{"url_path":"/sec/uvsp/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-23","source_url":"https://www.sec.gov/Archives/edgar/data/102212/0000102212-26-000012-index.html","accession_number":"0000102212-26-000012","cik":"0000102212","ticker":"UVSP","issuer_name":"UNIVEST FINANCIAL Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/102212/0000102212-26-000012-index.html","primary_entity_key":"0000102212","primary_entity_name":"UNIVEST FINANCIAL Corp"},"word_count":29494,"has_tables":true,"body_markdown":"Item 8.    Financial Statements and Supplementary Data\n\nThe following audited consolidated financial statements and related documents are set forth in this Annual Report on Form 10-K on the following pages:\n\nPage\n\n[Report of Independent Registered Public Accounting Firm](#i6bbaaaf3878f49499ffe998dd81ccacb_121)\n\n[53](#i6bbaaaf3878f49499ffe998dd81ccacb_121)\n\nAuditor Name: KPMG, LLP\n\nAuditor Location: Philadelphia, PA\n\nAuditor Firm ID: 185\n\n[Consolidated Balance Sheets](#i6bbaaaf3878f49499ffe998dd81ccacb_124)\n\n[55](#i6bbaaaf3878f49499ffe998dd81ccacb_124)\n\n[Consolidated Statements of Income](#i6bbaaaf3878f49499ffe998dd81ccacb_127)\n\n[56](#i6bbaaaf3878f49499ffe998dd81ccacb_127)\n\n[Consolidated Statements of Comprehensive Income](#i6bbaaaf3878f49499ffe998dd81ccacb_130)\n\n[57](#i6bbaaaf3878f49499ffe998dd81ccacb_130)\n\n[Consolidated Statements of Changes in Shareholders](#i6bbaaaf3878f49499ffe998dd81ccacb_133)['](#i6bbaaaf3878f49499ffe998dd81ccacb_133)[Equity](#i6bbaaaf3878f49499ffe998dd81ccacb_133)\n\n[58](#i6bbaaaf3878f49499ffe998dd81ccacb_133)\n\n[Consolidated Statements of Cash Flows](#i6bbaaaf3878f49499ffe998dd81ccacb_136)\n\n[59](#i6bbaaaf3878f49499ffe998dd81ccacb_136)\n\n[Notes to Consolidated Financial Statements](#i6bbaaaf3878f49499ffe998dd81ccacb_139)\n\n[61](#i6bbaaaf3878f49499ffe998dd81ccacb_139)\n\n52\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and Board of Directors\n\nUnivest Financial Corporation:\n\nOpinion on the Consolidated Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Univest Financial Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.\n\nValuation of the allowance for credit losses related to pooled loans\n\nAs discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses on loans and leases was $88.2 million as of December 31, 2025, a portion of which is related to pooled loans (the collective ACL). The Company utilizes a discounted cash flow (DCF) model to calculate the present value of the expected cash flows for pools of loans that share similar risk characteristics and compares the results of this calculation to the amortized cost basis to determine its collective ACL balance. The contractual term used in projecting the cash flows of a loan is based on the maturity date of a loan and is adjusted for prepayment or curtailment assumptions which may shorten that contractual time period. The Company estimated the collective ACL using a model that incorporates probability of default (PD) and loss given default (LGD) components. The PD model component incorporates economic factors into forecasting within the DCF model utilizing a method which generates PD rate inputs by analyzing how one or more of the economic factors, chosen based on statistical correlation to a loan pool’s performance, change the default rate using a statistical regression analysis. The reasonable and supportable forecasts\n\n53\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nand scenarios are based on the projected performance of the selected economic variables which are sourced from a third party. Management evaluated the likelihood of each scenario to determine a reasonable and supportable forecast, including the relevant economic factors (loss driver selection). Management utilizes a four-quarter forecast period followed by a four-quarter reversion to historical averages. The LGD model component is determined utilizing an estimation technique that derives a LGD input from segment specific risk curves that correlate LGD with PD. The effective interest rate of the underlying loans of the Company serves as the discount rate applied to the expected periodic cash flows. The collective ACL estimate also included consideration of the need for qualitative adjustments related to factors that are not fully captured in the quantitative model.\n\nWe identified the assessment of the collective ACL as a critical audit matter. Such assessment required complex auditor judgment, and specialized skills and knowledge in the industry due to significant measurement uncertainty. The assessment of the collective ACL encompassed the evaluation of the collective ACL methodology, including the assumptions used to estimate (1) the PD rate input and its key assumptions including loan pool segmentation, peer selection, the historical observation period, and loss driver selection, (2) the reasonable and supportable economic forecast and scenarios and (3) the LGD input. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.\n\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ACL, including controls over the:\n\n•governance and oversight over the collective ACL methodology\n\n•development of the PD rate input and LGD rate input\n\n•determination of the key assumptions used to estimate the PD rate input, reasonable and supportable economic forecast and scenarios, and the LGD rate input\n\n•measurement and on-going monitoring of the collective ACL estimate.\n\nWe evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used and considered, including the relevance and reliability of such data, factors and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge who assisted in:\n\n•evaluating the Company's collective ACL methodology for compliance with U.S. generally accepted accounting principles\n\n•evaluating the assumptions used in determining the PD rate input, reasonable and supportable economic forecast, and LGD rate input, by inspecting management's model and methodology documentation and through comparisons against Company specific metrics and applicable industry and regulatory practices\n\n•determining whether loans are pooled by similar risk characteristics by comparing to the Company's business and environment and relevant industry practices.\n\nWe also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the:\n\n•cumulative results of the audit procedures\n\n•qualitative aspects of the Company's accounting practices\n\n•potential bias in the accounting estimate.\n\nWe have served as the Company's auditor since 2004.\n\nPhiladelphia, Pennsylvania\n\nFebruary 23, 2026\n\n54\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION\n\nCONSOLIDATED BALANCE SHEETS\n\nAt December 31,\n\n(Dollars in thousands, except share data)20252024\n\nASSETS\n\nCash and due from banks$63,579 $75,998 \n\nInterest-earning deposits with other banks490,133 252,846 \n\nCash and cash equivalents553,712 328,844 \n\nInvestment securities held-to-maturity (fair value $109,724 and $115,007 at December 31, 2025 and 2024, respectively)\n123,024 134,111 \n\nInvestment securities available-for-sale (amortized cost $398,476 and $402,651, net of allowance for credit losses of $11 and $839 at December 31, 2025 and 2024, respectively)\n371,251 357,361 \n\nInvestments in equity securities2,014 2,506 \n\nFederal Home Loan Bank, Federal Reserve Bank and other stock, at cost37,808 38,980 \n\nLoans held for sale15,288 16,653 \n\nLoans and leases held for investment6,914,804 6,826,583 \n\nLess: Allowance for credit losses, loans and leases(88,165)(87,091)\n\nNet loans and leases held for investment6,826,639 6,739,492 \n\nPremises and equipment, net45,554 46,671 \n\nOperating lease right-of-use asset25,795 28,531 \n\nGoodwill175,510 175,510 \n\nOther intangibles, net of accumulated amortization7,328 8,309 \n\nBank owned life insurance140,001 139,351 \n\nAccrued interest receivable and other assets112,973 112,098 \n\nTotal assets$8,436,897 $8,128,417 \n\nLIABILITIES\n\nNoninterest-bearing deposits$1,431,974 $1,414,635 \n\nInterest-bearing deposits5,655,339 5,344,624 \n\nTotal deposits7,087,313 6,759,259 \n\nShort-term borrowings24,411 11,181 \n\nLong-term debt200,000 225,000 \n\nSubordinated notes98,867 149,261 \n\nOperating lease liabilities28,531 31,485 \n\nAccrued interest payable and other liabilities54,457 64,930 \n\nTotal liabilities7,493,579 7,241,116 \n\nSHAREHOLDERS' EQUITY\n\nCommon stock, $5 par value: 48,000,000 shares authorized at December 31, 2025 and 2024; 31,556,799 shares issued at December 31, 2025 and 2024; 28,156,917 and 29,045,877 shares outstanding at December 31, 2025 and 2024, respectively\n157,784 157,784 \n\nAdditional paid-in capital304,021 302,829 \n\nRetained earnings591,202 525,780 \n\nAccumulated other comprehensive loss, net of tax benefit(25,467)(43,992)\n\nTreasury stock, at cost; 3,399,882 and 2,510,922 shares at December 31, 2025 and 2024, respectively\n(84,222)(55,100)\n\nTotal shareholders' equity943,318 887,301 \n\nTotal liabilities and shareholders' equity$8,436,897 $8,128,417 \n\nSee accompanying notes to consolidated financial statements.\n\n55\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n For the Years Ended December 31,\n\n(Dollars in thousands, except per share data)202520242023\n\nInterest income\n\nInterest and fees on loans and leases$397,807 $383,308 $347,918 \n\nInterest and dividends on investment securities:\n\nTaxable15,925 14,909 14,225 \n\nExempt from federal income taxes4 33 58 \n\nInterest on deposits with other banks13,902 11,193 6,660 \n\nInterest and dividends on other earning assets2,848 2,912 2,869 \n\nTotal interest income430,486 412,355 371,730 \n\nInterest expense\n\nInterest on demand deposits106,159 113,074 87,821 \n\nInterest on savings deposits4,024 3,529 3,249 \n\nInterest on time deposits61,838 64,266 34,979 \n\nInterest on short-term borrowings19 249 7,095 \n\nInterest on long-term debt and subordinated notes 18,251 20,067 18,589 \n\nTotal interest expense190,291 201,185 151,733 \n\nNet interest income240,195 211,170 219,997 \n\nProvision for credit losses11,667 5,933 10,770 \n\nNet interest income after provision for credit losses228,528 205,237 209,227 \n\nNoninterest income\n\nTrust fee income8,853 8,491 7,732 \n\nService charges on deposit accounts8,991 8,082 7,048 \n\nInvestment advisory commission and fee income22,799 21,208 18,864 \n\nInsurance commission and fee income22,443 22,349 21,043 \n\nOther service fee income10,938 14,747 12,381 \n\nBank owned life insurance income5,849 3,861 3,185 \n\nNet gain on sales of investment securities— 18 — \n\nNet gain on mortgage banking activities3,362 5,265 3,689 \n\nOther income4,626 4,034 2,882 \n\nTotal noninterest income87,861 88,055 76,824 \n\nNoninterest expense\n\nSalaries, benefits and commissions127,023 123,745 120,188 \n\nNet occupancy11,149 11,025 10,686 \n\nEquipment4,293 4,453 4,132 \n\nData processing17,425 16,956 16,799 \n\nProfessional fees7,217 6,402 7,141 \n\nMarketing and advertising1,653 2,173 2,180 \n\nDeposit insurance premiums4,526 4,432 4,825 \n\nIntangible expenses469 694 938 \n\nRestructuring charges— — 1,519 \n\nOther expense29,284 28,112 28,954 \n\nTotal noninterest expense203,039 197,992 197,362 \n\nIncome before income taxes113,350 95,300 88,689 \n\nIncome tax expense22,593 19,369 17,585 \n\nNet income$90,757 $75,931 $71,104 \n\nNet income per share:\n\nBasic$3.16 $2.60 $2.42 \n\nDiluted3.13 2.58 2.41 \n\nSee accompanying notes to consolidated financial statements.\n\n56\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n For the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nBefore\nTax\nAmountTax\nExpense\n(Benefit)Net of\nTax\nAmountBefore\nTax\nAmountTax\nExpense\n(Benefit)Net of\nTax\nAmountBefore\nTax\nAmountTax\nExpense\n(Benefit)Net of\nTax\nAmount\n\nIncome$113,350 $22,593 $90,757 $95,300 $19,369 $75,931 $88,689 $17,585 $71,104 \n\nOther comprehensive income:\n\nNet unrealized gains (losses) on available-for-sale investment securities:\n\nNet unrealized holding gains (losses) arising during the period18,066 3,794 14,272 (1,098)(231)(867)7,681 1,613 6,068 \n\n(Reversal of provision) provision for credit losses(828)(174)(654)108 23 85 (409)(86)(323)\n\nLess: reclassification adjustment for net gains on sales realized in net income (1)— — — (18)(4)(14)— — — \n\nTotal net unrealized gains (losses) on available-for-sale investment securities17,238 3,620 13,618 (1,008)(212)(796)7,272 1,527 5,745 \n\nNet unrealized gains on interest rate swaps used in cash flow hedges:\n\nNet unrealized holding losses arising during the period— — — (1,979)(416)(1,563)(2,726)(573)(2,153)\n\nLess: reclassification adjustment for net losses realized in net income— — — 3,747 787 2,960 5,593 1,175 4,418 \n\nReclassification adjustment recorded in earnings (2)2,289 481 1,808 946 199 747 — — — \n\nTotal net unrealized gains on interest rate swaps used in cash flow hedges2,289 481 1,808 2,714 570 2,144 2,867 602 2,265 \n\nDefined benefit pension plans:\n\nNet unrealized gains arising during the period3,773 792 2,981 6,129 1,287 4,842 3,380 710 2,670 \n\nLess: amortization of net actuarial loss included in net periodic pension costs (3)149 31 118 587 123 464 985 207 778 \n\nTotal defined benefit pension plans3,922 823 3,099 6,716 1,410 5,306 4,365 917 3,448 \n\nOther comprehensive income23,449 4,924 18,525 8,422 1,768 6,654 14,504 3,046 11,458 \n\nTotal comprehensive income$136,799 $27,517 $109,282 $103,722 $21,137 $82,585 $103,193 $20,631 $82,562 \n\n(1) Included in net gain on sales of investment securities on the consolidated statements of income (before tax amount).\n\n(2) Represents reclassification to earnings as a reduction to interest income of amounts included in accumulated other comprehensive income on the consolidated balance sheet related to the interest rate swap terminated August 2, 2024.\n\n(3) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (before tax amount). See Note 13, \"Retirement Plans and Other Postretirement Benefits\" for additional details.\n\nSee accompanying notes to consolidated financial statements.\n\n57\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY\n\n(Dollars in thousands, except per share data)Common\nShares\nOutstandingCommon\nStockAdditional\nPaid-in\nCapitalRetained\nEarningsAccumulated\nOther\nComprehensive\n(Loss) IncomeTreasury\nStockTotal\n\nBalance at December 31, 202229,271,915 $157,784 $300,808 $428,637 $(62,104)$(48,625)$776,500 \n\nNet income— — — 71,104 — — 71,104 \n\nOther comprehensive income, net of income tax— — — — 11,458 — 11,458 \n\nCash dividends declared ($0.84 per share)\n— — — (24,717)— — (24,717)\n\nStock-based compensation— — 4,210 (333)— — 3,877 \n\nStock issued under dividend reinvestment and employee stock purchase plans128,480 — (78)— — 2,643 2,565 \n\nVesting of restricted stock units, net of shares withheld to cover taxes131,601 — (3,857)— — 2,625 (1,232)\n\nExercise of stock options6,210 — (17)— — 132 115 \n\nPurchases of treasury stock(26,485)— — — — (462)(462)\n\nBalance at December 31, 202329,511,721 $157,784 $301,066 $474,691 $(50,646)$(43,687)$839,208 \n\nNet income— — — 75,931 — — 75,931 \n\nOther comprehensive income, net of income tax— — — — 6,654 — 6,654 \n\nCash dividends declared ($0.84 per share)\n— — — (24,552)— — (24,552)\n\nStock-based compensation— — 4,526 (290)— — 4,236 \n\nStock issued under dividend reinvestment and employee stock purchase plans98,424 — 114 — — 2,270 2,384 \n\nVesting of restricted stock units, net of shares withheld to cover taxes108,615 — (3,251)— — 2,378 (873)\n\nExercise of stock options130,810 — 374 — — 2,821 3,195 \n\nPurchases of treasury stock(803,693)— — — — (18,882)(18,882)\n\nBalance at December 31, 202429,045,877 $157,784 $302,829 $525,780 $(43,992)$(55,100)$887,301 \n\nNet income— — — 90,757 — — 90,757 \n\nOther comprehensive income, net of income tax— — — — 18,525 — 18,525 \n\nCash dividends declared ($0.87 per share)\n— — — (25,023)— — (25,023)\n\nStock-based compensation— — 4,542 (311)— — 4,231 \n\nStock issued under dividend reinvestment and employee stock purchase plans76,481 — 201 (1)— 2,116 2,316 \n\nVesting of restricted stock units, net of shares withheld to cover taxes110,262 — (3,725)— — 2,113 (1,612)\n\nExercise of stock options53,514 — 174 — — 1,274 1,448 \n\nPurchases of treasury stock(1,129,217)— — — — (34,625)(34,625)\n\nBalance at December 31, 202528,156,917 $157,784 $304,021 $591,202 $(25,467)$(84,222)$943,318 \n\nSee accompanying notes to consolidated financial statements.\n\n58\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n For the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nCash flows from operating activities:\n\nNet income$90,757 $75,931 $71,104 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nProvision for credit losses11,667 5,933 10,770 \n\nDepreciation of premises and equipment5,505 5,473 5,057 \n\nNet gain on sales of investment securities— (18)— \n\nNet gain on mortgage banking activities(3,362)(5,265)(3,689)\n\nBank owned life insurance income(5,849)(3,861)(3,185)\n\nNet amortization of investment securities premiums and discounts968 1,058 1,138 \n\nAmortization, fair market value adjustments and capitalization of servicing rights512 1,993 (411)\n\nStock-based compensation4,690 4,615 4,194 \n\nIntangible expenses 469 694 938 \n\nOther adjustments to reconcile net income to cash used in by operating activities(4,412)(3,362)(1,462)\n\nDeferred tax expense (benefit)508 (1,271)(710)\n\nOriginations of loans held for sale(213,609)(309,506)(228,532)\n\nProceeds from the sale of loans held for sale217,811 311,150 226,506 \n\nContributions to pension and other postretirement benefit plans(257)(243)(250)\n\nDecrease (increase) in accrued interest receivable and other assets2,136 (12,020)(8,877)\n\n(Decrease) increase in accrued interest payable and other liabilities(6,022)3,805 17,150 \n\nNet cash provided by operating activities101,512 75,106 89,741 \n\nCash flows from investing activities:\n\nProceeds from sale of premises and equipment411 2,367 1,877 \n\nPurchases of premises and equipment(4,585)(3,104)(6,724)\n\nProceeds from maturities, calls and principal repayments of securities held-to-maturity13,308 13,949 14,799 \n\nProceeds from maturities, calls and principal repayments of securities available-for-sale54,821 55,873 30,738 \n\nProceeds from sales of securities available-for-sale— 505 — \n\nPurchases of investment securities held-to-maturity(2,546)(2,640)(6,253)\n\nPurchases of investment securities available-for-sale(51,315)(64,017)(25,132)\n\nProceeds from sales of equity securities6,940 4,944 1,232 \n\nPurchases of money market mutual funds(6,448)(4,089)(1,963)\n\nNet decrease (increase) in other investments1,172 1,519 (6,658)\n\nProceeds from sale of loans originally held-for-investment— — 25,450 \n\nNet increase in loans and leases(100,961)(260,981)(474,200)\n\nProceeds from sales of foreclosed / repossessed assets322 80 260 \n\nPurchases of bank owned life insurance— (5,710)(7,862)\n\nProceeds from bank owned life insurance5,199 1,563 — \n\nNet cash used in investing activities(83,682)(259,741)(454,436)\n\nCash flows from financing activities:\n\nNet increase in deposits328,051 383,458 462,229 \n\nNet increase (decrease) in short-term borrowings13,230 4,875 (190,835)\n\nProceeds from issuance of long-term debt50,000 — 250,000 \n\nRepayment of long-term debt(75,000)(85,000)(35,000)\n\nProceeds from issuance of subordinated notes50,000 — — \n\nSubordinated notes issuance costs(802)— — \n\nRepayment of subordinated notes(100,000)— — \n\nPayment of contingent consideration on acquisitions(635)(635)(635)\n\nPayment for shares withheld to cover taxes on vesting of restricted stock units(1,611)(873)(1,232)\n\nPurchases of treasury stock(34,625)(18,882)(462)\n\nStock issued under dividend reinvestment and employee stock purchase plans 2,316 2,384 2,565 \n\nProceeds from exercise of stock options1,448 3,195 115 \n\nCash dividends paid(25,334)(24,842)(25,050)\n\nNet cash provided by financing activities207,038 263,680 461,695 \n\n59\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNet increase in cash and cash equivalents224,868 79,045 97,000 \n\nCash and cash equivalents at beginning of year328,844 249,799 152,799 \n\nCash and cash equivalents at end of period$553,712 $328,844 $249,799 \n\nFor the Years Ended December 31,\n\n202520242023\n\nSupplemental disclosures of cash flow information:\n\nCash paid for interest$200,413 $191,513 $139,600 \n\nNon cash transactions:\n\nTransfer of loans to other real estate owned$3,945 $407 $79 \n\nTransfer of leases to repossessed assets143 181 — \n\nTransfer of loans to loans held for sale— — 25,646 \n\nSee accompanying notes to consolidated financial statements.\n\n60\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nUNIVEST FINANCIAL CORPORATION AND SUBSIDIARIES\n\nNotes to Consolidated Financial Statements\n\n(All dollar amounts presented in tables are in thousands, except share and per share data. \"N/M\" equates to \"not meaningful\"; \"-\" equates to \"zero\" or \"doesn't round to a reportable number\"; and \"N/A\" equates to \"not applicable\".)\n\nNote 1. Summary of Significant Accounting Policies\n\nOrganization\n\nUnivest Financial Corporation (the \"Corporation\") through its wholly-owned subsidiary, Univest Bank and Trust Co. (the \"Bank\"), is engaged in domestic banking services for individuals, businesses, municipalities and non-profit organizations. The Bank is the parent company of Girard Investment Services, LLC, a full-service registered introducing broker-dealer and a licensed insurance agency, Girard Advisory Services, LLC, a registered investment advisory firm, and Girard Pension Services, LLC, a registered investment advisor, which provides investment consulting and management services to municipal entities. The Bank is also the parent company of Univest Insurance, LLC, an independent insurance agency, and Univest Capital, Inc., an equipment financing business. The Bank's subsidiaries enhance the traditional banking services provided by the Bank. Additionally, 1876 Double Eagle, LLC is a subsidiary of the Corporation.   \n\nThe Bank serves 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and five counties in Maryland. Additionally, the Bank provides banking services to the residents and employees of 10 retirement communities.\n\nPrinciples of Consolidation\n\nThe consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, including the Bank as the Corporation's primary subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current-year presentation. Assets held by the Corporation in a fiduciary or agency capacity for its customers are not included in the consolidated financial statements since such items are not assets of the Corporation.\n\nUse of Estimates\n\nThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes include the fair value measurement of investment securities available-for-sale and the determination of the allowance for credit losses on loans and leases.\n\nEarnings per Share\n\nBasic earnings per share represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if outstanding options to acquire common shares had been exercised and restricted stock units had vested and the hypothetical repurchases of shares to fund such option exercises and restricted stock unit vestings during the periods presented. The effects of options to issue common stock and unvested restricted stock units are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive. Antidilutive options are those options with weighted average exercise prices in excess of the weighted average market value. Antidilutive restricted stock units are those with hypothetical repurchases of shares, under the treasury stock method, with a price exceeding the average restricted stock units outstanding for the periods presented.\n\nCash and Cash Equivalents\n\nThe Corporation has defined those items included in the caption \"Cash and due from banks\" and \"Interest-earning deposits with other banks\" as cash and cash equivalents. Interest-earning deposits with other banks consist of deposit accounts with other financial institutions. At times, such balances exceed the FDIC limits for insurance coverage.\n\n61\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nInvestment Securities\n\nManagement determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities are classified as investment securities held-to-maturity and carried at amortized cost if management has the positive intent and ability to hold the securities to maturity. Securities classified as available-for-sale are those securities that the Corporation intends to hold for an indefinite period of time but not necessarily until maturity. Securities available-for-sale are carried at fair value with unrealized gains and losses recorded in accumulated other comprehensive income, net of estimated income taxes. Any decision to sell a security classified as available-for-sale would be based on various factors, including interest rates, changes in the maturity or mix of the Corporation's assets and liabilities, liquidity needs, regulatory capital considerations and other factors. Securities purchased with the intention of recognizing short-term profits are placed in a trading account and are carried at fair value. The Corporation did not have any trading account securities at December 31, 2025 or 2024.\n\nPurchase premiums and discounts are recognized in interest income using the interest method over the expected life of the securities except for premiums on callable debt securities, which are amortized to the next call date. Due to volatility in the financial markets, there is the risk that any future fair value could vary from that disclosed in the accompanying financial statements. Realized gains and losses on the sale of investment securities are recorded on the trade date, determined using the specific identification method, and are included in the consolidated statements of income.\n\nThe Corporation measures expected credit losses on held-to-maturity debt securities, which are comprised of residential mortgage-backed securities. The Corporation's residential mortgage-backed security holdings are issued by U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.\n\nHeld-to-maturity debt securities are typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest. When held-to-maturity debt securities are placed on nonaccrual status, unpaid interest credited to income is reversed.\n\nThe Corporation measures expected credit losses on available-for-sale debt securities when the Corporation does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security or the issuer, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss equal to the amount that the fair value is less than the amortized cost basis. Economic forecast data is utilized to calculate the present value of expected cash flows. The Corporation obtains its forecast data through a subscription to a widely recognized and relied upon company that publishes various forecast scenarios. Management evaluates various scenarios to determine a reasonable and supportable scenario, or a combination of scenarios, to be utilized in the model. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.\n\nThe allowance for credit losses on available-for-sale debt securities is included within Investment securities available-for-sale on the consolidated balance sheet. Changes in the allowance for credit losses are recorded within Provision for credit losses on the consolidated statement of income. Losses are charged against the allowance when the Corporation believes the collectability of an available-for-sale security is in jeopardy or when either of the criteria regarding intent or requirement to sell is met.\n\nAccrued interest receivable on available-for-sale debt securities totaled $1.3 million at December 31, 2025 and was included within accrued interest receivable and other assets on the consolidated balance sheet. This amount was excluded from the estimate of expected credit losses. Available-for-sale debt securities are typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When available-for-sale debt securities are placed on nonaccrual status, unpaid interest credited to income is reversed.\n\nEquity securities are measured at fair value with changes in fair value recognized in net income.\n\n62\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nFederal Home Loan Bank Stock, Federal Reserve Bank Stock and Certain Other Investments without Readily Determinable Fair Values\n\nAt December 31, 2025 and 2024, the Bank held $14.9 million in Federal Reserve Bank stock as required by the Federal Reserve Bank. The Bank is a member of the Federal Home Loan Bank (\"FHLB\"), and as such, is required to hold FHLB stock as a condition of membership as determined by the FHLB. The Bank is required to hold stock in the FHLB in relation to the level of outstanding borrowings. The Bank held $22.8 million and $23.9 million of FHLB stock at December 31, 2025 and 2024, respectively. Because ownership is restricted, the fair values of these investments are not readily determinable. As such, these investments are recorded at cost and periodically evaluated for impairment based on ultimate recovery of par value. The Corporation determined there was no impairment of its investments in these stocks at December 31, 2025 or 2024.\n\nLoans Held for Sale\n\nThe Corporation may elect the fair value option for loans intended for sale in the secondary market. This election is made on a loan level basis at the time of origination. If the fair value option is not elected, loans held for sale were carried at the lower of aggregate cost or estimated fair value. As of December 31, 2025 and 2024, loans held for sale were accounted for under the fair value option. Cash payments and cash receipts resulting from acquisitions and sales of loans are classified as operating cash flows if those loans are acquired specifically for resale. Cash receipts resulting from sales of loans that were not specifically acquired for resale are classified as investing cash inflows regardless of a change in the purpose for holding those loans.\n\nLoans and Leases\n\nLoans that the Corporation has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, which is the principal amount, net of deferred fees and costs, and the allowance for credit losses. Lease financings are stated at net investment amount, consisting of the present value of lease payments and unguaranteed residual value, plus initial direct costs.\n\nA loan or lease is typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest, even though the loan or lease is currently performing. When a loan or lease is classified as nonaccrual, the accrual of interest on such a loan or lease is discontinued. A loan or lease may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan or lease is placed on nonaccrual status, unpaid interest credited to income is reversed and the amortization of the deferred fees and costs is suspended. Interest payments received on nonaccrual loans and leases are either applied against principal or reported as interest income, according to management's judgment as to the ultimate collectability of principal. Loans and leases are usually restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.\n\nA loan is classified as a modified loan to a borrower experiencing financial difficulty when a contractual loan modification in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay or a term extension (or a combination thereof) has been granted to an existing borrower experiencing financial difficulties. The goal when modifying a credit is to provide relief to customers experiencing cash flow difficulties. Accruing modified loans to borrowers experiencing financial difficulty are primarily comprised of loans on which interest is being accrued under the modified terms, and the loans are current or less than 90 days past due.\n\nAccrued interest receivable on loans and leases held for investment totaled $27.5 million at December 31, 2025 and was included within accrued interest receivable and other assets on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.\n\nOverdraft deposits are reclassified as loans and are included in the total loans and leases on the balance sheet.\n\nLoan and Lease Fees\n\nFees collected upon loan or lease originations and certain direct costs of originating loans and leases are deferred and recognized over the contractual lives of the related loans and leases as yield adjustments using the interest method. Upon prepayment or other disposition of the underlying loans and leases before their contractual maturities, any associated unearned fees or unamortized costs are recognized. Initial direct costs, comprised of commissions paid that would not have been incurred if the lease had not been obtained, are deferred and amortized over the life of the contract, and are classified within net interest income.\n\n63\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nAllowance for Credit Losses on Loans and Leases\n\nThe allowance for credit losses (\"ACL\") on loans and leases is a valuation account that presents the amount that potentially may not be collected on a loan or lease. The ACL on loans and leases is measured on a collective (pooled) basis when similar risk characteristics exist. The ACL on loans and leases is adjusted through a provision for credit losses as a charge against, or credit to, earnings. Loans and leases deemed to be uncollectible are charged against the ACL on loans and leases, and any subsequent recoveries are credited to the ACL on loans and leases. Management evaluates the ACL on loans and leases on a quarterly basis and when changes in the reserve are necessary, an adjustment is made. The ACL on loans and leases is included within Allowance for credit losses, loans and leases on the consolidated balance sheet. Changes in the ACL on loans and leases are recorded within provision for credit losses on the consolidated statements of income.\n\nManagement utilizes a discounted cash flow (\"DCF\") model to calculate the present value of the expected cash flows for pools of loans and leases that share similar risk characteristics and compares the results of this calculation to the amortized cost basis of such loans and leases to determine its allowance for credit loss balance.\n\nManagement uses relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable economic forecasts in calculating its ACL. Historical credit loss experience provides one of the bases for the estimation of expected credit losses. Management determines whether there is a need to make qualitative adjustments to historical loss information by monitoring certain factors including differences in current loan-specific risk characteristics as well as for changes in external or environmental conditions, or other relevant factors.\n\nThe contractual term used in projecting the cash flows of a loan is based on the maturity date of a loan and is adjusted for prepayment or curtailment assumptions, which may shorten that contractual time period. Options to extend are considered by management in determining the contractual term.\n\nThe key inputs to the DCF model are (1) probability of default, (2) loss given default, (3) prepayment and curtailment rates, (4) recovery delay, (5) reasonable and supportable economic forecasts, (6) forecast reversion period, (7) expected recoveries on charged-off loans, and (8) discount rate.\n\nProbability of Default (\"PD\")\n\nIn order to incorporate economic factors into forecasting within the DCF model, management uses the Loss Driver method to generate the PD rate inputs. The Loss Driver method analyzes how one or more economic factors change the default rate using a statistical regression analysis. Management selects economic factors for each loan pool that have strong correlations to historical default rates, and reviews the economic factors selected on an annual basis. For the period ended December 31, 2025, the factors management selected were unemployment rate, GDP, and the housing pricing index.\n\nLoss Given Default (\"LGD\")\n\nManagement uses the Frye Jacobs parameter for determining the LGD input, which is an estimation technique that derives an LGD input from segment specific risk curves that correlates LGD with PD.\n\nPrepayment and Curtailment rates\n\nPrepayment Rates: Loan and lease level transaction data is used to calculate quarterly prepayment rates using available historical loan and lease level data. Those quarterly rates are annualized, and the average of the annualized rates is used in the DCF calculation for fixed payment or term loans. Rates are calculated for each pool.\n\nCurtailment Rates: Loan level transaction data is used to calculate annual curtailment rates using available historical loan level data. The average of the historical rates is used in the DCF model for interest only payment or line of credit type loans. Rates are calculated for each pool.\n\nRecovery Delay\n\nThe recovery delay input within the DCF calculation represents an estimate of the period of time between when a modeled default occurs and the ultimate resolution of that default, specifically the portion of that default that does not result in a loss. Management analyzes historical recovery activity on previous default activity to determine an appropriate recovery delay for each pool.\n\n64\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nReasonable and Supportable Forecasts\n\nThe forecast data used in the DCF model is obtained via a subscription to a widely recognized and relied upon company that publishes various forecast scenarios. Management evaluates the various scenarios to determine a reasonable and supportable scenario, or a combination of scenarios, to be utilized in the model.\n\nForecast Reversion Period\n\nManagement uses forecasts to predict how economic factors will perform and uses a four-quarter forecast period as well as a four-quarter straight-line reversion period to historical averages (also commonly referred to as the mean reversion period).\n\nExpected Recoveries on Charged-off Loans\n\nManagement performs an analysis to estimate recoveries that could be reasonably expected based on historical experience in order to account for expected recoveries on loans that have already been fully charged-off and are not included in the ACL calculation.\n\nDiscount Rate\n\nThe effective interest rate of the underlying loans and leases of the Corporation serves as the discount rate applied to the expected periodic cash flows. Management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments which can be reasonably estimated for each pool.\n\nIndividual Evaluation\n\nManagement evaluates individual loans and leases for expected credit losses when those instruments do not share similar risk characteristics with instruments evaluated using a collective (pooled) basis. Instruments will not be included in both collective and individual analyses. Individual analysis may establish a specific reserve. All loans on nonaccrual status are individually evaluated for a specific reserve.\n\nManagement considers a financial asset as collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral, based on management's assessment as of the reporting date.\n\nModifications to Borrowers Experiencing Financial Difficulty\n\nThe allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Corporation uses either a discounted cash flow model or the fair value of collateral method to determine the allowance for credit losses on modifications to borrowers experiencing financial difficulty, depending on the accrual status of the account after modification. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty are already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification but will get assessed and updated each quarter as necessary.\n\nPremises and Equipment\n\nLand is stated at cost, and premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method and charged to operating expenses over the estimated useful lives of the assets or, for leasehold improvements, over the shorter of the expected life of the related lease or the remaining estimated useful life of the asset. The estimated useful life for new buildings constructed on land owned is 40 years. For new buildings constructed on leased land or land improvements, the estimated useful life is the initial term. The useful life of purchased existing buildings is the estimated remaining useful life at the time of the purchase. Furniture, fixtures and equipment have estimated useful lives ranging from three to ten years. When assets are retired, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts.\n\n65\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nGoodwill and Other Intangible Assets\n\nThe Corporation accounts for its acquisitions using the purchase accounting method. Purchase accounting requires the total purchase price to be allocated to the estimated fair values of assets acquired and liabilities assumed, including certain intangible assets that must be recognized. Typically, this allocation results in the purchase price exceeding the fair value of net assets acquired, which is recorded as goodwill. Core deposit intangibles are a measure of the value of checking, money market and savings deposits acquired in business combinations accounted for under the purchase method. Core deposit intangibles are amortized using the sum of the year's digits over their estimated useful lives of up to fifteen years. Customer-related intangibles are the value associated with the existing customer base acquired in business combinations accounted for under the purchase method. Customer-related intangibles are amortized over their estimated useful lives of five to twelve years. The Corporation performs an assessment of goodwill at least on an annual basis or more often if events and circumstances indicate that a goodwill impairment test should be performed. The Corporation also completes an impairment test for other intangible assets on an annual basis or more often if events and circumstances indicate a possible impairment. The Corporation has selected October 31st as the date to perform the annual impairment test.\n\nServicing rights are recognized as separate assets when loans are sold, and the servicing rights are retained. Capitalized servicing rights are reported in other intangible assets on the consolidated balance sheets and are amortized into noninterest income in proportion to, and over the period of, estimated net servicing income on a basis similar to the interest method and an accelerated amortization method for loan payoffs. Servicing rights are evaluated for impairment, on a quarterly basis, based upon the estimated fair value of the rights as compared to their amortized cost. The Corporation estimates the fair value of servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the portfolios serviced. The impairment test stratifies servicing assets based on predominant risk characteristics of the underlying financial assets such as the term and interest rate. In conjunction with the impairment test, the Corporation records a valuation allowance when the fair value of the stratified servicing asset is less than amortized cost. Subsequent changes in the valuation of the assets are recorded as either an increase or a reduction of the valuation allowance, however, if the fair value exceeds amortized cost, such excess will not be recognized.\n\nBank Owned Life Insurance\n\nThe Corporation has invested in bank-owned life insurance (\"BOLI\"). BOLI involves the purchasing of life insurance by the Corporation for certain employees. The Corporation is the owner and beneficiary of the policies, however certain policies include split-dollar endorsements. Under these endorsements, beneficiaries of the insured individuals are entitled to a portion of the proceeds from the policy upon death of the insured. The life insurance investment is carried at the net cash surrender value of the underlying policies. Changes in the net cash surrender value of these policies are reflected in noninterest income. Proceeds from and purchases of bank-owned life insurance are reflected on the consolidated statements of cash flows under investing activities. The Corporation recognizes a liability for the future death benefit for certain endorsement split-dollar life insurance arrangements that provide an employee with a death benefit in a postretirement period.\n\nOther Real Estate Owned\n\nOther real estate owned (\"OREO\") represents properties that the Corporation has acquired through foreclosure by either accepting a deed in lieu of foreclosure, or by taking possession of assets that collateralized a loan. The Corporation reports OREO at the lower of cost or fair value less cost to sell, adjusted periodically based on current appraisals, letters of intent, or agreements of sale. Capital improvement expenses associated with the construction or repair of the property are capitalized as part of the cost of the OREO asset. Write-downs and any gain or loss upon the sale of OREO is recorded in other noninterest income. OREO is reported in accrued interest receivable and other assets on the consolidated balance sheet.\n\nRepossessed Assets\n\nRepossessed assets represent non-real estate assets that the Corporation has acquired by taking possession of the asset that collateralized a loan or lease. The Corporation reports repossessed assets at the fair value less cost to sell, adjusted periodically based on a current appraisal provided by a third party based on their assumptions and quoted market prices for similar assets, when available. Write-downs and any gain or loss upon the sale of repossessed assets is recorded in other noninterest income. Repossessed assets are reported in accrued interest receivable and other assets on the consolidated balance sheet.\n\nRetirement Plans and Other Postretirement Benefits\n\nSubstantially all employees who were hired before December 8, 2009 are covered by a non-contributory retirement plan. Effective December 31, 2009, the benefits previously accrued under the non-contributory retirement plan were frozen and the\n\n66\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nplan was amended and converted to a cash balance plan, with participants not losing any pension benefits already earned in the plan. Prior to the cash balance plan conversion, the plan provided benefits based on a formula of each participant's final average pay. Future benefits under the cash balance plan accrue by crediting participants annually with an amount equal to a percentage of earnings in that year based on years of credited service as defined in the plan. Employees hired on or after December 8, 2009 are not eligible to participate in the non-contributory retirement plan.\n\nThe Corporation also maintains a non-qualified benefit plan that provides supplemental executive retirement benefits to certain former executives, a portion of which is in excess of limits imposed on qualified plans by federal tax law. This non-qualified benefit plan is not offered to new participants and all current participants are now retired. The Corporation provides certain postretirement healthcare and life insurance benefits for retired employees. The Corporation's measurement date for plan assets and obligations is fiscal year-end. The Corporation recognizes on its consolidated balance sheet the funded status of its defined pension plans and changes in the funded status of the plan in the year in which the changes occur. An under-funded position would create a liability, and an over-funded position would create an asset, with a correlating deferred tax asset or liability. The net impact would be an adjustment to equity as accumulated other comprehensive income (loss). The Corporation recognizes as a component of other comprehensive income (loss), net of tax, the actuarial gains and losses and the prior service costs and credits that arise during the period.\n\nThe Corporation sponsors a 401(k) deferred salary savings plan, which is a qualified defined contribution plan, and which covers all employees of the Corporation and its subsidiaries and provides that the Corporation make matching contributions as defined by the plan.\n\nThe Corporation sponsors a Supplemental Non-Qualified Pension Plan, which was established in 1981 prior to the existence of 401(k) deferred salary savings, employee stock purchase and long-term incentive plans, and therefore is not offered to new participants. All current participants are now retired. This non-qualified plan is accounted for under guidance for deferred compensation arrangements.\n\nDerivative Financial Instruments\n\nThe Corporation recognizes all derivative financial instruments on its consolidated balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income until the underlying transaction is recognized in earnings. To determine fair value, the Corporation uses third-party pricing models that incorporate assumptions about market conditions and risks that are current at the reporting date.\n\nThe Corporation may use interest-rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation accounts for its interest-rate swap contracts in cash flow hedging relationships by establishing and documenting the effectiveness of the instrument in offsetting the change in cash flows of assets or liabilities that are being hedged. To determine effectiveness, the Corporation performs an analysis to identify if changes in fair value of the derivative correlate to the equivalent changes in the forecasted interest receipts related to a specified hedged item. Recorded amounts related to interest-rate swaps are included in other assets or liabilities. The entire change in the fair values of the derivative instruments designated as hedges of future cash flows are recognized in accumulated other comprehensive income until the underlying forecasted transactions occur, at which time the deferred gains and losses are recognized in interest income. In a fair value hedge, the entire change in the fair values of the interest rate swap and hedged item included in the assessment of hedge effectiveness is recorded in interest income. The Corporation performs an assessment, both at the inception of the hedge and quarterly thereafter, to determine whether these derivatives are highly effective in offsetting changes in the value of the hedged items.\n\nThe Corporation has agreements with third-party financial institutions whereby the third-party financial institution enters into interest rate derivative contracts with loan customers referred to them by the Corporation. By the terms of the agreements, the third-party financial institution has recourse to the Corporation for any exposure created under each swap contract in the event the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. The Corporation records the fair value of credit derivatives in other liabilities on the consolidated balance sheets. The Corporation recognizes changes in the fair value of credit derivatives, net of any fees received, in other noninterest income in the consolidated statements of income.\n\nIn connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed-rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sale of mortgage loans to third-party investors to hedge the effect of changes in interest rates on the\n\n67\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nvalue of the interest rate locks. Forward loan sale commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price at a future date. Both the interest rate locks and the forward loan sale commitments are accounted for as derivatives and carried at fair value. Gross derivative assets and liabilities are recorded within other assets and other liabilities on the consolidated balance sheets, with changes in fair value during the period recorded within the net gain on mortgage banking activities on the consolidated statements of income.\n\nOff-balance Sheet Commitments and Reserve for Unfunded Commitments\n\nCommitments are made to accommodate the financial needs of customers. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet financial instruments. The Corporation maintains a reserve for off-balance sheet credit exposures that are currently unfunded. Management calculates funding rates using historical loan level data. The current quarter's funding rate is subtracted from the maximum historical funding rate which is then applied to each pool's total non-cancellable available line of credit. The applicable ACL pool level loss rates for the current quarter are then applied to calculate the reserve for unfunded commitments liability each period.\n\nThe reserve for off-balance sheet credit exposures is included within accrued expenses and other liabilities on the consolidated balance sheet. Changes in the reserve for off-balance sheet credit exposures are recorded within the provision for credit losses on the consolidated statements of income.\n\nLease Liabilities and Right-of-Use Assets\n\nThe Corporation and its subsidiaries are obligated under non-cancelable operating leases for premises for certain financial centers and other office locations. The Corporation determines if an arrangement is a lease at inception by assessing whether a contract contains a right to control an identified asset for a period of time in exchange for consideration. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheets. For purposes of calculating operating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that the Corporation will exercise that option and begins when the Corporation has control and possession of the leased property, which may be before rental payments are due under the lease. Right-of use assets and operating lease liabilities are recognized based on the present value of lease payments, discounted using the Corporation's incremental borrowing rate, over the lease term at the possession date. The Corporation determines its incremental borrowing rate using publicly available information available for debt issuers with similar credit ratings as the Bank, as the substantial majority of the Corporation's leases are related to properties of the Bank. The Corporation separately accounts for lease and non-lease components such as property taxes, insurance, and maintenance costs. Operating lease expense for the Corporation's leases, which generally have escalating rental payments over the term of the lease, is recognized on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms generally containing one or more five-year renewal options. At December 31, 2025, the Corporation's leases have remaining terms of 4 months to 17 years.\n\nIncome Taxes\n\nThere are two components of income tax expense: current and deferred. Current income taxes approximates cash to be paid or refunded for taxes for the applicable period. Deferred income taxes are provided for temporary differences between amounts reported for financial statement and tax purposes. Deferred income taxes are computed using the asset and liability method, such that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between financial reporting amounts and the tax basis of existing assets and liabilities based on currently enacted tax laws and tax rates in effect for the periods in which the differences are expected to reverse. Deferred tax assets are subject to management's judgment based upon available evidence that future taxes are \"more likely than not\" to be realized. If management determines that the Corporation is not more likely than not to realize some or all of the net deferred tax asset in the future, a charge to income tax expense may be required to reduce the value of the net deferred tax asset to the expected realizable value. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Penalties are recorded in noninterest expense in the year they are assessed and paid and are treated as a nondeductible expense for tax purposes. Interest is recorded in noninterest expense in the year it is assessed and paid and is treated as a deductible expense for tax purposes.\n\nStock-Based Compensation\n\nThe fair value of share-based awards is recognized as compensation expense over the vesting period, on a straight-line basis, based on the grant-date fair value of the awards.\n\n68\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe fair value of restricted stock is equivalent to the fair value of the Corporation's common stock on the date of grant. The Corporation grants performance-based and service-based restricted stock. The performance-based restricted stock vests based upon the Corporation's performance with respect to certain financial measures over a three-year period and based on continued employment over a period of time. The service-based restricted stock vests based on continued employment over a period of time. The fair value of restricted stock is recognized as compensation expense over the vesting period and for performance-based restricted stock is adjusted for a probability factor of achieving the performance goals.\n\nRevenue Recognition\n\nThe Corporation's revenue is the sum of net interest income and noninterest income. Revenues are recognized when obligations under the terms of contracts with customers are satisfied, including the transfer of control of the promised goods or services to customers, in an amount that reflects the consideration the Corporation expects to be entitled to in exchange for those goods or services. The Corporation provides services to customers which have related performance obligations that are completed to recognize revenue. The Corporation's revenues are generally recognized either immediately upon the completion of the services or over time as the services are performed. Any services performed over time generally require services to be rendered each period and therefore progress in completing these services is measured based upon the passage of time.\n\nAccounting Pronouncements Adopted in 2025\n\nIn December 2023, the Financial Accounts Standards Board (the \"FASB\") issued ASU No. 2023-09, \"Income Taxes (Topic 740): Improvements to Income Tax Disclosures\". This ASU enhances annual income tax disclosures to address investor requests for more transparency about income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU became effective on December 15, 2025 for the Corporation. The adoption of this ASU resulted in updated disclosures within our financial statements but otherwise did not have a material impact on the Corporation's financial statements.\n\nRecent Accounting Pronouncements Yet to Be Adopted\n\nIn October 2023, the FASB issued ASU No. 2023-06, \"Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative\". This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. For entities subject to the SEC's existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Corporation does not expect the adoption of this ASU will have a material impact of the Corporation's financial statements.\n\nIn November 2024, the FASB issued ASU No. 2024-03, \"Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses\". This ASU requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. This ASU applies on a prospective basis for periods beginning after the effective date. However, retrospective application to any or all prior periods presented is permitted. In January 2025, the FASB issued ASU No. 2025-01 to amend the effective date of ASU No. 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.\n\nIn November 2024, the FASB issued ASU No. 2024-04, \"Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments\". This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2025. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.\n\n69\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nIn July 2025, the FASB issued ASU 2025-05, \"Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.\" This ASU amends ASC 326-202 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, \"Revenue From Contracts with Customers\". This ASU is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2025. Early adoption is permitted for financial statements that have not yet been issued. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.\n\nIn November 2025, the FASB issued ASU 2025-08, \"Financial Instruments—Credit Losses (Topic 326): Purchased Loans.\" This ASU expands the population of acquired financial assets subject to the \"gross-up approach\" in Topic 326. All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are considered to be seasoned if they were purchased more than 90 days after origination and the acquirer was not involved in the origination of the loans. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted for financial statements that have not yet been issued. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.\n\nIn November 2025, the FASB issued ASU 2025-09, \"Derivatives and Hedging (Topic 815): Hedge Accounting Improvements.\" This ASU is to align hedge accounting more closely with the economics of an entity's risk management activities. This ASU addresses five issues intended to enable financial statements to better reflect certain hedging strategies by allowing entities to achieve and maintain hedge accounting for a greater number of highly effective economic hedges. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted any date on or after its issuance. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.\n\nNote 2. Earnings per Share\n\nThe following table sets forth the computation of basic and diluted earnings per share:\n\n For the Years Ended December 31,\n\n(Dollars and shares in thousands, except per share data)202520242023\n\nNumerator for basic and diluted earnings per share—net income available to common shareholders\n$90,757 $75,931 $71,104 \n\nDenominator for basic earnings per share—weighted-average shares outstanding\n28,735 29,215 29,433 \n\nEffect of dilutive securities—stock options and restricted stock units242 186 100 \n\nDenominator for diluted earnings per share—adjusted weighted-average shares outstanding\n28,977 29,401 29,533 \n\nBasic earnings per share$3.16 $2.60 $2.42 \n\nDiluted earnings per share$3.13 $2.58 $2.41 \n\nAverage anti-dilutive options and restricted stock units excluded from computation of diluted earnings per share111 195 293 \n\nNote 3. Restrictions on Cash and Due from Banks and Interest-earning Deposit Accounts\n\nThe average balances of cash on deposit at the Federal Reserve Bank of Philadelphia were $323.8 million and $207.8 million for the years ended December 31, 2025 and 2024, respectively. There were no reserve requirements at December 31, 2025 or 2024.\n\nThe Corporation maintains interest-earning deposit accounts at other financial institutions that may represent collateral requirements for credit derivatives and interest rate swap agreements. At December 31, 2025 and 2024, the Corporation had $4.5 million and $1.0 million of cash pledged for credit derivatives, respectively. See Note 18, \"Derivative Instruments and Hedging Activities\" for additional information.\n\n70\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 4. Investment Securities\n\nThe following tables show the amortized cost, the estimated fair value and the allowance for credit losses of the held-to-maturity securities and available-for-sale securities at December 31, 2025 and 2024, by contractual maturity within each type:\n\n At December 31, 2025\n\n(Dollars in thousands)Amortized\nCostGross\nUnrealized\nGainsGross\nUnrealized\nLossesAllowance for Credit LossesFair Value\n\nSecurities Held-to-Maturity\n\nResidential mortgage-backed securities:\n\nAfter 1 year to 5 years$514 $— $(5)$— $509 \n\nAfter 5 years to 10 years10,714 — (249)— 10,465 \n\nOver 10 years111,796 42 (13,088)— 98,750 \n\n123,024 42 (13,342)— 109,724 \n\nTotal$123,024 $42 $(13,342)$— $109,724 \n\nSecurities Available-for-Sale\n\nResidential mortgage-backed securities:\n\nAfter 1 year to 5 years$130 $— $(1)$— $129 \n\nAfter 5 years to 10 years13,829 — (933)— 12,896 \n\nOver 10 years300,227 1,279 (24,951)— 276,555 \n\n314,186 1,279 (25,885)— 289,580 \n\nCollateralized mortgage obligations:\n\nAfter 1 year to 5 years71 — (1)— 70 \n\nOver 10 years1,371 — (73)— 1,298 \n\n1,442 — (74)— 1,368 \n\nCorporate bonds:\n\nWithin 1 year7,482 2 (55)(7)7,422 \n\nAfter 1 year to 5 years75,366 129 (2,609)(4)72,881 \n\n82,848 131 (2,664)(11)80,303 \n\nTotal$398,476 $1,410 $(28,623)$(11)$371,251 \n\n71\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n At December 31, 2024\n\n(Dollars in thousands)Amortized\nCostGross\nUnrealized\nGainsGross\nUnrealized\nLossesAllowance for Credit LossesFair Value\n\nSecurities Held-to-Maturity\n\nResidential mortgage-backed securities:\n\nAfter 1 year to 5 years$1,114 $— $(24)$— $1,090 \n\nAfter 5 years to 10 years10,208 — (450)— 9,758 \n\nOver 10 years122,789 — (18,630)— 104,159 \n\n134,111 — (19,104)— 115,007 \n\nTotal$134,111 $— $(19,104)$— $115,007 \n\nSecurities Available-for-Sale\n\nState and political subdivisions:\n\nWithin 1 year$1,300 $— $(5)$— $1,295 \n\n1,300 — (5)— 1,295 \n\nResidential mortgage-backed securities:\n\nWithin 1 year20 — — — 20 \n\nAfter 1 year to 5 years298 — (6)— 292 \n\nAfter 5 years to 10 years11,260 — (791)— 10,469 \n\nOver 10 years311,126 119 (38,645)— 272,600 \n\n322,704 119 (39,442)— 283,381 \n\nCollateralized mortgage obligations:\n\nAfter 1 year to 5 years155 — (4)— 151 \n\nOver 10 years1,663 — (129)— 1,534 \n\n1,818 — (133)— 1,685 \n\nCorporate bonds:\n\nWithin 1 year5,905 5 (58)(6)5,846 \n\nAfter 1 year to 5 years10,924 16 (303)(31)10,606 \n\nAfter 5 years to 10 years60,000 — (4,650)(802)54,548 \n\n76,829 21 (5,011)(839)71,000 \n\nTotal$402,651 $140 $(44,591)$(839)$357,361 \n\nGross unrealized gains and losses on available-for-sale securities are recognized in accumulated other comprehensive income (loss) and changes in the allowance for credit loss are recorded through provision for credit loss expense. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.\n\nSecurities with a carrying value of $439.4 million and $424.8 million at December 31, 2025 and 2024, respectively, were pledged to secure public funds deposits and contingency funding. There were no pledged securities to secure credit derivatives and interest rate swaps at December 31, 2025 or 2024.\n\nThe following table presents information related to sales of securities available-for-sale during the years ended December 31, 2025, 2024 and 2023:\n\n For the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nSecurities available-for-sale:\n\nProceeds from sales$— $505 $— \n\nGross realized gains on sales— 18 — \n\nTax expense related to net realized gains on sales— 4 — \n\nAt December 31, 2025 and 2024, there were no reportable investments in any single issuer representing more than 10% of shareholders' equity.\n\n72\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following table shows the fair value of securities that were in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2025 and 2024, by the length of time those securities were in a continuous loss position.\n\n Less than\nTwelve MonthsTwelve Months\nor LongerTotal\n\n(Dollars in thousands)Fair ValueUnrealized\nLossesFair ValueUnrealized\nLossesFair ValueUnrealized\nLosses\n\nAt December 31, 2025\n\nSecurities Held-to-Maturity\n\nResidential mortgage-backed securities$— $— $102,819 $(13,342)$102,819 $(13,342)\n\nTotal$— $— $102,819 $(13,342)$102,819 $(13,342)\n\nSecurities Available-for-Sale\n\nResidential mortgage-backed securities$15,254 $(42)$189,259 $(25,843)$204,513 $(25,885)\n\nCollateralized mortgage obligations— — 1,368 (74)1,368 (74)\n\nCorporate bonds— — 57,409 (2,591)57,409 (2,591)\n\nTotal$15,254 $(42)$248,036 $(28,508)$263,290 $(28,550)\n\nAt December 31, 2024\n\nSecurities Held-to-Maturity\n\nResidential mortgage-backed securities$2,566 $(50)$112,441 $(19,054)$115,007 $(19,104)\n\nTotal$2,566 $(50)$112,441 $(19,054)$115,007 $(19,104)\n\nSecurities Available-for-Sale\n\nResidential mortgage-backed securities65,044 (905)205,071 (38,537)270,115 (39,442)\n\nCollateralized mortgage obligations— — 1,685 (133)1,685 (133)\n\nTotal$65,044 $(905)$206,756 $(38,670)$271,800 $(39,575)\n\nAt December 31, 2025, the fair value of held-to-maturity securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $102.8 million, including unrealized losses of $13.3 million. These holdings were comprised of 87 federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The Corporation did not recognize any credit losses on held-to-maturity debt securities for the years ended December 31, 2025 or 2024.\n\nAt December 31, 2025, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $263.3 million, including unrealized losses of $28.6 million. These holdings were comprised of: (1) 100 federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses, (2) six investment grade corporate bonds, and (3) two collateralized mortgage obligation bonds . The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. The Corporation concluded that the unrealized loss of these securities was not indicative of a credit loss. Accrued interest receivable on available-for-sale debt securities totaled $1.3 million at December 31, 2025 and was included within accrued interest receivable and other assets on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.\n\n73\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe table below presents a rollforward by major security type for the years ended December 31, 2025 and 2024 of the allowance for credit losses on securities available-for-sale.\n\n(Dollars in thousands)Corporate Bonds\n\nFor the Year Ended December 31, 2025\n\nSecurities Available-for-Sale\n\nBeginning balance$(839)\n\nAdditions for securities for which no previous expected credit losses were recognized(2)\n\nChange in securities for which a previous expected credit loss was recognized830 \n\nEnding balance$(11)\n\nFor the Year Ended December 31, 2024\n\nSecurities Available-for-Sale\n\nBeginning balance$(731)\n\nAdditions for securities for which no previous expected credit losses were recognized(3)\n\nChange in securities for which a previous expected credit loss was recognized(105)\n\nEnding balance$(839)\n\nAt December 31, 2025, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $6.9 million, including unrealized losses of $84 thousand, and allowance for credit losses of $11 thousand. These holdings were comprised of 14 investment grade corporate bonds, all of which fluctuate in value based on changes in market conditions. For these securities, fluctuations were primarily due to changes in the interest rate environment. The Corporation does not intend to sell these securities, and it is not likely that it will be required to sell the securities before their anticipated recovery. The underlying issuers continue to make timely principal and interest payments on the securities.\n\nDuring the year ended December 31, 2025, $719 thousand of allowance credit for losses was reversed on six investment grade corporate bonds. These six investment grade corporate bonds were issued by Global Systemically Important Banks (\"G-SIBs\") and Domestic Systemically Important Banks, which hold a significant amount of excess capital to address a systemic event. As such, these banks were excluded from the allowance for credit loss on investments as the credit risk within this portfolio was deemed to be de minimis. The G-SIBs are evaluated and confirmed annually by the Financial Stability Board and a formal list is published and available each November.\n\nThe following is a summary of unrealized and realized gains and losses of equity securities recognized in other noninterest income in the consolidated statements of income during the years ended December 31, 2025 and 2024.\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)20252024\n\nEquity Securities:\n\nNet gains (losses) recognized during the period$— $68 \n\nLess: Net gains recognized during the period on equity securities sold during the period— 68 \n\nUnrealized losses recognized during the reporting period on equity securities still held at the reporting date$— $— \n\n74\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 5. Loans and Leases\n\nSummary of Major Loan and Lease Categories\n\nAt December 31,\n\n(Dollars in thousands)20252024\n\nCommercial, financial and agricultural$1,027,434 $1,037,835 \n\nReal estate-commercial3,621,536 3,530,451 \n\nReal estate-construction306,793 274,483 \n\nReal estate-residential secured for business purpose554,178 536,095 \n\nReal estate-residential secured for personal purpose959,610 994,972 \n\nReal estate-home equity secured for personal purpose200,394 186,836 \n\nLoans to individuals12,793 21,250 \n\nLease financings232,066 244,661 \n\nTotal loans and leases held for investment, net of deferred income6,914,804 6,826,583 \n\nLess: Allowance for credit losses, loans and leases(88,165)(87,091)\n\nNet loans and leases held for investment$6,826,639 $6,739,492 \n\nImputed interest on lease financings, included in the above table$(30,646)$(31,927)\n\nNet deferred costs, included in the above table6,194 6,992 \n\nOverdraft deposits included in the above table153 104 \n\nAge Analysis of Past Due Loans and Leases\n\nThe following presents, by class of loans and leases held for investment, an aging of past due loans and leases, loans and leases which are current and nonaccrual loans and leases at December 31, 2025 and 2024:\n\nAccruing Loans and Leases\n\n(Dollars in thousands)30-59\nDays\nPast Due60-89\nDays\nPast Due90 Days\nor more\nPast DueTotal\nPast DueCurrentTotal Accruing Loans and LeasesNonaccrual Loans and LeasesTotal Loans\nand Leases\nHeld for\nInvestment\n\nAt December 31, 2025\n\nCommercial, financial and agricultural$1,142 $749 $— $1,891 $1,021,268 $1,023,159 $4,275 $1,027,434 \n\nReal estate—commercial real estate and construction:\n\nCommercial real estate3,943 4,236 — 8,179 3,611,002 3,619,181 2,355 3,621,536 \n\nConstruction380 — — 380 305,678 306,058 735 306,793 \n\nReal estate—residential and home equity:\n\nResidential secured for business purpose781 1,029 — 1,810 550,651 552,461 1,717 554,178 \n\nResidential secured for personal purpose5,500 — — 5,500 951,892 957,392 2,218 959,610 \n\nHome equity secured for personal purpose2,021 427 — 2,448 196,290 198,738 1,656 200,394 \n\nLoans to individuals148 63 7 218 12,575 12,793 — 12,793 \n\nLease financings706 452 82 1,240 230,039 231,279 787 232,066 \n\nTotal$14,621 $6,956 $89 $21,666 $6,879,395 $6,901,061 $13,743 $6,914,804 \n\n75\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nAccruing Loans and Leases\n\n(Dollars in thousands)30-59\nDays\nPast Due60-89\nDays\nPast Due90 Days\nor more\nPast DueTotal\nPast DueCurrentTotal Accruing Loans and LeasesNonaccrual Loans and LeasesTotal Loans\nand Leases\nHeld for\nInvestment\n\nAt December 31, 2024\n\nCommercial, financial and agricultural$1,750 $723 $— $2,473 $1,031,567 $1,034,040 $3,795 $1,037,835 \n\nReal estate—commercial real estate and construction:\n\nCommercial real estate415 2,919 — 3,334 3,524,438 3,527,772 2,679 3,530,451 \n\nConstruction3,659 — — 3,659 270,824 274,483 — 274,483 \n\nReal estate—residential and home equity:\n\nResidential secured for business purpose1,077 — — 1,077 534,432 535,509 586 536,095 \n\nResidential secured for personal purpose3,040 — — 3,040 988,127 991,167 3,805 994,972 \n\nHome equity secured for personal purpose1,063 309 — 1,372 184,273 185,645 1,191 186,836 \n\nLoans to individuals187 59 24 270 20,980 21,250 — 21,250 \n\nLease financings1,026 502 297 1,825 242,225 244,050 611 244,661 \n\nTotal$12,217 $4,512 $321 $17,050 $6,796,866 $6,813,916 $12,667 $6,826,583 \n\nDuring the second quarter of 2025, a $23.7 million commercial loan relationship was placed on nonaccrual status due to, among other things, suspected fraud. Subsequent to the relationship being placed on nonaccrual status, a $7.3 million charge-off was recognized during the second quarter. During the third quarter of 2025, a $1.4 million residential property associated with this relationship was transferred to other real estate owned. During the fourth quarter of 2025, loans totaling $13.9 million related to this relationship were paid off and a $449 thousand recovery was recognized. At December 31, 2025, the carrying value of the $1.4 million other real estate owned asset is supported by the appraised value of real estate collateral.\n\nNonperforming Loans and Leases\n\nThe following presents, by class of loans and leases, nonperforming loans and leases at December 31, 2025 and 2024.\n\nAt December 31,\n\n 20252024\n\n(Dollars in thousands)Nonaccrual\nLoans and\nLeasesLoans and\nLeases\n90 Days\nor more\nPast Due\nand\nAccruing\nInterestTotal Nonperforming\nLoans and\nLeasesNonaccrual\nLoans and\nLeasesLoans and\nLeases\n90 Days\nor more\nPast Due\nand\nAccruing\nInterestTotal Nonperforming\nLoans and\nLeases\n\nCommercial, financial and agricultural$4,275 $— $4,275 $3,795 $— $3,795 \n\nReal estate—commercial real estate and construction:\n\nCommercial real estate2,355 — 2,355 2,679 — 2,679 \n\nConstruction735 — 735 — — — \n\nReal estate—residential and home equity:\n\nResidential secured for business purpose1,717 — 1,717 586 — 586 \n\nResidential secured for personal purpose2,218 — 2,218 3,805 — 3,805 \n\nHome equity secured for personal purpose1,656 — 1,656 1,191 — 1,191 \n\nLoans to individuals— 7 7 — 24 24 \n\nLease financings787 82 869 611 297 908 \n\nTotal$13,743 $89 $13,832 $12,667 $321 $12,988 \n\n76\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following table presents the amortized cost basis of loans and leases held for investment on nonaccrual status and loans and leases held for investment 90 days or more past due and still accruing as of December 31, 2025 and 2024.\n\n(Dollars in thousands)Nonaccrual With No Allowance for Credit LossesNonaccrual With Allowance for Credit LossesTotal NonaccrualLoans and Leases 90 Days or more Past Due and Accruing Interest\n\nAt December 31, 2025\n\nCommercial, financial and agricultural$154 $4,121 $4,275 $— \n\nReal estate-commercial1,995 360 2,355 — \n\nReal estate-construction735 — 735 — \n\nReal estate-residential secured for business purpose1,666 51 1,717 — \n\nReal estate-residential secured for personal purpose2,218 — 2,218 — \n\nReal estate-home equity secured for personal purpose1,570 86 1,656 — \n\nLoans to individuals— — — 7 \n\nLease financings— 787 787 82 \n\nTotal$8,338 $5,405 $13,743 $89 \n\nAt December 31, 2024\n\nCommercial, financial and agricultural$187 $3,608 $3,795 $— \n\nReal estate-commercial1,834 845 2,679 — \n\nReal estate-residential secured for business purpose586 — 586 — \n\nReal estate-residential secured for personal purpose3,805 — 3,805 — \n\nReal estate-home equity secured for personal purpose1,191 — 1,191 — \n\nLoans to individuals— — — 24 \n\nLease financings— 611 611 297 \n\nTotal$7,603 $5,064 $12,667 $321 \n\nFor the years ended December 31, 2025 and 2024, $88 thousand and $102 thousand of interest income was recognized on nonaccrual loans and leases, respectively.\n\nThe following table presents, by class of loans and leases, the amortized cost basis of collateral-dependent nonaccrual loans and leases and type of collateral as of December 31, 2025 and 2024.\n\n(Dollars in thousands)Real Estate\nOther (1)\n\nNone (2)\nTotal\n\nAt December 31, 2025\n\nCommercial, financial and agricultural$1,907 $1,937 $431 $4,275 \n\nReal estate-commercial2,355 — — 2,355 \n\nReal estate-construction735 — — 735 \n\nReal estate-residential secured for business purpose1,666 51 — 1,717 \n\nReal estate-residential secured for personal purpose2,218 — — 2,218 \n\nReal estate-home equity secured for personal purpose1,656 — — 1,656 \n\nLease financings— 787 — 787 \n\nTotal$10,537 $2,775 $431 $13,743 \n\n(Dollars in thousands)Real Estate\nOther (1)\nNoneTotal\n\nAt December 31, 2024\n\nCommercial, financial and agricultural$1,521 $1,843 $431 $3,795 \n\nReal estate-commercial2,661 — 18 2,679 \n\nReal estate-residential secured for business purpose586 — — 586 \n\nReal estate-residential secured for personal purpose3,805 — — 3,805 \n\nReal estate-home equity secured for personal purpose1,191 — — 1,191 \n\nLease financings— 611 — 611 \n\nTotal$9,764 $2,454 $449 $12,667 \n\n(1) Collateral consists of business assets, including accounts receivable, personal property and equipment.\n\n(2) Loans fully guaranteed or fully reserved given lack of collateral.\n\n77\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nCredit Quality Indicators\n\nThe Corporation categorizes risk based on relevant information about the ability of the borrower to service their debt. Loans with a relationship balance of less than $1 million are reviewed when necessary, based on their performance, primarily when such loans are delinquent. Commercial, financial and agricultural loans, real estate-commercial loans, real estate-construction loans and real estate-residential secured for a business purpose loans with relationships greater than $1 million are reviewed at least annually. Loan relationships with a higher risk profile or classified as special mention or substandard are reviewed at least quarterly. The Corporation reviews credit quality key risk indicators on at least an annual basis and last completed this review in conjunction with the period ended December 31, 2025. The following is a description of the internal risk ratings, and the likelihood of loss related to the credit quality of commercial, financial and agricultural loans, real estate-commercial loans, real estate-construction loans and real estate-residential secured for a business purpose loans.\n\n1.Pass—Loans considered satisfactory with no indications of deterioration\n\n2.Special Mention—Potential weakness that deserves management's close attention\n\n3.Substandard—Well-defined weakness or weaknesses that jeopardize the liquidation of the debt\n\n4.Doubtful—Collection or liquidation in-full, on the basis of current existing facts, conditions and values, highly questionable and improbable\n\n78\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nBased on the most recent analysis performed, the following table presents the recorded investment in loans and leases held for investment for commercial, financial and agricultural loans, real estate-commercial loans, real estate-construction loans and real estate-residential secured for a business purpose loans by credit quality indicator at December 31, 2025 and 2024.\n\nTerm Loans Amortized Cost Basis by Origination Year\n\n(Dollars in thousands)20252024202320222021PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal\n\nAt December 31, 2025\n\nCommercial, financial and agricultural\n\nRisk Rating\n\n1. Pass$190,229 $100,720 $38,778 $37,042 $68,428 $48,061 $449,957 $982 $934,197 \n\n2. Special Mention700 812 2,452 1,406 — 643 12,391 — 18,404 \n\n3. Substandard485 4,286 6,849 20,078 5,512 154 37,469 — 74,833 \n\nTotal$191,414 $105,818 $48,079 $58,526 $73,940 $48,858 $499,817 $982 $1,027,434 \n\nCurrent period gross charge-offs$18 $— $2,135 $8 $265 $585 $7,260 $— $10,271 \n\nReal estate-commercial\n\nRisk Rating\n\n1. Pass$705,601 $395,166 $389,163 $859,503 $507,262 $631,928 $100,794 $— $3,589,417 \n\n2. Special Mention2,432 2,914 807 — 1,735 — — — 7,888 \n\n3. Substandard429 1,010 187 5,435 246 16,924 — — 24,231 \n\nTotal$708,462 $399,090 $390,157 $864,938 $509,243 $648,852 $100,794 $— $3,621,536 \n\nCurrent period gross charge-offs$— $— $— $601 $582 $— $— $— $1,183 \n\nReal estate-construction\n\nRisk Rating\n\n1. Pass$166,806 $42,023 $43,121 $28,330 $1,718 $2,434 $13,477 $— $297,909 \n\n2. Special Mention— — — — — — — — — \n\n3. Substandard— — 3,641 2,545 — 639 2,059 — 8,884 \n\nTotal$166,806 $42,023 $46,762 $30,875 $1,718 $3,073 $15,536 $— $306,793 \n\nReal estate-residential secured for business purpose\n\nRisk Rating\n\n1. Pass$114,828 $80,784 $81,481 $117,108 $94,503 $29,906 $33,062 $— $551,672 \n\n2. Special Mention— — — 507 — — 50 — 557 \n\n3. Substandard— 149 232 — 360 1,083 125 — 1,949 \n\nTotal$114,828 $80,933 $81,713 $117,615 $94,863 $30,989 $33,237 $— $554,178 \n\nTotals By Risk Rating\n\n1. Pass$1,177,464 $618,693 $552,543 $1,041,983 $671,911 $712,329 $597,290 $982 $5,373,195 \n\n2. Special Mention3,132 3,726 3,259 1,913 1,735 643 12,441 — 26,849 \n\n3. Substandard914 5,445 10,909 28,058 6,118 18,800 39,653 — 109,897 \n\nTotal$1,181,510 $627,864 $566,711 $1,071,954 $679,764 $731,772 $649,384 $982 $5,509,941 \n\nTotal current period gross charge-offs$18 $— $2,135 $609 $847 $585 $7,260 $— $11,454 \n\n79\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nTerm Loans Amortized Cost Basis by Origination Year\n\n(Dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal\n\nAt December 31, 2024\n\nCommercial, financial and agricultural\n\nRisk Rating\n\n1. Pass$232,925 $73,453 $68,205 $95,135 $16,403 $44,329 $411,413 $871 $942,734 \n\n2. Special Mention3,622 6,489 24,423 166 5 — 27,106 — 61,811 \n\n3. Substandard— 500 1,975 6,623 — 6,401 17,791 — 33,290 \n\nTotal$236,547 $80,442 $94,603 $101,924 $16,408 $50,730 $456,310 $871 $1,037,835 \n\nReal estate-commercial\n\nRisk Rating\n\n1. Pass$506,644 $441,802 $882,071 $581,693 $538,539 $471,734 $81,145 $— $3,503,628 \n\n2. Special Mention1,763 — 716 — 3,028 12,213 — — 17,720 \n\n3. Substandard— — 2,662 827 1,402 1,317 2,895 — 9,103 \n\nTotal$508,407 $441,802 $885,449 $582,520 $542,969 $485,264 $84,040 $— $3,530,451 \n\nReal estate-construction\n\nRisk Rating\n\n1. Pass$109,627 $71,770 $58,072 $4,226 $1,700 $1,899 $19,636 $— $266,930 \n\n2. Special Mention— — — — — — — — — \n\n3. Substandard248 — 4,095 — 2,403 — 807 — 7,553 \n\nTotal$109,875 $71,770 $62,167 $4,226 $4,103 $1,899 $20,443 $— $274,483 \n\nReal estate-residential secured for business purpose\n\nRisk Rating\n\n1. Pass$93,976 $95,743 $137,406 $104,156 $48,495 $21,937 $31,922 $— $533,635 \n\n2. Special Mention547 239 — 683 405 — — — 1,874 \n\n3. Substandard— — — — 548 38 — — 586 \n\nTotal$94,523 $95,982 $137,406 $104,839 $49,448 $21,975 $31,922 $— $536,095 \n\nTotals By Risk Rating\n\n1. Pass$943,172 $682,768 $1,145,754 $785,210 $605,137 $539,899 $544,116 $871 $5,246,927 \n\n2. Special Mention5,932 6,728 25,139 849 3,438 12,213 27,106 — 81,405 \n\n3. Substandard248 500 8,732 7,450 4,353 7,756 21,493 — 50,532 \n\nTotal$949,352 $689,996 $1,179,625 $793,509 $612,928 $559,868 $592,715 $871 $5,378,864 \n\nThe Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at December 31, 2025 or 2024.\n\nThe Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: real estate-residential secured for personal purpose loans, real estate-home equity secured for personal purpose loans, loans to individuals and lease financings. The Corporation reviews credit quality indicators on at least an annual basis and last completed this review in conjunction with the period ended December 31, 2025. Loans and leases past due 90 days or more and loans and leases on nonaccrual status are considered nonperforming. Nonperforming loans and leases are reviewed monthly. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due.\n\nBased on the most recent analysis performed, the following table presents the recorded investment in loans and leases held for investment for real estate-residential secured for personal purpose loans, real estate-home equity secured for personal purpose loans, loans to individuals and lease financings by credit quality indicator at December 31, 2025 and 2024.\n\n80\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nTerm Loans Amortized Cost Basis by Origination Year\n\n(Dollars in thousands)20252024202320222021PriorRevolving Loans Amortized Cost BasisTotal\n\nAt December 31, 2025\n\nReal estate-residential secured for personal purpose\n\nPayment Performance\n\n1. Performing$34,439 $29,536 $190,287 $333,364 $183,622 $186,144 $— $957,392 \n\n2. Nonperforming— — — 1,824 — 394 — 2,218 \n\nTotal$34,439 $29,536 $190,287 $335,188 $183,622 $186,538 $— $959,610 \n\nCurrent period gross charge-offs$— $— $— $— $— $42 $— $42 \n\nReal estate-home equity secured for personal purpose\n\nPayment Performance\n\n1. Performing$468 $232 $257 $1,654 $311 $1,162 $194,654 $198,738 \n\n2. Nonperforming— — — — — — 1,656 1,656 \n\nTotal$468 $232 $257 $1,654 $311 $1,162 $196,310 $200,394 \n\nLoans to individuals\n\nPayment Performance\n\n1. Performing$1,696 $1,268 $464 $181 $26 $486 $8,665 $12,786 \n\n2. Nonperforming— — — — — 7 — 7 \n\nTotal$1,696 $1,268 $464 $181 $26 $493 $8,665 $12,793 \n\nCurrent period gross charge-offs$170 $122 $74 $13 $— $— $351 $730 \n\nLease financings\n\nPayment Performance\n\n1. Performing$77,223 $63,335 $54,777 $25,549 $8,253 $2,060 $— $231,197 \n\n2. Nonperforming293 67 236 233 26 14 — 869 \n\nTotal$77,516 $63,402 $55,013 $25,782 $8,279 $2,074 $— $232,066 \n\nCurrent period gross charge-offs$— $201 $247 $164 $101 $90 $41 $844 \n\nTotals by Payment Performance\n\n1. Performing$113,826 $94,371 $245,785 $360,748 $192,212 $189,852 $203,319 $1,400,113 \n\n2. Nonperforming293 67 236 2,057 26 415 1,656 4,750 \n\nTotal$114,119 $94,438 $246,021 $362,805 $192,238 $190,267 $204,975 $1,404,863 \n\nTotal current period gross charge-offs$170 $323 $321 $177 $101 $132 $392 $1,616 \n\n81\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nTerm Loans Amortized Cost Basis by Origination Year\n\n(Dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal\n\nAt December 31, 2024\n\nReal estate-residential secured for personal purpose\n\nPayment Performance\n\n1. Performing$25,908 $203,136 $356,506 $195,727 $121,743 $88,147 $— $991,167 \n\n2. Nonperforming— — 142 37 2,836 790 — 3,805 \n\nTotal$25,908 $203,136 $356,648 $195,764 $124,579 $88,937 $— $994,972 \n\nReal estate-home equity secured for personal purpose\n\nPayment Performance\n\n1. Performing$354 $352 $2,260 $402 $326 $1,201 $180,750 $185,645 \n\n2. Nonperforming— — 21 — — — 1,170 1,191 \n\nTotal$354 $352 $2,281 $402 $326 $1,201 $181,920 $186,836 \n\nLoans to individuals\n\nPayment Performance\n\n1. Performing$2,008 $963 $459 $300 $19 $610 $16,867 $21,226 \n\n2. Nonperforming— — — — — 24 — 24 \n\nTotal$2,008 $963 $459 $300 $19 $634 $16,867 $21,250 \n\nLease financings\n\nPayment Performance\n\n1. Performing$83,360 $82,634 $46,986 $23,088 $5,989 $1,696 $— $243,753 \n\n2. Nonperforming197 168 473 32 25 13 — 908 \n\nTotal$83,557 $82,802 $47,459 $23,120 $6,014 $1,709 $— $244,661 \n\nTotals by Payment Performance\n\n1. Performing$111,630 $287,085 $406,211 $219,517 $128,077 $91,654 $197,617 $1,441,791 \n\n2. Nonperforming197 168 636 69 2,861 827 1,170 5,928 \n\nTotal$111,827 $287,253 $406,847 $219,586 $130,938 $92,481 $198,787 $1,447,719 \n\nThe Corporation had no revolving loans which were converted to term loans included within recorded investment in loans and leases held for investment at December 31, 2025 or 2024.\n\n82\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nAllowance for Credit Losses on Loan and Leases and Recorded Investment in Loans and Leases\n\nThe following presents, by portfolio segment, a summary of the activity in the allowance for credit losses, loans and leases, for the years ended December 31, 2025, 2024 and 2023. There were no changes to the reasonable and supportable forecast period and the reversion period, or any other significant methodology changes during the year ended December 31, 2025.\n\n(Dollars in thousands)Beginning balanceProvision (reversal of provision) for credit lossesCharge-offsRecoveriesEnding balance\n\nFor the Year Ended December 31, 2025\n\nAllowance for credit losses, loans and leases:\n\nCommercial, financial and agricultural$16,079 $9,348 $(10,271)$1,827 $16,983 \n\nReal estate-commercial46,867 1,446 (1,183)36 47,166 \n\nReal estate-construction4,924 551 — — 5,475 \n\nReal estate-residential secured for business purpose7,491 109 — — 7,600 \n\nReal estate-residential secured for personal purpose7,222 (846)(42)7 6,341 \n\nReal estate-home equity secured for personal purpose1,706 (70)— 2 1,638 \n\nLoans to individuals342 681 (730)55 348 \n\nLease financings2,460 973 (844)25 2,614 \n\nTotal$87,091 $12,192 $(13,070)$1,952 $88,165 \n\nFor the Year Ended December 31, 2024\n\nAllowance for credit losses, loans and leases:\n\nCommercial, financial and agricultural$13,699 $4,709 $(2,926)$597 $16,079 \n\nReal estate-commercial45,849 1,039 (35)14 46,867 \n\nReal estate-construction6,543 (1,119)(500)— 4,924 \n\nReal estate-residential secured for business purpose8,692 (1,436)— 235 7,491 \n\nReal estate-residential secured for personal purpose6,349 739 — 134 7,222 \n\nReal estate-home equity secured for personal purpose1,289 371 — 46 1,706 \n\nLoans to individuals392 778 (921)93 342 \n\nLease financings2,574 425 (651)112 2,460 \n\nTotal$85,387 $5,506 $(5,033)$1,231 $87,091 \n\nFor the Year Ended December 31, 2023\n\nAllowance for credit losses, loans and leases:\n\nCommercial, financial and agricultural$16,920 $1,289 $(4,877)$367 $13,699 \n\nReal estate-commercial41,673 4,213 (50)13 45,849 \n\nReal estate-construction4,952 1,797 (207)1 6,543 \n\nReal estate-residential secured for business purpose7,054 1,503 (50)185 8,692 \n\nReal estate-residential secured for personal purpose3,685 2,664 — — 6,349 \n\nReal estate-home equity secured for personal purpose1,287 4 (85)83 1,289 \n\nLoans to individuals351 467 (507)81 392 \n\nLease financings3,082 (157)(410)59 2,574 \n\nTotal$79,004 $11,780 $(6,186)$789 $85,387 \n\n83\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following presents, by portfolio segment, the balance in the allowance for credit losses on loans and leases disaggregated on the basis of whether the loan or lease was measured for credit loss as a pooled loan or lease or if it was individually analyzed for a reserve at December 31, 2025 and 2024:\n\nAllowance for credit losses, loans and leasesLoans and leases held for investment\n\n(Dollars in thousands)Ending balance: individually analyzedEnding balance: pooledTotal ending balanceEnding balance: individually analyzedEnding balance: pooledTotal ending balance\n\nAt December 31, 2025\n\nCommercial, financial and agricultural$2,515 $14,468 $16,983 $4,275 $1,023,159 $1,027,434 \n\nReal estate-commercial154 47,012 47,166 2,355 3,619,181 3,621,536 \n\nReal estate-construction— 5,475 5,475 735 306,058 306,793 \n\nReal estate-residential secured for business purpose51 7,549 7,600 1,717 552,461 554,178 \n\nReal estate-residential secured for personal purpose— 6,341 6,341 2,218 957,392 959,610 \n\nReal estate-home equity secured for personal purpose42 1,596 1,638 1,656 198,738 200,394 \n\nLoans to individuals— 348 348 — 12,793 12,793 \n\nLease financings260 2,354 2,614 260 231,806 232,066 \n\nTotal$3,022 $85,143 $88,165 $13,216 $6,901,588 $6,914,804 \n\nAt December 31, 2024\n\nCommercial, financial and agricultural$1,922 $14,157 $16,079 $3,795 $1,034,040 $1,037,835 \n\nReal estate-commercial23 46,844 46,867 2,679 3,527,772 3,530,451 \n\nReal estate-construction— 4,924 4,924 — 274,483 274,483 \n\nReal estate-residential secured for business purpose— 7,491 7,491 586 535,509 536,095 \n\nReal estate-residential secured for personal purpose— 7,222 7,222 3,805 991,167 994,972 \n\nReal estate-home equity secured for personal purpose— 1,706 1,706 1,191 185,645 186,836 \n\nLoans to individuals— 342 342 — 21,250 21,250 \n\nLease financings— 2,460 2,460 — 244,661 244,661 \n\nTotal$1,945 $85,146 $87,091 $12,056 $6,814,527 $6,826,583 \n\nModified Loans to Borrowers Experiencing Financial Difficulty\n\nThe following presents, by class of loans, information regarding accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during the years ended December 31, 2025 and 2024:\n\nTerm Extension\n\nFor the Years Ended December 31,\n\n 20252024\n\n(Dollars in thousands)Number\nof\nLoansAmortized Cost Basis*% of Total Class of Financing ReceivableRelated\nReserveNumber\nof\nLoansAmortized Cost Basis*% of Total Class of Financing ReceivableRelated\nReserve\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural8 $17,454 1.70 %$152 1 $4,925 0.47 %$9 \n\nReal estate—commercial— — — — 4 7,927 0.22 20 \n\nReal estate—construction1 2,545 0.83 1 — — — — \n\nTotal9 $19,999 $153 5 $12,852 $29 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nReal estate—commercial1 $429 0.01 %$— — $— — %$— \n\nTotal1 $429 $— — $— $— \n\n84\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nOther-Than-Insignificant Payment Delay\n\nFor the Years Ended December 31,\n\n20252024\n\n(Dollars in thousands)Number\nof\nLoansAmortized Cost Basis*% of Total Class of Financing ReceivableRelated\nReserveNumber\nof\nLoansAmortized Cost Basis*% of Total Class of Financing ReceivableRelated\nReserve\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural— $— — %$— 2 $6,667 0.64 %$12 \n\nTotal— $— $— 2 $6,667 $12 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nTotal— $— $— — $— $— \n\n*Amortized cost excludes $124 thousand and $126 thousand of accrued interest receivable on modified loans for the years ended December 31, 2025 and 2024, respectively.\n\nThe following presents, by class of loans, information regarding the financial effect on accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during the years ended December 31, 2025 and 2024.\n\n Term ExtensionOther-Than-Insignificant Payment Delay\n\n(Dollars in thousands)No. of\nLoansFinancial EffectNo. of\nLoansFinancial Effect\n\nFor the Year Ended December 31, 2025\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural8 \n Added a weighted-average 12 months to the life of the loans, which reduced monthly payment amount for the borrowers.\n— \n\nReal estate—construction1 \n Added 9 months to the life of the loan, which reduced monthly payment amounts for the borrower.\n— \n\nTotal9 — \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nReal estate—commercial1 \nAdded 8 months to the life of loan, which reduced monthly payment amount for the borrower.\n— \n\nTotal1 — \n\nFor the Year Ended December 31, 2024\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural1 \nAdded 8 months to the life of the loan, which reduced monthly payment amount for the borrower.\n2 \nProvided 3-month payment deferrals to assist borrowers.\n\nReal estate—commercial4 \nAdded a weighted-average 12 months to the life of loans, which reduced monthly payment amount for the borrowers.\n— \n\nTotal5 2 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nTotal— — \n\n85\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following presents, by class of loan, the amortized cost of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that had a payment default subsequent to modification during the years ended December 31, 2025 and 2024 and were modified in the 12 months prior to that default.\n\nFor the Years Ended December 31,\n\n20252024\n\nTerm ExtensionTerm Extension\n\n(Dollars in thousands)Number\nof LoansAmortized Cost BasisNumber\nof LoansAmortized Cost Basis\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nReal estate—commercial— $— 1 $1,849 \n\nTotal— $— 1 $1,849 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nTotal— $— — $— \n\nThe following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of December 31, 2025 and 2024.\n\nAt December 31, 2025\n\n(Dollars in thousands)Current30-89 Days Past Due90 Days or More Past DueTotal\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural$17,454 $— $— $17,454 \n\nReal estate—construction2,545 — — 2,545 \n\nTotal$19,999 $— $— $19,999 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nReal estate—commercial $429 $— $— $429 \n\nTotal$429 $— $— $429 \n\nAt December 31, 2024\n\n(Dollars in thousands)Current30-89 Days Past Due90 Days or More Past DueTotal\n\nAccruing Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nCommercial, financial and agricultural$11,592 $— $— $11,592 \n\nReal estate—commercial 7,927 — — 7,927 \n\nTotal$19,519 $— $— $19,519 \n\nNonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:\n\nTotal$— $— $— $— \n\nAs of December 31, 2025 and 2024, the Bank had $1.5 million and $1.0 million, respectively, of commitments to extend credit to borrowers experiencing financial difficulty whose terms had been modified in the tables above.\n\nThe following presents the amount of consumer mortgages collateralized by residential real estate property that were in the process of foreclosure at December 31, 2025 or 2024.\n\n(Dollars in thousands)At December 31, 2025At December 31, 2024\n\nReal estate-residential secured for personal purpose$3,641 $3,095 \n\nReal estate-home equity secured for personal purpose328 125 \n\nTotal$3,969 $3,220 \n\n86\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following presents foreclosed residential real estate property included in other real estate owned at December 31, 2025 or 2024.\n\n(Dollars in thousands)At December 31, 2025At December 31, 2024\n\nForeclosed residential real estate$3,981 $234 \n\nLease Financings\n\nThe following presents the schedule of minimum lease payments receivable:\n\n(Dollars in thousands)At December 31, 2025At December 31, 2024\n\n2025N/A$91,125 \n\n202694,185 76,977 \n\n202773,655 56,881 \n\n202849,277 32,899 \n\n202928,148 12,101 \n\n203011,337 1,641 \n\nThereafter1,729 323 \n\nTotal future minimum lease payments receivable258,331 271,947 \n\nPlus: Unguaranteed residual1,446 1,485 \n\nPlus: Initial direct costs2,935 3,156 \n\nLess: Imputed interest(30,646)(31,927)\n\nLease financings$232,066 $244,661 \n\nNote 6. Premises and Equipment\n\nThe following table reflects the components of premises, equipment and computer software:\n\nAt December 31,\n\n(Dollars in thousands)20252024\n\nLand and land improvements$11,415 $11,487 \n\nPremises and improvements48,560 50,277 \n\nFurniture, equipment and computer software27,914 33,809 \n\nTotal cost87,889 95,573 \n\nLess: accumulated depreciation(42,335)(48,902)\n\nNet book value$45,554 $46,671 \n\nNote 7. Goodwill and Other Intangible Assets\n\nThe Corporation has goodwill from acquisitions which is deemed to be an indefinite intangible asset and is not amortized. In accordance with ASC Topic 350, goodwill is tested at least annually for impairment at the reporting unit level. The Corporation performs an annual test of goodwill for impairment during the fourth quarter of each year. The Corporation concluded there was no impairment of goodwill during 2023 through 2025.\n\n87\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nChanges in the carrying amount of the Corporation's goodwill by business segment for the years ended December 31, 2025 and 2024 were as follows:\n\n(Dollars in thousands)BankingWealth ManagementInsuranceConsolidated\n\nBalance at December 31, 2023$138,476 $15,434 $21,600 $175,510 \n\nAddition to goodwill from acquisitions— — — — \n\nBalance at December 31, 2024138,476 15,434 21,600 175,510 \n\nAddition to goodwill from acquisitions— — — — \n\nBalance at December 31, 2025$138,476 $15,434 $21,600 $175,510 \n\nThe Corporation also has core deposit and customer-related intangibles, which are not deemed to have an indefinite life and therefore will continue to be amortized over their useful life using the present value of projected cash flows. The Corporation also performs an annual test of core deposit and customer-related intangibles for impairment during the fourth quarter of each year. The Corporation concluded there was no impairment of core deposit and customer-related intangibles during 2023 through 2025.\n\nThe amortization of core deposit and customer-related intangibles for the years ended December 31, 2025, 2024 and 2023 was $469 thousand, $648 thousand and $845 thousand, respectively.\n\nThe following table reflects the components of intangible assets at the dates indicated:\n\nAt December 31, 2025At December 31, 2024\n\n(Dollars in thousands)Gross Carrying Amount\nAccumulated Amortization (1)\nNet Carrying AmountGross Carrying Amount\nAccumulated Amortization (1)\nNet Carrying Amount\n\nAmortized intangible assets:\n\nCore deposit intangibles$5,268 $5,220 $48 $6,788 $6,597 $191 \n\nCustomer-related intangibles2,476 1,674 802 2,476 1,348 1,128 \n\nServicing rights12,985 6,507 6,478 12,274 5,284 6,990 \n\nTotal amortized intangible assets$20,729 $13,401 $7,328 $21,538 $13,229 $8,309 \n\n(1) Included within accumulated amortization is a valuation allowance of $307 thousand and $7 thousand on servicing rights at December 31, 2025 and 2024, respectively.\n\nThe estimated aggregate amortization expense for core deposit and customer-related intangibles for each of the five succeeding fiscal years and thereafter follows:\n\nYear(Dollars in thousands)Amount\n\n2026$318 \n\n2027216 \n\n2028161 \n\n2029105 \n\n203050 \n\nTotal$850 \n\nThe aggregate fair value of servicing rights was $10.3 million and $12.7 million at December 31, 2025 and 2024, respectively. The fair value of these rights was determined using a discount rate of 11.3% at December 31, 2025 and 11.0% at December 31, 2024.\n\n88\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nChanges in the servicing rights balance are summarized as follows:\n\n For the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nBeginning of period$6,990 $8,982 $8,572 \n\nServicing rights capitalized1,613 2,724 1,946 \n\nAmortization of servicing rights(1,825)(1,341)(1,443)\n\nSold servicing rights— (3,466)— \n\nChanges in valuation allowance(300)91 (93)\n\nEnd of period$6,478 $6,990 $8,982 \n\nLoans serviced for others$1,069,216 $1,032,011 $1,630,032 \n\nThe change in loans serviced for others from December 31, 2023 to December 31, 2024 was primarily related to the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter of 2024.\n\nActivity in the valuation allowance for servicing rights are summarized as follows:\n\n For the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nValuation allowance, beginning of period$(7)$(98)$(5)\n\nAdditions(300)— (93)\n\nReductions— 91 — \n\nValuation allowance, end of period$(307)$(7)$(98)\n\nThe estimated amortization expense of servicing rights for each of the five succeeding fiscal years and thereafter is as follows:\n\nYear(Dollars in thousand)Amount\n\n2026$1,367 \n\n20271,065 \n\n2028842 \n\n2029675 \n\n2030544 \n\nThereafter1,985 \n\nTotal$6,478 \n\nNote 8. Accrued Interest Receivable and Other Assets\n\nThe following table provides the details of accrued interest receivable and other assets:\n\nAt December 31,\n\n(Dollars in thousands)20252024\n\nOther real estate owned and repossessed assets$23,990 $20,217 \n\nAccrued interest receivable29,646 28,651 \n\nAccrued income and other receivables6,134 7,384 \n\nRetirement plans14,610 10,154 \n\nFair market value of derivative financial instruments331 226 \n\nOther prepaid expenses13,542 12,517 \n\nCurrent income tax receivable 679 582 \n\nNet deferred tax assets15,825 21,295 \n\nOther8,216 11,072 \n\nTotal accrued interest receivable and other assets$112,973 $112,098 \n\n89\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 9. Deposits\n\nDeposits and their respective weighted average interest rate at December 31, 2025 and 2024 consisted of the following:\n\nDecember 31,\n\n20252024\n\nWeighted Average Interest RateAmountWeighted Average Interest RateAmount\n\n(Dollars in thousands)\n\nNoninterest-bearing deposits—%$1,431,974 —%$1,414,635 \n\nDemand deposits2.90 3,478,924 3.25 3,186,597 \n\nSavings deposits0.70 762,130 0.44 704,321 \n\nTime deposits3.83 1,414,285 4.40 1,453,706 \n\nTotal2.27%$7,087,313 2.52%$6,759,259 \n\nDeposits are insured up to applicable limits set by the Deposit Insurance Fund of the FDIC, which is currently $250 thousand per account owner. The aggregate amount of time deposits in denominations over $250 thousand was $281.9 million and $276.0 million at December 31, 2025 and 2024, respectively.\n\nAt December 31, 2025, the scheduled maturities of time deposits were as follows:\n\nYear(Dollars in thousands)Amount\n\nDue in 2026$960,028 \n\nDue in 2027212,074 \n\nDue in 2028167,266 \n\nDue in 202973,096 \n\nDue in 20301,441 \n\nThereafter380 \n\nTotal$1,414,285 \n\n90\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 10. Borrowings\n\nThe following is a summary of borrowings by type. Short-term borrowings consist of overnight borrowings and term borrowings with an original maturity of one year or less.\n\n    \n\nBalance at End of YearWeighted Average Interest RateMaximum Amount Outstanding at Month End During the YearAverage Amount Outstanding During the YearWeighted Average Interest Rate During the Year\n\n(Dollars in thousands)\n\n2025\n\nShort-term borrowings:\n\nFederal funds purchased$— — %$— $291 4.57 %\n\nCustomer repurchase agreements24,411 0.0524,411 10,821 0.05 \n\nLong-term debt:\n\nFHLB advances$200,000 4.20%$200,000 $204,452 4.29%\n\nSubordinated notes98,867 6.98149,581 139,584 6.79\n\n2024\n\nShort-term borrowings:\n\nFHLB borrowings$— —%$16,000 $201 5.79%\n\nFederal funds purchased— — 60,000 4,126 5.63 \n\nCustomer repurchase agreements11,181 0.0514,101 9,376 0.05 \n\nLong-term debt:\n\nFHLB advances$225,000 4.35%$310,000 $253,730 4.31%\n\nSecurity repurchase agreements— — — 3 — \n\nSubordinated notes149,261 6.08149,261 149,007 6.12\n\nThe Corporation, through the Bank, has a credit facility with the FHLB that had a maximum borrowing capacity of approximately $3.4 billion and $3.3 billion at December 31, 2025 and 2024, respectively. All borrowings and letters of credit from the FHLB are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets. At December 31, 2025 and 2024, the Bank had outstanding short-term letters of credit with the FHLB totaling $1.4 billion and $1.3 billion, respectively, which were utilized to collateralize public funds deposits and other secured deposits. The maximum borrowing capacity with the FHLB changes as a function of the Bank's qualifying collateral assets as well as the FHLB's internal credit rating of the Bank. The available borrowing capacity from the FHLB totaled $1.9 billion and $1.7 billion at December 31, 2025 and 2024, respectively.\n\nThe Corporation, through the Bank, holds investment securities at the Federal Reserve Bank of Philadelphia to provide access to the Discount Window Lending program. The Bank participates in the FRB Borrower in Custody program, which provides additional committed borrowing capacity for the Bank through the Discount Window Lending program based upon select loans pledged to the FRB. The total borrowing capacity based upon the qualifying pledged commercial loans and held investment securities was $380.2 million and $397.2 million at December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the Corporation had no outstanding borrowings under the Discount Window Lending program.\n\nThe Corporation has a $10.0 million committed line of credit with a correspondent bank. At December 31, 2025 and 2024, the Corporation had no outstanding borrowings under this line.\n\nThe Corporation and the Bank had $3.8 billion and $3.7 billion of committed borrowing capacity at December 31, 2025 and 2024, respectively, of which $2.3 billion and $2.1 billion was available as of December 31, 2025 and 2024, respectively. The Corporation, through the Bank, also maintained uncommitted funding sources from correspondent banks of $457.0 million and $468.0 million at December 31, 2025 and 2024, respectively. Future availability under these lines is subject to the prerogatives of the granting banks and may be withdrawn at will.\n\n91\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nLong-term advances with the FHLB of Pittsburgh mature as follows:\n\n(Dollars in thousands)As of December 31, 2025Weighted Average Rate\n\n2026$100,000 4.29%\n\n202725,000 3.99 \n\n202840,000 4.33 \n\n202925,000 3.91 \n\n203010,000 3.94 \n\nThereafter— — \n\nTotal$200,000 4.20%\n\nSubordinated Notes\n\nOn November 15, 2022, the Corporation issued $50.0 million aggregate principal amount of 7.25% fixed-to-floating rate subordinated notes due 2032 (the \"2022 Notes\") in an underwritten public offering. The net proceeds of the offering approximated $49.0 million. The 2022 Notes bear interest at a fixed rate of 7.25%, payable semi-annually in arrears for a five-year period. The last interest payment date for the fixed rate period will be November 15, 2027. From and including November 15, 2027 to, but excluding, November 15, 2032 or the date of earlier redemption, the Notes will bear interest at an annual floating rate of interest equivalent to the Benchmark rate, which is expected to be the Three-Month Term SOFR, plus 309.8 basis points, payable quarterly in arrears, commencing on February 15, 2028. Notwithstanding the foregoing, if the Benchmark rate is less than zero, the Benchmark rate will be deemed to be zero. The Corporation may redeem the 2022 Notes (i) in whole or in part beginning with the interest payment date of November 15, 2027, and on any interest payment date thereafter or (ii) in whole, but not in part, at any time within 90 days upon the occurrence of certain tax, regulatory capital and Investment Company Act of 1940 events. The redemption price for any redemption is 100% of the principal amount of the subordinated notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. Any redemption of the subordinated notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations.\n\nOn November 6, 2025, the Corporation issued $50.0 million aggregate principal amount of 6.00% fixed-to-floating rate subordinated notes due 2035 (the \"2025 Notes\") in a private placement transaction. Subsequently, the Corporation has taken certain actions to provide for the exchange of the 2025 Notes for subordinated notes that are registered under the Securities Act and have substantially the same terms as the 2025 Notes. The net proceeds of the offering approximated $49.2 million. The 2025 Notes bear interest at a fixed rate of 6.00%, payable semi-annually in arrears for a five-year period. The last interest payment date for the fixed rate period will be May 15, 2030. From and including November 15, 2030 to, but excluding, November 15, 2035 or the date of earlier redemption, the Notes will bear interest at an annual floating rate of interest equivalent to the Benchmark rate, which is expected to be the Three-Month Term SOFR, plus 261.5 basis points, payable quarterly in arrears, commencing on February 15, 2031. Notwithstanding the foregoing, if the Benchmark rate is less than zero, the Benchmark rate will be deemed to be zero. The Corporation may redeem the 2025 Notes (i) in whole or in part beginning with the interest payment date of November 15, 2030, and on any interest payment date thereafter or (ii) in whole, but not in part, at any time upon certain other events. The redemption price for any redemption is 100% of the principal amount of the subordinated notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. Any redemption of the subordinated notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations.\n\nSubordinated notes qualify as Tier 2 capital for regulatory capital purposes for the first five years of the notes' terms. The Tier 2 capital benefit is phased out at 20% per year after the fifth year (from years six to ten) and have no benefit in the tenth year.\n\n92\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 11. Accrued Interest Payable and Other Liabilities\n\nThe following table provides the details of accrued interest payable and other liabilities:\n\nAt December 31,\n\n(Dollars in thousands)20252024\n\nAccrued compensation costs$16,220 $17,115 \n\nRetirement plans1,957 2,245 \n\nAccrued interest payable 15,632 26,160 \n\nAccrued expenses and other payables6,211 5,999 \n\nOther reserves5,323 4,904 \n\nContingent consideration liability— 635 \n\nOther liabilities fair value of derivative financial instruments 221 67 \n\nCurrent income taxes payable 1,009 — \n\nAccounts payable4,552 5,230 \n\nOther3,332 2,575 \n\nTotal accrued interest payable and other liabilities $54,457 $64,930 \n\nNote 12. Income Taxes\n\nIncome taxes paid to federal and state jurisdictions consisted of the following:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nFederal$19,200 $17,975 $19,300 \n\nForeign— — — \n\nState1,934 2,699 1,740 \n\nTotal$21,134 $20,674 $21,040 \n\nState income taxes paid, net of refunds, exceeded 5 percent of total income taxes paid, net of refunds, in the following jurisdiction:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nState:\n\nNew Jersey$1,410 $1,929 *\n\n*Jurisdiction below the threshold for the period presented.\n\n93\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe components of pre-tax income are related to domestic activities. The Corporation did not have any foreign operations. The provision income taxes from continuing operations included in the accompanying consolidated statements of income consists of the following:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nCurrent:\n\nFederal$20,002 $18,535 $16,775 \n\nState2,083 2,105 1,520 \n\nTotal current expense$22,085 $20,640 $18,295 \n\nDeferred:\n\nFederal465 (1,048)(609)\n\nState43 (223)(101)\n\nTotal deferred expense$508 $(1,271)$(710)\n\nTotal income tax expense from continuing operations$22,593 $19,369 $17,585 \n\nThe Corporation did not have any income tax expense (benefit) in foreign jurisdictions for the years ended December 31, 2025, 2024 or 2023.\n\nThe provision for income taxes differs from the expected statutory provision as follows:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nUS Federal Statutory Tax Rate$23,804 21.0%$20,013 21.0%$18,625 21.0%\n\nState and local income taxes, net of federal benefit*1,680 1.5 1,487 1.5 1,121 1.3 \n\nNontaxable or nondeductible items\n\nTax-exempt interest income, net of disallowance(2,034)(1.8)(1,741)(1.8)(1,648)(1.9)\n\nIncrease in value of bank owned life insurance assets(1,224)(1.1)(810)(0.8)(669)(0.8)\n\nOther518 0.5 391 0.4 349 0.4 \n\nOther adjustments(151)(0.2)29 — (193)(0.2)\n\nEffective tax rate$22,593 19.9%$19,369 20.3%$17,585 19.8%\n\n*State taxes in New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.\n\nOn July 4, 2025, the One Big Beautiful Bill Act (\"OBBBA\") was signed into law. The OBBBA enacts significant changes to U.S. federal income tax law, including both individual and business tax provisions. The OBBBA introduced new and enhanced business tax credits, modified the deduction for qualified business income, and made permanent the increased Section 179 expensing limits. The OBBBA also terminated or phased out a number of energy-related credits and deductions, and increased the reporting threshold for certain information returns. Most of the corporate tax provisions are effective for tax years beginning after December 31, 2025, unless otherwise specified. The Corporation has evaluated the impact of the OBBBA as of December 31, 2025, and determined that the new law did not have a material impact on the Corporation's income taxes for the year ended December 31, 2025. The Corporation will continue to monitor for further guidance and assess the impact of these changes on its financial statements in subsequent periods.\n\nRetained earnings included $6.0 million at December 31, 2025, 2024 and 2023, which was originally generated by Fox Chase Bank (acquired in 2016), for which no provision for federal income tax has been made. This amount represents deductions for bad debt reserves for tax purposes, which were only allowed to savings institutions that met certain criteria prescribed by the Internal Revenue Code of 1986, as amended. The Small Business Job Protection Act of 1996 (the \"Act\") eliminated the special bad debt deduction granted solely to thrifts. Under the terms of the Small Business Job Protection Act, there would be no recapture of the pre-1988 (base year) reserves. However, these pre-1988 reserves would be subject to\n\n94\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nrecapture under the rules of the Internal Revenue Code if the Corporation pays a cash dividend in excess of cumulative retained earnings or liquidates.\n\nAt December 31, 2025 and 2024, the Corporation had no material unrecognized tax benefits or accrued interest and penalties recorded. Interest and penalties are recorded in noninterest expense in the year they are assessed. For tax purposes, interest is treated as a deductible expense and penalties are treated as a non-deductible expense.\n\nThe Corporation and its subsidiaries are subject to U.S. federal income tax, as well as income tax of the Commonwealth of Pennsylvania and various other state and local jurisdictions. The Corporation and its subsidiaries are generally no longer subject to examination by federal, state and local taxing authorities for years prior to December 31, 2022.\n\nDeferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred state taxes are combined with federal deferred taxes (net of the impact of deferred state tax on the deferred federal tax) and are shown in the table below by major category.\n\nThe Corporation has a state net operating loss carry-forward of $126.0 million which will begin to expire in 2026 if not utilized. A valuation allowance of $4.5 million and $4.0 million at December 31, 2025 and 2024, respectively, was attributable to deferred tax assets generated in certain state jurisdictions for which management believes it is more likely than not that such deferred tax assets will not be realized. Other than the valuation allowance on certain state deferred tax assets, management has determined that no additional valuation allowance is necessary for deferred tax assets because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and through future taxable income. The Corporation will continue to review the criteria related to the recognition of deferred tax assets on a regular basis.\n\nThe assets and liabilities giving rise to the Corporation's deferred tax assets and liabilities are as follows:\n\nAt December 31,\n\n(Dollars in thousands)20252024\n\nDeferred tax assets:\n\nAllowance for credit losses, loans and leases$19,661 $19,447 \n\nDeferred compensation1,601 1,693 \n\nActuarial adjustments on retirement benefits*892 1,715 \n\nState net operating losses4,968 4,285 \n\nNet unrealized holding losses on securities available-for-sale and swaps*5,883 9,984 \n\nLease liability6,361 7,029 \n\nOther deferred tax assets2,902 2,775 \n\nGross deferred tax assets42,268 46,928 \n\nValuation allowance(4,496)(3,959)\n\nTotal deferred tax assets, net of valuation allowance37,772 42,969 \n\nDeferred tax liabilities:\n\nMortgage servicing rights1,206 1,350 \n\nRetirement plans4,907 4,768 \n\nDeferred loan fees and costs1,521 1,549 \n\nAcquisition-related fair value adjustments493 554 \n\nIntangible assets5,313 4,843 \n\nDepreciation1,200 1,123 \n\nRight of use asset5,751 6,369 \n\nOther deferred tax liabilities1,518 1,118 \n\nTotal deferred tax liabilities21,909 21,674 \n\nNet deferred tax assets$15,863 $21,295 \n\n*Represents the amount of deferred taxes recorded in accumulated other comprehensive income.\n\n95\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 13. Retirement Plans and Other Postretirement Benefits\n\nInformation with respect to the Retirement Plans and Other Postretirement Benefits follows:\n\nRetirement PlansOther Postretirement Benefits\n\n(Dollars in thousands)2025202420252024\n\nChange in benefit obligation:\n\nBenefit obligation at beginning of year$44,770 $48,777 $1,986 $2,209 \n\nService cost548 565 43 56 \n\nInterest cost2,415 2,383 107 108 \n\nActuarial gain (loss)799 (2,225)72 (301)\n\nBenefits paid(2,854)(4,730)(108)(86)\n\nBenefit obligation at end of year$45,678 $44,770 $2,100 $1,986 \n\nChange in plan assets:\n\nFair value of plan assets at beginning of year$56,777 $54,348 $— $— \n\nActual return on plan assets8,287 7,002 — — \n\nBenefits paid(2,854)(4,730)(108)(86)\n\nEmployer contribution and non-qualified benefit payments157 157 108 86 \n\nFair value of plan assets at end of year$62,367 $56,777 $— $— \n\nFunded status16,689 12,007 (2,100)(1,986)\n\nUnrecognized net actuarial loss (gain)5,108 9,265 (827)(1,015)\n\nNet amount recognized$21,797 $21,272 $(2,927)$(3,001)\n\nThe net actuarial loss (gain) for December 31, 2025 and 2024 was the result of changes in the discount rate, interest crediting rate, cash balance conversion rate and driven by a higher than assumed mortality rate.\n\nComponents of net periodic benefit (income) cost were as follows: \n\nRetirement PlansOther Postretirement Benefits\n\n(Dollars in thousands)202520242023202520242023\n\nService cost$548 $565 $532 $43 $56 $76 \n\nInterest cost2,415 2,383 2,365 107 108 129 \n\nExpected loss on plan assets(3,580)(3,478)(3,056)— — — \n\nAmortization of net actuarial loss (gain)250 700 1,001 (101)(113)(16)\n\nNet periodic benefit (income) cost$(367)$170 $842 $49 $51 $189 \n\nThe components of net periodic benefit cost, other than the service cost component, are included in other noninterest expense in the consolidated statement of income.\n\n(Dollars in thousands)Retirement PlansOther Postretirement Benefits\n\nExpected amortization expense for 2026:\n\nAmortization (accretion) of net actuarial loss (gain)$69 $(89)\n\nDuring 2026, the Corporation expects to contribute approximately $155 thousand to the Retirement Plans and approximately $120 thousand to Other Postretirement Benefit Plans.\n\n96\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following benefits payments, which reflect expected future service, as appropriate, are expected to be paid:\n\n(Dollars in thousands)Retirement PlansOther Postretirement Benefits\n\nFor the fiscal year ending:\n\n2026$3,254 $120 \n\n20273,284 123 \n\n20283,306 130 \n\n20293,341 133 \n\n20303,352 129 \n\nYears 2031-203516,580 699 \n\n       Total$33,117 $1,334 \n\nWeighted-average assumptions used to determine benefit obligations at December 31, 2025 and 2024 were as follows:\n\nRetirement PlansOther Postretirement Benefits\n\n2025202420252024\n\nAssumed discount rate5.4%5.6%5.4%5.6%\n\nAssumed salary increase rate3%-6%3%-6%— — \n\nThe benefit obligation for all plans at December 31, 2025 was based on the Pri-2012 White Collar Dataset Mortality Table with scale MP-2021 fully generational published by the Society of Actuaries. The discount rate is based on matching the Plan's projected cash flows to the spot rates in FTSE Pension Above Median Double-A Curve as of the disclosure date. The assumed salary increase considers available service years from the valuation date through the participant's normal retirement date.\n\nWeighted-average assumptions used to determine net periodic costs for the years ended December 31, 2025 and 2024 were as follows:\n\nRetirement PlansOther Postretirement Benefits\n\n2025202420252024\n\nAssumed discount rate5.4%5.0%5.4%5.0%\n\nAssumed long-term rate of investment return6.5%6.5%— — \n\nAssumed salary increase rate3%-6%3%-6%— — \n\nAssumed cash balance interest crediting rate5.2%5.6 %— — \n\nThe net periodic costs for the years ended December 31, 2025 and 2024 was based on the Pri-2012 White Collar Mortality Table with scale MP-2021 fully generational published by the Society of Actuaries. The discount rate was based on matching the Plan's projected cash flows to the spot rates in FTSE Pension Above Median Double-A Curve as of the disclosure date. Historical investment returns was the basis used to determine the overall expected long-term rate of return on assets. The assumed salary increase rate considers available service years from the valuation date through the participant's normal retirement date.\n\nThe Corporation's pension plan asset allocation at December 31, 2025 and 2024, by asset category was as follows:\n\nPercentage of Plan Assets at December 31,\n\n20252024\n\nAsset Category:\n\nEquity securities63%60%\n\nDebt securities35 38 \n\nOther2 2 \n\nTotal100%100%\n\n97\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nPlan assets include marketable equity securities, corporate and government debt securities, and certificates of deposit. The investment strategy is to keep a 60% equity to 40% fixed income mix to achieve the overall expected long-term rate of return of 6.5%. Equity securities do not include any common stock of the Corporation.\n\nThe major categories of assets in the Corporation's pension plan at year-end are presented in the following table. Assets are segregated by the level of the valuation inputs within the fair value hierarchy described in Note 19, \"Fair Value Disclosures.\"\n\nFair Value Measurements at December 31,\n\n(Dollars in thousands)20252024\n\nLevel 1:\n\nMutual funds$39,802 $35,030 \n\nShort-term investments1,669 1,042 \n\nU.S. treasury bonds1,226 1,641 \n\nLevel 2:\n\nU.S. government obligations8,931 7,427 \n\nCorporate bonds9,886 9,855 \n\nCertificates of deposit853 1,782 \n\nTotal fair value of plan assets$62,367 $56,777 \n\nThe Corporation sponsors a 401(k) deferred salary savings plan, which is a qualified defined contribution plan, which covers all employees of the Corporation and its subsidiaries, and provides that the Corporation makes matching contributions as defined by the plan. Expense recorded by the Corporation for the 401(k) deferred salary savings plan was $2.3 million for the year ended December 31, 2025 and $2.2 million for the years ended December 31, 2024 and 2023.    \n\nThe Corporation sponsors a Supplemental Non-Qualified Pension Plan (\"SNQPP\"), which was established in 1981 prior to the existence of the 401(k) deferred salary savings plan, employee stock purchase plan and long-term incentive plans and therefore is not offered to new participants. All current participants are now retired. The Corporation recorded expense of $2 thousand and $46 thousand for the SNQPP for the years ended December 31, 2025 and 2024, respectively, and income of $15 thousand for the year ended December 31, 2023.\n\nNote 14. Stock-Based Incentive Plan\n\nOn April 26, 2023, the 2023 Equity Incentive Plan (the \"Plan\") was approved by shareholders. This Plan replaced the Amended and Restated Univest 2013 Long-Term Incentive Plan (the \"2013 Plan\"), which expired in April 2023. No new grants are permitted under the 2013 Plan. However, certain options and restricted stock units granted under the 2013 Plan remain outstanding.\n\nUnder the Plan, the Corporation may grant up to 1,200,000 options and restricted stock awards and units to employees and non-employee directors, subject to adjustment, as described in the Plan. The Plan provides for the issuance of options to purchase common shares at prices not less than 100 percent of the fair market value on the date of option grant and have a contractual term of ten years. There were 743,651 shares available for future grants at December 31, 2025 under the Plan. At December 31, 2025, there were 74,268 options to purchase common stock and 521,838 nonvested restricted stock units outstanding under the Plan and the 2013 Plan.\n\nThe following is a summary of the Corporation's stock option activity and related information for the year ended December 31, 2025:\n\n(Dollars in thousands, except per share data)Shares Under OptionWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual Life (Years)Aggregate Intrinsic Value at December 31, 2025\n\nOutstanding at December 31, 2024127,782 $27.72 \n\nExercised(53,514)27.06 \n\nOutstanding at December 31, 202574,268 28.20 1.8$338 \n\nExercisable at December 31, 202574,268 28.20 1.8338 \n\n98\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe Corporation did not grant any stock options during the years ended December 31, 2025, 2024 or 2023.\n\nThe following is a summary of nonvested restricted stock units at December 31, 2025 including changes during the year:\n\n(Dollars in thousands, except per share data) Nonvested Stock Units Weighted Average Grant Date Fair Value\n\nNonvested stock units at December 31, 2024501,679 $22.67 \n\nGranted196,666 28.44 \n\nAdded by performance factors2,761 28.21 \n\nVested(167,198)25.26 \n\nCancelled/forfeited(12,070)23.03 \n\nNonvested stock units at December 31, 2025521,838 24.03 \n\nCertain information regarding restricted stock units is summarized below for the periods indicated:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands, except per share data)202520242023\n\nRestricted stock units granted196,666 277,134 217,929 \n\nWeighted average grant date fair value$28.44 $19.81 $24.88 \n\nIntrinsic value of units granted$5,592 $5,490 $5,423 \n\nRestricted stock units vested167,198 152,875 181,508 \n\nWeighted average grant date fair value$25.26 $27.56 $22.21 \n\nIntrinsic value of units vested$4,758 $3,031 $4,512 \n\nThe total unrecognized compensation expense and the weighted average period over which unrecognized compensation expense is expected to be recognized related to nonvested restricted stock units at December 31, 2025 is presented below:\n\n(Dollars in thousands)Unrecognized Compensation CostWeighted-Average Period Remaining (Years)\n\nRestricted stock units$6,122 1.8\n\nThe following table presents information related to the Corporation's compensation expense related to its stock incentive plans recognized for the periods indicated:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nStock-based compensation expense:\n\nRestricted stock units$4,690 $4,615 $4,194 \n\nEmployee stock purchase plan90 91 104 \n\nTotal$4,780 $4,706 $4,298 \n\nTax benefit on nonqualified stock option expense and disqualifying dispositions of incentive stock options$753 $1,041 $702 \n\nThere were no significant modifications or accelerations to options, restricted stock awards or restricted stock units from 2023 through 2025.\n\n99\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 15. Accumulated Other Comprehensive (Loss) Income\n\nThe following table shows the components of accumulated other comprehensive (loss) income, net of taxes, for the periods presented:\n\n(Dollars in thousands)Net Unrealized\n(Losses) Gains on\nAvailable-for-Sale\nInvestment\nSecuritiesNet Change\nRelated to\nDerivatives Used\nfor Cash Flow\nHedgesNet Change\nRelated to\nDefined Benefit\nPension PlansAccumulated\nOther\nComprehensive\n(Loss) Income\n\nBalance, December 31, 2022$(40,066)$(6,831)$(15,207)$(62,104)\n\nOther comprehensive income5,745 2,265 3,448 11,458 \n\nBalance, December 31, 2023(34,321)(4,566)(11,759)(50,646)\n\nOther comprehensive (loss) income(796)1,397 5,306 5,907 \n\nReclassification adjustment recorded in earnings (1)\n— 747 — 747 \n\nBalance, December 31, 2024(35,117)(2,422)(6,453)(43,992)\n\nOther comprehensive income13,618 — 3,099 16,717 \n\nReclassification adjustment recorded in earnings (1)— 1,808 — 1,808 \n\nBalance, December 31, 2025$(21,499)$(614)$(3,354)$(25,467)\n\n(1) Represents reclassification to earnings as a reduction to interest income of amounts included in accumulated other comprehensive income on the consolidated balance sheet related to the interest rate swap terminated on August 2, 2024.\n\nNote 16. Leases\n\nThe following table provides information with respect to the Corporation's operating leases:\n\nFor the Years Ended December 31,\n\n(Dollars in thousands)20252024\n\nOperating lease cost$4,124 $4,179 \n\nShort-term lease cost18 17 \n\nTotal lease cost$4,142 $4,196 \n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows from leases$4,342 $4,262 \n\nAt December 31, 2025At December 31, 2024\n\nWeighted-average remaining lease term in years10.510.8\n\nWeighted-average discount rate3.96%3.97%\n\nAt December 31, 2025, maturities of lease liabilities are as follows:\n\nYear(Dollars in thousands)Amount\n\n2026$4,394 \n\n20274,181 \n\n20283,809 \n\n20293,465 \n\n20303,184 \n\nThereafter16,157 \n\nTotal lease payments35,190 \n\nLess: imputed interest(6,659)\n\nPresent value of lease liabilities$28,531 \n\n100\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 17. Commitments and Contingencies\n\nLending Operations\n\nCommitments to extend credit, performance letters of credit, standby letters of credit, and other letters of credit are financial instruments issued by the Corporation to accommodate the financial needs of our customers. The Corporation uses the same credit policies in issuing these financial instruments as it does for on-balance sheet financial instruments, including obtaining collateral when management's credit assessment of the customer deems it necessary. These financial instruments generally have fixed expiration dates and historically most of these financial instruments expire without being drawn upon. The Corporation maintains a reserve for off-balance sheet credit exposures that are currently unfunded.\n\nCommitments to extend credit are agreements to lend to a customer if there is no violation of any condition established in the contract. The Corporation's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments.\n\nPerformance letters of credit and standby letters of credit commit the Bank to make payments on behalf of customers when certain specified future events occur. The Corporation's exposure to credit loss is essentially the same as the risk involved in extending loans to customers. At December 31, 2025, the maximum potential amount of future payments under letters of credit was $92.0 million. The carrying amount of the contingent obligation at December 31, 2025 was $428 thousand.\n\nThe following schedule summarizes the Corporation's off-balance sheet financial instruments at December 31, 2025:\n\n(Dollars in thousands)Contract/Notional Amount\n\nFinancial instruments representing credit risk:\n\nCommitments to extend credit$1,811,879 \n\nPerformance letters of credit65,657 \n\nFinancial standby letters of credit26,338 \n\nThe Bank maintains a reserve in other liabilities for estimated losses associated with sold mortgages that may be repurchased. At December 31, 2025, the reserve for sold mortgages was $372 thousand.\n\nLegal Proceedings\n\nThe Corporation is periodically subject to various pending and threatened legal actions, which involve claims for monetary relief. Based upon information presently available to the Corporation, it is the Corporation's opinion that any legal and financial responsibility arising from such claims will not have a material adverse effect on the Corporation's results of operations, financial position or cash flows.\n\nNote 18. Derivative Instruments and Hedging Activities\n\nInterest Rate Swaps\n\nThe Corporation periodically uses interest rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation's credit exposure on interest rate swaps includes changes in fair value and any collateral that is held by a third party.\n\nIn May 2022, the Corporation entered into an interest rate swap classified as a cash flow hedge with a notional amount of $250.0 million to hedge the interest payments received on a pool of variable rate loans. Under the terms of the swap agreement, the Corporation paid a variable rate equal to the Prime Rate and received a fixed rate of 5.99% with a maturity date of May 4, 2026. On August 2, 2024, the Corporation terminated the swap. In connection with the termination, the Corporation incurred an unwind fee of $4.0 million, of which $3.2 million has been reclassified to earnings as a reduction to interest income since termination. Additionally, unamortized origination and third-party fees totaled $49 thousand at December 31, 2025. The $827 thousand will be amortized into interest income over the remaining four months of the original swap.\n\nCredit Derivatives\n\nThe Corporation has agreements with third-party financial institutions whereby the third-party financial institution enters\n\n101\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\ninto interest rate derivative contracts with loan customers referred to them by the Corporation. By the terms of the agreements, the third-party financial institution has recourse to the Corporation for any exposure created under each swap contract in the event the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. These transactions represent credit derivatives and are a customary arrangement that allows the Corporation to provide access to interest rate swap transactions for customers without issuing the swap.\n\nAt December 31, 2025, the Corporation had exposure to 138 variable-rate to fixed-rate interest rate swap transactions between the third-party financial institution and customers with a current notional amount of $873.6 million and remaining maturities ranging from one month to ten years. At December 31, 2025, the fair value of the Corporation's interest rate swap credit derivatives was a liability of $140 thousand. At December 31, 2025, the fair value of the swaps to the customers was a net gain of $25.1 million. At December 31, 2025, the Corporation's credit exposure related to the customer totaled $4.5 million.\n\nThe maximum potential payments by the Corporation to the third-party financial institution under these credit derivatives are not estimable as they are contingent on future interest rates and the agreements do not provide for a limitation of the maximum potential payment amount.\n\nMortgage Banking Derivatives\n\nDerivative loan commitments represent agreements for delayed delivery of financial instruments in which the buyer agrees to purchase, and the seller agrees to deliver, at a specified future date, a specified instrument at a specified price or yield. The Corporation's derivative loan commitments are commitments to sell loans secured by 1- to 4-family residential properties whose predominant risk characteristic is interest rate risk.\n\nDerivatives Tables\n\nThe Corporation had no derivatives designated as hedging instruments recorded on the consolidated balance sheets at December 31, 2025 or 2024.\n\nThe following table presents the notional amounts and fair values of derivatives not designated as hedging instruments recorded on the consolidated balance sheets at December 31, 2025 and 2024:\n\n  Derivative AssetsDerivative Liabilities\n\n(Dollars in thousands)Notional\nAmountBalance Sheet\nClassificationFair\nValueBalance Sheet\nClassificationFair\nValue\n\nAt December 31, 2025\n\nCredit derivatives$873,568  $— Other liabilities$140 \n\nInterest rate locks with customers16,954 Other assets331  — \n\nForward loan sale commitments32,242  — Other liabilities82 \n\nTotal$922,764 $331 $222 \n\nAt December 31, 2024\n\nCredit derivatives$860,423  $— Other liabilities$67 \n\nInterest rate locks with customers23,291 Other assets214  — \n\nForward loan sale commitments39,944 Other assets12  — \n\nTotal$923,658 $226 $67 \n\n102\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following table presents amounts included in the consolidated statements of income for derivatives designated as hedging instruments for the periods indicated:\n\n Statement of Income ClassificationFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nInterest rate swaps—cash flow hedge—net interest paymentsInterest expense$— $3,747 $5,593 \n\nReclassification adjustment included in earnings (1)Interest income(2,289)(946)— \n\nTotal net loss$(2,289)$2,801 $5,593 \n\n(1) Represents reclassification to earnings as a reduction to interest income of amounts included in accumulated other comprehensive income on the consolidated balance sheet related to the interest rate swap terminated on August 2, 2024.\n\nThe following table presents amounts included in the consolidated statements of income for derivatives not designated as hedging instruments for the periods indicated:\n\n Statement of Income ClassificationFor the Years Ended December 31,\n\n(Dollars in thousands)202520242023\n\nCredit derivativesOther noninterest income$1,182 $562 $1,167 \n\nInterest rate locks with customersNet gain (loss) on mortgage banking activities117 (503)597 \n\nForward loan sale commitmentsNet (loss) gain on mortgage banking activities(94)439 (456)\n\nTotal net gain$1,205 $498 $1,308 \n\nThe following table presents amounts included in accumulated other comprehensive (loss) income for derivatives designated as hedging instruments at December 31, 2025 and 2024:\n\n Accumulated Other\nComprehensive IncomeAt December 31,\n\n(Dollars in thousands)20252024\n\nInterest rate swap—cash flow hedge (1)Fair value, net of taxes$(614)$(2,422)\n\nTotal$(614)$(2,422)\n\n(1) The interest rate swap was terminated on August 2, 2024. This after-tax amount will be reclassified to earnings as a reduction to interest income over the remaining four months of the original swap.\n\nNote 19. Fair Value Disclosures\n\nFair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The Corporation determines the fair value of financial instruments based on the fair value hierarchy. The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Corporation. Unobservable inputs are inputs that reflect the Corporation's assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances, including assumptions about risk. Three levels of inputs are used to measure fair value. A financial instrument's level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement. Transfers between levels are recognized at the end of the reporting periods.\n\nLevel 1: Valuations are based on quoted prices in active markets for identical assets or liabilities that the Corporation can access at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.\n\nLevel 2: Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.\n\nLevel 3: Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Assets and liabilities utilizing Level 3 inputs include: financial instruments whose value is determined using pricing models, discounted cash-flow methodologies, or similar techniques, as well as instruments for which the fair value calculation requires significant management judgment or estimation.\n\nFollowing is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy.\n\n103\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nInvestment Securities\n\nWhere quoted prices are available in an active market for identical instruments, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include U.S. Treasury securities, most equity securities and money market mutual funds. Mutual funds are registered investment companies which are valued at net asset value of shares on a market exchange at the end of each trading day. Level 2 of the valuation hierarchy includes securities issued by U.S. Government sponsored enterprises, mortgage-backed securities, collateralized mortgage obligations, corporate and municipal bonds and certain equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. In cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy.\n\nFair values for securities are determined using independent pricing services and market-participating brokers. The Corporation's independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the pricing service's evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. If at any time, the pricing service determines that it does not have sufficient verifiable information to value a particular security, the Corporation will utilize valuations from another pricing service. Management has a sufficient understanding of the third-party service's valuation models, assumptions and inputs used in determining the fair value of securities to enable management to maintain an appropriate system of internal control.\n\nOn a quarterly basis, the Corporation reviews changes, as submitted by the pricing service, in the market value of its security portfolio. Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities. If, upon the Corporation's review or in comparing with another service, a material difference between pricing evaluations were to exist, the Corporation may submit an inquiry to the current pricing service regarding the data used to determine the valuation of a particular security. If the Corporation determines there is market information that would support a different valuation than from the current pricing service's evaluation, the Corporation may utilize and change the security's valuation. There were no material differences in valuations noted at December 31, 2025.\n\nLoans Held for Sale\n\nThe fair value of our mortgage loans held for sale is based on estimates using Level 2 inputs. These inputs are based on pricing information obtained from wholesale mortgage banks and brokers and applied to loans with similar interest rates and maturities.\n\nDerivative Financial Instruments\n\nThe fair values of derivative financial instruments are based upon the estimated amount the Corporation would receive or pay to terminate the contracts or agreements, taking into account current interest rates and, when appropriate, the current creditworthiness of the counterparties. Interest rate swaps and mortgage banking derivative financial instruments are classified within Level 2 of the valuation hierarchy. Credit derivatives are valued based on credit worthiness of the underlying borrower which is a significant unobservable input and therefore classified in Level 3 of the valuation hierarchy.\n\nContingent Consideration Liability\n\nThe Corporation estimates the fair value of the contingent consideration liability by using a discounted cash flow model of future contingent payments based on projected revenue related to the acquired business. The estimated fair value of the contingent consideration liability is reviewed on a quarterly basis and any valuation adjustments resulting from a change of estimated future contingent payments based on projected revenue of the acquired business affecting the contingent consideration liability will be recorded through noninterest expense. Due to the significant unobservable input related to the projected revenue, the contingent consideration liability is classified within Level 3 of the valuation hierarchy. An increase in the projected revenue may result in a higher fair value of the contingent consideration liability. Alternatively, a decrease in the projected revenue may result in a lower estimated fair value of the contingent consideration liability.\n\n104\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe following table presents the assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024, classified using the fair value hierarchy:\n\n At December 31, 2025\n\n(Dollars in thousands)Level 1Level 2Level 3Assets/\nLiabilities at\nFair Value\n\nAssets:\n\nAvailable-for-sale securities:\n\nResidential mortgage-backed securities$— $289,580 $— $289,580 \n\nCollateralized mortgage obligations— 1,368 — 1,368 \n\nCorporate bonds— 75,303 5,000 80,303 \n\nTotal available-for-sale securities— 366,251 5,000 371,251 \n\nEquity securities:\n\nMoney market mutual funds2,014 — — 2,014 \n\nTotal equity securities2,014 — — 2,014 \n\nLoans held for sale— 15,288 — 15,288 \n\nInterest rate locks with customers*— 331 — 331 \n\nTotal assets$2,014 $381,870 $5,000 $388,884 \n\nLiabilities:\n\nCredit derivatives*$— $— $140 $140 \n\nForward loan sale commitments*— 82 — 82 \n\nTotal liabilities$— $82 $140 $222 \n\n*Such financial instruments are recorded at fair value as further described in Note 18, \"Derivative Instruments and Hedging Activities.\"\n\nThe $140 thousand of credit derivatives liability represents the Credit Valuation Adjustment (\"CVA\"), which is obtained from real-time financial market data, of 138 interest rate swaps with a current notional amount of $873.6 million. The December 31, 2025, CVA is calculated using a 40% loss given default rate on the most recent investment grade credit curve.\n\n At December 31, 2024\n\n(Dollars in thousands)Level 1Level 2Level 3Assets/\nLiabilities at\nFair Value\n\nAssets:\n\nAvailable-for-sale securities:\n\nState and political subdivisions$— $1,295 $— $1,295 \n\nResidential mortgage-backed securities— 283,381 — 283,381 \n\nCollateralized mortgage obligations— 1,685 — 1,685 \n\nCorporate bonds— 71,000 — 71,000 \n\nTotal available-for-sale securities— 357,361 — 357,361 \n\nEquity securities:\n\nMoney market mutual funds2,506 — — 2,506 \n\nTotal equity securities2,506 — — 2,506 \n\nLoans held for sale— 16,653 — 16,653 \n\nInterest rate locks with customers*— 214 — 214 \n\nForward loan sale commitments*— 12 — 12 \n\nTotal assets$2,506 $374,240 $— $376,746 \n\nLiabilities:\n\nContingent consideration liability$— $— $635 $635 \n\nCredit derivatives*— — 67 67 \n\nTotal liabilities$— $— $702 $702 \n\n*Such financial instruments are recorded at fair value as further described in Note 18, \"Derivative Instruments and Hedging Activities.\"\n\n105\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe $67 thousand of credit derivatives liability represents the CVA, which is obtained from real-time financial market data, of 135 interest rate swaps with a current notional amount of $860.4 million. The December 31, 2024 CVA is calculated using a 40% loss given default rate on the most recent investment grade credit curve.\n\nThe contingent consideration liability resulting from the Sheaffer acquisition was calculated using a discount rate of 8.3% on the acquisition date. During the years ended December 31, 2025 and 2024, the Corporation paid $635 thousand in contingent consideration related to this acquisition. There was no contingent consideration liability at December 31, 2025 and the contingent consideration liability was $635 thousand at December 31, 2024.\n\nThe following table includes a rollforward of credit derivatives for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the years ended December 31, 2025 and 2024.\n\n For the Year Ended December 31, 2025\n\n(Dollars in thousands)Balance at December 31, 2024AdditionsIncrease in valueBalance at December 31, 2025\n\nCredit derivatives$(67)$(1,255)$1,182 $(140)\n\nNet total $(67)$(1,255)$1,182 $(140)\n\n For the Year Ended December 31, 2024\n\n(Dollars in thousands)Balance at\nDecember 31,\n2023AdditionsIncrease in valueBalance at December 31, 2024\n\nCredit derivatives$(186)$(443)$562 $(67)\n\nNet total $(186)$(443)$562 $(67)\n\nThe following table presents the change in the balance of the contingent consideration liability related to acquisitions for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the years ended December 31, 2025 and 2024:\n\n For the Year Ended December 31, 2025\n\n(Dollars in thousands)Balance at December 31, 2024Payment of\nContingent\nConsiderationAdjustment\nof Contingent\nConsiderationBalance at December 31, 2025\n\nPaul I. Sheaffer Insurance Agency$635 $635 $— $— \n\nTotal contingent consideration liability$635 $635 $— $— \n\n For the Year Ended December 31, 2024\n\n(Dollars in thousands)Balance at\nDecember 31,\n2023Payment of\nContingent\nConsiderationAdjustment\nof Contingent\nConsiderationBalance at December 31, 2024\n\nPaul I. Sheaffer Insurance Agency$1,224 $635 $46 $635 \n\nTotal contingent consideration liability$1,224 $635 $46 $635 \n\nThe Corporation may be required to periodically measure certain assets and liabilities at fair value on a non-recurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from the application of lower of cost or market accounting or changes in the value of individual assets. The following table represents assets measured at fair value on a non-recurring basis at December 31, 2025 and 2024:\n\n At December 31, 2025\n\n(Dollars in thousands)Level 1Level 2Level 3Assets at\nFair Value\n\nIndividually analyzed loans held for investment$— $— $10,194 $10,194 \n\nOther real estate owned— — 23,926 23,926 \n\nRepossessed assets— — 65 65 \n\nTotal$— $— $34,185 $34,185 \n\n106\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n At December 31, 2024\n\n(Dollars in thousands)Level 1Level 2Level 3Assets at\nFair Value\n\nIndividually analyzed loans held for investment$— $— $10,111 $10,111 \n\nOther real estate owned— — 20,141 20,141 \n\nRepossessed assets— — 76 76 \n\nTotal$— $— $30,328 $30,328 \n\nThe following table presents assets and liabilities not measured at fair value on a recurring or non-recurring basis in the Corporation's consolidated balance sheet but for which the fair value is required to be disclosed at December 31, 2025 and 2024. The disclosed fair values are classified using the fair value hierarchy.\n\n At December 31, 2025\n\n(Dollars in thousands)Level 1Level 2Level 3Fair\nValueCarrying\nAmount\n\nAssets:\n\nCash and short-term interest-earning assets$553,712 $— $— $553,712 $553,712 \n\nHeld-to-maturity securities— 109,724 — 109,724 123,024 \n\nFederal Home Loan Bank, Federal Reserve Bank and other stockN/AN/AN/AN/A37,808 \n\nNet loans and leases held for investment— — 6,824,797 6,824,797 6,816,445 \n\nServicing rights— — 10,267 10,267 6,478 \n\nTotal assets$553,712 $109,724 $6,835,064 $7,498,500 $7,537,467 \n\nLiabilities:\n\nDeposits:\n\nDemand and savings deposits, non-maturity$5,673,028 $— $— $5,673,028 $5,673,028 \n\nTime deposits— 1,417,969 — 1,417,969 1,414,285 \n\nTotal deposits5,673,028 1,417,969 — 7,090,997 7,087,313 \n\nShort-term borrowings24,411 — — 24,411 24,411 \n\nLong-term debt— 211,230 — 211,230 200,000 \n\nSubordinated notes— 102,000 — 102,000 98,867 \n\nTotal liabilities$5,697,439 $1,731,199 $— $7,428,638 $7,410,591 \n\n107\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n At December 31, 2024\n\n(Dollars in thousands)Level 1Level 2Level 3Fair\nValueCarrying\nAmount\n\nAssets:\n\nCash and short-term interest-earning assets$328,844 $— $— $328,844 $328,844 \n\nHeld-to-maturity securities— 115,007 — 115,007 134,111 \n\nFederal Home Loan Bank, Federal Reserve Bank and other stockN/AN/AN/AN/A38,980 \n\nNet loans and leases held for investment— — 6,586,054 6,586,054 6,729,381 \n\nServicing rights— — 12,710 12,710 6,990 \n\nTotal assets$328,844 $115,007 $6,598,764 $7,042,615 $7,238,306 \n\nLiabilities:\n\nDeposits:\n\nDemand and savings deposits, non-maturity$5,305,553 $— $— $5,305,553 $5,305,553 \n\nTime deposits— 1,458,774 — 1,458,774 1,453,706 \n\nTotal deposits5,305,553 1,458,774 — 6,764,327 6,759,259 \n\nShort-term borrowings11,181 — — 11,181 11,181 \n\nLong-term debt— 225,475 — 225,475 225,000 \n\nSubordinated notes— 147,500 — 147,500 149,261 \n\nTotal liabilities$5,316,734 $1,831,749 $— $7,148,483 $7,144,701 \n\nThe following valuation methods and assumptions were used by the Corporation in estimating the fair value for financial instruments measured at fair value on a non-recurring basis and financial instruments not measured at fair value on a recurring or non-recurring basis in the Corporation's consolidated balance sheets but for which the fair value is required to be disclosed:\n\nCash and short-term interest-earning assets: The carrying amounts reported in the balance sheet for cash and due from banks, interest-earning deposits with other banks and other short-term investments is their stated value. Cash and short-term interest-earning assets are classified within Level 1 in the fair value hierarchy.\n\nHeld-to-maturity securities: Fair values for the held-to-maturity investment securities are estimated by using pricing models or quoted prices of securities with similar characteristics and are classified in Level 2 in the fair value hierarchy.\n\nFederal Home Loan Bank, Federal Reserve Bank and other stock: It is not practical to determine the fair values of Federal Home Loan Bank, Federal Reserve Bank and other stock, due to restrictions placed on their transferability.\n\nLoans held for sale: Loans held for sale are carried at the lower of cost or estimated fair value. The fair value of the Corporation's mortgage loans held for sale are generally determined using a pricing model based on current market information obtained from external sources, including interest rates, bids or indications provided by market participants on specific loans that are actively marketed for sale. These loans are primarily residential mortgage loans and are generally classified in Level 2 due to the observable pricing data.\n\nLoans and leases held for investment: The fair values for loans and leases held for investment are estimated using discounted cash flow analyses, using a discount rate based on current interest rates at which similar loans with similar terms would be made to borrowers, adjusted as appropriate to consider credit, liquidity and marketability factors to arrive at a fair value that represents the Corporation's exit price at which these instruments would be sold or transferred. Loans and leases are classified within Level 3 in the fair value hierarchy since credit risk is not an observable input.\n\nIndividually analyzed loans and leases held for investment: For individually analyzed loans and leases, the Corporation uses a variety of techniques to measure fair value, such as using the current appraised value of the collateral, agreements of sale, discounting the contractual cash flows, and analyzing market data that the Corporation may adjust due to specific characteristics of the loan/lease or collateral. At December 31, 2025, individually analyzed loans held for investment had a carrying amount of $13.0 million with a valuation allowance of $2.8 million. At December 31, 2024, individually analyzed loans held for investment had a carrying amount of $12.1 million with a valuation allowance of $1.9 million. At December 31, 2025, the Corporation had individually analyzed leases of $260 thousand with a valuation allowance of $260 thousand. At December 31, 2024, the Corporation had no individually analyzed leases.\n\n108\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nServicing rights: The Corporation estimates the fair value of servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the interest rates of the portfolios serviced. Servicing rights are classified within Level 3 in the fair value hierarchy based upon management's assessment of the inputs. The Corporation reviews the servicing rights portfolio on a quarterly basis for impairment and the servicing rights are carried at the lower of amortized cost or estimated fair value. At December 31, 2025, servicing rights had a net carrying amount of $6.8 million, which included a valuation allowance of $307 thousand. At December 31, 2024, servicing rights had a net carrying amount of $7.0 million, which included a valuation allowance of $7 thousand.\n\nGoodwill and other identifiable assets: Certain non-financial assets subject to measurement at fair value on a non-recurring basis include goodwill and other identifiable intangible assets. In accordance with ASC Topic 350, goodwill is tested at least annually for impairment at the reporting unit level. The Corporation performed its annual test of goodwill for impairment during the fourth quarter of 2025 and concluded there was no impairment of goodwill. There was no impairment of goodwill recorded in 2023 or 2024. The Corporation also completed an impairment test for other intangible assets during the fourth quarter of 2025 and concluded there was no impairment of other intangible assets. There was no impairment of other identifiable intangible assets recorded in 2023 or 2024.\n\nOther real estate owned: Other real estate owned (\"OREO\") represents properties that the Corporation has acquired through foreclosure by either accepting a deed in lieu of foreclosure, or by taking possession of assets that collateralized a loan. The Corporation reports OREO at the lower of cost or fair value less cost to sell, adjusted periodically based on a current appraisal or an executed agreement of sale. Capital improvement expenses associated with the construction or repair of the property are capitalized as part of the cost of the OREO asset. Write-downs and any gain or loss upon the sale of OREO is recorded in other noninterest income. OREO is reported in other assets on the consolidated balance sheet. At December 31, 2025 and 2024, OREO had a carrying amount of $23.9 million and $20.1 million, respectively. During the year ended December 31, 2025, two nonaccrual residential real estate properties with a carrying value of $3.9 million were transferred to OREO. Additionally, during the year ended December 31, 2025, two residential real estate properties with a total carrying value of $226 thousand were sold. Other real estate owned is classified within Level 3 in the fair value hierarchy based on appraisals, letters of intent or agreement of sale received from third parties.\n\nRepossessed Assets: Repossessed assets represents non-real estate assets that the Corporation has acquired by taking possession of the asset that collateralized a loan or lease. The Corporation reports repossessed assets at the fair value less cost to sell, adjusted periodically based on a current appraisal provided by a third party based on their assumptions and quoted market prices for similar assets, when available. Write-downs and any gain or loss upon the sale of repossessed assets is recorded in other noninterest income. Repossessed assets are reported in other assets on the consolidated balance sheet. At December 31, 2025 and 2024, repossessed assets had a carrying amount of $65 thousand and $76 thousand, respectively. During the year ended December 31, 2025, repossessed assets totaling $143 thousand were acquired and repossessed assets totaling $105 thousand were sold. Additionally, write-downs on repossessed assets totaled $44 thousand during the year. Repossessed assets are classified within Level 3 in the fair value hierarchy based on appraisals, letters of intent, agreement of sale or indications of value received from third parties.\n\nDeposit liabilities: The fair values for demand and savings accounts, with no stated maturities, is the amount payable on demand at the reporting date (carrying value) and are classified within Level 1 in the fair value hierarchy. The fair values for time deposits with fixed maturities are estimated by discounting the final maturity using interest rates currently offered for deposits with similar remaining maturities. Time deposits are classified within Level 2 in the fair value hierarchy.\n\nShort-term borrowings: The fair value of short-term borrowings are estimated using current market rates for similar borrowings and are classified within Level 2 in the fair value hierarchy.\n\nLong-term debt: The fair value of long-term debt is estimated by using discounted cash flow analysis, based on current market rates for debt with similar terms and remaining maturities. Long-term debt is classified within Level 2 in the fair value hierarchy.\n\nSubordinated notes: The fair value of the subordinated notes are estimated by discounting the principal balance using indicative pricing for the term to the call date as the Corporation has the option to call the subordinated notes. The subordinated notes are classified within Level 2 in the fair value hierarchy.\n\n109\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 20. Share Repurchase Plan\n\nThe Corporation may repurchase shares of its common stock from time to time through open market purchases, tender offers, privately negotiated purchases or other means based on general market conditions, the trading price of the Corporation's common stock, tax considerations, alternative uses of capital and the Corporation's results of operations. On October 23, 2024, the Corporation's Board of Directors approved the repurchase of 1,000,000 shares, or approximately 3.4% of the Corporation's common stock outstanding as of September 30, 2024. On December 10, 2025, the Corporation's Board of Directors approved the repurchase of 2,000,000 additional shares, or approximately 7.1% of the Corporation's common stock outstanding as of November 30, 2025. The share repurchase programs do not obligate the Corporation to acquire any particular amount of common stock. The programs have no scheduled expiration date, and the Board of Directors has the right to suspend or discontinue the programs at any time. During the years ended December 31, 2025, 2024 and 2023, the Corporation repurchased 1,129,217, 802,535 and 26,485 shares, respectively, of common stock at a cost of $34.7 million, $18.9 million and $462 thousand, respectively, under the Corporation's share repurchase program. At December 31, 2025, there were 2,270,937 shares available to be repurchased under the programs.\n\nNote 21. Regulatory Matters\n\nThe Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation's and the Bank's financial statements. Capital adequacy guidelines, and additionally for the Bank, the prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.\n\nQuantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum capital amounts and ratios are set forth in the following table. To comply with the regulatory definition of well capitalized, a depository institution must maintain minimum capital amounts and ratios as set forth in the following table.\n\nUnder current rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier 1 capital above its minimum risk-based capital requirements in an amount greater than 2.50% of total risk-weighted assets. The Corporation's and Bank's intent is to maintain capital levels in excess of the capital conservation buffer, which requires Tier 1 Capital to Risk Weighted Assets to exceed 8.50% and Total Capital to Risk Weighted Assets to exceed 10.50%. The Corporation and the Bank were in compliance with these requirements for 2025.\n\n110\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nThe Corporation's and Bank's actual and required capital ratios as of December 31, 2025 and December 31, 2024 under regulatory capital rules were as follows.\n\nActualFor Capital Adequacy\nPurposesTo Be Well-Capitalized\nUnder Prompt\nCorrective Action\nProvisions\n\n(Dollars in thousands)AmountRatioAmountRatioAmount  Ratio  \n\nAt December 31, 2025\n\nTotal Capital (to Risk-Weighted Assets):\n\nCorporation$985,345 13.86%$568,568 8.00%$710,709 10.00%\n\nBank846,416 11.97 565,684 8.00 707,106 10.00 \n\nTier 1 Capital (to Risk-Weighted Assets):\n\nCorporation797,595 11.22 426,426 6.00 568,568 8.00 \n\nBank757,978 10.72 424,263 6.00 565,684 8.00 \n\nTier 1 Common Capital (to Risk-Weighted Assets):\n\nCorporation797,595 11.22 319,819 4.50 461,961 6.50 \n\nBank757,978 10.72 318,197 4.50 459,619 6.50 \n\nTier 1 Capital (to Average Assets):\n\nCorporation797,595 9.51 335,451 4.00 419,314 5.00 \n\nBank757,978 9.07 334,260 4.00 417,825 5.00 \n\nAt December 31, 2024\n\nTotal Capital (to Risk-Weighted Assets):\n\nCorporation$999,073 14.19%$563,074 8.00%$703,842 10.00%\n\nBank843,245 12.03 560,778 8.00 700,972 10.00 \n\nTier 1 Capital (to Risk-Weighted Assets):\n\nCorporation763,947 10.85 422,305 6.00 563,074 8.00 \n\nBank757,380 10.80 420,583 6.00 560,778 8.00 \n\nTier 1 Common Capital (to Risk-Weighted Assets):\n\nCorporation763,947 10.85 316,729 4.50 457,497 6.50 \n\nBank757,380 10.80 315,438 4.50 455,632 6.50 \n\nTier 1 Capital (to Average Assets):\n\nCorporation763,947 9.51 321,439 4.00 401,799 5.00 \n\nBank757,380 9.45 320,674 4.00 400,843 5.00 \n\nAt December 31, 2025 and December 31, 2024, the Corporation and the Bank continued to meet all capital adequacy requirements to which they are subject. At December 31, 2025, the Bank was categorized as \"well capitalized\" under the regulatory framework for prompt corrective action. There are no conditions or events since that management believes have changed the Bank's category.\n\nDividends and Other Restrictions\n\nThe primary sources of the Corporation's dividends paid to its shareholders is from cash held at the Corporation and the earnings of the Bank paid to the Corporation in the form of dividends.\n\nThe approval of the Federal Reserve Board of Governors is required for a state bank member in the Federal Reserve system to pay dividends if the total of all dividends declared in any calendar year exceeds the Bank's net profits (as defined) for that year combined with its retained net profits for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2026 without approval of the Federal Reserve Board of Governors of approximately $74.6 million plus an additional amount equal to the Bank's net profits for 2026 up to the date of any such dividend declaration.\n\nFederal Reserve Board policy applicable to the holding company also provides that, as a general matter, a bank holding company should inform the Federal Reserve and should eliminate, defer or significantly reduce the holding company's dividends if the holding company's net income for the preceding four quarters, net of dividends paid during the period, is not sufficient to fully fund the dividends, the holding company's prospective rate of earnings retention is inconsistent with its\n\n111\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\ncapital needs and overall current and prospective financial condition, or the holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. Federal Reserve Board policy also provides that a bank holding company should inform the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period or that could result in a material adverse change to the organization's capital structure.\n\nThe Federal Reserve Act requires that the extension of credit by the Bank to certain affiliates, including the Corporation (parent), be secured by readily marketable securities, that the extension of credit to any one affiliate be limited to 10% of the Bank's capital and surplus (as defined), and that extensions of credit to all such affiliates be limited to 20% of the Bank's capital and surplus.\n\nNote 22. Related Party Transactions\n\nIn the ordinary course of business, the Corporation has made loans and commitments to extend credit to certain directors and executive officers of the Corporation and companies in which directors have an interest (\"Related Parties\"). These loans and commitments have been made on substantially the same terms, including interest rates and collateral requirements, as those prevailing at the same time for comparable transactions with customers not related to the lender and did not involve more than the normal risk of collectability or present other unfavorable terms.\n\nThe following table provides a summary of activity for loans to Related Parties during the year ended December 31, 2025:\n\n(Dollars in thousands)\n\nBalance at January 1, 2025$35 \n\nAmounts collected and other reductions(35)\n\nBalance at December 31, 2025$— \n\nThe following table provides additional information regarding transactions with Related Parties:\n\n(Dollars in thousands)At December 31, 2025\n\nCommitments to extend credit$1,630 \n\nDeposits received573 \n\nNote 23. Segment Reporting\n\nAt December 31, 2025, the Corporation had three reportable business segments, Banking, Wealth Management and Insurance, which were determined by the Chief Executive Officer (\"CEO\"), who is the designated Chief Operating Decision Maker (\"CODM\") of the Corporation. The CEO determines the segments based primarily upon product and service offerings, through the types of income generated and the regulatory environment. The CEO is responsible for allocating resources and assessing the performance of the Corporation based on each reportable business segment, and regularly receives information from the reportable segment managers. These segments represent how the Corporation strategically operates and has positioned itself in the marketplace. The parent holding company and intercompany eliminations are included in the \"Other\" segment. The accounting policies of the reportable segments are the same as those described in Note 1. Summary of Significant Accounting Policies.\n\nEach segment generates revenue from a variety of products and services it provides. Examples of products and services provided for each reportable segment are indicated as follows:\n\n●The Banking segment provides financial services to individuals, businesses, municipalities and non-profit organizations. These services include a full range of banking services such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing.\n\n●\nThe Wealth Management segment offers investment advisory, financial planning and trust and brokerage services. The Wealth Management segment serves a diverse client base of private families and individuals, municipal pension plans, retirement plans, trusts and guardianships.\n\n●The Insurance segment includes a full-service insurance brokerage agency offering commercial property and casualty insurance, employee benefit solutions, personal insurance lines and human resources consulting.\n\n112\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nEach reportable segment manager receives a monthly management report containing current-month and year-to-date actual and budgeted income statement data, which reflects the segment's interest income, interest expense, provision for credit losses, noninterest income, noninterest expense, and income before taxes. Income before taxes is the most important measurement used by the segment managers, Chief Operating Officer, Chief Financial Officer and CEO to assess performance of the segments and the Corporation as a whole.\n\nThe monthly management reports and results are regularly reviewed by the segment managers and the CEO. In addition, the CEO regularly meets with the segment managers to discuss operating results, forecasts and business issues. The CEO uses total revenue and noninterest expense for each segment predominantly in the annual budget and forecasting process. The CEO considers budget-to-actual variances on a quarterly basis for both measures when making decisions about the allocation of operating and capital resources to each segment. Accordingly, significant operating decisions are based upon analysis of each of these segments.\n\nInformation About Significant Segment Expenses\n\nThe significant segment expenses are regularly provided to the CEO and included in the reported measure of the segment's profit and loss. The Corporation considered relevant qualitative and quantitative factors when determining whether these segment expense categories and amounts were significant.\n\nThe following tables provide reportable segment-specific information, as well as the Other Segment, and reconciliations to consolidated financial information for the years ended December 31, 2025, 2024 and 2023.\n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2025\n\nInterest income$430,306 $62 $— $118 $430,486 \n\nInterest expense180,818 — — 9,473 190,291 \n\nNet interest income (expense)249,488 62 — (9,355)240,195 \n\nNoninterest income33,317 31,920 22,484 140 87,861 \n\nTotal revenue282,805 31,982 22,484 (9,215)328,056 \n\nProvision for credit losses11,667 — — — 11,667 \n\nLess: (1)\n\nSalaries, benefits and commissions74,773 17,665 14,493 20,092 127,023 \n\nNet occupancy8,925 497 630 1,097 11,149 \n\nEquipment3,703 42 94 454 4,293 \n\nData processing10,132 1,499 576 5,218 17,425 \n\nProfessional fees2,458 1,061 42 3,656 7,217 \n\nMarketing and advertising882 152 52 567 1,653 \n\nDeposit insurance premiums4,526 — — — 4,526 \n\nIntangible expense143 — 326 — 469 \n\nOther segment items (2)\n23,546 2,237 284 3,217 29,284 \n\nIntersegment expense (revenue) (3)\n26,495 548 443 (27,486)— \n\nIncome (expense) before income taxes$115,555 $8,281 $5,544 $(16,030)$113,350 \n\nIncome tax expense (benefit)23,311 1,674 1,129 (3,521)22,593 \n\nNet income (loss)$92,244 $6,607 $4,415 $(12,509)$90,757 \n\nNet capital expenditures$3,133 $18 $44 $979 $4,174 \n\n113\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2024\n\nInterest income$412,264 $73 $— $18 $412,355 \n\nInterest expense192,060 — — 9,125 201,185 \n\nNet interest income (expense)220,204 73 — (9,107)211,170 \n\nNoninterest income35,480 29,909 22,471 195 88,055 \n\nTotal revenue255,684 29,982 22,471 (8,912)299,225 \n\nProvision for credit losses5,933 — — — 5,933 \n\nLess: (1)\n\nSalaries, benefits and commissions74,561 17,912 13,578 17,694 123,745 \n\nNet occupancy9,446 316 614 649 11,025 \n\nEquipment4,039 40 96 278 4,453 \n\nData processing12,866 1,417 544 2,129 16,956 \n\nProfessional fees3,278 616 57 2,451 6,402 \n\nMarketing and advertising834 158 53 1,128 2,173 \n\nDeposit insurance premiums4,432 — — — 4,432 \n\nIntangible expenses267 — 427 — 694 \n\nOther segment items (2)\n20,922 2,594 661 3,935 28,112 \n\nIntersegment expense (revenue) (3)\n22,984 846 711 (24,541)— \n\nIncome (expense) before income taxes$96,122 $6,083 $5,730 $(12,635)$95,300 \n\nIncome tax expense (benefit)19,467 1,372 1,264 (2,734)19,369 \n\nNet income (loss)$76,655 $4,711 $4,466 $(9,901)$75,931 \n\nNet capital expenditures$449 $14 $75 $199 $737 \n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2023\n\nInterest income$371,625 $67 $— $38 $371,730 \n\nInterest expense142,608 — — 9,125 151,733 \n\nNet interest income (expense)229,017 67 — (9,087)219,997 \n\nNoninterest income28,414 26,804 21,501 105 76,824 \n\nTotal revenue257,431 26,871 21,501 (8,982)296,821 \n\nProvision for credit losses10,770 — — — 10,770 \n\nLess: (1)\n\nSalaries, benefits and commissions74,933 15,790 13,283 16,182 120,188 \n\nNet occupancy9,219 278 599 590 10,686 \n\nEquipment3,769 44 88 231 4,132 \n\nData processing12,914 1,361 527 1,997 16,799 \n\nProfessional fees3,584 903 22 2,632 7,141 \n\nMarketing and advertising1,251 166 70 693 2,180 \n\nDeposit insurance premiums4,825 — — — 4,825 \n\nIntangible expenses390 — 548 — 938 \n\nRestructuring charges1,519 — — — 1,519 \n\nOther segment items (2)\n20,067 2,828 757 5,302 28,954 \n\nIntersegment expense (revenue) (3)\n23,912 459 486 (24,857)— \n\nIncome (expense) before income taxes$90,278 $5,042 $5,121 $(11,752)$88,689 \n\nIncome tax expense (benefit)18,440 768 1,128 (2,751)17,585 \n\nNet income (loss)$71,838 $4,274 $3,993 $(9,001)$71,104 \n\nNet capital expenditures$4,193 $19 $156 $479 $4,847 \n\n114\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.\n\n(2) Other segment items for each reportable segment includes:\n\nBanking - loan and lease financing related fees, deposit and card service fees, and certain overhead expenses.\n\nWealth Management - referral fees, clearing broker fees, and certain overhead expenses.\n\nInsurance - certain overhead expenses.\n\nOther - Board of Director fees, retirement costs, and certain overhead expenses.\n\n(3) Includes an allocation of general and administrative expenses from both the parent holding company and the Bank.\n\nThe following tables show significant components of segment net assets as of December 31, 2025 and 2024.\n\nAt December 31, 2025\n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nOther segment disclosures:\n\nCash and cash equivalents$462,888 $55,155 $35,669 $— $553,712 \n\nLoans and leases, including loans held for sale, net of allowance for credit losses6,841,927 — — — 6,841,927 \n\nGoodwill138,476 15,434 21,600 — 175,510 \n\nOther segment assets828,550 2,520 2,438 32,240 865,748 \n\nTotal segment assets$8,271,841 $73,109 $59,707 $32,240 $8,436,897 \n\nAt December 31, 2024\n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nOther segment disclosures:\n\nCash and cash equivalents$247,023 $50,149 $31,672 $— $328,844 \n\nLoans and leases, including loans held for sale, net of allowance for credit losses6,756,145 — — — 6,756,145 \n\nGoodwill138,476 15,434 21,600 — 175,510 \n\nOther segment assets839,359 3,485 2,828 22,246 867,918 \n\nTotal segment assets$7,981,003 $69,068 $56,100 $22,246 $8,128,417 \n\n115\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 24. Revenue from Contracts with Customers\n\nThe following tables disaggregate the Corporation's revenue by major source and reportable segment for the years ended December 31, 2025, 2024 and 2023.\n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2025\n\nNet interest income (1)$249,488 $62 $— $(9,355)$240,195 \n\nNoninterest income:\n\nTrust fee income— 8,853 — — 8,853 \n\nService charges on deposit accounts8,991 — — — 8,991 \n\nInvestment advisory commission and fee income— 22,799 — — 22,799 \n\nInsurance commission and fee income— — 22,443 — 22,443 \n\nOther service fee income (2)10,635 262 41 — 10,938 \n\nBank owned life insurance income (1)5,723 — — 126 5,849 \n\nNet gain on mortgage banking activities (1)3,362 — — — 3,362 \n\nOther income (2)4,606 6 — 14 4,626 \n\nTotal noninterest income$33,317 $31,920 $22,484 $140 $87,861 \n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2024\n\nNet interest income (1)$220,204 $73 $— $(9,107)$211,170 \n\nNoninterest income:\n\nTrust fee income— 8,491 — — 8,491 \n\nService charges on deposit accounts8,082 — — — 8,082 \n\nInvestment advisory commission and fee income— 21,208 — — 21,208 \n\nInsurance commission and fee income— — 22,349 — 22,349 \n\nOther service fee income (2)14,415 210 122 — 14,747 \n\nBank owned life insurance income (1)3,739 — — 122 3,861 \n\nNet gain on sales of investment securities (1)18 — — — 18 \n\nNet gain on mortgage banking activities (1)5,265 — — — 5,265 \n\nOther income (2)3,961 — — 73 4,034 \n\nTotal noninterest income$35,480 $29,909 $22,471 $195 $88,055 \n\n(Dollars in thousands)BankingWealth ManagementInsuranceOtherConsolidated\n\nFor the Year Ended December 31, 2023\n\nNet interest income (1)$229,017 $67 $— $(9,087)$219,997 \n\nNoninterest income:\n\nTrust fee income— 7,732 — — 7,732 \n\nService charges on deposit accounts7,048 — — — 7,048 \n\nInvestment advisory commission and fee income— 18,864 — — 18,864 \n\nInsurance commission and fee income— — 21,043 — 21,043 \n\nOther service fee income (2)11,715 208 458 — 12,381 \n\nBank owned life insurance income (1)3,067 — — 118 3,185 \n\nNet gain on mortgage banking activities (1)3,689 — — — 3,689 \n\nOther income (2)2,895 — — (13)2,882 \n\nTotal noninterest income$28,414 $26,804 $21,501 $105 $76,824 \n\n116\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n(1)Net interest income as well as many other revenues for financial assets and liabilities including loans, leases, securities, and derivatives are excluded from the scope of FASB ASC 606 \"Revenue from Contracts with Customers\" (\"FASB ASC 606\"). Noninterest income streams that are out of scope of FASB ASC 606 include bank owned life insurance income, sales of investment securities and mortgage banking activities.\n\n(2)Other service fee income and other income include certain items that are in scope and certain items that are out of scope of FASB ASC 606 as described further in the following paragraphs.\n\nBanking Segment\n\nService charges on deposit accounts are generally earned on depository accounts for commercial and consumer customers and primarily includes fees for account services, overdraft and non-sufficient funds services, and cash management services for commercial customers. Account services include fees for event-driven services such as ATM transactions and fees for periodic account maintenance activities. Cash management services for commercial customers include fees for event-driven services such as lockbox processing and line sweep services and fees for periodic account maintenance activities. The Corporation's obligation for event-driven services is satisfied at the time of the event when the service is delivered, while the obligation for periodic services is satisfied over the course of each month. Obligations for overdraft services are satisfied at the time of the overdraft.\n\nOther service fee income is earned from commercial and consumer customers and primarily includes credit and debit card interchange and merchant revenues, mortgage servicing income, which is out of scope of FASB ASC 606, and other deposit related service fee income such as wire transfers, check services and safe deposit boxes. Interchange and merchant revenues are recognized concurrently with the delivery of services on a monthly basis. Other deposit related service fee income include fees for event-driven services, such as wire transfers and check services, and fees for periodic services such as safe deposit box services. The obligation for event-driven services is satisfied at the time of the event when the service is delivered, while the obligation for periodic services is satisfied over the course of each month.\n\nOther income primarily includes net gains or losses from the sales of loans and leases, net gains or losses from the sales or disposition of fixed assets and net gains or losses on interest rate swaps, all of which are out of scope of FASB ASC 606, and net gains or losses on sales and write-downs of other real estate owned. Net gains or losses on sales of other real estate owned are recognized at the point in time in which control of the other real estate owned is transferred.\n\nWealth Management Segment\n\nTrust fee income is earned for providing trust, investment management and other related services. Obligations for trust and other related services are generally satisfied over time but may be satisfied at points in time for certain activities that are transactional in nature and obligations for investment management services are generally performed over time. Fees for trust fee income are typically based on a tiered scale relative to the market value of assets under management and are recognized in conjunction with the delivery of services.\n\nInvestment advisory commission and fee income include fees for financial planning, guardian and custodian of employee benefits, investment advisory, and brokerage services. Obligations for financial planning, guardian and custodian of employee benefits, and investment advisory services are generally satisfied over time and fees, typically based on a tiered scale relative to the market value of assets under management, are recognized in conjunction with the delivery of services. Brokerage services are typically event driven and are based on the size and number of transactions executed at the client's direction and recognized on the trade date.\n\nInsurance Segment\n\nInsurance commission and fee income is derived primarily from commissions from the sale of insurance policies, which are generally calculated as a percentage of the policy premium, and contingent income, which is calculated based on the performance of the policies held by each carrier. Obligations for the sale of insurance policies are generally satisfied at the point in time which the policy is executed and are recognized at the point in time in which the amounts are known and collection is reasonably assured. Obligations for contingent income are generally satisfied over time and are recognized at the point in time in which the amounts are known and collection is reasonably assured.\n\nOther service fee income is earned from payroll and human resources consulting services. These obligations are generally satisfied over time and are recognized on a periodic basis.\n\n117\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\nNote 25. Condensed Financial Information - Parent Company Only\n\nCondensed financial statements of the Corporation, parent company only, follow:\n\n(Dollars in thousands)At December 31,\n\nBalance Sheets20252024\n\nAssets:\n\nCash$112,643 $132,643 \n\nCash and cash equivalents112,643 132,643 \n\nInvestments in subsidiaries, at equity in net assets:\n\nBank907,055 887,188 \n\nNon-banks5,090 — \n\nOther assets27,089 22,247 \n\nTotal assets$1,051,877 $1,042,078 \n\nLiabilities:\n\nSubordinated notes$98,867 $149,261 \n\nOther liabilities9,692 5,516 \n\nTotal liabilities108,559 154,777 \n\nShareholders' equity:943,318 887,301 \n\nTotal liabilities and shareholders' equity$1,051,877 $1,042,078 \n\n(Dollars in thousands)For the Years Ended December 31,\n\nStatements of Income202520242023\n\nDividends from Bank$98,826 $56,283 $18,386 \n\nDividends from non-bank— — — \n\nOther income28,137 24,754 25,000 \n\nTotal operating income126,963 81,037 43,386 \n\nInterest expense9,473 9,125 9,125 \n\nOperating expenses34,810 28,266 27,627 \n\nIncome before income tax benefit and equity in undistributed income of subsidiaries82,680 43,646 6,634 \n\nIncome tax benefit(3,546)(2,733)(2,751)\n\nIncome before equity in undistributed income of subsidiaries86,226 46,379 9,385 \n\nEquity in undistributed income of subsidiaries:\n\nBank4,441 29,552 61,719 \n\nNon-banks90 — — \n\nNet income$90,757 $75,931 $71,104 \n\n118\n\n[Table of Contents](#i6bbaaaf3878f49499ffe998dd81ccacb_7)\n\n(Dollars in thousands)For the Years Ended December 31,\n\nStatements of Cash Flows202520242023\n\nCash flows from operating activities:\n\nNet income$90,757 $75,931 $71,104 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nEquity in undistributed net income of subsidiaries(4,531)(29,552)(61,719)\n\nBank owned life insurance income(127)(122)(118)\n\nDepreciation of premises and equipment477 355 342 \n\nStock based compensation4,690 4,615 4,194 \n\nContributions to pension and other postretirement benefit plans(257)(243)(250)\n\nIncrease in other assets(5,115)(6,198)(4,526)\n\nIncrease in other liabilities8,617 8,999 2,975 \n\nNet cash provided by operating activities94,511 53,785 12,002 \n\nCash flow from investing activities:\n\nInvestments in subsidiaries(5,000)— — \n\nProceeds from sales of securities— 409 — \n\nOther, net(903)(199)(478)\n\nNet cash (used in) provided by investing activities(5,903)210 (478)\n\nCash flows from financing activities:\n\nProceeds from issuance of subordinated notes49,198 — — \n\nRepayment of subordinated debt(100,000)— — \n\nPayment for shares withheld to cover taxes on vesting of restricted stock units(1,611)(873)(1,232)\n\nPurchases of treasury stock(34,625)(18,882)(462)\n\nStock issued under dividend reinvestment and employee stock purchase plans2,316 2,384 2,565 \n\nProceeds from exercise of stock options1,448 3,195 115 \n\nCash dividends paid(25,334)(24,842)(25,050)\n\nNet cash used in by financing activities(108,608)(39,018)(24,064)\n\nNet (decrease) increase in cash and due from financial institutions(20,000)14,977 (12,540)\n\nCash and cash equivalents at beginning of year132,643 117,666 130,206 \n\nCash and cash equivalents at end of period$112,643 $132,643 $117,666"}