consisted primarily of FHLB stock, and proceeds consisted primarily of sales of FHLB stock. Changes in the Company’s FHLB stock holdings directly correlate to FHLB line of credit advances and paydowns.
At March 31, 2026 and December 31, 2025, the Company held FRB, FHLB and correspondent bank stock for regulatory or debt facility purposes. These are restricted securities which, lacking a market, are carried at cost. There have been no identified events or changes in circumstances that may have an adverse effect on the FRB, FHLB and correspondent bank stock carried at cost.
Other securities include convertible preferred stock without a readily determinable fair value. During the three months ended March 31, 2026 and 2025, the Company had no purchases of convertible preferred stock.
Other securities also include equity method investments totaling $36.1 million and $32.4 million at March 31, 2026 and December 31, 2025, respectively. Purchases of equity method investments during the three months ended March 31, 2026 and 2025 totaled $2.2 million and $0.5 million, respectively. During the three months ended March 31, 2026 and 2025, the Company recorded net unrealized gains totaling $0.1 million and net unrealized losses totaling $0.3 million, respectively, on equity method investments. These gains and losses were recorded in other non-interest income in the Company’s consolidated statements of operations. Carrying values of equity method investments without a readily determinable fair value are updated periodically and impairments may be taken to reflect a new basis. The Company recorded no impairment related to equity method investments without a readily determinable fair value for the three months ended March 31, 2026 or the year ended December 31, 2025.
Equity securities with readily determinable fair values are generally traded on an exchange and market prices are readily available. Unrealized gains or losses on equity securities with readily determinable fair values are recognized in other non-interest income in the Company’s consolidated statements of operations. During the three months ended March 31, 2026 and 2025, the Company sold $4.6 million and zero, respectively, of equity securities with readily determinable fair values, resulting in a realized loss totaling $0.7 million in the first quarter of 2026. During the three months ended March 31, 2026 and 2025, the Company recorded $0.1 million and zero, respectively, of unrealized losses from equity securities with readily determinable fair values.
19
Note 6 Loans
The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions. The tables below show the loan portfolio composition including carrying value by segment as of the dates shown. The carrying value of loans is net of discounts, fees, costs and fair value marks of $28.1 million and $21.7 million as of March 31, 2026 and December 31, 2025, respectively.
Total loans
% of total
Commercial
5,576,747
58.0%
Commercial real estate non-owner occupied
2,539,522
26.4%
Residential real estate
1,480,573
15.4%
Consumer
14,644
0.2%
100.0%
4,668,153
62.8%
1,582,428
21.3%
1,169,699
15.7%
13,076
Information about delinquent and non-accrual loans is shown in the following tables at March 31, 2026 and December 31, 2025:
Greater
30-89 days
than 90 days
Total past
past due and
Non-accrual
due and
accruing
loans
non-accrual
Current
Commercial:
Commercial and industrial
10,254
12,390
23,986
46,630
2,715,767
2,762,397
Municipal and non-profit
1,291,024
Owner occupied commercial real estate
6,481
1,211
1,806
9,498
1,282,165
1,291,663
Food and agribusiness
223
10,392
10,615
221,048
231,663
Total commercial
16,958
23,993
25,792
66,743
5,510,004
Commercial real estate non-owner occupied:
Construction
2,075
1,578
3,653
266,345
269,998
Acquisition/development
317
189,226
189,543
Multifamily
320,271
Non-owner occupied
254
1,759,456
1,759,710
Total commercial real estate non-owner occupied
2,329
1,895
4,224
2,535,298
Residential real estate:
Senior lien
2,103
2,856
2,135
7,094
1,386,750
1,393,844
Junior lien
218
168
386
86,343
86,729
Total residential real estate
2,321
2,303
7,480
1,473,093
25
14,619
21,624
26,858
29,990
78,472
9,533,014
20
Non-accrual loans
with a related
with no related
allowance for
credit loss
11,679
12,307
13,485
46
271
1,624
1,524
611
1,692
16,801
13,189
6,243
4,716
19,607
30,566
2,007,138
2,037,704
1,273,761
1,498
1,541
2,355
5,394
1,123,224
1,128,618
2,868
6,184
9,052
219,018
228,070
10,609
12,441
21,962
45,012
4,623,141
188,992
867
331
1,198
51,289
52,487
298,497
154
1,042,298
1,042,452
1,352
1,581,076
1,027
2,100
2,332
5,459
1,082,248
1,087,707
123
249
372
81,620
81,992
1,150
2,581
5,831
1,163,868
48
38
95
12,981
11,961
15,417
24,912
52,290
7,381,066
13,738
5,869
16,093
284
1,715
617
1,964
18,142
6,770
Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans to borrowers experiencing financial difficulties may be modified. Modified loans are discussed in more detail below. There was no interest income recognized from non-accrual loans during the three months ended March 31, 2026 or 2025.
21
The Company’s internal risk rating system uses a series of grades, which reflect our assessment of the credit quality of loans based on an analysis of the borrower’s financial condition, liquidity and ability to meet contractual debt service requirements and are categorized as “Pass,” “Special mention,” “Substandard” and “Doubtful.” For a description of the general characteristics of the risk grades, refer to note 2 Summary of Significant Accounting Policies in our audited consolidated financial statements in our 2025 Annual Report on Form 10-K.
22
The amortized cost basis and current period gross charge-offs for all loans as determined by the Company’s internal risk rating system and year of origination are shown in the following tables as of and for the three months ended March 31, 2026 and the year ended December 31, 2025:
Revolving
Origination year
amortized
converted
2024
2023
2022
Prior
cost basis
to term
Commercial and industrial:
Pass
219,264
622,399
503,722
155,286
227,469
250,203
642,724
586
2,621,653
Special mention
11,482
4,699
27,919
13,376
4,422
15,621
77,518
Substandard
805
4,839
14,833
2,953
11,299
20,028
1,292
56,049
Doubtful
750
1,231
454
742
7,177
Total commercial and industrial
638,686
514,010
199,269
244,252
266,666
678,373
1,877
Gross charge-offs: Commercial and industrial
2,525
62
4,722
7,309
Municipal and non-profit:
42,299
260,834
108,631
133,277
581,504
36,631
Total municipal and non-profit
Owner occupied commercial real estate:
38,905
191,595
179,063
134,088
251,359
400,864
27,593
72
1,223,539
1,946
6,361
6,186
23,468
40,507
650
1,939
6,428
13,632
2,659
25,308
250
121
1,713
225
2,309
Total owner occupied commercial real estate
193,541
186,074
138,823
264,094
439,677
30,477
Gross charge-offs: Owner occupied commercial real estate
142
Food and agribusiness:
290
1,609
14,735
15,561
63,955
25,738
83,663
103
205,654
5,631
9,866
298
15,811
10,198
Total food and agribusiness
20,366
73,821
35,952
83,961
300,758
1,094,670
829,081
481,501
715,444
1,323,799
829,442
2,052
Gross charge-offs: Commercial
204
7,451
Construction:
16,188
61,021
87,993
19,426
19,858
22,001
20,606
14,901
261,994
118
5,671
1,345
7,134
620
232
870
Total construction
61,157
26,149
23,578
Acquisition/development:
16,095
32,513
68,820
4,076
24,236
13,442
7,504
166,686
1,974
9,872
7,267
19,113
2,614
2,931
564
813
Total acquisition/development
71,043
17,126
31,503
13,759
Multifamily:
37,667
1,307
32,753
161,728
74,047
307,502
4,464
8,305
Total multifamily
174,497
Non-owner occupied:
188,338
174,305
222,225
192,960
313,470
617,999
30,902
2,480
1,742,679
696
7,255
174
8,125
3,949
6,001
2,352
553
2,905
Total non-owner occupied
222,921
325,129
622,675
220,621
305,642
383,264
262,265
557,278
734,059
59,012
17,381
Senior lien:
62,252
236,047
115,800
63,624
373,787
502,382
32,072
261
1,386,225
537
59
2,113
734
1,699
2,117
6,722
106
360
Total senior lien
62,311
118,167
64,358
375,592
505,036
Gross charge-offs: Senior lien
52
Junior lien:
5,314
2,472
1,729
2,932
3,724
5,931
62,961
1,212
86,275
27
86
179
162
427
Total junior lien
3,810
6,137
63,123
67,625
238,519
119,896
67,290
379,402
511,173
95,195
1,473
Gross charge-offs: Residential real estate
Consumer:
2,012
3,191
1,658
1,043
512
463
5,726
14,626
Total consumer
3,200
1,667
Gross charge-offs: Consumer
196
591,016
1,642,031
1,333,908
812,099
1,652,636
2,569,494
989,375
20,927
Gross charge-offs: Total loans
2,537
4,820
7,757
2021
448,020
367,280
116,168
228,648
149,829
105,169
427,465
36,042
1,878,621
12,367
794
33,712
7,835
1,311
3,338
15,938
2,376
77,671
1
8,765
17,661
3,084
19,043
3,108
21,665
682
74,009
291
2,079
387
646
7,403
464,388
377,130
169,620
239,954
170,183
112,261
465,068
39,100
933
3,042
14,062
366
2,504
1,094
268,314
114,545
128,619
133,664
208,117
385,561
34,941
140,118
213,072
113,393
192,107
124,070
242,553
15,572
1,117
1,042,002
2,955
1,664
7,387
6,906
22,164
850
41,926
12,227
9,509
8,135
8,874
5,290
44,035
239
416
655
228,254
124,566
207,868
139,850
270,423
16,422
2,266
1,480
303
4,049
630
13,377
8,500
61,432
6,063
18,866
101,022
4,072
213,962
3,659
4,407
8,066
83
5,092
6,042
65,174
6,930
28,365
Gross charge-offs: Food and agribusiness
24
873,450
733,306
431,305
646,660
525,080
796,610
617,453
44,289
16,352
1,846
1,397
26,074
18,338
85,198
8,900
42,629
880
33,047
4,483
16,627
435
20,076
1,923
8,072
540
52,156
8,403
11,500
1,320
37,107
146,730
23,501
65,554
285,712
4,482
8,303
159,515
61,931
48,296
140,934
238,047
154,937
340,290
22,351
1,006,786
4,700
4,879
3,000
27,787
30,787
66,631
241,047
368,256
Gross charge-offs: Non-owner occupied
1,467
100,952
151,441
187,376
463,267
180,361
443,093
55,938
Gross charge-offs: Commercial real estate non-owner occupied
118,410
55,172
46,936
364,528
250,897
225,011
21,622
1,082,580
737
1,996
442
1,896
5,076
40
55,177
47,673
366,564
251,339
226,918
26
145
173
2,778
5,871
3,110
3,837
876
5,264
59,651
68
81,455
87
259
164
510
3,924
5,550
59,815
121,188
61,048
50,783
370,488
252,215
232,468
81,437
4,157
1,812
1,007
347
312
4,794
37
13,019
57
4,167
1,821
350
715
747
1,099,757
947,616
670,471
1,480,968
958,003
1,472,521
759,622
44,398
1,648
3,079
16,353
1,991
3,972
1,418
28,461
Loans evaluated individually
We evaluate loans individually when they no longer share risk characteristics with pooled loans. These loans include loans on non-accrual status, loans in bankruptcy, and modified loans as described below. If a specific allowance is warranted based on the borrower’s overall financial condition, the specific allowance is calculated based on discounted expected cash flows using the loan’s initial contractual effective interest rate or the fair value of the collateral less selling costs for collateral-dependent loans.
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Management individually evaluates collateral-dependent loans with an amortized cost basis of $250 thousand or more and includes collateral-dependent loans less than $250 thousand within the general allowance population. The amortized cost basis of collateral-dependent loans over $250 thousand was as follows at March 31, 2026 and December 31, 2025:
Total amortized
Real property
Business assets
10,447
15,737
26,184
4,843
1,086
5,929
15,290
16,823
32,113
5,401
6,907
978
7,885
12,308
13,286
3,748
31,346
17,801
49,147
3,095
18,453
21,548
4,563
1,052
5,615
7,658
19,505
27,163
1,030
8,688
28,193
Loan modifications
The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. The Company considers loans to borrowers experiencing financial difficulties, where such a concession is utilized, to be modified loans. Modified loans may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof.
The following schedules present, by loan class, the amortized cost basis for loans to borrowers experiencing financial difficulty that remain outstanding and were modified during the periods presented:
As of and for the three months ended March 31, 2026
Term Extension
% of loan
class
0.0%
As of and for the three months ended March 31, 2025
Payment Delay
3,526
2,195
5,721
0.1%
The following schedules present, by loan class, the payment status of loans that have been modified in the last twelve months as of the dates presented on an amortized cost basis:
30-89 days past due
90+ days past due
5,576
1,934
382
4,436
31,239
36,874
4,707
March 31, 2025
5,014
7,454
1,602
7,209
158
42
1,644
Accrual of interest is resumed on loans that were previously on non-accrual only after the loan has performed sufficiently for a period of time. During the three months ended March 31, 2026, the Company had six modified loans with an amortized cost totaling $3.6 million that were modified within the past 12 months, primarily utilizing payment delays with one loan utilizing a term extension, that defaulted on their modified terms. During the three months ended March 31, 2025, the Company had one modified loan with an amortized cost totaling $1.6 million that was modified within the past 12 months, utilizing a payment delay, that defaulted on its modified terms. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due on principal or
interest. The allowance for credit losses related to modified loans on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as modified loans.
The following schedules present the financial effect of the modifications made to borrowers experiencing financial difficulty as of and for the periods indicated:
Financial Effect
Extended a weighted average of 10.9 years to the life of loans
Delayed payments for a weighted average of 0.4 years
Delayed payments for a weighted average of 0.3 years
Note 7 Allowance for Credit Losses
The tables below detail the Company’s allowance for credit losses as of the dates shown:
Three months ended March 31, 2026
Non-owner
occupied
commercial
Residential
real estate
Beginning balance
47,482
23,076
16,597
260
87,415
10,172
15,065
4,208
29,462
Charge-offs
(7,451)
(52)
(254)
(7,757)
Recoveries
2
Provision expense (release) for credit losses on loans
5,153
(111)
(963)
221
4,300
Ending balance
55,369
38,030
19,792
286
113,477
Three months ended March 31, 2025
48,552
26,136
94,455
(13,569)
(1,467)
(215)
(15,251)
56
28
138
(1,192)
(1,147)
170
10,850
48,058
23,494
18,307
333
90,192
In evaluating the loan portfolio for an appropriate ACL level, excluding loans evaluated individually, loans were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of developing the underlying data used within the discounted cash flow model including, but not limited to, prepayment and recovery rates as well as loss rates tied to macro-economic conditions within management’s reasonable and supportable forecast. The ACL also includes subjective adjustments based upon qualitative risk factors including asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.
At March 31, 2026 and December 31, 2025, the allowance for credit losses totaled $113.5 million and $87.4 million, respectively. As a result of the Vista acquisition, we recorded $29.5 million of allowance for credit losses for the loans acquired. The remaining increase during the three months ended March 31, 2026, excluding net charge-offs, was driven by loan growth. During the three months ended March 31, 2026, the Company recorded provision expense for credit losses totaling $4.0 million, including $4.3 million provision expense for funded loans and $0.3 million of provision release for unfunded loan commitments. During the three months ended March 31, 2025, the Company recorded provision expense for credit losses totaling $10.2 million, which included $10.9 million of provision expense for funded loans and $0.7 million of provision release for unfunded loan commitments. Net charge-offs on loans during the three months ended March 31, 2026 and 2025 totaled $7.7 million and $15.1 million, respectively.
The Company has elected to exclude AIR from the allowance for credit losses calculation. As of March 31, 2026 and December 31, 2025, AIR from loans totaled $51.9 million and $38.3 million, respectively.
Note 8 Goodwill and Intangible Assets
Goodwill and other intangible assets
In connection with our acquisitions, the Company’s goodwill was $454.7 million as of March 31, 2026. The Vista acquisition added $148.6 million of goodwill as of March 31, 2026. Goodwill is measured as the excess of the fair value of consideration paid over the fair value of net assets acquired. No goodwill impairment was recorded during the three months ended March 31, 2026 or the year ended December 31, 2025.
The gross carrying amounts of other intangible assets and the associated accumulated amortization at March 31, 2026 and December 31, 2025, are presented as follows:
Net
carrying
amount
amortization
Core deposit intangible
112,113
(62,584)
49,529
91,566
(60,739)
30,827
Customer relationship intangible
17,000
(6,539)
10,461
(6,059)
10,941
Acquired technology intangible
2,300
(1,265)
1,035
(1,150)
Trade name intangible
1,000
(25)
975
132,413
(70,413)
62,000
110,866
(67,948)
42,918
The Vista acquisition added a core deposit intangible totaling $20.5 million and a trade name intangible totaling $1.0 million as of March 31, 2026.
The Company is amortizing intangibles from acquisitions over a weighted average period of 9.9 years from the date of the respective acquisitions. The core deposit, customer relationship and trade name intangibles are being amortized over a weighted average period of 10 years, the acquired technology intangible is being amortized over a weighted average period of five years. The Company recognized other intangible assets amortization expense of $2.5 million and $2.0 million during the three months ended March 31, 2026 and 2025, respectively.
The following table shows the estimated future amortization expense during the next five years for other intangible assets as of the periods presented:
Years ending December 31,
Amount
For the nine months ending December 31, 2026
7,317
2027
9,697
2028
8,297
2029
7,945
2030
7,823
Servicing Rights
Mortgage servicing rights
MSRs represent rights to service loans originated by the Company and sold to GSEs including FHLMC, FNMA, GNMA and FHLB and are included in other assets in the consolidated statements of financial condition. Mortgage loans serviced for others were $0.3 billion and $0.3 billion at March 31, 2026 and 2025, respectively.
Below are the changes in the MSRs for the periods presented:
2,841
4,835
Originations
92
Sales
(1,811)
Amortization
(104)
(132)
2,829
2,954
Fair value of mortgage servicing rights
4,386
4,457
During the three months ended March 31, 2025, the Company sold rights to service loans totaling $203.7 million in unpaid principal balances from our mortgage servicing rights portfolio. As a result of the sale, the book value of our mortgage servicing rights intangible decreased $1.8 million and generated a pre-tax gain of $0.6 million included in mortgage banking income in the consolidated statements of operations.
The fair value of MSRs was determined based upon a discounted cash flow analysis. The cash flow analysis included assumptions for discount rates and prepayment speeds. The discount rate ranged from 9.5% to 10.0% and the constant prepayment speed ranged from 6.4% to 11.0% for the March 31, 2026 valuation. The discount rate ranged from 10.0% to 10.5%, and the constant prepayment speed ranged from 6.3% to 12.4% for the March 31, 2025 valuation. Included in mortgage banking income in the consolidated statements of operations was servicing income of $0.2 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively.
MSRs are evaluated and impairment is recognized to the extent fair value is less than the carrying amount. The Company evaluates impairment by stratifying MSRs based on the predominant risk characteristics of the underlying loans, including loan type and loan term. There was no impairment of MSRs during the three months ended March 31, 2026 or 2025. The Company is amortizing the MSRs in proportion to and over the period of the estimated net servicing income of the underlying loans.
The following table shows the estimated future amortization expense during the next five years for the MSRs as of the periods presented:
305
269
237
209
SBA servicing asset
The SBA servicing asset represents the value associated with servicing small business real estate loans that have been sold to outside investors with servicing retained. The SBA servicing asset is evaluated and impairment is recognized to the extent fair value is less than the carrying amount. The Company evaluates impairment by stratifying the SBA servicing asset based on the predominant risk characteristics of the underlying loans, including loan type and loan term. The Company is amortizing the SBA servicing asset in proportion to and over the period of the estimated net servicing income of the underlying loans. The Company serviced $127.6 million and $125.5 million of SBA loans that have been sold into the secondary market as of March 31, 2026 and December 31, 2025, respectively. The Company recognized SBA servicing asset fee income totaling $0.2 million for both the three months ended March 31, 2026 and 2025.
29
Below are the changes in the SBA servicing asset for the periods presented:
2,578
2,862
90
Disposals
(59)
(68)
Recovery
(67)
(149)
2,777
Fair value of SBA servicing asset
The Company uses assumptions and estimates in determining the fair value of SBA loan servicing rights. These assumptions include prepayment speeds, discount rates, and other assumptions. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. For the three months ended March 31, 2026 and 2025, the key assumptions used to determine the fair value of the Company’s SBA servicing asset included weighted average lifetime constant prepayment rates equal to 16.0% and 15.7%, respectively, and weighted average discount rates equal to 10.4% and 9.3%, respectively.
The following table shows the estimated future amortization expense during the next five years for the SBA servicing asset as of the periods presented:
229
278
245
215
190
Note 9 Borrowings
Borrowings consist of securities sold under agreements to repurchase, FHLB advances and long-term debt.
The Company enters into repurchase agreements to facilitate the needs of its clients. As of March 31, 2026 and December 31, 2025, the Company sold securities under agreements to repurchase totaling $17.0 million and $17.4 million, respectively. The Company pledged mortgage-backed securities with a fair value of approximately $26.7 million and $28.5 million as of March 31, 2026 and December 31, 2025, respectively, for these agreements. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. As of March 31, 2026 and December 31, 2025, the Company had $9.7 million and $11.1 million, respectively, of excess collateral pledged for repurchase agreements.
Federal Home Loan Bank advances
As a member of the FHLB, the Banks have access to a line of credit and term financing from the FHLB with total available credit of $2.0 billion at March 31, 2026. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At March 31, 2026 and December 31, 2025, NBH Bank had no outstanding borrowings from the FHLB. The Banks may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged for FHLB advances at March 31, 2026 or December 31, 2025. Loans pledged were $3.6 billion and $2.4 billion at March 31, 2026 and December 31, 2025, respectively. The Company incurred $0.1 million and $1.1 million of interest expense related to FHLB advances and other short-term borrowings for the three months ended March 31, 2026 and 2025, respectively.
In connection with the acquisition, the Company paid off Vista’s FHLB term loan during the three months ended March 31, 2026, which incurred a prepayment penalty totaling $0.1 million, included in interest on borrowings in the consolidated statements of operations.
30
Long-term debt
During February 2026, the Company closed a public offering of fixed-to-floating rate subordinated notes totaling $150.0 million. The balance on the notes at March 31, 2026, net of long-term debt issuance costs of $2.7 million, totaled $147.3 million. During the three months ended March 31, 2026, interest expense totaling $1.2 million was recorded in the consolidated statements of operations. From the issue date to February 15, 2031, or the date of earlier redemption, the Company will pay interest on the notes semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2026, at a fixed annual interest rate equal to 5.875%. From February 15, 2031 to the maturity date, or the date of earlier redemption, the floating interest rate per annum will be equal to the three-month term SOFR plus a spread of 241 basis points, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, commencing on May 15, 2031. The notes will mature on February 15, 2036. The Company may, at its option, redeem the notes in whole or in part beginning with the interest payment date of February 15, 2031 and on any interest payment date thereafter. The Company deployed the net proceeds from the sale of the notes for general corporate purposes.
The Company also holds a fixed-to-floating rate note totaling $40.0 million. The balance on the note at March 31, 2026 and December 31, 2025, net of long-term debt issuance costs totaling $0.1 million, totaled $40.0 million. During the three months ended March 31, 2026 and 2025, interest expense totaling $0.3 million was recorded in the consolidated statements of operations. The note is subordinated, unsecured and matures on November 15, 2031. Payments consist of interest only. Interest expense on the note is payable semi-annually in arrears and will bear interest at 3.00% per annum until November 15, 2026 (or any earlier redemption date). From November 15, 2026 until November 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.
As part of the acquisition of BOJH on October 1, 2022, the Company assumed three subordinated fixed-to-floating rate notes totaling $15.0 million. The balance on the notes at March 31, 2026 and December 31, 2025, net of the fair value adjustment from the acquisition, totaled $15.0 million. Interest expense related to the notes totaling $0.1 million was recorded in the consolidated statements of operations during the three months ended March 31, 2026 and 2025. The three notes, containing similar terms, are subordinated, unsecured and mature on June 15, 2031. Payments consist of interest only. Interest expense on the notes is payable semi-annually in arrears and will bear interest at 3.75% per annum until June 15, 2026 (or any earlier redemption date). From June 15, 2026 until June 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 306 basis points. Prior to June 15, 2026, the Company may redeem the notes only under certain limited circumstances. Beginning on June 15, 2026 through maturity, the notes may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the notes being redeemed, together with any accrued and unpaid interest on the notes being redeemed up to but excluding the date of redemption. The notes are not subject to redemption at the option of the holder.
Note 10 Regulatory Capital
As a bank holding company that has elected to be treated as a financial holding company, the Company, NBH Bank and BOJHT are subject to regulatory capital adequacy requirements implemented by the Federal Reserve, in addition to those implemented by the FDIC for NBH Bank and BOJHT, including maintaining capital positions at the “well-capitalized” level. The federal banking agencies have risk-based capital adequacy regulations intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations. Under these regulations, assets are assigned to one of several risk categories, and nominal dollar amounts of assets and credit equivalent amounts of off-balance-sheet items are multiplied by a risk-adjustment percentage for the category. Regulatory authorities can initiate certain mandatory actions if the Company, NBH Bank or BOJHT fail to meet the minimum capital requirements, which could have a material effect on our financial statements and business generally.
31
Under the Basel III requirements, at March 31, 2026 and December 31, 2025, the Company and the Banks met all capital requirements, including the capital conservation buffer of 2.5%. The Company and the Banks had regulatory capital ratios in excess of the levels established for well-capitalized institutions, as detailed in the tables below:
Required to be
well capitalized under
considered
prompt corrective
adequately
Actual
action provisions
capitalized(1)
Ratio
Tier 1 leverage ratio:
Consolidated
10.4%
1,222,565
N/A
4.0%
468,102
NBH Bank
10.2%
1,186,624
5.0%
583,205
466,564
34.6%
13,291
1,922
1,538
Common equity tier 1 risk based capital:
12.5%
7.0%
684,036
12.2%
6.5%
632,032
680,650
129.7%
718
Tier 1 risk based capital ratio:
8.5%
830,615
8.0%
777,886
826,504
820
871
Total risk based capital ratio:
15.8%
1,542,004
10.5%
1,026,054
13.4%
1,301,078
10.0%
972,357
1,020,975
129.9%
13,320
1,025
1,076
Includes the capital conservation buffer of 2.5%.
11.6%
1,101,481
381,030
963,497
474,353
379,483
34.2%
13,219
1,548
14.9%
517,822
13.1%
477,845
514,602
79.3%
1,083
1,167
628,784
588,117
624,874
1,333
1,417
16.8%
1,244,572
776,733
14.3%
1,051,838
735,146
771,904
79.5%
13,250
1,750
Note 11 Revenue from Contracts with Clients
Revenue is recognized when obligations under the terms of a contract with clients are satisfied. Below is the detail of the Company’s revenue from contracts with clients, including service charges and other deposit account related fees, bank card fees and other non-interest income. Other non-interest income includes trust and wealth management fees and Cambr fee income.
32
Service charges and other account-related fees
Service charge fees are primarily comprised of monthly service fees, check orders and other deposit account related fees. Other fees include revenue from processing wire transfers, bill pay service, cashier’s checks and other services. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account-related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to clients’ accounts.
Bank card fees are primarily comprised of debit card income, ATM fees, merchant services income and other fees. Debit card income is primarily comprised of interchange fees earned whenever the Company’s debit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Bank cardholder uses a non-Bank ATM or a non-Bank cardholder uses a Bank ATM. Merchant services income mainly represents fees charged to merchants to process their debit card transactions. The Company’s performance obligation for bank card fees is largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.
Trust and wealth management fees
The trust and wealth management business offers separately managed investment account solutions and trustee services to clients. Services may include custody of assets, trustee services, wealth management and directed trusts. The Company charges an asset-based fee earned for personal and corporate accounts. Additional fees may include minimum annual fees, fees for additional tax reporting and preparation for irrevocable trust returns or annual flat fees for certain trusts. The performance obligations related to this revenue include items such as performing investment advisory services, custody and record-keeping services, and fund administrative and accounting services. The performance obligations are satisfied upon completion of service and fees are generally a fixed flat rate or based on a percentage of the account’s market value per the contract with the client. These fees are recorded within other non-interest income in the consolidated statements of operations.
Cambr fee income
Cambr operates a deposit acquisition and processing platform that generates core deposits from accounts offered through third-party embedded finance companies. Cambr’s platform facilitates the movement of embedded finance companies’ client deposits into FDIC-insured accounts at banks within Cambr’s network. Cambr generates fee income by charging a percentage-based fee of the deposit balance placed into the Cambr network. The performance obligation is satisfied upon completion of service, and Cambr fee income is recorded within other non-interest income in the consolidated statements of operations.
Included within other non-interest expense are gains and losses from OREO sales, which are recognized when the Company meets its performance obligation to transfer title to the buyer. The gain or loss is measured as the excess of the proceeds received compared to the OREO carrying value. Sales proceeds are received in cash at the time of transfer.
33
The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, and non-interest expense in-scope of Topic 606 for the three months ended March 31, 2026 and 2025:
Non-interest income
In-scope of Topic 606:
5,232
1,791
1,396
Non-interest income (in-scope of Topic 606)
11,357
10,822
Non-interest income (out-of-scope of Topic 606)
6,622
4,554
Non-interest expense
Other non-interest expense(1)
(12)
Total revenue in-scope of Topic 606
11,345
Other non-interest expense includes net gains (losses) from sales of OREO.
Contract acquisition costs
The Company utilizes the practical expedient which allows entities to expense immediately contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. The Company has not capitalized any contract acquisition costs.
Note 12 Stock-based Compensation and Benefits
The Company provides stock-based compensation primarily in accordance with shareholder-approved plans.
To date, the Company has issued stock options, restricted stock and PSUs. If awarded, the Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of Company common stock at the date of grant.
In connection with the acquisition of Vista, the Company assumed the Vista Equity Plan and adopted the Inducement Plan. During the quarter, the Company registered 95,396 shares under the Vista Equity Plan, which may be issuable upon the vesting or settlement of a portion of a restricted stock award granted under the Vista Equity Plan. These replacement awards consist of non‑vested restricted shares of common stock that will vest based on continued service, and had a weighted‑average grant‑date fair value of $39.33 per share.
During the quarter, the Company issued 36,265 shares of common stock under the Inducement Plan, consisting of 22,398 non‑vested restricted shares that vest based on continued service and 13,867 PSUs. The inducement awards had a weighted‑average grant‑date fair value of $39.59 per share. The PSUs vest based on performance conditions generally consistent with the Company’s other PSU awards, with one‑half of the award based on the achievement of cumulative adjusted EPS targets and one‑half based on relative ROTA subject to an adjustment factor ranging from 80% - 120% based on the Company’s cumulative relative TSR during the performance period. All awards are equity‑classified and accounted for under ASC Topic 718, Compensation—Stock Compensation, with compensation expense recognized over the respective service or performance periods.
Stock options
Prior to 2024, the Company issued stock options, which are primarily time-vesting with 1/3 vesting on each of the first, second and third anniversary of the date of grant or date of hire. At March 31, 2026 and 2025, the Company had 516,196 and 560,386 stock options outstanding, respectively, at a weighted average exercise price of $33.16 and $32.93, respectively. No stock options were granted during the three months ended March 31, 2026. Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $12.4 thousand and $42.9 thousand for the three months ended March 31, 2026 and 2025, respectively. At March 31, 2026, there was $4.6 thousand of total unrecognized compensation cost related to non-vested stock options granted under the plans. The cost is expected to be recognized over a weighted average period of 0.1 years.
34
Restricted stock awards
The Company issues time-based restricted stock awards that generally vest over a range of a 1-3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.
The Company granted 567,549 shares of performance-based restricted stock in 2026 in connection with the Vista acquisition. One-third of each such award is performance-based and will vest on December 15, 2026, subject to continued employment through such date and the achievement of: (i) with respect to 50% of such portion, the successful closing, integration and rebranding of the combined organization, as determined by the Board’s Compensation Committee in its sole discretion; and (ii) with respect to the other 50% of such portion, specified annual cost savings goals with respect to the combined organization directly resulting from the acquisition and integration of Vista through November 30, 2026. The remaining two-thirds of each such award are time-based and will vest in eight quarterly installments beginning on March 15, 2027, subject to continued employment through such vesting dates.
Performance stock units
The Company grants PSUs whereby the recorded fair value represents the value of the award at the initial target performance and does not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares to be awarded at the end of the performance period will range from 0% - 180% of the initial target awards.
For all PSU components granted in 2026, one-half of the award is based on the Company’s cumulative adjusted earnings per share (EPS target), and one-half is based on the Company’s relative ROTA. On the vesting date, the Company’s annual ROTA will be compared to the respective ROTAs of companies comprising the S&P 600 Regional Banks group, and the Company’s ranking will be averaged over the measurement period to determine the shares available for settlement. Both halves will be subject to an adjustment factor ranging from 80% - 120% based on the Company’s cumulative relative TSR during the performance period. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the S&P 600 Regional Banks group as of the grant date to determine the relative TSR modifier to be applied to the PSU awards. The fair value of the PSUs was determined using a Monte Carlo Simulation at the grant date.
The weighted-average grant date fair value per unit for the awards granted during the three months ended March 31, 2026 of the EPS target portion and ROTA target portion was $39.66. During the three months ended March 31, 2026, the Company canceled 39,673 PSUs due to final performance results related to PSUs granted in 2023.
The following table summarizes restricted stock and PSU activity during the three months ended March 31, 2026:
Restricted
average grant-
Performance
stock shares
date fair value
stock units
Unvested at December 31, 2025
303,156
35.57
212,513
34.09
Granted
660,544
39.21
293,350
39.45
Adjustment due to performance
(39,673)
28.68
Vested
(8,595)
39.02
(25,876)
33.46
Forfeited
(2,642)
36.87
(1,300)
33.74
Unvested at March 31, 2026
952,463
38.06
439,014
38.20
As of March 31, 2026, the total unrecognized compensation cost related to the non-vested restricted stock awards and PSUs totaled $26.8 million and $12.7 million, respectively, and is expected to be recognized over a weighted average period of approximately 2.7 years and 1.7 years, respectively. Expense related to non-vested restricted stock awards totaled $4.0 million and $1.1 million during the three months ended March 31, 2026 and 2025, respectively. Expense related to non-vested PSUs totaled $2.3 million and $0.5 million during the three months ended March 31, 2026 and 2025, respectively. Expense related to non-vested restricted stock awards and PSUs is a component of salaries and benefits expense in the Company’s consolidated statements of operations.
35
Associate stock purchase plan
The ASPP is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ASPP. Under the ASPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 188,269 was available for issuance at March 31, 2026.
Under the ASPP, employees purchased 8,490 shares and 8,099 shares during the three months ended March 31, 2026 and 2025, respectively.
Note 13 Common Stock
The Company had 44,692,472 and 37,772,516 shares of common stock outstanding at March 31, 2026 and December 31, 2025, respectively, inclusive of 7,305,975 shares of common stock added to the Company’s total outstanding shares upon the closing of the Vista acquisition. Additionally, the Company had 952,463 and 303,156 shares outstanding at March 31, 2026 and December 31, 2025, respectively, of restricted common stock issued but not yet vested and are not included in shares outstanding until such time that they are vested. Of the 952,463 shares of restricted common stock issued but not yet vested at March 31, 2026, 842,618 shares were under the Omnibus Plan, 87,447 shares were under the Vista Equity Plan, and 22,398 shares were under the Inducement Plan. All shares of restricted common stock issued but not vested at March 31, 2025 were under the Omnibus Plan. All restricted shares under each plan have voting rights, however, restricted shares under the Omnibus Plan and Inducement Plan also have certain dividend rights.
On January 27, 2026, the Company’s Board of Directors authorized a program to repurchase up to $100.0 million of the Company’s common stock from time to time in the open market or in privately negotiated transactions in accordance with applicable regulations of the SEC. The timing and amount of any share repurchases will be determined by the Company’s management based on market conditions and other factors. The new program replaces in its entirety the stock repurchase program that was authorized by the Board of Directors and announced on May 9, 2023. No time limit has been set for completion of the program. During the three months ended March 31, 2026, the Company repurchased 401,869 shares of common stock for $16.1 million at a weighted average price per share of $40.07. The remaining authorization under the current program as of March 31, 2026 was $83.9 million.
Note 14 Earnings Per Share
The Company calculates earnings per share under the two-class method, as certain non-vested share awards contain non-forfeitable rights to dividends. As such, these awards are considered securities that participate in the earnings of the Company. Non-vested shares are discussed further in note 12.
The Company had 44,692,472 and 38,094,105 shares of common stock outstanding as of March 31, 2026 and 2025, respectively, excluding issued but unvested restricted shares. Certain stock options and non-vested restricted shares are potentially dilutive securities, but are not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive for the three months ended March 31, 2026 and 2025.
36
The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2026 and 2025:
Less: income allocated to participating securities
(394)
(182)
Income allocated to common shareholders
20,399
24,049
Weighted average shares outstanding for basic earnings per common share
Dilutive effect of equity awards
170,723
161,414
Weighted average shares outstanding for diluted earnings per common share
Basic earnings per share
Diluted earnings per share
The Company had 516,196 and 560,386 outstanding stock options to purchase common stock at weighted average exercise prices of $33.16 and $32.93 per share at March 31, 2026 and 2025, respectively, which have time-vesting criteria, and as such, any dilution is derived only for the timeframe in which the vesting criteria had been met and where the inclusion of those stock options is dilutive. The Company had 439,014 and 147,955 unvested PSUs issued as of March 31, 2026 and 2025, respectively, which have performance, market and/or time-vesting criteria, and as such, any dilution is derived only for the timeframe in which the vesting criteria had been met and where the inclusion of those units is dilutive. The Company had 87,447 and zero unvested restricted shares issued as of March 31, 2026 and 2025, respectively, which do not have dividend rights, and as such, any dilution is derived only for the timeframe in which the vesting criteria had been met and where the inclusion of those units is dilutive.
Note 15 Derivatives
Risk management objective of using derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company has established policies stipulating that neither carrying value nor fair value at risk should exceed established guidelines. The Company has designed strategies to confine these risks within the established limits and identify appropriate trade-offs in the financial structure of its balance sheet. These strategies include the use of derivative financial instruments to help achieve the desired balance sheet repricing structure while meeting the desired objectives of its clients. Currently, the Company employs certain interest rate swaps that are designated as fair value hedges, cash flow hedges and economic hedges. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.
Fair values of derivative instruments on the balance sheet
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated statements of financial condition as of March 31, 2026 and December 31, 2025. Information about the valuation methods used to measure fair value is provided in note 17.
Asset derivatives fair value
Liability derivatives fair value
Balance Sheet
December 31,
location
Derivatives designated as hedging instruments:
Interest rate products
21,512
21,929
2,028
1,866
Total derivatives designated as hedging instruments
Derivatives not designated as hedging instruments:
7,067
7,221
7,204
7,227
Interest rate lock commitments
399
283
Forward contracts
186
Total derivatives not designated as hedging instruments
7,652
7,228
7,315
Cash flow hedges
The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses floors and collars as part of its interest rate risk management strategy. Interest rate floors designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates fall below the strike rate on the contract in exchange for an up-front premium. Interest rate collars designated as cash flow hedges involve the payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and receipt of variable-rate amounts if interest rates fall below the floor strike rate on the contract.
For derivatives that qualify and are designated as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest income in the same periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis. The earnings recognition of excluded components is included in interest income. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate assets. As of March 31, 2026, the Company had cash flow hedges with a notional amount of $50.0 million. The Company expects to reclassify $0.3 million from AOCI as a reduction to interest income during the next 12 months.
Fair value hedges
Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of March 31, 2026 and December 31, 2025, the Company had interest rate swaps with a notional amount of $396.4 million and $365.2 million, respectively, which were designated as fair value hedges of interest rate risk.
For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. The following table presents the Company’s fixed-rate loans associated with the interest rate swaps and the loss included in loans receivable in the statements of financial condition as of the dates shown:
Cumulative amount of fair value
hedging adjustment included in the
Carrying amount of hedged assets
carrying amount of hedged assets(1)
Line item in the consolidated statements of financial
condition in which the hedged item is included
Loans receivable
488,416
457,658
(20,070)
(18,812)
Fair value hedge adjustments included basis adjustments on terminated positions to be amortized through the contractual maturity date of each respective hedged item. Excluding those terminated positions, the fair value hedge adjustments consisted of losses totaling $21.8 million and $20.7 million as of March 31, 2026 and December 31, 2025, respectively.
Non-designated hedges
Derivatives not designated as hedges are not speculative and consist of interest rate swaps with commercial banking clients that facilitate their respective risk management strategies. Interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client swaps and the offsetting swaps are recognized directly in earnings. As of March 31, 2026 and December 31, 2025, the Company had matched interest rate swap transactions with an aggregate notional amount of $992.8 million and $777.7 million, respectively, related to this program. Derivative fee income from non-designated hedges totaled $0.6 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.
As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the clients have locked into that interest rate. The Company then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Fair value changes of certain
loans under interest rate lock commitments are hedged with forward sales contracts of MBS. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in non-interest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying assets. The fair value of the underlying assets is impacted by current interest rates, remaining origination fees, costs of production to be incurred and the probability that the interest rate lock commitments will close or will be funded.
Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Company does not expect any counterparty to any MBS contract to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Company fails to deliver the loans subject to interest rate risk lock commitments, it will still be obligated to “pair off” MBS to the counterparty. Should this be required, the Company could incur significant costs in acquiring replacement loans and such costs could have an adverse effect on the consolidated financial statements.
The fair value of the mortgage banking derivative is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.
The Company had interest rate lock commitments with a notional value of $27.2 million and forward contracts with a notional value of $40.9 million at March 31, 2026. At December 31, 2025, the Company had interest rate lock commitments with a notional value of $16.7 million and forward contracts with a notional value of $34.0 million.
Effect of derivative instruments on the consolidated statements of operations and accumulated other comprehensive income
The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the three months ended March 31, 2026 and 2025:
Location of gain (loss)
Amount of gain (loss) recognized in income on derivatives
recognized in income on
Derivatives in hedging relationships
derivatives
Fair value hedging relationships - Interest rate products
1,887
(4,843)
Cash flow hedging relationships - Interest rate products
(119)
(355)
1,768
(5,198)
Amount of (loss) gain recognized in income on derivatives
Hedged items
hedged items
(1,258)
6,326
Amount of loss recognized in income on derivatives
Derivatives not designated
as hedging instruments
(131)
(2)
194
534
262
(178)
325
354
The tables below present the effect of cash flow hedge accounting on AOCI as of the dates presented.
For the three months ended March 31, 2026
Loss recognized in OCI on derivatives
Loss recognized in OCI included component
Gain recognized in OCI excluded component
Location of loss recognized from AOCI into income
Loss reclassified from AOCI into income
Loss reclassified from AOCI into income included component
Loss reclassified from AOCI into income excluded component
Derivatives in cash flow hedging relationships:
(22)
(83)
61
Interest income
(91)
39
For the three months ended March 31, 2025
Gain recognized in OCI on derivatives
Gain recognized in OCI included component
(239)
(116)
Credit-risk-related contingent features
The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness for reasons other than an error or omission of an administrative or operational nature, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.
The Company also has agreements with certain of its derivative counterparties that contain a provision where, if the Company fails to maintain its status as a well/adequately capitalized institution, the counterparty has the right to terminate the derivative positions and the Company would be required to settle its obligations under the agreements.
As of March 31, 2026, the termination value of derivatives in a net liability position related to these agreements was zero. The Company has minimum collateral posting thresholds with certain of its derivative counterparties and, as of March 31, 2026, the Company had met these thresholds. If the Company had breached any of these provisions at March 31, 2026, it could have been required to settle its obligations under the agreements at the termination value.
Note 16 Commitments and Contingencies
Commitments
In the normal course of business, the Company enters into various off-balance sheet commitments to help meet the financing needs of clients. These financial instruments include commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. The same credit policies are applied to these commitments as the loans in the consolidated statements of financial condition; however, these commitments involve varying degrees of credit risk in excess of the amount recognized in the consolidated statements of financial condition. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon. However, the contractual amount of these commitments, offset by any additional collateral pledged, represents the Company’s potential credit loss exposure.
Total unfunded commitments at March 31, 2026 and December 31, 2025 were as follows:
Commitments to fund loans
638,951
499,960
Unfunded commitments under lines of credit
807,514
640,181
Commercial and standby letters of credit
125,768
7,987
Total unfunded commitments
1,572,233
1,148,128
Commitments to fund loans—Commitments to fund loans are legally binding agreements to lend to clients in accordance with predetermined contractual provisions provided there have been no violations of any conditions specified in the contract. These commitments are generally at variable interest rates and are for specific periods or contain termination clauses and may require the payment of a fee. The total amounts of unused commitments are not necessarily representative of future credit exposure or cash requirements, as commitments often expire without being drawn upon.
Unfunded commitments under lines of credit—In the ordinary course of business, the Company extends revolving credit to its clients. These arrangements may require the payment of a fee.
Commercial and standby letters of credit—The Company routinely issues commercial and standby letters of credit, which may be financial standby letters of credit or performance standby letters of credit. These are various forms of “back-up” commitments to guarantee the performance of a client to a third party. While these arrangements represent a potential cash outlay for the Company, the
majority of these letters of credit will expire without being drawn upon. Letters of credit are subject to the same underwriting and credit approval process as traditional loans, and as such, many of them have various forms of collateral securing the commitment, which may include real estate, personal property, receivables or marketable securities.
Contingencies
Mortgage loans sold to investors may be subject to repurchase or indemnification in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company established a reserve liability for expected losses related to these representations and warranties based upon management’s evaluation of actual and historical loss history, delinquency trends or other documentation or deficiency findings in the portfolio and economic conditions. Charges against the reserve during the three months ended March 31, 2026 and 2025 totaling $20 thousand and $45 thousand, respectively, were primarily driven by early payoffs and repurchases. The repurchase reserve is included in other liabilities in the consolidated statements of financial condition.
The following table summarizes mortgage repurchase reserve activity for the periods presented:
557
Provision released from operating expense, net
(50)
(90)
(20)
(45)
487
865
In the ordinary course of business, the Company may be subject to litigation. Based upon the available information and advice from the Company’s legal counsel, management does not believe that any potential, threatened or pending litigation to which it is, or would reasonably become, a party will have a material adverse effect on the Company’s liquidity, financial condition or results of operations.
Note 17 Fair Value Measurements
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For disclosure purposes, the Company groups its financial and non-financial assets and liabilities into three different levels based on the nature of the instrument and the availability and reliability of the information that is used to determine fair value. The three levels are defined as follows:
Level 1 inputs are considered to be the most transparent and reliable and level 3 inputs are considered to be the least transparent and reliable. The Company assumes the use of the principal market to conduct a transaction of each particular asset or liability being measured and then considers the assumptions that market participants would use when pricing the asset or liability. Whenever possible, the Company first looks for quoted prices for identical assets or liabilities in active markets (level 1 inputs) to value each asset or liability. However, when inputs from identical assets or liabilities on active markets are not available, the Company utilizes market observable data for similar assets and liabilities. The Company maximizes the use of observable inputs and limits the use of unobservable inputs to occasions when observable inputs are not available. The need to use unobservable inputs generally results from the lack of market liquidity of the actual financial instrument or of the underlying collateral. While third-party price indications may be available in those cases, limited trading activity can challenge the observability of those inputs.
41
Changes in the valuation inputs used for measuring the fair value of financial instruments may occur due to changes in current market conditions or other factors. Such changes may necessitate a transfer of the financial instruments to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfer occurs. During the three months ended March 31, 2026 and 2025, there were no transfers of financial instruments between the hierarchy levels.
The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of each instrument under the valuation hierarchy:
Fair Value of Financial Instruments Measured on a Recurring Basis
Investment securities available-for-sale—Investment securities available-for-sale are carried at fair value and measured on a recurring basis. To the extent possible, observable quoted prices in an active market are used to determine fair value and, as such, these securities are classified as level 1. When quoted market prices in active markets for identical assets or liabilities are not available, quoted prices of securities with similar characteristics, discounted cash flows or other pricing characteristics are used to estimate fair values and the securities are then classified as level 2.
Equity securities with readily determinable fair values—Equity securities with readily determinable fair values are generally traded on an exchange and market prices are readily available. These securities are carried at fair value on a recurring basis based on quoted market prices and are classified as level 1.
Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The portfolio consists primarily of fixed-rate residential mortgage loans that are sold within 45 days. The Company estimates fair value based on quoted market prices for similar loans in the secondary market and are classified as level 2.
Interest rate swap derivatives—The Company’s derivative instruments are limited to interest rate swaps that may be accounted for as fair value hedges or non-designated hedges. The fair values of the swaps incorporate credit valuation adjustments in order to appropriately reflect nonperformance risk in the fair value measurements. The credit valuation adjustment is the dollar amount of the fair value adjustment related to credit risk and utilizes a probability weighted calculation to quantify the potential loss over the life of the trade. The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying the respective counterparties’ credit spreads to the exposure offset by marketable collateral posted, if any. Certain derivative transactions are executed with counterparties who are large financial institutions, or dealers. ISDA Master Agreements are employed for all contracts with dealers. These contracts contain bilateral collateral arrangements. The fair value inputs of these financial instruments are determined using discounted cash flow analysis through the use of third-party models whose significant inputs are readily observable market parameters, primarily yield curves, with appropriate adjustments for liquidity and credit risk, and are classified as level 2.
Mortgage banking derivatives—The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale includes grouping the interest rate lock commitments by interest rate and terms, applying an average 83.5% estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.
The tables below present the financial instruments measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 in the consolidated statements of financial condition utilizing the hierarchy structure described above:
Level 1
Level 2
Level 3
U.S. Treasuries
Interest rate swap derivatives
28,579
Mortgage banking derivatives
585
Total assets at fair value
54,044
604,723
659,352
9,232
Total liabilities at fair value
9,256
29,150
79,285
508,536
588,104
9,093
88
9,181
The table below details the changes in level 3 financial instruments during the three months ended March 31, 2026:
Mortgage banking
derivatives, net
Balance at December 31, 2025
195
Gain included in earnings, net
456
Fees and (costs) included in earnings, net
Balance at March 31, 2026
561
43
Fair Value of Financial Instruments Measured on a Non-recurring Basis
Certain assets may be recorded at fair value on a non-recurring basis as conditions warrant. These non-recurring fair value measurements typically result from the application of lower of cost or fair value accounting or a write-down occurring during the period.
Individually evaluated loans—The Company records individually evaluated loans based on the fair value of the collateral when it is probable that the Company will be unable to collect all contractual amounts due in accordance with the terms of the loan agreement. The Company relies on third-party appraisals and internal assessments, utilizing a discount rate in the range of 3% - 31% with a weighted average discount rate of 6.6%, in determining the estimated fair values of these loans. The inputs used to determine the fair values of loans are considered level 3 inputs in the fair value hierarchy. At March 31, 2026, the Company estimated a specific reserve of $14.4 million related to 34 loans with a carrying balance of $64.4 million. At March 31, 2025, the Company estimated a specific reserve of $6.0 million related to 16 loans with a carrying balance of $22.1 million. The increase at March 31, 2026, compared to the same period in the prior year, was primarily due to $7.8 million of specific reserves related to acquired Vista loans.
Mortgage servicing rights—MSRs represent the value associated with servicing residential real estate loans that have been sold to outside investors with servicing retained. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes a discount rate ranging from 9.5% to 10.0% with a weighted average rate of 9.5% at March 31, 2026 and prepayment speed assumption ranges of 6.4% to 11.0% with a weighted average rate of 6.6% at March 31, 2026. The weighted average MSRs are subject to impairment testing. The carrying values of these MSRs are reviewed quarterly for impairment based upon the calculation of fair value. For purposes of measuring impairment, the MSRs are stratified into certain risk characteristics including note type and note term. If the valuation model reflects a value less than the carrying value, MSRs are adjusted to fair value through a valuation allowance and the adjustment is included in mortgage banking income in the consolidated statements of operations. There was no impairment of MSRs during the three months ended March 31, 2026 or 2025. The inputs used to determine the fair values of MSRs are considered level 3 inputs in the fair value hierarchy.
Premises and equipment—During the first quarter of 2026, the Company approved plans to consolidate nine banking centers. Premises and equipment are written down to estimated fair value less costs to sell in the period in which the held-for-sale criteria are met. Fair value is estimated in a process that considers current local commercial real estate market conditions, the judgment of the sales agent and often involves obtaining third-party appraisals from certified real estate appraisers. These fair value measurements are classified as level 3. Unobservable inputs to these measurements, which include estimates and judgments often used in conjunction with appraisals, are not readily quantifiable. For the three months ended March 31, 2026, the Company recognized $0.8 million of impairment in its consolidated statements of operations related to premises and equipment classified as held-for-sale totaling $3.1 million as of March 31, 2026.
SBA servicing asset—The SBA servicing asset represents the value associated with servicing small business real estate loans that have been sold to outside investors with servicing retained. The fair value for the SBA servicing asset is determined through a discounted cash flow analysis and utilizes a weighted average discount rate of 10.4% and a weighted average lifetime constant prepayment rate of 16.0%. The SBA servicing asset is amortized over the period of the estimated future net servicing life of the underlying assets, and it is evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized in the consolidated statements of operations to the extent the fair value is less than the capitalized amount of the SBA servicing asset. The Company recorded no impairment for the three months ended March 31, 2026 or 2025.
The Company may be required to record fair value adjustments on other available-for-sale and municipal securities valued at par on a non-recurring basis.
The tables below provide information regarding losses from the assets recorded at fair value on a non-recurring basis during the three months ended March 31, 2026 and 2025:
Losses from fair value changes
Individually evaluated loans
117,005
3,364
3,076
763
120,081
4,127
44
52,522
15,036
The Company did not record any liabilities measured at fair value on a non-recurring basis during the three months ended March 31, 2026 or 2025.
Note 18 Fair Value of Financial Instruments
The fair value of a financial instrument is the amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is determined based upon quoted market prices to the extent possible; however, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques that may be significantly impacted by the assumptions used, including the discount rate and estimates of future cash flows. Changes in any of these assumptions could significantly affect the fair value estimates. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies and are based on the exit price concept within ASC Topic 825 and applied to this disclosure on a prospective basis. Considerable judgment is required to interpret market data in order to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange.
45
The fair value of financial instruments at March 31, 2026 and December 31, 2025 are set forth below:
Level in fair value
measurement
Carrying
Estimated
hierarchy
fair value
U.S. Treasury securities - AFS
U.S. Treasury securities - HTM
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale
Other available-for-sale securities
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity
FHLB and FRB stock
35,248
9,405,189
7,274,904
56,576
41,951
LIABILITIES
Deposit transaction accounts
9,163,963
7,142,863
1,296,522
1,157,231
204,957
204,598
54,719
53,165
Accrued interest payable
20,393
18,017
Note 19 Business Segment
The Company has aligned its operations into one reportable segment. Key metrics used to evaluate the segment include consolidated net income and its major components. Revenue and expenses are consistent with the consolidated statement of operations, and the measure of segment assets is consistent with total consolidated assets on the balance sheet.
Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the three months ended March 31, 2026, and with our annual report on Form 10-K (file number 001-35654), which includes our audited consolidated financial statements and related notes as of and for the years ended December 31, 2025, 2024 and 2023. Our acquisition of Vista occurred on January 7, 2026, subsequent to the dates of information in our most recent report on Form 10-K, and comparisons herein to prior quarters or years should be reviewed with that context. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” located elsewhere in this quarterly report and in Item 1A“Risk Factors” in the annual report on Form 10-K, referenced above, and should be read herewith.
All amounts are in thousands, except share and per share data, or as otherwise noted.
Overview
Our focus is on building relationships by creating a win-win scenario for our clients and our Company. We believe in providing solutions and services for our clients that are based on fairness and simplicity. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We have executed on strategic acquisition opportunities to expand our presence in attractive markets and to diversify our revenue streams. Additionally, the Company continues to shift from constructing systems for 2UniFi to activating services. 2UniFi is an innovative financial ecosystem with treasury management depository capabilities and a streamlined SBA loan offering. Moving forward, 2UniFi will continue to focus on providing a unified client experience that helps small- and medium-sized business owners manage financial products and services across multiple banks and fintechs. We believe that our established presence in our core markets of Colorado, the greater Kansas City region, Texas, Utah, Wyoming, New Mexico, Idaho and Palm Beach, Florida, as well as our ongoing investment in digital solutions and strategic acquisitions, position us well for growth opportunities. As of March 31, 2026, we had $12.6 billion in assets, $9.6 billion in loans, $10.5 billion in deposits, $1.7 billion in equity and $1.4 billion in assets under management in our trust and wealth management business.
Operating Highlights
Strategic execution
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The Company closed the acquisition of Vista on January 7, 2026, which further strengthens the Company’s presence in the high-growth Dallas-Ft. Worth, Austin, and Lubbock, Texas markets. The acquisition added $1.9 billion in total loans and $2.2 billion in total deposits. The merger consideration totaled $377.7 million and consisted of $288.7 million in NBHC common stock and $89.0 million in cash. The core system conversion for this transaction will be completed during the third quarter of 2026.
During the first quarter of 2026, the Company generated record loan fundings of $805.5 million driving annualized loan growth of 12.4% on top of $1.9 billion in loans added in January 2026 from the Vista acquisition.
Enhanced shareholder returns by increasing the quarterly dividend by 3% to $0.32 per share and executed $16.1 million of share buybacks during the first quarter.
Received Moody’s long-term issuer rating of Baa2, and a Baseline Credit Assessment of Baa1 and initiated on-going monitoring by Moody’s.
In February 2026, the Company closed a public offering of $150.0 million aggregate principal amount of 5.875% fixed-to-floating rate subordinated notes. The offering was increased to $150.0 million from a $100.0 million initial transaction given strong investor demand from a high-quality institutional investor base.
Profitability and returns
Net income totaled $20.8 million, or $0.46 per diluted share, for the three months ended March 31, 2026, compared to net income of $24.2 million, or $0.63 per diluted share, for the three months ended March 31, 2025. During the three months ended March 31, 2026, acquisition and restructuring expenses totaled $11.8 million, after tax. Adjusted net income, which
excludes these items, increased $8.4 million, or 34.6%, to $32.6 million, during the three months ended March 31, 2026. Adjusted earnings per–diluted share totaled $0.72 and $0.63 during the three months ended March 31, 2026 and 2025, respectively, as a result of both organic growth and growth generated from the strategic acquisition of Vista.
Pre-provision net revenue FTE totaled $32.1 million and $42.0 million for the three months ended March 31, 2026 and 2025, respectively. Adjusted pre-provision net revenue FTE, which excludes acquisition and restructuring expenses, increased $5.5 million, or 13.1%, to $47.5 million for the three months ended March 31, 2026, compared to the same period in the prior year.
The return on average assets totaled 0.70% and 0.99% for the three months ended March 31, 2026 and 2025, respectively. Excluding acquisition and restructuring expenses during the three months ended March 31, 2026, the adjusted return on average tangible assets increased 11 basis points to 1.20%, compared to the three months ended March 31, 2025.
The return on average equity was 5.02% and 7.42% for the three months ended March 31, 2026 and 2025, respectively. Excluding acquisition and restructuring expenses during the three months ended March 31, 2026, the adjusted return on average tangible common equity increased 115 basis points to 11.79%, compared to the three months ended March 31, 2025.
Loan portfolio
Loans increased $2.2 billion, or 29.3%, to $9.6 billion at March 31, 2026, compared to December 31, 2025. The increase was driven by record quarterly loan fundings totaling $805.5 million in addition to acquired Vista loans totaling $1.9 billion.
The Company maintained a conservatively structured loan portfolio represented by diverse industries and industry sector concentrations at 15% or less of total loans and all concentration levels remain well below our self-imposed limits.
Non-owner occupied CRE loans, which are comprised of multiple industry sectors, were 164.7% of the Company’s risk based capital, or 26.4% of total loans, and no specific property type comprised more than 7.0% of total loans at March 31, 2026.
The Company maintains a low level of non-owner occupied CRE retail properties and office properties. Including available credit, non-owner occupied CRE retail properties and office properties comprised 4.0% and 2.3% of total loans, respectively, at March 31, 2026. Multifamily loans totaled $320.3 million, or 3.3% of total loans at March 31, 2026.
We do not originate high-dollar non-amortizing or balloon payment mortgage loans to our clients.
Credit quality
Allowance for credit losses totaled 1.18% of total loans at March 31, 2026 and December 31, 2025.
The Company continued to prudently manage credit risk in 2026, further strengthening our credit profile. Non-performing loans improved three basis points to 0.31% of total loans at March 31 2026, compared to 0.34% at December 31, 2025.
Criticized loans decreased $10.7 million, or 3.4%, to $303.6 million as of March 31, 2026, compared to December 31, 2025.
Provision expense for credit losses totaled $4.0 million and $10.2 million during the three months ended March 31, 2026 and 2025, respectively.
Net charge-offs of $7.7 million and $15.1 million were recorded during the three months ended March 31, 2026 and 2025, respectively, and annualized net charge-offs to average total loans totaled 0.34% and 0.80% for the three months ended March 31, 2026 and 2025, respectively.
Deposits
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Average total deposits for the three months ended March 31, 2026 increased $1.8 billion to $10.1 billion, compared to the three months ended March 31, 2025. The increase was driven by $2.2 billion of total deposits, on a spot basis, related to the Vista acquisition.
Average transaction deposits for the three months ended March 31, 2026 increased $1.6 billion to $8.8 billion, compared to the three months ended March 31, 2025, driven by $2.0 billion of transaction deposits, on a spot basis, related to the Vista acquisition.
The mix of transaction deposits to total deposits increased 19 basis points to 87.6% at March 31, 2026, compared to March 31, 2025.
Cost of deposits improved nine basis points to 1.94% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, as a result of our disciplined deposit pricing.
Approximately 63% of our deposits were FDIC insured at March 31, 2026.
Liquidity
The Company prudently manages liquidity and maintains a profile focused on core deposits and stable, long-term and diversified funding sources, including access to Cambr platform deposits. The Company maintains an investment portfolio with a short average duration and targets a neutral interest rate position.
On-balance sheet liquidity totaled $1.1 billion at March 31, 2026 and was comprised of $472.8 million of cash and $608.9 million of unencumbered investments.
Liquidity is monitored and managed to ensure that sufficient funds are available on demand to meet our business needs. At March 31, 2026, the Company’s available secured and committed borrowing capacity at the FHLB and FRB totaled $3.8 billion. The Company also accesses a variety of other short-term and long-term unsecured funding sources, which include access to Cambr platform deposits, multiple brokered deposit platform options and lines of credit.
Our investment securities portfolio has a short average duration and is entirely backed by U.S. government agencies or GSEs, which we believe mitigates the risk of material losses. Regarding the fair value of investment securities, our accumulated other comprehensive loss does not have a material impact on our capital position.
Revenues
Net interest income FTE increased 25.3% to $111.0 million during the three months ended March 31, 2026, compared to $88.6 million during the same period in the prior year.
The net interest margin FTE expanded 13 basis points to 4.06% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by a five basis point increase in earning asset yields and a nine basis point
improvement in the cost of funds. The cost of funds totaled 1.98% for the three months ended March 31, 2026, compared to 2.07% during the three months ended March 31, 2025.
During the three months ended March 31, 2026, non-interest income increased $2.6 million, or 16.9%, to $18.0 million, compared to the same period in the prior year, primarily driven by increases in our diversified sources of fee income including swap fee income, Cambr fee income, and trust income.
Expenses
Non-interest expense totaled $96.8 million, which included $15.3 million of acquisition and restructuring expenses, during the three months ended March 31, 2026. Non-interest expense during the three months ended March 31, 2025 totaled $62.0 million. Excluding the acquisition and restructuring expenses, adjusted non-interest expense during the three months ended March 31, 2026 increased $19.5 million, or 31.4%, to $81.5 million, primarily due to an increase in core operating expenses driven by growth from our recent acquisition. Occupancy and equipment expense increased $5.0 million primarily driven by the 2UniFi capitalized asset depreciation in connection with the launch of 2UniFi in the third quarter of 2025.
During the three months ended March 31, 2026, the efficiency ratio FTE totaled 75.1%, compared to 59.6% for the same period in the prior year. The adjusted efficiency ratio FTE totaled 61.3%, compared to 57.7% during the same period in the prior year.
Income tax expense totaled $5.2 million during the three months ended March 31, 2026, compared to $5.6 million during the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 was 19.9%, compared to 18.0% for the full year 2025.
Capital
The Company paid dividends of $0.32 per common share during the three months ended March 31, 2026, and declared a quarterly dividend of $0.32 per common share during the second quarter of 2026.
On January 27, 2026, the Company’s Board of Directors authorized a new stock repurchase program under which the Company may repurchase up to $100.0 million of the Company’s stock. This new program replaces the old stock repurchase program approved in May of 2023 in its entirety. During the three months ended March 31, 2026, the Company repurchased 401,869 shares of common stock for $16.1 million at a weighted average price per share of $40.07. The remaining authorization under the 2026 program as of March 31, 2026 was $83.9 million.
Capital ratios continue to be well in excess of federal bank regulatory agency “well capitalized” thresholds, after deploying capital for the Vista acquisition. At March 31, 2026, our consolidated tier 1 leverage ratio was 10.45%, and our consolidated common equity tier 1 and tier 1 risk based capital ratios were 12.51%.
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The ratio of total shareholders’ equity to total assets was 13.2% at March 31, 2026, compared to 14.0% at December 31, 2025. Our tangible common equity capital ratio totaled 9.6% at March 31, 2026, compared to 11.0% at December 31, 2025, after deploying capital for the Vista acquisition.
Key Challenges
Macroeconomic pressures have resulted in volatility and uncertainty in the banking industry and many other industries. Liquidity within the financial services sector remains tight, and we expect the intense competition for deposits throughout our markets to continue. While these are widespread challenges for the banking industry, the Company has not experienced a material impact to our financial condition, operations, client base, liquidity, capital position or risk profile.
Additionally, we face continual challenges implementing our business strategy. These include growing our assets, particularly loans, and deposits amidst intense competition, changing interest rates, adhering to changes in the regulatory environment and identifying and consummating disciplined acquisition and other expansionary opportunities in a competitive and inflationary environment. We will continue to make investments in our digital growth strategy and our digital financial ecosystem 2UniFi, and may also seek to partner with third parties to accelerate growth. 2UniFi may prove difficult to successfully scale and may require additional operational and control systems to manage fraud, cybersecurity, operational, legal and compliance risks.
While Vista integration activities are progressing and remain on track, acquisition integrations present operational and execution challenges. Integration activities require ongoing investments in systems, processes, and personnel. While the acquisition supports our long term growth strategy, the integration process may be more costly or time consuming than anticipated.
Future growth in our interest income will ultimately be dependent on our ability to originate high-quality loans and source other high-quality earning assets such as investment securities as well as our ability to access liquidity and manage our cost of funds. Over the past two years, the Federal Reserve lowered the prevailing interest rates by 175 basis points. While further rate changes remain unclear, our future earnings will be impacted by the Federal Reserve’s future interest rate policy decisions. Management employs risk management policies to monitor and limit exposure to changes in market rates, which is discussed in more detail in the Asset/Liability Management and Interest Rate Risk section of Management’s Discussion and Analysis.
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Performance Overview
In evaluating our consolidated statements of financial condition and results of operations financial statement line items, we evaluate and manage our performance based on key earnings indicators, balance sheet ratios, asset quality metrics and regulatory capital ratios, among others. The table below presents key performance indicators regularly used to analyze our business for the periods indicated:
Key Metrics(1)
As of and for the three months ended
Return on average assets
0.70%
0.65%
0.99%
Return on average tangible assets(2)
0.79%
0.73%
1.09%
Adjusted return on average tangible assets(2)(3)
1.20%
1.02%
Return on average equity
5.02%
4.57%
7.42%
Return on average tangible common equity(2)
7.75%
6.58%
10.64%
Adjusted return on average tangible common equity(2)(3)
11.79%
9.10%
Loan to deposit ratio (end of period)(4)
91.90%
89.64%
90.77%
Non-interest bearing deposits to total deposits (end of period)
24.60%
26.58%
26.30%
Net interest margin(5)
3.98%
3.80%
3.85%
Net interest margin FTE(5)(6)
4.06%
3.89%
3.93%
Interest rate spread FTE(6)(7)
3.29%
3.04%
3.05%
Yield on earning assets(8)
5.82%
5.57%
5.77%
Yield on earning assets FTE(6)(8)
5.90%
5.66%
5.85%
Cost of funds
1.98%
1.93%
2.07%
Cost of deposits
1.94%
1.92%
2.03%
Non-interest income to total revenue FTE(6)(9)
13.94%
14.05%
14.79%
Efficiency ratio FTE(6)
75.09%
70.55%
59.64%
Adjusted efficiency ratio FTE(3)(6)
61.28%
61.38%
57.74%
Pre-provision net revenue FTE(2)(6)
32,126
30,249
41,960
Adjusted pre-provision net revenue FTE(2)(3)(6)
47,475
39,009
Total Loans Asset Quality Data(4)(10)(11)
Non-performing loans to total loans
0.31%
0.34%
0.45%
Non-performing assets to total loans and OREO
0.35%
0.36%
0.46%
Allowance for credit losses to total loans
1.18%
Allowance for credit losses to non-performing loans
378.38%
350.90%
260.52%
Net charge-offs to average loans
0.54%
0.80%
Ratios are annualized.
Represents a non-GAAP financial measure. See Non-GAAP Financial Measures and Reconciliations below.
(3)
Ratios are adjusted for acquisition-related and restructuring expenses. See Non-GAAP Financial Measures and Reconciliations below.
(4)
Total loans are net of unearned discounts and fees.
Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(6)
Presented on an FTE basis using the statutory rate of 21% for all periods presented. The taxable equivalent adjustments included above are $2,182, $2,059 and $1,910 for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.
(7)
Interest rate spread represents the difference between the weighted average yield on interest earning assets, including FTE income, and the weighted average cost of interest bearing liabilities. Ratio represents non-GAAP financial measure.
Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
(9)
Non-interest income to total revenue represents non-interest income divided by the sum of net interest income FTE and non-interest income.
(10)
Non-performing loans consist of non-accruing loans.
(11)
Non-performing assets include non-performing loans and OREO.
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Non-GAAP Financial Measures and Reconciliations
About Non-GAAP Financial Measures
Certain financial measures and ratios presented are supplemental measures that are not required by, or are not presented in accordance with, U.S. GAAP. We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.
These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these differences by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.
Reconciliations of our non-GAAP financial measures to the comparable GAAP financial measures are as follows:
Tangible Book Value Ratios
Less: goodwill and other intangible assets, net
(516,672)
(348,961)
(354,800)
Add: deferred tax liability related to goodwill
14,050
13,947
13,638
Tangible common equity (non-GAAP)
1,162,253
1,050,100
988,146
10,098,870
Tangible assets (non-GAAP)
12,111,786
9,548,504
9,757,708
Tangible common equity to tangible assets calculations:
Total shareholders’ equity to total assets
13.20%
14.01%
13.16%
Less: impact of goodwill and other intangible assets, net
(3.60)%
(3.01)%
(3.03)%
Tangible common equity to tangible assets (non-GAAP)
9.60%
11.00%
10.13%
Tangible book value per share calculations:
Divided by: ending shares outstanding
44,692,472
37,772,516
38,094,105
Tangible book value per share (non-GAAP)
26.01
27.80
25.94
Return on Average Tangible Assets and Return on Average Tangible Equity
16,036
Add: adjustments, after tax (non-GAAP)(1)
11,814
6,712
Adjusted net income (non-GAAP)(1)
32,607
22,748
Add: impact of other intangible assets amortization expense, after tax (non-GAAP)
1,897
1,491
1,516
Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP)
22,690
17,527
25,747
Net income excluding the impact of other intangible assets amortization expense, adjusted for acquisition-related expenses, restructuring expenses and loss on security sales, after tax (non-GAAP)(1)
34,504
24,239
Average assets
12,132,345
9,797,053
9,916,023
Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill (non-GAAP)
(492,642)
(336,252)
(342,425)
Average tangible assets (non-GAAP)
11,639,703
9,460,801
9,573,598
Average shareholders’ equity
1,679,262
1,392,563
1,323,915
Average tangible common equity (non-GAAP)
1,186,620
1,056,311
981,490
Return on average tangible assets (non-GAAP)
Adjusted return on average tangible assets (non-GAAP)(1)
Return on average tangible common equity (non-GAAP)
Adjusted return on average tangible common equity (non-GAAP)(1)
Adjustments:
Non-interest income adjustments:
Loss on security sales(2)
3,348
Non-interest expense adjustments:
Acquisition-related expenses
14,342
5,412
Restructuring expenses(3)
Total adjustments before tax (non-GAAP)
15,349
8,760
Tax benefit impact
(3,535)
(2,048)
Total adjustments after tax (non-GAAP)
For details, refer to the “Adjustments” section at the bottom of the table.
Adjusted for the loss on security sales incurred as part of the Company's strategic balance sheet management during the fourth quarter of 2025.
Restructuring expenses are primarily related to banking center consolidation expenses.
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Efficiency Ratio and Pre-Provision Net Revenue
Net interest income FTE(1)
110,984
88,264
88,601
14,433
Add: loss on security sales
Adjusted non-interest income (non-GAAP)
17,781
72,448
Less: other intangible assets amortization
(2,464)
(1,946)
(1,977)
Less: acquisition-related expenses and restructuring expenses
(15,349)
(5,412)
Adjusted non-interest expense, excluding other intangible assets amortization (non-GAAP)
79,024
65,090
60,040
Adjusted non-interest expense (non-GAAP)
81,488
67,036
Efficiency ratio FTE(1)
Adjusted efficiency ratio FTE (non-GAAP)(1)(2)
Add: income tax expense
3,054
Add: provision expense for credit losses
9,100
Add: impact of taxable equivalent adjustment
2,182
2,059
1,910
Pre-provision net revenue, FTE (non-GAAP)(1)
Add: acquisition-related expenses
Add: restructuring expenses
Adjusted pre-provision net revenue FTE (non-GAAP)(1)
Adjusted efficiency ratio FTE excludes other intangible assets amortization, acquisition-related expenses, restructuring expenses and loss on security sales.
Adjusted Net Income and Earnings Per Share
Adjustments to net income:
Add: acquisition-related expenses, after tax
11,039
4,147
Add: restructuring expenses, after tax
775
Add: loss on security sales, after tax
2,565
Adjusted net income (non-GAAP)
Adjustments to earnings per share:
Earnings per share - diluted
0.42
0.24
0.11
0.02
0.07
Adjusted earnings per share - diluted (non-GAAP)
0.72
0.60
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Application of Critical Accounting Policies and Significant Estimates
We use accounting principles and methods that conform to GAAP and general banking practices. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. The most significant of these estimates is described below.
Acquired loans
ASC Topic 805, Business Combinations, requires all acquired loans be recorded at fair value at the date of acquisition. The fair value for acquired loans at the time of acquisition is based on a variety of factors including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, the fair value adjustment is recorded as premium or discount to the unpaid principal balance of each acquired loan. The net premium or discount on loans includes credit quality and interest rate considerations and is accreted or amortized into interest income over the remaining life of the loan using the level yield method. The Company early adopted ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans on January 1, 2026. That update amends the guidance in ASC 326 related to the accounting for purchased loans so that loans are recorded at their purchase price plus an allowance for expected credit losses, commonly known as the gross-up method.
The determination of the ACL, which represents management’s estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date, involves a high degree of judgment and complexity. The Company estimates the ACL by first disaggregating the loan portfolio into segments based upon broad characteristics such as primary use and underlying collateral. Within these segments, the portfolio is further disaggregated into classes of loans with similar attributes and risk characteristics. The ACL is determined at the class level, analyzing loss history based upon specific loss drivers and risk factors affecting each loan class. The Company utilizes a DCF model developed within a third-party software tool that incorporates forecasts of certain national macroeconomic factors (reasonable and supportable forecasts) which drive the losses predicted in establishing the Company’s ACL. Management accounts for the inherent uncertainty of the underlying economic forecast by reviewing and weighting alternate forecast scenarios. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis. Additionally, the ACL calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition.
Future Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-scope Improvements. The update amends the guidance in ASC 270 to improve the required interim disclosures and clarify when that guidance is applicable as well as clarify disclosures that should be provided in interim reporting periods. The guidance also requires entities to disclose events taking place after the end of the last annual reporting period that have a material impact. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact from ASU 2025-11 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The update includes targeted changes to the guidance in ASC 815 to better reflect risk management, reduce complexity and align with economic reality. The update will allow grouping of hedged items for forecasts with similar risk, more flexibility for variable-rate debt and simplified accounting for certain complex hedges, including swaps and options. It primarily affects cash flow hedges. The standard is effective for interim and annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The guidance must be adopted on a prospective basis, and there are transition provisions designed to assist in migrating existing hedging relationships to the new guidance. The Company is currently evaluating the impact from ASU 2025-09 and does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. The update requires public business entities to disclose specific components of certain expense categories. This includes expense categories such as employee compensation, depreciation,
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and intangible asset amortization. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and are to be applied on a prospective basis with an option for retrospective application. Early adoption is permitted. The Company has evaluated the impact from ASU 2024-03 and does not expect the adoption of this pronouncement to have a material impact on its financial statements apart from the inclusion of additional disclosures.
Financial Condition
As of March 31, 2026, the Vista acquisition added $2.5 billion of total assets, including $339.1 million of cash and cash equivalents, $145.5 million of investment securities, $1.9 billion of loans and $29.5 million of allowance for credit losses. The acquisition also included total deposits of $2.2 billion.
At March 31, 2026, the Company’s total assets, including the additions from the Vista acquisition, were $12.6 billion, increasing $2.7 billion, or 27.6%, from December 31, 2025. Cash and cash equivalents increased $55.7 million from December 31, 2025, and investment securities increased $182.1 million. Loans totaled $9.6 billion and $7.4 billion at March 31, 2026 and December 31, 2025, respectively, and the allowance for credit losses totaled $113.5 million and $87.4 million at March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026, lower-cost transaction deposits increased $2.0 billion to $9.2 billion, compared to December 31, 2025. Total deposits increased $2.2 billion to $10.5 billion at March 31, 2026, compared to December 31, 2025.
Investment securities
Total investment securities available-for-sale were $605.2 million at March 31, 2026, compared to $528.6 million at December 31, 2025. During the three months ended March 31, 2026 and 2025, purchases of available-for-sale securities totaled $144.8 million and $142.2 million, respectively. During 2026, the Company acquired available-for-sale securities with a fair value of $145.5 million related to the Vista acquisition. Paydowns and maturities totaled $33.3 million and $48.4 million during the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026, the Company sold $176.9 million of available-for-sale securities, primarily related to Vista securities. There were no sales of available-for-sale securities during the three months ended March 31, 2025.
Available-for-sale investment securities are summarized in the following table as of the dates indicated. The weighted average yield was calculated based on amortized cost. Yields on tax-exempt securities have not been adjusted for tax-exempt status.
Percent of
average
portfolio
yield
Treasury securities
8.9%
4.26%
14.1%
4.35%
33.2%
2.80%
29.8%
2.55%
57.9%
2.57%
56.0%
2.31%
Corporate debt
0.00%
2.78%
2.64%
As of March 31, 2026 and December 31, 2025, nearly all the available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed-rate and adjustable-rate FHLMC, FNMA and GNMA securities. The other MBS are comprised of securities backed by FHLMC, FNMA and GNMA securities.
Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 4.3 years and 4.6 years at March 31, 2026 and December 31, 2025, respectively. This estimate is based on assumptions and actual results may differ. At March 31, 2026 and December 31, 2025, the duration of the total available-for-sale investment portfolio was 3.6 years and 3.9 years, respectively.
At March 31, 2026 and December 31, 2025, adjustable-rate securities comprised 2.8% and 0.6%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed-rate amortizing securities with 10- to 30-year contractual maturities, with a weighted average coupon of 2.46% per annum and 2.30% per annum at March 31, 2026 and December 31, 2025, respectively.
The available-for-sale investment portfolio included $63.2 million of unrealized losses and $0.8 million of unrealized gains at March 31, 2026. At December 31, 2025, the available-for-sale investment portfolio included $60.2 million of unrealized losses and $2.9 million of unrealized gains. We believe any unrealized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were impaired. Management believes that default of the available-for-sale securities is highly unlikely. FHLMC, FNMA and GNMA guaranteed mortgage-backed securities and U.S. Treasury securities have a long history of zero credit losses, an explicit guarantee by the U.S. government (although limited for FNMA and FHLMC securities) and yields that generally trade based on market views of prepayment and liquidity risk rather than credit risk.
Our investment security portfolio consists of high-quality securities, which are largely backed by either U.S. government agencies or GSEs. We regularly model liquidity stress scenarios to assess potential liquidity issues.
Held-to-maturity investment securities totaled $757.4 million at March 31, 2026, compared to $651.7 million at December 31, 2025, an increase of $105.6 million, or 16.2%. Purchases during the three months ended March 31, 2026 and 2025 totaled $137.9 million and $190.6 million, respectively. Maturities and paydowns of held-to-maturity securities totaled $32.8 million and $17.0 million during the three months ended March 31, 2026 and 2025, respectively.
3.3%
3.8%
32.3%
2.38%
36.3%
2.28%
64.4%
3.53%
59.9%
3.37%
3.14%
2.97%
The residential mortgage pass-through and other residential MBS held-to-maturity investment portfolios are comprised of fixed-rate FHLMC, FNMA and GNMA securities.
The fair value of the held-to-maturity investment portfolio included $59.6 million of unrealized losses and $1.3 million of unrealized gains at March 31, 2026. At December 31, 2025, the held-to-maturity investment portfolio included $57.3 million of unrealized losses and $3.0 million of unrealized gains.
The Company does not measure expected credit losses on a financial asset, or groups of financial assets, in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Management evaluated held-to-maturity securities noting they are backed by loans guaranteed by either U.S. government agencies or GSEs, and management believes that default is highly unlikely given this governmental backing and long history without credit losses. Additionally, management notes that yields on which the portfolio generally trades are based upon
market views of prepayment and liquidity risk and not credit risk. The Company has no intention to sell the securities and believes it will not be required to sell the securities before the recovery of their amortized cost.
Mortgage-backed securities may have actual maturities that differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of March 31, 2026 and December 31, 2025 was 3.9 years and 4.3 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 3.3 years and 3.6 years as of March 31, 2026 and December 31, 2025, respectively.
Other securities included FRB stock, FHLB stock, correspondent bank stock, convertible preferred stock, equity method investments and equity securities with readily determinable fair values. During the three months ended March 31, 2026, purchases of other securities totaled $12.7 million, proceeds from maturities and paydowns of other securities totaled $2.2 million, and proceeds from sales of other securities totaled $10.4 million. During the three months ended March 31, 2025 , purchases of other securities totaled $15.9 million and proceeds from other securities totaled $15.7 million. Purchases consisted primarily of FHLB stock, and proceeds consisted primarily of sales of FHLB stock. Changes in the Company’s FHLB stock holdings directly correlate to FHLB line of credit advances and paydowns.
Equity securities with readily determinable fair values are generally traded on an exchange and market prices are readily available. Unrealized gains or losses on equity securities with readily determinable fair values are recognized in other non-interest income in the Company’s consolidated statements of operations. During the three months ended March 31, 2026 and 2025, the Company sold $4.6
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million and zero, respectively, of equity securities with readily determinable fair values, resulting in a realized loss totaling $0.7 million in the first quarter of 2026. During the three months ended March 31, 2026 and 2025, the Company recorded $0.1 million and zero, respectively, of unrealized losses from equity securities with readily determinable fair values.
Loans overview
At March 31, 2026, our loan portfolio was comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.
The table below shows the loan portfolio composition at the respective dates:
March 31, 2026 vs.
% Change
Originated:
2,073,442
1,948,331
6.4%
1,290,778
1,273,508
1.4%
Owner-occupied commercial real estate
892,378
950,270
(6.1)%
185,368
208,009
(10.9)%
4,441,966
4,380,118
1,189,200
1,030,069
974,316
927,663
13,340
12,771
4.5%
Total originated
6,618,822
6,350,621
4.2%
Acquired:
688,955
89,373
670.9%
253
(2.8)%
399,285
178,348
123.9%
46,295
20,061
130.8%
1,134,781
288,035
294.0%
1,350,322
552,359
144.5%
506,257
242,036
109.2%
1,304
327.5%
Total acquired
2,992,664
1,082,735
176.4%
29.3%
The Company maintains a granular and well-diversified loan portfolio with self-imposed concentration limits. At March 31, 2026, loans totaled $9.6 billion, compared to $7.4 billion at December 31, 2025. The increase was driven by record quarterly loan fundings totaling $805.5 million on top of acquired Vista loans totaling $1.9 billion.
Our commercial and industrial loan portfolio is highly diversified across industry sectors and geography. At March 31, 2026, there were no industry sectors representing more than 15.0% of our total loan portfolio. Key sectors included government/non-profit loans of $1.0 billion, or 10.7% of total loans, and health care/hospital loans of $488.0 million, or 5.1% of total loans. The commercial and industrial portfolio also includes loans to companies that operate in the transportation industry. The transportation industry, trucking in particular, has experienced recent economic challenges. As a result of these industry challenges, some of the transportation loans may be subject to higher credit risk. The Company has intentionally reduced exposure to this industry to $130.1 million, or 1.4% of total loans, at March 31, 2026.
Non-owner occupied CRE loans were 163.1% of the Company’s risk based capital, or 26.4% of total loans, and no specific property type comprised more than 7.0% of total loans. The Company maintains limited exposure to non-owner occupied CRE retail properties and office properties, comprising 4.0% and 2.3% of total loans, respectively, including available credit. Multifamily loans totaled $324.9 million, including available credit, or 3.4% of total loans, as of March 31, 2026.
The agriculture industry continues to be impacted by volatile commodity prices and generally by higher input costs, combining to stress margins. Our food and agribusiness portfolio is 2.4% of total loans and is well-diversified across food production, crop and livestock types. Crop and livestock loans represent 0.7% of total loans. We have maintained relationships with food and agribusiness
clients that generally possess low leverage and, correspondingly, low bank debt to assets, minimizing potential credit losses in the future.
New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan fundings totaled $2.1 billion over the trailing 12 months, led by commercial loan fundings of $1.4 billion. Loan fundings during the three months ended March 31, 2026 totaled a record $805.5 million. Fundings are defined as closed-end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of fundings to better approximate the impact of fundings on loans outstanding and ultimately net interest income.
The following table represents new loan fundings for the periods presented:
First quarter
Fourth quarter
Third quarter
Second quarter
346,250
237,813
159,250
133,402
108,594
119,918
81,418
34,393
12,506
49,556
66,798
42,362
47,233
37,762
5,697
4,437
5,015
4,576
1,338
446,503
428,966
288,045
219,604
160,200
268,021
96,482
81,136
56,770
65,254
89,375
64,161
49,877
44,470
29,300
1,583
1,399
2,142
1,823
970
805,482
591,008
421,200
322,667
255,724
Included in fundings are net fundings (paydowns) under revolving lines of credit totaling $65,273, $95,774, ($1,591), $15,490 and $21,752 for the periods noted in the table above, respectively.
The tables below show the contractual maturities of our total loans for the dates indicated:
Due within
Due after 1 but
Due after 5 but
Due after
1 year
within 5 years
within 15 years
15 years
603,912
1,757,986
358,793
41,706
22,437
205,723
707,203
355,661
196,061
521,168
488,748
85,686
32,486
106,188
77,250
15,739
854,896
2,591,065
1,631,994
498,792
688,541
1,451,270
390,788
8,923
102,999
223,676
225,884
928,014
5,012
7,954
1,649
1,651,448
4,273,965
2,250,315
1,435,758
60
373,744
1,358,943
293,546
11,471
23,845
207,944
726,237
315,735
170,825
428,000
448,893
80,900
34,226
100,263
79,247
14,334
602,640
2,095,150
1,547,923
422,440
415,208
792,312
365,852
9,056
42,634
194,423
214,146
718,496
4,173
7,440
1,463
1,064,655
3,089,325
2,129,384
1,149,992
The stated interest rate (which excludes the effects of non-refundable loan origination and commitment fees, net of costs and the accretion of fair value marks) of total loans with maturities over one year is as follows at the dates indicated:
Fixed
Variable
Balance
average rate
510,798
5.01%
1,638,946
6.67%
2,149,744
6.25%
Municipal and non-profit(1)
1,270,871
17,786
4.84%
1,288,657
4.33%
296,485
4.19%
799,117
6.74%
1,095,602
6.43%
23,402
7.07%
175,775
6.66%
199,177
6.70%
2,101,556
4.66%
2,631,624
6.68%
4,733,180
5.80%
685,983
5.26%
1,164,998
6.26%
1,850,981
5.89%
622,759
4.88%
754,815
1,377,574
5,238
7.35%
4,394
6.79%
9,632
7.09%
Total loans with > 1 year maturity
3,415,536
4.82%
4,555,831
6.39%
7,971,367
5.73%
319,305
5.97%
1,344,655
6.57%
1,663,960
6.46%
1,250,767
4.24%
17,962
5.07%
1,268,729
4.31%
244,861
712,932
6.91%
957,793
20,817
6.85%
173,027
6.53%
193,844
6.56%
1,835,750
4.69%
2,248,576
4,084,326
5.81%
445,733
4.74%
721,486
6.06%
1,167,219
5.56%
425,431
4.28%
701,634
5.53%
1,127,065
5.06%
5,121
6.95%
3,782
6.72%
8,903
2,712,035
4.64%
3,675,478
6.33%
6,387,513
5.63%
Included in municipal and non-profit fixed-rate loans are loans totaling $396,411 and $365,224 that have been swapped to variable rates at current market pricing at March 31, 2026 and December 31, 2025, respectively. Included in the municipal and non-profit segment are tax-exempt loans totaling $1,035,809 and $1,013,078 with an FTE weighted average rate of 4.94% and 4.79% at March 31, 2026 and December 31, 2025, respectively.
Asset quality
Asset quality is fundamental to our success and remains a strong point, driven by our disciplined adherence to our self-imposed concentration limits across industry sector and real estate property type. Accordingly, for the origination of loans, we have established a credit policy that allows for responsive, yet controlled lending with credit approval requirements that are scaled to loan size. Within the scope of the credit policy, each prospective loan is reviewed in order to determine the appropriateness and the adequacy of the loan characteristics and the security or collateral prior to making a loan. We have established underwriting standards and loan origination procedures that require appropriate documentation, including financial data and credit reports. For loans secured by real property, we require property appraisals, title insurance or a title opinion, hazard insurance and flood insurance, in each case where appropriate.
Additionally, we have implemented procedures to timely identify loans that may become problematic in order to ensure the most beneficial resolution for the Company. Asset quality is monitored by our credit risk management department and evaluated based on quantitative and subjective factors such as the timeliness of contractual payments received. Additional factors that are considered, particularly with commercial loans over $500,000, include the financial condition and liquidity of individual borrowers and guarantors, if any, and the value of our collateral. To facilitate the oversight of asset quality, loans are categorized based on the number of days past due and on an internal risk rating system, as discussed in more detail below.
The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Loan modifications may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof. Modified loans are discussed further in note 6 of our consolidated financial statements. Assets that have been foreclosed on or acquired through deed-in-lieu of foreclosure are classified as OREO until sold, and are carried at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ACL and any subsequent declines in carrying value charged to impairments on OREO.
Non-performing assets and past due loans
Non-performing assets consist of non-accrual loans and OREO. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during the three months ended March 31, 2026 and 2025 was $0.6 million and $0.7 million, respectively.
Past due status is monitored as an indicator of credit deterioration. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans that are 90 days or more past due are put on non-accrual status unless the loan is well secured and in the process of collection.
The following table sets forth the non-performing assets and past due loans as of the dates presented:
Non-performing loans
Total non-performing assets
33,811
26,586
Loans 90 days or more past due and still accruing interest
Total past due and non-accrual loans
56,848
40,329
Loans 30-89 days past due and still accruing interest
Accruing modified loans
43,870
43,838
Total 90 days past due and still accruing interest and non-accrual loans to total loans
0.59%
Total non-performing assets to total loans and OREO
ACL to non-performing loans
At March 31, 2026, non-performing loans to total loans improved three basis points to 0.31%, compared to December 31, 2025. Loans 30-89 days past due and still accruing interest were 0.22% and 0.16% of total loans at March 31, 2026 and December 31, 2025, respectively. Loans 90 days or more past due and still accruing interest were 0.28% and 0.21% of total loans at March 31, 2026 and December 31, 2025, respectively. Non-performing assets to total loans and OREO improved one basis point to 0.35%, during the three months ended March 31, 2026, compared to December 31, 2025.
The ACL represents the amount that we believe is necessary to absorb estimated lifetime credit losses inherent in the loan portfolio at the balance sheet date and involves a high degree of judgment and complexity. The Company utilizes a DCF model developed within a third-party software tool to establish expected lifetime credit losses for the loan portfolio. The ACL is calculated as the difference between the amortized cost basis and the projections from the DCF analysis. The DCF model allows for individual lifetime loan cash flow modeling, excluding extensions and renewals, using loan-specific interest rates and repayment schedules including estimated prepayment rates and loss recovery timing delays. The model incorporates forecasts of certain national macro-economic factors, including unemployment rates, HPI, retail sales and GDP, which drive correlated loss rates. The determination and application of the ACL accounting policy involves judgments, estimates and uncertainties that are subject to change. For periods beyond the reasonable and supportable forecast period, the Company reverts to historical long-term average loss rates on a straight-line basis.
We measure expected credit losses for groups of loans included in segments with similar risk characteristics. We have identified four primary loan segments within the ACL model that are further stratified into 11 loan classes to provide more granularity in analyzing loss history and to allow for more definitive qualitative adjustments based upon specific risk factors affecting each loan class. Generally, the underlying risk of loss for each of these loan segments will follow certain norms/trends in various economic environments. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Following are the loan classes within each of the four primary loan segments:
commercial real estate
Acquisition and development
Loans on non-accrual, in bankruptcy and modified loans with a balance greater than $250 thousand are excluded from the pooled analysis and are evaluated individually. If management determines that foreclosure is probable, expected credit losses are evaluated based on the criteria listed below, adjusted for selling costs as appropriate. Typically, these loans consist of commercial, commercial
63
real estate and agriculture loans and exclude homogeneous loans such as residential real estate and consumer loans. Specific allowances are determined by collectively analyzing:
the borrower’s resources, ability and willingness to repay in accordance with the terms of the loan agreement;
the likelihood of receiving financial support from any guarantors;
the adequacy and present value of future cash flows, less disposal costs, of any collateral; and
the impact current economic conditions may have on the borrower’s financial condition and liquidity or the value of the collateral.
The resulting ACL for loans is calculated as the sum of the general reserves, specific reserves on individually evaluated loans, and qualitative factor adjustments. While these amounts are calculated by individual loan or by segment and class, the entire ACL is available for any loan that, in our judgment, should be charged off. The determination and application of the ACL accounting policy involves judgments, estimates, and uncertainties that are subject to change. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition, liquidity or results of operations.
At March 31, 2026 and December 31, 2025, the allowance for credit losses totaled $113.5 million and $87.4 million, respectively. As a result of the Vista acquisition, the Company recorded $29.5 million of allowance for credit losses for the loans acquired. The remaining increase during the three months ended March 31, 2026, excluding net charge-offs, was primarily driven by loan growth. Specific reserves on individually evaluated loans totaled $14.4 million at March 31, 2026, compared to $8.1 million at December 31, 2025.
Net charge-offs on loans during the three months ended March 31, 2026 totaled $7.7 million. The ratio of annualized net charge-offs to average total loans totaled 0.34%. Net charge-offs on loans during the three months ended March 31, 2025 totaled $15.1 million, and the ratio of annualized net charge-offs to average total loans totaled 0.80%.
The Company has elected to exclude AIR from the ACL calculation. As of March 31, 2026 and December 31, 2025, AIR from loans totaled $51.9 million and $38.3 million, respectively. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income.
Total ACL
After considering the above-mentioned factors, we believe that the ACL of $113.5 million is adequate to cover estimated lifetime losses inherent in the loan portfolio at March 31, 2026. However, it is likely that future adjustments to the ACL will be necessary. Any changes to the underlying assumptions, circumstances or estimates, including but not limited to changes in the underlying macro-economic forecast, used in determining the ACL, could negatively or positively affect the Company’s results of operations, liquidity or financial condition.
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The following schedule presents, by class stratification, the changes in the ACL during the periods listed:
% NCOs(1)
Beginning allowance for credit losses
Charge-offs:
0.33%
0.72%
Commercial real estate non owner-occupied
0.08%
0.01%
Total charge-offs
(7,700)
(15,113)
Provision expense for credit losses on loans
Ending allowance for credit losses
Ratio of ACL to total loans outstanding at period end
Ratio of ACL to total non-performing loans at period end
7,646,296
Average total loans outstanding during the period
9,255,883
7,660,974
34,620
Ratio of annualized net charge-offs to average total loans.
The Company continues to prudently manage credit risk, further strengthening our credit profile through proactive monitoring. During the three months ended March 31, 2026, the Company recorded provision expense for credit losses on loans totaling $4.0 million, including $4.3 million provision expense for funded loans and $0.3 million of provision release for unfunded loan commitments. During the three months ended March 31, 2025, the Company recorded provision expense for credit losses totaling $10.2 million, including $10.9 million of provision expense for funded loans and $0.7 million of provision release for unfunded loan commitments.
The following tables present the allocation of the ACL and the percentage of the total amount of loans in each loan category listed as of the dates presented:
ACL as a %
% of total loans
Related ACL
of total ACL
48.8%
33.5%
17.4%
0.3%
54.3%
19.0%
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Deposits from banking clients serve as a primary funding source for our banking operations, and our ability to gather and manage deposit levels is critical to our success. Deposits not only provide a lower-cost funding source for our loans, but also provide a foundation for the client relationships that are critical to future loan growth. We maintain a granular and well diversified deposit base with no exposure to venture capital or crypto deposits. The following table presents information regarding our deposit composition at March 31, 2026 and December 31, 2025:
Increase (decrease)
24.6%
26.6%
368,972
16.7%
14.8%
309,563
25.0%
Savings accounts
637,353
6.1%
610,004
7.3%
27,349
Money market accounts
4,406,828
42.1%
3,091,612
37.3%
1,315,216
42.5%
Total transaction deposits
87.6%
86.1%
2,021,100
28.3%
Time deposits < $250,000
906,633
8.7%
825,624
81,009
9.8%
Time deposits ≥ $250,000
388,248
3.7%
324,147
3.9%
64,101
19.8%
Total time deposits
12.4%
13.9%
145,110
12.6%
2,166,210
26.1%
The following table shows uninsured time deposits by scheduled maturity as of March 31, 2026:
Three months or less
75,774
Over 3 months through 6 months
85,859
Over 6 months through 12 months
133,953
Thereafter
26,734
Total uninsured time deposits
322,320
At March 31, 2026 and December 31, 2025, time deposits that were scheduled to mature within 12 months totaled $1.2 billion and $1.0 billion, respectively. Of the time deposits scheduled to mature within 12 months at March 31, 2026, $363.2 million were in denominations of $250 thousand or more, and $813.2 million were in denominations less than $250 thousand. Approximately 63% of our total deposits were FDIC insured at March 31, 2026. Additionally, the Company participates in the IntraFi Cash Service program, which allows depositors to receive reciprocal FDIC insurance coverage. The Company had $1.0 billion and $0.8 billion of deposits in the program as of March 31, 2026 and December 31, 2025, respectively.
The Company also holds a fixed-to-floating rate note totaling $40.0 million. The balance on the note at March 31, 2026 and December 31, 2025, net of long-term debt issuance costs totaling $0.1 million, totaled $40.0 million. Interest expense totaling $0.3 million was recorded in the consolidated statements of operations for both the three months ended March 31, 2026 and 2025. The note is subordinated, unsecured and matures on November 15, 2031. Payments consist of interest only. Interest expense on the note is payable semi-annually in arrears and will bear interest at 3.00% per annum until November 15, 2026 (or any earlier redemption date). From November 15, 2026 until November 15, 2031 (or any earlier redemption date) payments will be made quarterly in arrears, and the
66
interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month term SOFR plus 203 basis points. The Company deployed the net proceeds from the sale of the note for general corporate purposes. Prior to November 5, 2026, the Company may redeem the note only under certain limited circumstances. Beginning on November 5, 2026 through maturity, the note may be redeemed, at the Company’s option, on any scheduled interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the note being redeemed, together with any accrued and unpaid interest on the note being redeemed up to but excluding the date of redemption. The note is not subject to redemption at the option of the holder.
Other borrowings
As of March 31, 2026 and December 31, 2025, the Company sold securities under agreements to repurchase totaling $17.0 million and $17.4 million, respectively. In addition, as a member of the FHLB, the Company has access to a line of credit and term financing from the FHLB with total available credit of $2.0 billion at March 31, 2026. The Company may utilize the FHLB line of credit as a funding mechanism for originated loans and loans held for sale. At March 31, 2026 and December 31, 2025, NBH Bank had no outstanding borrowings from the FHLB. The Company may pledge investment securities and loans as collateral for FHLB advances. There were no investment securities pledged at March 31, 2026 or December 31, 2025. Loans pledged were $3.6 billion and $2.4 billion at March 31, 2026 and December 31, 2025, respectively. The Company incurred $0.1 million and $1.1 million of interest expense related to FHLB advances or other short-term borrowings for the three months ended March 31, 2026 and 2025, respectively.
Regulatory Capital
Our subsidiary banks and the holding company are subject to the regulatory capital adequacy requirements of the Federal Reserve Board and the FDIC, as applicable. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly further discretionary actions by regulators that could have a material adverse effect on us. At March 31, 2026 and December 31, 2025, our subsidiary banks and the consolidated holding company exceeded all capital ratio requirements under prompt corrective action and other regulatory requirements, as further detailed in note 10 of our consolidated financial statements.
Results of Operations
Our net income depends largely on net interest income, which is the difference between interest income from interest earning assets and interest expense on interest bearing liabilities. Our results of operations are also affected by provisions for credit losses and non-interest income, such as service charges, bank card income, swap fee income, and gain on sale of mortgages. Our primary operating expenses, aside from interest expense, consist of salaries and benefits, occupancy costs, telecommunications data processing expense, FDIC deposit insurance and intangible assets amortization. Any expenses related to the resolution of problem assets are also included in non-interest expense.
Overview of results of operations
Net income totaled $20.8 million and $24.2 million, or $0.46 and $0.63 per diluted share, during the three months ended March 31, 2026 and 2025, respectively. Pre-provision net revenue FTE totaled $32.1 million and $42.0 million during the three months ended March 31, 2026 and 2025, respectively. The return on average tangible assets was 0.79% and 1.09% during the three months ended March 31, 2026 and 2025, respectively, and the return on average tangible common equity was 7.75% and 10.64%, respectively.
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Adjusting for pre-tax acquisition-related and restructuring expenses totaling $15.3 million, net income totaled $32.6 million, or $0.72 per diluted share, during the three months ended March 31, 2026. The adjusted return on average tangible assets was 1.20% during the three months ended March 31, 2026, and the adjusted return on average tangible common equity was 11.79%.
Net interest income
We regularly review net interest income metrics to provide us with indicators of how the various components of net interest income are performing. We regularly review (i) our loan mix and the yield on loans; (ii) the investment portfolio and the related yields; (iii) our deposit mix and the cost of deposits; and (iv) net interest income simulations for various forecast periods.
The effects of trade-date accounting of investment securities for which the cash had not settled are not considered interest earning assets and are excluded from this presentation for timeframes prior to their cash settlement, as are the market value adjustments on the investment securities available-for-sale and loans.
The table below presents the components of net interest income on an FTE basis for the three months ended March 31, 2026 and 2025.
Average balance
Interest
Average rate
Interest earning assets:
Originated loans FTE(1)(2)(3)
6,324,783
97,058
6.22%
6,335,931
102,221
6.54%
2,948,300
49,815
1,351,726
19,547
5.86%
18,556
6.21%
19,756
349
7.16%
694,048
5,001
2.88%
716,938
4,617
2.58%
Investment securities held-to-maturity
691,109
5,150
2.98%
635,961
4,120
2.59%
37,111
31,386
6.12%
Interest earning deposits
375,473
3.79%
48,206
4.53%
Total interest earning assets FTE(2)
11,089,380
161,333
9,139,904
131,873
99,579
77,237
1,040,484
794,374
(97,098)
(95,492)
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits
6,321,115
37,187
2.39%
5,027,052
32,511
2.62%
1,329,219
11,182
3.41%
1,035,983
8,756
3.43%
8,333
152
7.40%
107,151
1,105
4.18%
Other borrowings(4)
29,978
124
1.68%
50,277
3.08%
135,277
5.11%
54,539
518
Total interest bearing liabilities
7,823,922
2.61%
6,275,002
Demand deposits
2,477,131
2,197,300
152,030
119,806
10,453,083
8,592,108
Shareholders’ equity
Net interest income FTE(2)
Interest rate spread FTE(2)
Net interest earning assets
3,265,458
2,864,902
Net interest margin FTE(2)
Average transaction deposits
8,798,246
7,224,352
Average total deposits
10,127,465
8,260,335
Ratio of average interest earning assets to average interest bearing liabilities
141.74%
145.66%
Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
Presented on an FTE basis using the statutory tax rate of 21% for all periods presented. The taxable equivalent adjustments included above are $2,182 and $1,910 for the three months ended March 31, 2026 and 2025, respectively.
Loan fees included in interest income totaled $3,711 and $3,323 for the three months ended March 31, 2026 and 2025, respectively.
Other borrowings includes securities sold under agreements to repurchase and cash collateral received from counterparties in connection with derivative swap agreements.
Net interest income on an FTE basis increased $22.4 million, or 25.3%, to $111.0 million during the three months ended March 31, 2026, compared to the same period in the prior year. During the three months ended March 31, 2026, the FTE net interest margin expanded 13 basis points to 4.06%, compared to the three months ended March 31, 2025, driven by a five basis point increase in earning asset yields and a nine basis point improvement in the cost of funds. During the three months ended March 31, 2026, the cost of funds improved nine basis points to 1.98%, compared to the three months ended March 31, 2025.
Average loans comprised $9.3 billion, or 83.6%, of total average interest earning assets during the three months ended March 31, 2026. During the three months ended March 31, 2025, average loans comprised $7.7 billion, or 84.1%, of total average interest earning assets. Average acquired loans increased $1.6 billion as a result of the Vista acquisition.
Average investment securities comprised 12.5% and 14.8% of total interest earning assets during the three months ended March 31, 2026 and 2025, respectively. Average interest bearing cash balances totaled $375.5 million and $48.2 million during the three months ended March 31, 2026 and 2025, respectively.
Average interest bearing liabilities increased $1.5 billion during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily driven by higher interest bearing demand, savings and money market deposits totaling $1.3 billion, time deposits totaling $293.2 million, and long-term debt totaling $80.7 million. The increase was partially offset by decreases in FHLB advances totaling $98.8 million and other borrowings totaling $20.3 million.
The Vista acquisition added $2.2 billion of total deposits, including $2.0 of transaction deposits and $0.2 billion of time deposits on January 7, 2026.
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The following table summarizes the changes in net interest income on an FTE basis by major category of interest earning assets and interest bearing liabilities, identifying changes related to volume and changes related to rates for the three months ended March 31, 2026, compared to the three months ended March 31, 2025:
compared to
(Decrease) increase due to
Volume
Rate
Interest income:
(171)
(4,992)
(5,163)
26,976
3,292
30,268
(18)
(47)
(65)
(165)
549
384
411
619
80
(44)
3,058
(88)
2,970
Total interest income
30,171
(711)
29,460
7,613
(2,937)
4,676
2,467
(41)
2,426
(1,803)
(953)
(84)
(174)
(258)
1,017
169
1,186
9,210
(2,133)
7,077
Net change in net interest income
20,961
1,422
22,383
Below is a breakdown of average deposits and the average rates paid during the periods indicated:
Average
rate
balance
paid
Non-interest bearing demand
2,476,347
Interest bearing demand
1,542,446
1,356,864
2.41%
4,143,468
2.72%
3,044,138
635,985
626,050
1.04%
Total average deposits
Provision for credit losses
The provision for credit losses represents the amount of expense that is necessary to bring the ACL to a level that we deem appropriate to absorb estimated lifetime losses inherent in the loan portfolio and estimated losses inherent in unfunded loans as of the balance sheet date. The determination of the ACL, and the resultant provision for credit losses, is subjective and involves significant estimates and assumptions.
The Company recorded provision expense for credit losses totaling $4.0 million, including $4.3 million provision expense for funded loans and $0.3 million of provision release for unfunded loan commitments, during the three months ended March 31, 2026. Provision expense for credit losses during the three months ended March 31, 2026 was primarily driven by loan growth during the quarter. During the three months ended March 31, 2025, the Company recorded provision expense for credit losses totaling $10.2 million,
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including $10.9 million of provision expense for funded loans and $0.7 million of provision release for unfunded loan commitments. The allowance for credit losses totaled 1.18% of total loans at March 31, 2026 and 2025.
The table below details the components of non-interest income for the periods presented:
2026 vs 2025
74
1.8%
140
(573)
(17.3)%
16.1%
2,593
86.9%
2,603
16.9%
Non-interest income totaled $18.0 million for the three months ended March 31, 2026, compared to $15.4 million for the three months ended March 31, 2025. The increase was primarily driven by increases in our diversified sources of fee income including swap fee income, Cambr fee income, and trust income.
The table below details the components of non-interest expense for the periods presented:
22,608
65.8%
4,997
46.1%
3,252
73.9%
558
59.0%
2.4%
(2.3)%
809
56.9%
2,102
34,820
56.1%
During the three months ended March 31, 2026, non-interest expense totaled $96.8 million, compared to $62.0 million during the three months ended March 31, 2025. Non-interest expense during the three months ended March 31, 2026 included $15.3 million of acquisition and restructuring expenses. Excluding these items, the current quarter adjusted non-interest expense totaled $81.5 million, increasing from the first quarter of 2025 primarily due to an increase in core operating expense growth from our recent acquisition. Occupancy and equipment expense increased $5.0 million primarily driven by the 2UniFi capitalized asset depreciation in connection with the launch of 2UniFi in the third quarter of 2025.
Income taxes
Income tax expense totaled $5.2 million and $5.6 million for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 and 2025 was 19.9% and 18.8%, respectively.
Additional information regarding income taxes can be found in note 18 of our audited consolidated financial statements in our 2025 Annual Report on Form 10-K.
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Liquidity and Capital Resources
Liquidity risk management is an important element in our asset/liability management. The Company maintains a robust liquidity profile at its holding company and the Banks collectively as well as separately. The Company is prudently managing liquidity in the current environment and maintains a liquidity profile focused on core deposits and stable long-term funding sources. Liquidity is supplemented with a variety of secured and unsecured wholesale funding sources across the maturity spectrum, which allows for the effective management of concentration and rollover risk. The Company’s corporate treasury team measures liquidity needs through daily cash monitoring, weekly cash projections and monthly liquidity measures reviewed in conjunction with Board-approved liquidity policy limits. The Company also regularly conducts stress tests to its Board-approved contingency funding plan to assess potential liquidity outflows or funding concerns resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into the contingency funding plan, which provides the basis for the identification of our liquidity needs and are monitored monthly by our Asset and Liability Committee.
The Company’s primary sources of funds include revenue from interest income and noninterest income as well as cash flows from loan repayments, payments from securities related to maturities and amortization, the sale of loans, and funds generated by deposits, in addition to the use of funds from debt offerings.
On-balance sheet liquidity is represented by our cash and cash equivalents, and unencumbered investment securities, and is detailed in the table below as of March 31, 2026 and December 31, 2025:
Unencumbered investment securities, at fair value
608,869
466,935
1,081,660
883,993
Total on-balance sheet liquidity increased $197.7 million at March 31, 2026, compared to December 31, 2025, due to higher unencumbered investment securities of $142.0 million and higher cash and due from banks of $55.7 million. As of March 31, 2026, approximately $745.5 million of investment securities were pledged to secure client deposits and repurchase agreements.
The Company’s investment portfolio remains positioned in liquid and readily marketable instruments and is a significant source of on-balance sheet collateral to secure borrowing capacity. Our investment securities portfolio is evaluated under established Asset and Liability Committee objectives and is structured as a liquidity portfolio, and only security fair values are used for the liquidity assessment. The fair value of total investment securities was $1.3 billion at March 31, 2026, compared to $1.1 billion at December 31, 2025. As of March 31, 2026, the fair value was inclusive of pre-tax net unrealized losses of $62.3 million on the available-for-sale securities portfolio. Additionally, our held-to-maturity securities portfolio had $58.3 million of pre-tax net unrealized losses. The gross unrealized gains and losses are detailed in note 4 of our consolidated financial statements. As of March 31, 2026, our investment securities portfolio consisted primarily of MBS, all of which were issued or guaranteed by U.S. government agencies or sponsored enterprises. The anticipated repayments and marketability of these securities offer substantial resources and flexibility to meet new loan demand, reinvest in the investment securities portfolio, or provide optionality for reductions in our deposit funding base. At March 31, 2026, the duration of the investment securities portfolio was 3.4 years and the weighted average life was 4.1 years.
As part of its liquidity management activities, the Company pledges collateral at its secured funding providers to ensure immediate availability of funding, which includes maintaining borrowing capacity at both the FHLB and the Federal Reserve. The Company does not consider borrowing capacity at the Federal Reserve a primary source of funding; however, it could be used as a potential source of funds in a stressed environment or during a market disruption. The amount of available contingent secured borrowing capacity may
fluctuate based on the level of borrowings outstanding and level of assets pledged. The table below details those amounts as of the dates shown:
Available FHLB borrowing capacity
1,991,667
1,536,090
Federal Reserve Bank discount window
1,808,998
1,416,059
Total off-balance sheet funds available
3,800,665
2,952,149
The Company had pledged $6.0 billion and $4.3 billion of loans as collateral to the FHLB and FRB discount window at March 31, 2026 and December 31, 2025, respectively. FHLB borrowing capacity totaled $2.0 billion and $1.5 billion at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, the Company had no outstanding FHLB borrowings, leaving undrawn borrowing capacity of $2.0 billion. At December 31, 2025, there were no outstanding borrowings with the FHLB, leaving undrawn borrowing capacity of $1.5 billion. At March 31, 2026, the Company’s available secured and committed borrowing capacity at the FHLB and Federal Reserve totaled $3.8 billion, compared to $3.0 billion at December 31, 2025.
In addition to core deposit and secured funding, the Company also accesses a variety of other short-term and long-term unsecured funding sources, which includes access to Cambr platform deposits, multiple brokered deposit platform options and lines of credit. Management does not rely on any one source of liquidity and manages availability in response to changing balance sheet needs, as well as within prudently defined concentration and policy limits. The Company executes periodic test trades to assess the level of access and operational processes associated with its secured and unsecured funding sources.
We anticipate that the sources of funds discussed above will provide adequate funding and liquidity for at least a 12-month period and the foreseeable future, and we may utilize any combination of these funding sources for long-term liquidity needs if deemed prudent.
Our primary uses of funds are loan fundings, investment security purchases, withdrawals of deposits, capital expenditures, operating expenses, and share repurchases. Additionally, $89.0 million was paid as cash consideration in connection with the Vista acquisition on January 7, 2026.
At present, financing activities primarily consist of changes in deposits and repurchase agreements, and advances from the FHLB, in addition to the payment of dividends and the repurchase of our common stock. Maturing time deposits represent a potential use of funds. As of March 31, 2026, $1.2 billion of time deposits were scheduled to mature within 12 months. Based on the current interest rate environment and market conditions, our consumer banking strategy is to focus on attracting and maintaining both lower-cost transaction accounts and time deposits.
During the first quarter of 2026, the Company issued and sold $150.0 million aggregate principal amount of 5.875% fixed-to-floating rate subordinated notes at a public offering price equal to 100% of the aggregate principal amount of the notes. The net proceeds from the sale of the notes to the Company were approximately $147.3 million, after giving effect to the underwriting discount of 1.25% and estimated expenses of the offering of the notes. The Company intends to use the net proceeds for general corporate purposes.
The Company also holds other fixed-to-floating notes. The balance on all subordinated notes totaled $202.1 million and $54.5 million at March 31, 2026 and December 31, 2025, respectively.
Under the Basel III requirements, at March 31, 2026, the Company, NBH Bank and BOJHT met all capital adequacy requirements, and the Banks had regulatory capital ratios in excess of the levels established for well-capitalized institutions. For more information on regulatory capital, see note 10 in our consolidated financial statements.
Our shareholders’ equity is impacted by earnings, changes in unrealized gains and losses on securities, net of tax, stock-based compensation activity, share repurchases, shares issued in connection with acquisitions and the payment of dividends. On January 7, 2026, the Company issued 7.3 million new shares of common stock as part of the consideration related to the Vista acquisition.
The Board of Directors has authorized multiple programs to repurchase shares of the Company’s common stock from time to time either in the open market or in privately negotiated transactions in accordance with applicable regulations of the SEC. On January 27, 2026, the Company announced that its Board of Directors authorized a new stock repurchase program under which the Company may
repurchase up to $100.0 million of its common stock. The new program replaces in its entirety the stock repurchase program that was authorized by the Board of Directors and announced on May 9, 2023. The timing and amount of any share repurchases will be determined by the Company’s management based on market conditions and other factors. No time limit has been set for completion of the program. During the three months ended March 31, 2026, the Company repurchased 401,869 shares of common stock for $16.1 million at a weighted average price per share of $40.07. The remaining authorization under the program as of March 31, 2026 was $83.9 million.
On May 7, 2026, our Board of Directors declared a quarterly dividend of $0.32 per common share, payable on June 15, 2026 to shareholders of record at the close of business on May 29, 2026.
Asset/Liability Management and Interest Rate Risk
The Board of Directors meets as often as necessary, but no less than quarterly, to review financial statements, significant accounting policy changes, liquidity, interest rate risk and asset and liability management. The Board also oversees the performance of our internal audit function as well as serves as an independent and objective body to monitor and assess our compliance with legal and regulatory requirements as well as internal control systems. Management and the Board of Directors are responsible for managing interest rate risk and employing risk management policies that monitor and limit this exposure. Interest rate risk is measured using net interest income simulations and market value of portfolio equity analyses. These analyses use various assumptions, including the nature and timing of interest rate changes, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, and reinvestment/replacement of asset and liability cash flows.
Interest rate risk results from the following:
Repricing risk — timing differences in the repricing and maturity of interest-earning assets and interest bearing liabilities;
Option risk — changes in the expected maturities of assets and liabilities, such as borrowers’ ability to prepay loans at any time and depositors’ ability to redeem certificates of deposit before maturity;
Yield curve risk — changes in the yield curve where interest rates increase or decrease in a nonparallel fashion; and
Basis risk — changes in spread relationships between different yield curves.
The Asset Liability Committee, a cross-functional committee comprised of executive management and senior leaders, meets monthly to review, among other things, the sensitivity of the Company’s assets and liabilities to interest rate changes, local and national market conditions and interest rates. The Asset Liability Committee also reviews the liquidity, capital, deposit mix, loan mix and investment positions of the Company. The Company’s principal objective regarding asset and liability management is to evaluate interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while preserving adequate levels of liquidity and capital.
Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in net interest margin. These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and utilize various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows.
We also analyze the economic value of equity as a secondary measure of interest rate risk. This is a complementary measure to net interest income where the calculated value is the result of the market value of assets less the market value of liabilities. The economic value of equity is a longer term view of interest rate risk because it measures the present value of the future cash flows. The impact of changes in interest rates on this calculation is analyzed for the risk to our future earnings and is used in conjunction with the analyses on net interest income.
Our interest rate risk model indicated that the Company was in a slightly asset sensitive position in terms of interest rate sensitivity at March 31, 2026. The table below illustrates the impact of an immediate and sustained 200 and 100 basis point increase and a 100 and
200 basis point decrease in interest rates on net interest income based on the interest rate risk model at March 31, 2026 and December 31, 2025:
Hypothetical
shift in interest
% change in projected net interest income
rates (in bps)
200
4.16%
4.65%
100
2.09%
2.36%
(100)
(1.08)%
(1.95)%
(200)
(1.19)%
(3.13)%
Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve. The computations of interest rate risk shown above do not include actions that management may undertake to manage the risks in response to anticipated changes in interest rates and actual results may also differ due to any actions taken in response to the changing rates.
As part of the asset/liability management strategy to manage primary market risk exposures expected to be in effect in future reporting periods, management has executed interest rate derivatives primarily using floors and collars. For further discussion of the Company’s derivative contracts refer to note 15. The strategy with respect to liabilities has been to continue to emphasize transaction deposit growth, particularly non-interest or low interest bearing non-maturing deposit accounts while building long-term client relationships. Non-maturing deposit accounts totaled 87.6% of total deposits at March 31, 2026, compared to 86.1% at December 31, 2025.
Impact of Inflation and Changing Prices
An inflationary environment may impact our financial performance and may impact our clients, including but not limited to impacts on assets, earnings, capital levels and growth opportunities. While we plan to continue our disciplined approach to expense management, an inflationary environment may cause wage pressures and general increases in our cost of doing business, which may increase our non-interest expense.
Unlike most industrial companies, virtually all of our assets and liabilities are monetary in nature. As a result, changes in interest rates have a more significant impact on our performance than do changes in the general rate of inflation and changes in prices. Interest rate changes do not necessarily move in the same direction, nor have the same magnitude, as changes in the prices of goods and services.
Off-Balance Sheet Activities
In the normal course of business, we are a party to various contractual obligations, commitments and other off-balance sheet activities that contain credit, market, and operational risk that are not required to be reflected in our consolidated financial statements. The most significant of these are the loan commitments that we enter into to meet the financing needs of clients, including commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. As of March 31, 2026 and December 31, 2025, we had loan commitments totaling $1.4 billion and $1.1 billion, respectively, and standby letters of credit totaling $125.8 million and $8.0 million, respectively. Unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information called for by this item is provided under the caption Asset/Liability Management and Interest Rate Risk in Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.
Item 4. CONTROLS AND PROCEDURES.
Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as of March 31, 2026. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.
On January 7, 2026, the Company completed the acquisition of Vista. The Company is in the process of incorporating Vista’s internal controls and procedures into its internal controls over financial reporting.
Other than mentioned above, there were no changes made in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, during the most recently completed fiscal quarter.
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PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
From time to time, we are a party to ordinary routine litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
Item 1A. RISK FACTORS.
There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the quarter ended March 31, 2026, the Company did not sell any unregistered equity securities.
Issuer Purchases of Equity Securities
Maximum
Total number of
approximate dollar
shares purchased
value of shares
as part of publicly
that may yet be
Total number
Average price
announced plans
purchased under the
Period
of shares purchased
paid per share
or programs
plans or programs(3)
January 1 - January 31, 2026
100,000,000
February 1 - February 28, 2026(1)
70,264
40.02
65,401
97,389,820
March 1 - March 31, 2026(2)
345,947
40.10
336,468
83,896,522
416,211
40.09
401,869
Of the shares repurchased in February 2026, 4,863 shares were not purchased through a publicly announced plan. Rather, these shares were repurchased at the then current market value in conjunction with employee stock option exercises, settlements of restricted stock and tax withholdings.
Of the shares repurchased in March 2026, 9,479 shares were not purchased through a publicly announced plan. Rather, these shares were repurchased at the then current market value in conjunction with employee stock option exercises, settlements of restricted stock and tax withholdings.
On January 27, 2026, the Company announced that its Board of Directors authorized a program to repurchase up to $100.0 million of the Company’s stock from time to time in either the open market or through privately negotiated transactions. During the three months ended March 31, 2026, the Company repurchased 401,869 shares of common stock for $16.1 million at a weighted average price per share of $40.07. The remaining authorization under the program as of March 31, 2026 was $83.9 million.
Item 5. OTHER INFORMATION.
During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(c) of Regulation S-K.
Item 6. EXHIBITS.
3.1
Second Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our Form S-1 Registration Statement (Registration No. 333-177971), filed August 22, 2012)
3.2
Second Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q, filed on November 7, 2014)
4.1
Form of 5.875% Subordinated Note due 2036 (incorporated herein by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed on February 11, 2026)
4.2
Indenture, dated February 11, 2026, by and between National Bank Holdings Corporation and U.S. Bank Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K dated and filed on February 11, 2026)
4.3
First Supplemental Indenture, dated February 11, 2026, between National Bank Holdings Corporation and U.S. Bank Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.2 to our Current Report on Form 8-K dated and filed on February 11, 2026)
10.1
Employment Agreement, dated September 15, 2025, by and between John D. Steinmetz and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.9 to our annual report on Form 10-K filed February 24, 2026)˄
10.2
Form of National Bank Holdings Corporation 2023 Omnibus Incentive Plan Restricted Stock Award Agreement 1/2026 (Laney and Birkans) (incorporated herein by reference to Exhibit 10.27 to our annual report on Form 10-K filed February 24, 2026)˄
10.3
National Bank Holdings Corporation 2026 Inducement Plan (incorporated herein by reference to Exhibit 99.1 of our Registration Statement on Form S-8 filed on January 30, 2026)˄
10.4
Form of National Bank Holdings Corporation 2026 Inducement Plan Restricted Stock Award Agreement (Executive Officer) (incorporated herein by reference to Exhibit 10.29 to our annual report on Form 10-K filed February 24, 2026)˄
10.5
Form of National Bank Holdings Corporation 2026 Inducement Plan Performance Share Unit Award Agreement (Executive Officer) (filed herewith)˄
10.6
Vista Bank Equity Incentive Plan (incorporated herein by reference to Exhibit 99.1 of our Registration Statement on Form S-8 filed on January 7, 2026)˄
10.7
Vista Bank Equity Incentive Plan – Restricted Stock Award Agreement with John D. Steinmetz (incorporated herein by reference to Exhibit 10.9 to our annual report on Form 10-K filed February 24, 2026)˄
10.8
Transition Agreement by and between Christopher Randall and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.32 to our annual report on Form 10-K filed February 24, 2026)˄
10.9
Form of National Bank Holdings Corporation 2023 Omnibus Incentive Plan Performance Stock Unit Award Agreement 3/2026 (For Management) (filed herewith)˄
31.1
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certifications of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Taxonomy Extension Calculation
101.DEF
XBRL Taxonomy Extension Definition
101.LAB
XBRL Taxonomy Extension Labels
101.PRE
XBRL Taxonomy Extension Presentation
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
˄
Indicates a management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
National Bank Holdings Corporation
By
/s/ Nicole Van Denabeele
Nicole Van Denabeele
Chief Financial Officer
(duly authorized officer and principal financial officer)
Date: May 7, 2026
79