v3.25.4
BORROWINGS AND BORROWING CAPACITY
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
BORROWINGS AND BORROWING CAPACITY BORROWINGS AND BORROWING CAPACITY
FHLB Advances
FHLB advances are collateralized by assets, including a blanket pledge of certain loans. FHLB advances and weighted average interest rates at end of period by contractual maturity are summarized as follows:
Fixed RateVariable Rate
(Dollars in thousands)Balance OutstandingWeighted Average Interest RateBalance OutstandingWeighted Average Interest Rate
2026$250,000 3.62 %$— — %
2027— — %$30,000 4.07 %
$250,000 3.62 %$30,000 4.07 %
Information concerning FHLB advances is summarized as follows:
(Dollars in thousands)December 31,
2025		December 31,
2024
Amount outstanding at end of the year$280,000 $30,000 
Weighted average interest rate at end of the year3.67 %4.79 %
Average daily balance during the year$208,014 $120,369 
Weighted average interest rate during the year4.35 %5.38 %
Maximum month-end balance during the year$355,000 $280,000 
The Company’s unused borrowing capacity with the FHLB is as follows:
(Dollars in thousands)December 31,
2025		December 31,
2024
Borrowing capacity$924,663 $849,134 
Borrowings outstanding(280,000)(30,000)
Unused borrowing capacity$644,663 $819,134 
Federal Funds Purchased
The Company had no federal funds purchased at December 31, 2025 and 2024. However, as of December 31, 2025, the Company had unsecured federal funds lines of credit with seven unaffiliated banks totaling $227,500,000.
Federal Reserve Bank Discount Window
The Company has entered into agreements with the Federal Reserve Bank of Dallas to borrow from its discount window. The Company had no Federal Reserve Bank discount window borrowings outstanding at December 31, 2025 and 2024. At December 31, 2025, the Company had $600,443,000 of unused borrowing capacity from the Federal Reserve Bank discount window, to which the Company pledged loans with an outstanding balance of $800,534,000.
Subordinated Notes
On November 27, 2019, the Company issued $39,500,000 of Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2019 Notes”). The 2019 Notes initially incurred interest at 4.875% per annum, payable semi-annually in arrears, to, but excluding, November 27, 2024. The 2019 Notes were redeemed on November 27, 2024 at a redemption price equal to the outstanding principal amount of the 2019 Notes plus accrued and unpaid interest to, but excluding, the date of redemption.
On August 26, 2021, the Company issued $70,000,000 of Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2021 Notes”). The 2021 Notes initially bear interest at 3.500% per annum, payable semi-annually in arrears, to, but excluding, September 1, 2026, and, thereafter and to, but excluding, the maturity date or earlier redemption, interest shall be payable quarterly in arrears, at an annual floating rate equal to a benchmark rate, initially three-month SOFR, as determined for the applicable quarterly period, plus 2.860%. The Company may, at its option, beginning on September 1, 2026 and on any scheduled interest payment date thereafter, redeem the 2021 Notes, in whole or in part, at a redemption price equal to the outstanding principal amount of the 2021 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption.
The Subordinated Notes are included on the consolidated balance sheets as liabilities at their carrying values; however, for regulatory purposes, the $69,879,000 and $69,662,000 carrying value of these obligations at December 31, 2025 and 2024, respectively, were eligible for inclusion in Tier 2 regulatory capital. At the beginning of each of the last five years of the life of the Subordinated Notes, the amount eligible to be included in Tier 2 regulatory capital will be reduced by 20%.
Issuance costs related to the Subordinated Notes have been netted against the subordinated notes liability on the balance sheet. The debt issuance costs are being amortized using the effective interest method through maturity and recognized as a component of interest expense.
The Subordinated Notes are subordinated in right of payment to the Company’s existing and future senior indebtedness and are structurally subordinated to the Company’s subsidiaries’ existing and future indebtedness and other obligations.
Junior Subordinated Debentures
The following provides a summary of the Company’s junior subordinated debentures:
(Dollars in thousands)Face ValueCarrying ValueMaturity DateVariable
Interest Rate		Interest Rate At December 31, 2025
National Bancshares Capital Trust II$15,464 $13,943 September 2033
Three Month SOFR + 3.26%
6.98%
National Bancshares Capital Trust III17,526 14,132 July 2036
Three Month SOFR + 1.64%
5.81%
ColoEast Capital Trust I5,155 4,010 September 2035
Three Month SOFR + 1.86%
5.55%
ColoEast Capital Trust II6,700 5,151 March 2037
Three Month SOFR + 2.05%
5.74%
Valley Bancorp Statutory Trust I3,093 2,953 September 2032
Three Month SOFR + 3.66%
7.35%
Valley Bancorp Statutory Trust II3,093 2,802 July 2034
Three Month SOFR + 3.01%
6.72%
$51,031 $42,991 
These debentures are unsecured obligations due to trusts that are unconsolidated subsidiaries. The debentures were issued in conjunction with the trusts’ issuances of obligated capital securities. The trusts used the proceeds from the issuances of their capital securities to buy floating rate junior subordinated deferrable interest debentures that bear the same interest rate and terms as the capital securities. These debentures are the trusts’ only assets and the interest payments from the debentures finance the distributions paid on the capital securities. These debentures rank junior and are subordinate in the right of payment to all other debt of the Company.
As part of the purchase accounting adjustments made with the National Bancshares, Inc. acquisition on October 15, 2013, the ColoEast acquisition on August 1, 2016, and the Valley acquisition on December 9, 2017, the Company adjusted the carrying value of the junior subordinated debentures to fair value as of the respective acquisition dates. The discount on the debentures will continue to be amortized through maturity and recognized as a component of interest expense.
The debentures may be called by the Company at par plus any accrued but unpaid interest. Interest on the debentures is calculated quarterly. The distribution rate payable on the capital securities is cumulative and payable quarterly in arrears. The Company has the right to defer payments on interest on the debentures at any time by extending the interest payment period for a period not exceeding 20 consecutive quarters with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures.
The debentures are included on the consolidated balance sheet as liabilities; however, for regulatory purposes, the carrying value of these obligations are eligible for inclusion in Tier I regulatory capital, subject to certain limitations. All of the carrying value of $42,991,000 and $42,352,000 was allowed in the calculation of Tier I regulatory capital as of December 31, 2025 and 2024, respectively.