Loans and Leases Held for Investment and Credit Quality

3 Months Ended

Mar. 31, 2026

Loans and Leases Held for Investment and Credit Quality

The following tables present total loans and leases held for investment and an aging analysis for the Company’s portfolio segments. Loans and leases are considered past due if the required principal and interest payments have not been received as of the date such payments were due.


	Current or Less than 30 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option (1)		Total Loans and Leases
March 31, 2026
Commercial & Industrial
Small Business Banking	$	2,385,254	$	29,234	$	127,717	$	156,951	$	2,542,205	$	79,425	$	2,621,630
Commercial Banking	2,997,549		4,298		38,053		42,351		3,039,900		40,011		3,079,911

Total	5,382,803		33,532		165,770		199,302		5,582,105		119,436		5,701,541
Construction & Development
Small Business Banking	705,561		2,072		2,561		4,633		710,194		—		710,194
Commercial Banking	70,974		—		—		—		70,974		—		70,974
Total	776,535		2,072		2,561		4,633		781,168		—		781,168
Commercial Real Estate
Small Business Banking	3,474,441		30,573		90,179		120,752		3,595,193		87,717		3,682,910
Commercial Banking	1,273,900		7,920		27,671		35,591		1,309,491		13,490		1,322,981
Total	4,748,341		38,493		117,850		156,343		4,904,684		101,207		5,005,891
Commercial Land
Small Business Banking	677,434		2,140		3,279		5,419		682,853		24,297		707,150

Total	677,434		2,140		3,279		5,419		682,853		24,297		707,150
Total	$	11,585,113	$	76,237	$	289,460	$	365,697	$	11,950,810	$	244,940	$	12,195,750
Retained Loan Discount and Net Deferred Costs													$	(37,534)
Loans and Leases, Net													$	12,158,216

Guaranteed Balance	$	2,972,452	$	44,866	$	231,802	$	276,668	$	3,249,120	$	67,614	$	3,316,734
% Guaranteed	25.7%		58.9%		80.1%		75.7%		27.2%		27.6%		27.2%


	Current or Less than 30 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option (1)		Total Loans and Leases
December 31, 2025
Commercial & Industrial
Small Business Banking	$	2,370,184	$	23,406	$	127,090	$	150,496	$	2,520,680	$	87,532	$	2,608,212
Commercial Banking	2,833,724		9		112		121		2,954,283		41		2,995,115


Total	5,203,908		32,108		238,947		271,055		5,474,963		128,364		5,603,327
Construction & Development
Small Business Banking	749,117		—		1,025		1,025		750,142		—		750,142
Commercial Banking	69,538		—		—		—		69,538		—		69,538

Total	818,655		—		1,025		1,025		819,680		—		819,680
Commercial Real Estate
Small Business Banking	3,267,787		12,640		88,089		100,729		3,368,516		91,876		3,460,392
Commercial Banking	1,383,615		4,613		23,257		27,870		1,411,485		15,912		1,427,397
Total	4,651,402		17,253		111,346		128,599		4,780,001		107,788		4,887,789
Commercial Land
Small Business Banking	670,725		—		3,840		3,840		674,565		24,473		699,038
Total	670,725		—		3,840		3,840		674,565		24,473		699,038
Total	$	11,344,690	$	49,361	$	355,158	$	404,519	$	11,749,209	$	260,625	$	12,009,834
Retained Loan Discount and Net Deferred Costs													$	(36,212)

Loans and Leases, Net													$	11,973,622

Guaranteed Balance	$	2,974,552	$	33,597	$	301,737	$	335,334	$	3,309,886	$	69,445	$	3,379,331
% Guaranteed	26.2%		68.1%		85.0%		82.9%		28.2%		26.6%		28.1%


(1)			Retained portions of government guaranteed loans sold prior to January 1, 2021 are carried at fair value under FASB ASC Subtopic 825-10, Financial Instruments: Overall. See Note 7. Fair Value of Financial Instruments for additional information.

Credit Quality Indicators

The following tables present asset quality indicators by portfolio class and origination year. See Note 3. Loans and Leases Held for Investment and Credit Quality in the Company’s 2025 Form 10-K for additional discussion around the asset quality indicators that the Company uses to manage and monitor credit risk.


	Term Loans and Leases Amortized Cost Basis by Origination Year
	2026		2025		2024		2023		2022		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total (1)
March 31, 2026
Small Business Banking
Pass	$	321,192	$	1,625,580	$	1,213,414	$	889,433	$	927,780	$	1,459,411	$	168,292	$	47,640	$	6,652,742
Special Mention	300		19,060		71,508		63,721		120,549		129,151		13,045		3,937		421,271
Substandard	—		32,542		69,217		82,384		109,558		138,067		22,311		2,353		456,432
Total	321,492		1,677,182		1,354,139		1,035,538		1,157,887		1,726,629		203,648		53,930		7,530,445
Commercial Banking
Pass	242,374		1,354,678		766,280		379,858		225,877		194,580		597,731		202,423		3,963,801
Special Mention	—		13,013		63,444		95,976		74,633		42,506		18,844		13,027		321,443
Substandard	—		19,207		8,339		—		23,581		52,368		21,718		9,908		135,121
Total	242,374		1,386,898		838,063		475,834		324,091		289,454		638,293		225,358		4,420,365



Total	$	563,866	$	3,064,080	$	2,192,202	$	1,511,372	$	1,481,978	$	2,016,083	$	841,941	$	279,288	$	11,950,810

Year-To-Date Gross Charge-offs
Small Business Banking	$	—	$	1,524	$	3,993	$	6,085	$	1,471	$	6,179	$	1,216	$	254	$	20,722
Commercial Banking	—		—		—		—		—		155		1,107		—		1,262
Total	$	—	$	1,524	$	3,993	$	6,085	$	1,471	$	6,334	$	2,323	$	254	$	21,984


	Term Loans and Leases Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total (1)
December 31, 2025
Small Business Banking
Pass	$	1,513,435	$	1,245,114	$	936,083	$	1,000,904	$	828,468	$	738,567	$	154,210	$	42,701	$	6,458,577
Special Mention	17,102		68,453		64,411		93,132		50,885		80,251		8,763		6,721		389,718
Substandard	30,291		63,432		75,658		115,556		73,330		81,077		23,591		1,768		464,703
Total	1,560,828		1,376,999		1,076,152		1,209,592		952,683		899,895		186,564		51,190		7,312,997
Commercial Banking
Pass	1,434,615		763,382		405,425		248,636		150,616		105,386		581,047		210,917		3,900,024
Special Mention	18,187		73,787		79,971		79,401		40,071		17,734		12,627		15,743		337,521
Substandard	9,000		5,419		—		23,919		107,596		30,552		14,562		6,713		197,761
Total	1,461,802		842,588		485,396		351,956		298,283		153,672		608,236		233,373		4,435,306



Total	$	3,022,630	$	2,219,587	$	1,561,548	$	1,561,548	$	1,250,966	$	1,053,567	$	794,800	$	284,563	$	11,749,209

Year-To-Date Gross Charge-offs
Small Business Banking	$	3,472	$	5,518	$	14,763	$	12,693	$	5,188	$	5,453	$	4,352	$	2,523	$	53,962
Commercial Banking	—		—		—		3,386		9,772		171		337		6,547		20,213
Total	$	3,472	$	5,518	$	14,763	$	16,079	$	14,960	$	5,624	$	4,689	$	9,070	$	74,175


(1)			Excludes $244.9 million and $260.6 million of loans accounted for under the fair value option as of March 31, 2026 and December 31, 2025, respectively.

The following tables present guaranteed and unguaranteed loan and lease balances by asset quality indicator:


March 31, 2026	Loan and Lease Balance (1)		Guaranteed Balance		Unguaranteed Balance		% Guaranteed
Pass	$	10,616,543	$	2,595,739	$	8,020,804	24.4	%
Special Mention	742,714		280,454		462,260		37.8
Substandard	591,553		372,928		218,625		63.0
Total	$	11,950,810	$	3,249,121	$	8,701,689	27.2	%


December 31, 2025	Loan and Lease Balance (1)		Guaranteed Balance		Unguaranteed Balance		% Guaranteed
Pass	$	10,359,506	$	2,590,030	$	7,769,476	25.0	%
Special Mention	727,239		261,506		465,733		36.0
Substandard	662,464		458,350		204,114		69.2
Total	$	11,749,209	$	3,309,886	$	8,439,323	28.2	%


(1)			Excludes $244.9 million and $260.6 million of loans accounted for under the fair value option as of March 31, 2026 and December 31, 2025, respectively.

Nonaccrual Loans and Leases

As of March 31, 2026 and December 31, 2025 there were no loans greater than 90 days past due and still accruing. There was no interest income recognized on nonaccrual loans and leases during the three months ended March 31, 2026 and 2025. Accrued interest receivable on loans totaled $83.8 million and $85.0 million at March 31, 2026 and December 31, 2025, respectively, and is included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Nonaccrual loans and leases held for investment as of March 31, 2026 and December 31, 2025 are as follows:


March 31, 2026	Loan and Lease Balance (1)		Guaranteed Balance		Unguaranteed Balance		Unguaranteed Exposure with No ACL
Commercial & Industrial
Small Business Banking	$	190,033	$	168,255	$	21,778	$	13,234
Commercial Banking	54,641		29,936		24,705		19,378
Total	244,674		198,191		46,483		32,612
Construction & Development
Small Business Banking	12,915		10,481		2,434		1,042
Total	12,915		10,481		2,434		1,042
Commercial Real Estate
Small Business Banking	146,514		103,341		43,173		25,483
Commercial Banking	35,591		11,274		24,317		16,397
Total	182,105		114,615		67,490		41,880
Commercial Land
Small Business Banking	4,506		4,122		384		145
Total	4,506		4,122		384		145
Total	$	444,200	$	327,409	$	116,791	$	75,679


December 31, 2025	Loan and Lease Balance (1)		Guaranteed Balance		Unguaranteed Balance		Unguaranteed Exposure with No ACL
Commercial & Industrial
Small Business Banking	$	195,342	$	169,818	$	25,524	$	7,438

Commercial Banking	122,847		111,103		11,744		2,142
Total	318,189		280,921		37,268		9,580
Construction & Development
Small Business Banking	13,282		10,620		2,662		1,342
Total	13,282		10,620		2,662		1,342
Commercial Real Estate
Small Business Banking	127,141		91,099		36,042		17,207

Commercial Banking	36,098		11,454		24,644		16,417
Total	163,239		102,553		60,686		33,624
Commercial Land
Small Business Banking	6,447		5,692		755		533
Total	6,447		5,692		755		533
Total	$	501,157	$	399,786	$	101,371	$	45,079


(1)			Excludes loans accounted for under the fair value option. See Note 7. Fair Value of Financial Instruments for additional information.

When a loan or lease is placed on nonaccrual status, any accrued interest is reversed from loan interest income. The following table summarizes the amount of accrued interest reversed during the periods presented:


	Three Months Ended March 31,
	2026 (1)		2025 (1)
Commercial & Industrial	$	886	$	444
Commercial Real Estate	392		490
Commercial Land	19		—
Construction & Development	215		—
Total	$	1,512	$	934


(1)			Excludes loans accounted for under the fair value option. See Note 7. Fair Value of Financial Instruments for additional information.

The following table presents the amortized cost basis of collateral-dependent loans and leases, which are individually evaluated to determine expected credit losses, as of March 31, 2026 and December 31, 2025:


	Total Collateral-Dependent Loans				Unguaranteed Portion
March 31, 2026	Real Estate		Business Assets		Real Estate		Business Assets		Allowance for Credit Losses
Commercial & Industrial
Small Business Banking	$	22,421	$	7,991	$	6,252	$	3,476	$	50

Commercial Banking	—		22,619		—		17,661		—
Total	22,421		30,610		6,252		21,137		50
Construction & Development
Small Business Banking	96		—		96		—		11
Total	96		—		96		—		11
Commercial Real Estate
Small Business Banking	112,163		—		38,070		—		322
Commercial Banking	27,754		5,098		24,063		314		7
Total	139,917		5,098		62,133		314		329



Total	$	162,434	$	35,708	$	68,481	$	21,451	$	390


	Total Collateral-Dependent Loans				Unguaranteed Portion
December 31, 2025	Real Estate		Business Assets			Real Estate		Business Assets		Allowance for Credit Losses
Commercial & Industrial
Small Business Banking	$	17,477	$	4,107		$	4,937	$	374	$	824
Commercial Banking	—		87,319			—		3,744		600
Total	17,477		91,426			4,937		4,118		1,424
Construction & Development
Small Business Banking	277		—			277		—		—
Total	277		—			277		—		—
Commercial Real Estate
Small Business Banking	85,987		1,990			27,813		690		266
Commercial Banking	20,389		—			15,425		—		—
Total	106,376		1,990			43,238		690		266
Total	$	124,130	$	93,416		$	48,452	$	4,808	$	1,690

Allowance for Credit Losses - Loans and Leases

See Note 1. Basis of Presentation above for a description of enhancements made to the ACL during the first quarter of 2026 and Note 1. Organization and Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Company’s 2025 Form 10-K for a description of the methodologies used to estimate the ACL prior to January 1, 2026.

The following table details activity in the ACL by portfolio segment allowance for the periods presented:


Three Months Ended	Commercial & Industrial		Construction & Development		Commercial Real Estate		Commercial Land		Total
March 31, 2026
Beginning Balance	$	144,188	$	7,224	$	37,362	$	3,490	$	192,264
Charge offs	(18,657)		(209)		(3,118)		—		(21,984)
Recoveries	2,971		50		378		—		3,399
Provision	10,709		409		9,921		(1,439)		19,600
Ending Balance	$	139,211	$	7,474	$	44,543	$	2,051	$	193,279
March 31, 2025
Beginning Balance	$	129,007	$	4,943	$	29,501	$	4,065	$	167,516
Charge offs	(5,987)		—		(936)		—		(6,923)
Recoveries	40		—		91		18		149
Provision	26,856		769		1,639		178		29,442
Ending Balance	$	149,916	$	5,712	$	30,295	$	4,261	$	190,184

During the three months ended March 31, 2026, the ACL increased primarily as a result of loan growth and charge off impacts amid a challenging macroeconomic environment, where elevated interest rates and inflationary pressures have placed financial strain on some small business and commercial borrowers. Loss rates are adjusted for multiple two year forecasted economic variables followed by a twelve-month straight-line reversion period.

During the three months ended March 31, 2025, the ACL increased as a result of loan growth amid a challenging macroeconomic environment which included specific reserve changes on individually evaluated loans. Loss rates are adjusted for twelve month forecasted unemployment followed by a twelve-month straight-line reversion period.

Loan Modifications for Borrowers Experiencing Financial Difficulty

The Company may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness.

The following tables summarize the amortized cost basis of loans that were modified during the three months ended March 31, 2026 and March 31, 2025, respectively:


Three Months Ended March 31, 2026	Other-Than-Insignificant Payment Delay		Term Extension		Interest Rate Reduction		Combination - Other-Than-Insignificant Payment Delay & Interest Rate Reduction		Combination - Term Extension & Interest Rate Reduction		Total Modifications		% of Total Class of Financing Receivable
Small Business Banking	$	6,837	$	13,610	$	13,127	$	7,774	$	1,141	$	42,489	0.56	%
Commercial Banking	738		—		—		—		—		738		0.02
Total	$	7,575	$	13,610	$	13,127	$	7,774	$	1,141	$	43,227	0.58	%


Three Months Ended March 31, 2025	Term Extension		Interest Rate Reduction		Combination - Term Extension, Other-Than-Insignificant Payment Delay & Interest Rate Reduction		Combination - Term Extension & Other-Than-Insignificant Payment Delay		Combination - Term Extension & Interest Rate Reduction		Total Modifications		% of Total Class of Financing Receivable
Small Business Banking	$	3,601	$	2,243	$	3,057	$	3,009	$	193	$	12,103	0.20	%

Total	$	3,601	$	2,243	$	3,057	$	3,009	$	193	$	12,103	0.20	%

As of March 31, 2026, the Company had commitments to lend additional funds to these borrowers totaling $698 thousand. As of March 31, 2025, the Company had commitments to lend additional funds to these borrowers totaling $28 thousand.

The following table presents an aging analysis of loans that were modified within the twelve months ended March 31, 2026 and March 31, 2025, respectively:


March 31, 2026	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due
Small Business Banking	$	117,347	$	3,287	$	390	$	3,677
Commercial Banking	6,121		—		—		—

Total	$	123,468	$	3,287	$	390	$	3,677


March 31, 2025	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due
Small Business Banking	$	17,644	$	—	$	2,243	$	2,243
Commercial Banking	17,576		—		—		—

Total	$	35,220	$	—	$	2,243	$	2,243

The following tables summarize the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the periods presented:


	Three Months Ended March 31, 2026
	Weighted Average Interest Rate Reduction		Weighted Average Term Extension (in Months)

Small Business Banking	5.99	%	37


	Three Months Ended March 31, 2025
	Weighted Average Interest Rate Reduction		Weighted Average Term Extension (in Months)
Small Business Banking	1.81	%	44

The following table presents the loans that were modified during the preceding twelve months and subsequently defaulted during the period.


Three Months Ended March 31, 2026	Other-Than-Insignificant Payment Delay		Term Extension		Interest Rate Reduction		Total
Small Business Banking	$	4,997	$	—	$	—	$	4,997
Commercial Banking	—		2,336		—		2,336

Total	$	4,997	$	2,336	$	—	$	7,333

At March 31, 2025, there were no loans that defaulted after being modified during the preceding twelve months.

The Company’s ACL is estimated using lifetime historical loan performance adjusted to reflect current conditions and reasonable and supportable forecasts. Upon determination that a modified loan, or portion of a modified loan, has subsequently been deemed uncollectible, the uncollectible portion is written off. The amortized cost basis is reduced by the uncollectible amount and the ACL is adjusted by the same amount. As a result, the impact of loss mitigation strategies is captured in the estimates of PD and LGD.