The following discussion is intended to assist in understanding the financial condition and results of operations of the Company as of and for the three and six months ended June 30, 2026. The information contained in this section should be read together with the unaudited Condensed Consolidated Financial Statements and the accompanying Notes included herein, the Cautionary Note Regarding Forward-Looking Statements included herein and the December 31, 2025 audited Consolidated Financial Statements, and the accompanying Notes included in our 2025 Annual Form 10-K. Overview Heritage Financial Corporation is a bank holding company that was incorporated in the State of Washington in August 1997. We are primarily engaged in the business of planning, directing, and coordinating the business activities of our wholly-owned subsidiary and single reportable segment, Heritage Bank. Heritage Bank is headquartered in Olympia, Washington and conducts business from its branch offices located throughout Washington State, the greater Portland, Oregon area, Eugene, Oregon and Boise, Idaho as of June 30, 2026. Heritage Bank also does business under the Whidbey Island Bank name on Whidbey Island, Washington and does business under the Kitsap Bank name for certain branches acquired in the Olympic Merger. Our business consists primarily of commercial lending and deposit relationships with small- to medium-sized businesses and their owners in our market areas, as well as attracting deposits from the general public. We also make real estate construction and land development loans, consumer loans and residential real estate loans on single family properties located primarily in our markets. Our core profitability depends primarily on our net interest income. Net interest income is the difference between interest income, which is the income that we earn on interest earning assets, consisting primarily of loans and investment securities, and interest expense, which is the amount we pay on our interest bearing liabilities, consisting primarily of deposits and borrowings. Management manages the repricing characteristics of the Company's interest earning assets and interest bearing liabilities to protect net interest income from changes in market interest rates and changes in the shape of the yield curve. Like most financial institutions, our net interest income is significantly affected by general and local economic conditions, particularly changes in market interest rates, and by governmental policies and actions of regulatory agencies. Net interest income is additionally affected by changes in the volume and mix of interest earning assets, interest earned on these assets, the volume and mix of interest bearing liabilities and interest paid on these liabilities. Our net income is affected by many factors, including the provision for credit losses on loans. The provision for credit losses on loans is dependent on changes in the loan portfolio and management’s assessment of the collectability of the loan portfolio, as 41 Table of Contents well as prevailing economic and market conditions. Management believes that the ACL on loans reflects the amount that is appropriate to provide for current expected credit losses in our loan portfolio based on the CECL methodology. Net income is also affected by noninterest income and noninterest expense. Noninterest income primarily consists of gains or losses on the sale of investment securities, service charges and other fees, card revenue and other income. Noninterest expense primarily consists of compensation and employee benefits, occupancy and equipment, data processing and professional services expense. Compensation and employee benefits consist primarily of the salaries and wages paid to our employees and payroll taxes and expenses for retirement and other employee benefits. Occupancy and equipment expenses are the fixed and variable costs of buildings and equipment and consist primarily of lease expenses, depreciation charges, maintenance and utilities. Data processing expense consists primarily of processing and network services related to the Bank’s core operating system, including the account processing system, electronic payments processing of products and services, internet and mobile banking channels and software-as-a-service providers. Professional services expense consists primarily of third-party service providers such as auditors, consultants and lawyers. Results of operations may also be significantly affected by general and local economic and competitive conditions, changes in accounting, tax, and regulatory rules, governmental policies and actions of regulatory authorities, including changes resulting from inflation and the governmental actions taken to address this issue, as well as changes in policies driven by the presidential administration, including policies on tariffs and immigration, which may impact our operations or those of our customers. Net income is also impacted by our ability to execute our strategic plan to grow the Company through organic growth or acquisitions. See also "Cautionary Note Regarding Forward-Looking Statements." Recent Acquisition On January 31, 2026, the Company completed its acquisition of Olympic, a bank holding company headquartered in Port Orchard, Washington, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2025, by and between the Company and Olympic (the "merger agreement"), whereby Olympic merged with and into the Company, and Kitsap Bank, Olympic's wholly-owned banking subsidiary, merged with and into the Bank. Pursuant to the terms of the merger agreement, Olympic shareholders received 45.0 shares of Heritage common stock for each share of Olympic capital stock based on a fixed exchange ratio. Olympic's principal activity was the ownership and operation of Kitsap Bank, a state-chartered banking institution that operated sixteen branches in Washington at the time of closing. The merger consideration, consisting of 7,167,600 shares of Heritage common stock, totaled approximately $185.0 million, based on the closing price of Heritage common stock on January 30, 2026 (the trading day immediately preceding the completion of the acquisition), as reported on the Nasdaq Global Select Market. The Company accounted for the transaction under the acquisition method of accounting, and thus, the financial position and results of operations of acquired institutions prior to the consummation date are not included in the accompanying consolidated financial statements. The acquisition method of accounting requires assets purchased and liabilities assumed to be recorded at their respective fair values at the date of acquisition. The Company determines the fair value of core deposit intangibles, securities, premises and equipment, loans, other assets and liabilities, deposits and borrowings with the assistance of third party valuations, appraisals, and third party advisors. The estimated fair values are subject to refinement for up to one year after deal consummation as additional information becomes available relative to the closing date fair values. Results of Operations Net Income Comparison of the quarter ended June 30, 2026 to the comparable quarter in the prior year Net income increased $5.3 million, or 43.6%, to $17.5 million, or $0.42 per diluted common share, for the three months ended June 30, 2026, compared to $12.2 million, or $0.36 per diluted common share, for the same period in 2025. The increase in net income was due primarily to a $19.8 million increase in net interest income and a $7.8 million increase in noninterest income. Net interest income increased primarily due to an increase in average interest earning assets, which increased substantially as a result of the Merger. Noninterest income increased due to a $6.9 million pre-tax loss on the sale of investment securities recognized during the three months ended June 30, 2025, compared to a $217,000 pre-tax loss on the sale of investment securities recognized during the three months ended June 30, 2026. These improvements were partially offset by a $23.2 million increase in noninterest expense primarily due to expenses associated with the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Comparison of the six months ended June 30, 2026 to the comparable period in the prior year. Net income increased $10.4 million, or 39.7%, to $36.5 million, or $0.90 per diluted common share, for the six months ended June 30, 2026, compared to $26.1 million, or $0.76 per diluted common share, for the same period in 2025. The increase in net income was due primarily to a $32.5 million increase in total interest income and a $12.6 million increase in noninterest income. Net interest income increased primarily due to an increase in average interest earning assets, which increased substantially as a result of the Merger. Noninterest income increased due to a $10.7 million pre-tax loss on the sale of investment securities recognized during the six months ended June 30, 2025, compared to a $217,000 pre-tax loss on the sale of investment securities recognized during the six months ended June 30, 2026. 42 Table of Contents These improvements were partially offset by a $38.4 million increase in noninterest expense primarily due to expenses associated with the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Net Interest Income and Margin One of the Company's key sources of revenue is net interest income. Several factors affect net interest income, including, but not limited to: the volume, pricing, mix and maturity of interest earning assets and interest bearing liabilities; the volume of noninterest earning assets, noninterest bearing demand deposits, other noninterest bearing liabilities and stockholders' equity; market interest rate fluctuations; and asset quality. Comparison of the quarter ended June 30, 2026 to the comparable quarter in the prior year The following table provides net interest income information for the periods indicated: Three Months Ended June 30, 2026 2025 Change AverageBalance(1) Interest Earned/ Paid AverageYield/Rate(1) AverageBalance(1) Interest Earned/ Paid AverageYield/Rate(1) AverageBalance(1) Interest Earned/ Paid Average Yield/ Rate(1) (Dollars in thousands) Interest Earning Assets: Loans receivable (2)(3) $ 5,740,927 $ 81,935 5.72 % $ 4,768,558 $ 65,373 5.50 % $ 972,369 $ 16,562 0.22 % Taxable securities 1,635,979 14,464 3.55 1,374,770 11,579 3.38 261,209 2,885 0.17 Nontaxable securities (3) 15,439 128 3.33 15,294 137 3.59 145 (9) (0.26) Interest earning deposits 124,969 1,147 3.68 127,687 1,411 4.43 (2,718) (264) (0.75) Total interest earning assets 7,517,314 97,674 5.21 % 6,286,309 78,500 5.01 % 1,231,005 19,174 0.20 % Noninterest earning assets 920,006 760,634 159,372 Total assets $ 8,437,320 $ 7,046,943 $ 1,390,377 Interest Bearing Liabilities: Certificates of deposit $ 1,090,406 $ 8,817 3.24 % $ 979,997 $ 9,349 3.83 % $ 110,409 $ (532) (0.59) % Savings accounts 591,458 348 0.24 425,703 288 0.27 165,755 60 (0.03) Interest bearing demand and money market accounts 3,444,901 12,226 1.42 2,770,352 10,513 1.52 674,549 1,713 (0.10) Total interest bearing deposits 5,126,765 21,391 1.67 4,176,052 20,150 1.94 950,713 1,241 (0.27) Junior subordinated debentures 22,455 431 7.70 22,165 472 8.54 290 (41) (0.84) Borrowings 105,131 1,036 3.95 245,663 2,895 4.73 (140,532) (1,859) (0.78) Total interest bearing liabilities 5,254,351 22,858 1.74 % 4,443,880 23,517 2.12 % 810,471 (659) (0.38) % Noninterest bearing demand deposits 1,973,038 1,602,987 370,051 Other noninterest bearing liabilities 97,753 120,268 (22,515) Stockholders’ equity 1,112,178 879,808 232,370 Total liabilities and stock-holders’ equity $ 8,437,320 $ 7,046,943 $ 1,390,377 Net interest income and spread $ 74,816 3.47 % $ 54,983 2.89 % $ 19,833 0.58 % Net interest margin 3.99 % 3.51 % 0.48 % (1) Average balances are calculated using daily balances. Average yield/rate is annualized. (2) Average loans receivable includes loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable includes the amortization of net deferred loan fees of $1.1 million and $898,000 for the three months ended June 30, 2026 and 2025, respectively, and the incremental accretion on purchased loans of $1.8 million and $76,000 for the three months ended June 30, 2026 and 2025, respectively. (3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis. 43 Table of Contents The following table provides the changes in net interest income for the three months ended June 30, 2026 compared to the same period in 2025, due to changes in average asset and liability balances (volume), changes in average yields/rates (rate) and changes attributable to the combined effect of volume and rates allocated proportionately to the absolute value of changes due to volume and changes due to rates: Increase (Decrease) Due to Changes In: Volume Yield/Rate Total (Dollars in thousands) Interest Earning Assets: Loans receivable $ 13,786 $ 2,776 $ 16,562 Taxable securities 2,287 598 2,885 Nontaxable securities 1 (10) (9) Interest earning deposits (29) (235) (264) Total interest income $ 16,045 $ 3,129 $ 19,174 Interest Bearing Liabilities: Certificates of deposit $ 985 $ (1,517) $ (532) Savings accounts 102 (42) 60 Interest bearing demand and money market accounts 2,429 (716) 1,713 Total interest bearing deposits 3,516 (2,275) 1,241 Junior subordinated debentures 6 (47) (41) Borrowings (1,445) (414) (1,859) Total interest expense $ 2,077 $ (2,736) $ (659) Net interest income $ 13,968 $ 5,865 $ 19,833 Net interest income increased $19.8 million, or 36.1%, to $74.8 million for the three months ended June 30, 2026, compared to $55.0 million for the same period in 2025, due primarily to a $19.2 million increase in total interest income and a $0.7 million decrease in total interest expense. The increase in net interest income was primarily due to an increase in average interest earning assets, which increased substantially as a result of the Merger. Net interest margin increased 48 basis points to 3.99% for the three months ended June 30, 2026, compared to 3.51% for the same period in 2025. The increase in net interest margin was due primarily to an increase in both the average loan balance and loan yield as a result of the Merger. The yield on interest earning assets increased 20 basis points to 5.21% for the three months ended June 30, 2026, compared to 5.01% for the same period in 2025. The yield on loans receivable increased 22 basis points to 5.72% during the three months ended June 30, 2026, compared to 5.50% for the same period in 2025. The increase was due primarily to the incremental accretion on purchased loans which contributed 12 basis points to loan yield during the three months ended June 30, 2026. The incremental accretion and the impact to loan yield will change during any period based on the volume of prepayments, but is expected to decrease over time as the balance of the purchased loans decreases. 44 Table of Contents The following table presents the net interest margin and loan yield and the effect of the incremental accretion on purchased loans on these ratios for the periods indicated: Three Months Ended June 30, 2026 2025 Net Interest Margin, excluding incremental accretion on purchased loans, annualized: Net interest margin 3.99 % 3.51 % Exclude impact from incremental accretion on purchased loans(2) (0.09) % (0.01) % Net interest margin, excluding incremental accretion on purchased loans(1) 3.90 % 3.50 % Loan yield, excluding incremental accretion on purchased loans, annualized: Loan yield 5.72 % 5.50 % Exclude impact from incremental accretion on purchased loans(2) (0.12) (0.01) Loan yield, excluding incremental accretion on purchased loans(1) 5.60 % 5.49 % Incremental accretion on purchased loans(1) $ 1,772 $ 76 (1) Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" section for a reconciliation to the comparable GAAP financial measure. (2) Represents the amount of interest income recorded on purchased loans in excess of the contractual stated interest rate in the individual loan notes due to incremental accretion of purchased discount or premium. Purchased discount or premium is the difference between the contractual loan balance and the fair value of acquired loans at the acquisition date. The purchased discount is accreted into income over the remaining life of the loan. The impact of incremental accretion on loan yield will change during any period based on the volume of prepayments, but it is expected to decrease over time as the balance of the purchased loans decreases. The cost of interest bearing deposits decreased 27 basis points to 1.67% for the three months ended June 30, 2026, compared to 1.94% for same period in 2025. This decrease was primarily due to the deposits acquired from Olympic, which had a lower cost of deposits. Comparison of six months ended June 30, 2026 to the comparable period in the prior year The following table provides net interest income information for the periods indicated: Six Months Ended June 30, 2026 2025 Change AverageBalance(1) Interest Earned/ Paid AverageYield/Rate(1) AverageBalance(1) Interest Earned/ Paid Average Yield/ Rate AverageBalance(1) Interest Earned/ Paid Average Yield/ Rate (Dollars in thousands) Interest Earning Assets: Loans receivable (2)(3) $ 5,577,841 $ 158,380 5.73 % $ 4,781,167 $ 129,809 5.48 % $ 796,674 $ 28,571 0.25 % Taxable securities 1,561,574 27,034 3.49 1,401,226 23,318 3.36 160,348 3,716 0.13 Nontaxable securities (3) 15,550 257 3.33 15,489 276 3.59 61 (19) (0.26) Interest earning deposits 148,715 2,678 3.63 111,990 2,463 4.44 36,725 215 (0.81) Total interest earning assets 7,303,680 188,349 5.20 % 6,309,872 155,866 4.98 % 993,808 32,483 0.22 % Noninterest earning assets 883,869 765,058 118,811 Total assets $ 8,187,549 $ 7,074,930 $ 1,112,619 45 Table of Contents Six Months Ended June 30, 2026 2025 Change AverageBalance(1) Interest Earned/ Paid AverageYield/Rate(1) AverageBalance(1) Interest Earned/ Paid Average Yield/ Rate AverageBalance(1) Interest Earned/ Paid Average Yield/ Rate (Dollars in thousands) Interest Bearing Liabilities: Certificates of Deposit $ 1,077,612 $ 17,631 3.30 % $ 980,166 $ 19,019 3.91 % $ 97,446 $ (1,388) (0.61) % Savings accounts 566,072 663 0.24 426,010 581 0.28 140,062 82 (0.04) Interest bearing demand and money market accounts 3,374,345 23,844 1.42 2,738,197 20,039 1.48 636,148 3,805 (0.06) Total interest bearing deposits 5,018,029 42,138 1.69 4,144,373 39,639 1.93 873,656 2,499 (0.24) Junior subordinated debentures 22,419 861 7.74 22,126 943 8.59 293 (82) (0.85) Borrowings 66,337 1,315 4.00 282,768 6,611 4.71 % (216,431) (5,296) (0.71) Total interest bearing liabilities 5,106,785 44,314 1.75 % 4,449,267 47,193 2.14 % 657,518 (2,879) (0.39) % Noninterest bearing demand deposits 1,903,547 1,617,050 286,497 Other noninterest bearing liabilities 96,432 135,358 (38,926) Stockholders’ equity 1,080,785 873,255 207,530 Total liabilities and stock-holders’ equity $ 8,187,549 $ 7,074,930 $ 1,112,619 Net interest income and spread $ 144,035 3.45 % $ 108,673 2.84 % $ 35,362 0.61 % Net interest margin 3.98 % 3.47 % 0.51 % (1) Average balances are calculated using daily balances. Average yield/rate is annualized. (2) Average loans receivable includes loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable includes the amortization of net deferred loan fees of $1.9 million and $1.7 million for the six months ended June 30, 2026 and 2025, respectively, and the incremental accretion on purchased loans of $3.4 million and $229,000 for the six months ended June 30, 2026 and 2025, respectively. (3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis. The following table provides the changes in net interest income for the six months ended June 30, 2026 compared to the same period in 2025, due to changes in average asset and liability balances (volume), changes in average yields/rates (rate) and changes attributable to the combined effect of volume and rates allocated proportionately to the absolute value of changes due to volume and changes due to rates: Increase (Decrease) Due to Changes In: Volume Yield/Rate Total (Dollars in thousands) Interest Earning Assets: Loans receivable $ 22,406 $ 6,165 $ 28,571 Taxable securities 2,748 968 3,716 Nontaxable securities 1 (20) (19) Interest earning deposits 713 (498) 215 Total interest income $ 25,868 $ 6,615 $ 32,483 Interest Bearing Liabilities: Certificates of deposit $ 1,776 $ (3,164) $ (1,388) Savings accounts 172 (90) 82 Interest bearing demand and money market accounts 4,516 (711) 3,805 Total interest bearing deposits 6,464 (3,965) 2,499 Junior subordinated debentures 12 (94) (82) Borrowings (4,418) (878) (5,296) Total interest expense $ 2,058 $ (4,937) $ (2,879) Net interest income $ 23,810 $ 11,552 $ 35,362 Net interest income increased $35.4 million, or 32.5%, to $144.0 million for the six months ended June 30, 2026, compared to $108.7 million for the same period in 2025, due primarily to a $32.5 million increase in total interest income and a $2.9 million decrease in total interest expense. The increase in net interest income was primarily due to an increase in average interest 46 Table of Contents earning assets, which increased substantially as a result of the Merger and a decrease in interest expense due to decrease in average borrowings. Net interest margin increased 51 basis points to 3.98% for the six months ended June 30, 2026, compared to 3.47% for the same period in 2025. The increase in net interest margin was due an increase in both the average loan balance and loan yield as a result of the Merger. The yield on interest earning assets increased 22 basis points to 5.20% for the six months ended June 30, 2026, compared to 4.98% for the same period in 2025. The yield on loans receivable increased 25 basis points to 5.73% during the six months ended June 30, 2026, compared to 5.48% for the same period in 2025. The increase was due primarily to the incremental accretion on purchased loans which contributed 13 basis points to loan yield during the six months ended June 30, 2026. The incremental accretion and the impact to loan yield will change during any period based on the volume of prepayments, but is expected to decrease over time as the balance of the purchased loans decreases. The following table presents the net interest margin and loan yield and the effect of the incremental accretion on purchased loans on these ratios for the periods indicated: Six Months Ended June 30, 2026 2025 Net Interest Margin, excluding incremental accretion on purchased loans, annualized: Net interest margin 3.98 % 3.47 % Exclude impact from incremental accretion on purchased loans(2) (0.10) % — % Net interest margin, excluding incremental accretion on purchased loans(1) 3.88 % 3.47 % Loan yield, excluding incremental accretion on purchased loans, annualized: Loan yield 5.73 % 5.48 % Exclude impact from incremental accretion on purchased loans(2) (0.13) (0.01) Loan yield, excluding incremental accretion on purchased loans(1) 5.60 % 5.47 % Incremental accretion on purchased loans(1) $ 3,395 $ 229 (1) Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" section for a reconciliation to the comparable GAAP financial measure. (2) Represents the amount of interest income recorded on purchased loans in excess of the contractual stated interest rate in the individual loan notes due to incremental accretion of purchased discount or premium. Purchased discount or premium is the difference between the contractual loan balance and the fair value of acquired loans at the acquisition date. The purchased discount is accreted into income over the remaining life of the loan. The impact of incremental accretion on loan yield will change during any period based on the volume of prepayments, but it is expected to decrease over time as the balance of the purchased loans decreases. The cost of interest bearing deposits decreased 24 basis points to 1.69% for the six months ended June 30, 2026, compared to 1.93% for same period in 2025. This decrease was primarily due to the deposits acquired from Olympic, which had a lower cost of deposits. Provision for Credit Losses The aggregate of the (reversal of) provision for credit losses on loans and on unfunded commitments is presented on the unaudited Condensed Consolidated Statements of Income as the provision for credit losses. The ACL on unfunded commitments is included on the unaudited Condensed Consolidated Statements of Financial Condition within accrued expenses and other liabilities. Comparison of the quarter ended June 30, 2026 to the comparable quarter in the prior year The following table presents the (reversal of) provision for credit losses for the periods indicated: Three Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) (Reversal of) provision for credit losses on loans $ (844) $ 863 $ (1,707) (197.8) % (Reversal of) provision for credit losses on unfunded commitments (77) 93 (170) (182.8) (Reversal of) provision for credit losses $ (921) $ 956 $ (1,877) (196.3) % The (reversal of) provision for credit losses on loans reflects the amount required to maintain the ACL on loans at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves and is impacted by 47 Table of Contents quarterly charge-offs and recoveries. The $844,000 reversal of provision for credit losses on loans recognized during the three months ended June 30, 2026, was due primarily to a decrease in the weighted average life of loans in the real estate construction and land development segment and an incremental change in the mix of loans from loans having a higher ACL percentage to those having a lower ACL percentage. Future assessments of expected credit losses will be impacted not only by changes in the composition of and amount of loans and to the reasonable and supportable forecast, but also by an updated assessment of qualitative factors, as well as consideration of any changes in the reasonable and supportable forecast reversion period. The $863,000 provision for credit losses on loans recognized during the three months ended June 30, 2025, was due primarily to net charge-offs of $494,000 and secondarily to growth in balances of collectively evaluated loans during the quarter. Comparison of the six months ended June 30, 2026 to the comparable period in the prior year The following table presents the provision for (reversal of) credit losses for the periods indicated: Six Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) (Reversal of) provision for credit losses on loans $ (1,664) $ 854 $ (2,518) (294.8) % (Reversal of) provision for credit losses on unfunded commitments (287) 153 (440) (287.6) (Reversal) of provision for credit losses $ (1,951) $ 1,007 $ (2,958) (293.7) % The (reversal of) provision for credit losses on loans reflects the amount required to maintain the ACL on loans at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves and is impacted by quarterly charge-offs and recoveries. The $1.7 million reversal of provision for credit losses on loans recognized during the six months ended June 30, 2026 was due primarily to a decrease in the weighted average life of loans which decreased the calculated reserves. The $287,000 reversal of provision for credit losses on unfunded commitments recognized during the six months ended June 30, 2026 was due primarily to an increase in utilization rates which resulted in a smaller unfunded capacity. The $854,000 provision for credit losses recognized during the six months ended June 30, 2025 was due primarily to $793,000 in net charge-offs. The $153,000 provision for credit losses on unfunded commitments recognized during the six months ended June 30, 2025 was due primarily to an increase in the unfunded exposure on construction loans. Noninterest Income Comparison of the three months ended June 30, 2026 to the comparable period in the prior year The following table presents the change in the key components of noninterest income for the periods indicated: Three Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) Service charges and other fees $ 3,592 $ 2,932 $ 660 22.5 % Card revenue 2,595 2,008 587 29.2 Loss on sale of investment securities, net (217) (6,854) 6,637 (96.8) Interest rate swap fees 3 19 (16) (84.2) BOLI income 1,485 1,280 205 16.0 Gain on sale of other assets, net — 5 (5) (100.0) Other income 1,853 2,127 (274) (12.9) Total noninterest income $ 9,311 $ 1,517 $ 7,794 513.8 % Noninterest income increased $7.8 million during the three months ended June 30, 2026, compared to the same period in 2025. Loss on sale of securities decreased $6.6 million due to a smaller pre-tax loss of $217,000 recognized during the three months ended June 30, 2026, compared to a $6.9 million pre-tax loss recognized during the same period in 2025, as part of the Company's strategic balance sheet repositioning efforts. Increases in service charges and other fees, card revenue and BOLI income were due primarily to income from the deposit portfolio and BOLI acquired from Olympic. 48 Table of Contents Comparison of six months ended June 30, 2026 to the comparable period in the prior year The following table presents the change in the key components of noninterest income for the periods indicated: Six Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) Service charges and other fees $ 6,959 $ 5,907 $ 1,052 17.8 % Card revenue 4,698 3,741 957 25.6 Loss on sale of investment securities, net (217) (10,741) 10,524 (98.0) Interest rate swap fees 3 19 (16) (84.2) Bank owned life insurance income 2,604 2,198 406 18.5 Gain on sale of other assets, net — 8 (8) (100.0) Other income 3,963 4,288 (325) (7.6) Total noninterest income $ 18,010 $ 5,420 $ 12,590 232.3 % Noninterest income increased $12.6 million, during the six months ended June 30, 2026, compared to the same period in 2025. Loss on sale of securities decreased $10.5 million due to a smaller pre-tax loss of $217,000 recognized during the six months ended June 30, 2026, compared to a $10.7 million pre-tax loss recognized during the same period in 2025, as part of the Company's strategic balance sheet repositioning efforts. Increases in service charges and other fees, card revenue and BOLI income were due primarily to income from the deposit portfolio and BOLI acquired from Olympic. Noninterest Expense Comparison of three months ended June 30, 2026 to the comparable period in the prior year The following table presents changes in the key components of noninterest expense for the periods indicated: Three Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) Compensation and employee benefits $ 35,769 $ 25,467 $ 10,302 40.5 % Occupancy and equipment 6,014 4,840 1,174 24.3 Data processing 10,218 3,666 6,552 178.7 Marketing 437 336 101 30.1 Professional services 939 1,122 (183) (16.3) State/municipal business and use taxes 1,801 1,205 596 49.5 Federal deposit insurance premium 881 810 71 8.8 Other real estate owned, net 44 — 44 100.0 Amortization of intangible assets 2,957 302 2,655 879.1 Other expense 5,264 3,337 1,927 57.7 Total noninterest expense $ 64,324 $ 41,085 $ 23,239 56.6 % Noninterest expense increased $23.2 million, to $64.3 million during the three months ended June 30, 2026, compared to $41.1 million during the same period in 2025. The increase was primarily due to expenses from the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Noninterest expense also increased due to an increase in the amortization of intangible assets of $2.7 million, relating to the Merger. Total Merger-related expenses incurred during the three months ended June 30, 2026 were $7.5 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs. The following table presents the merger costs included in noninterest expense for the period indicated: 49 Table of Contents Three Months Ended June 30, 2026 (Dollars in thousands) Compensation and employee benefits $ 1,481 Data processing 4,924 Professional services 128 Other expense 960 Total noninterest expense $ 7,493 Comparison of the six months ended June 30, 2026 to the comparable period in the prior year The following table presents changes in the key components of noninterest expense for the periods indicated: Six Months Ended June 30, Change 2026 2025 $ % (Dollars in thousands) Compensation and employee benefits $ 69,741 $ 51,266 $ 18,475 36.0 % Occupancy and equipment 11,344 9,766 1,578 16.2 Data processing 15,311 7,563 7,748 102.4 Marketing 820 671 149 22.2 Professional services 3,781 1,856 1,925 103.7 State/municipal business and use taxes 3,475 2,425 1,050 43.3 Federal deposit insurance premium 1,918 1,622 296 18.2 Other real estate owned, net 48 — 48 100.0 Amortization of intangible assets 5,015 605 4,410 728.9 Other expense 9,422 6,694 2,728 40.8 Total noninterest expense $ 120,875 $ 82,468 $ 38,407 46.6 % Noninterest expense increased $38.4 million, to $120.9 million during the six months ended June 30, 2026, compared to $82.5 million during the same period in 2025. The increase was primarily due to expenses from the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Noninterest expense also increased due to an increase in the amortization of intangible assets of $4.4 million, relating to the Merger. Total Merger-related expenses incurred during the six months ended June 30, 2026 were $12.7 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs. The following table presents the merger costs included in noninterest expense for the period indicated: Six Months Ended June 30, 2026 (Dollars in thousands) Compensation and employee benefits $ 4,214 Data processing 5,415 Professional services 1,996 Other expense 1,046 Total noninterest expense $ 12,671 50 Table of Contents Income Tax Expense Comparison of the three months ended June 30, 2026 to the comparable period in the prior year The following table presents the income tax expense, and related metrics and the change for the periods indicated: Three Months Ended June 30, 2026 2025 Change (Dollars in thousands) Income before income taxes $ 20,724 $ 14,459 $ 6,265 Income tax expense $ 3,178 $ 2,244 $ 934 Effective income tax rate 15.3 % 15.5 % (0.2) % Income tax expense increased due primarily to higher estimated pre-tax income during the three months ended June 30, 2026 compared to the same period in 2025. The Company also recognized income tax expense of $515,000 related to the surrender of $8.5 million in BOLI policies during the three months ended June 30, 2025. Comparison of the six months ended June 30, 2026 to the comparable period in the prior year. The following table presents the income tax expense and related metrics and the change for the periods indicated: Six Months Ended June 30, Change 2026 2025 $ (Dollars in thousands) Income before income taxes $ 43,121 $ 30,618 $ 12,503 Income tax expense $ 6,628 $ 4,492 $ 2,136 Effective income tax rate 15.4 % 14.7 % 0.7 % Income tax expense and the effective income tax rate both increased due primarily to higher estimated pre-tax income during the six months ended June 30, 2026, compared to the same period in 2025, which decreased the impact of favorable permanent tax items such as tax-exempt investments, investments in BOLI and LIHTC investments. The Company also recognized income tax expense of $515,000 related to the surrender of $8.5 million in BOLI policies during the six months ended June 30, 2025. Financial Condition The following table provides a comparison of the changes in the Company's financial condition at the periods indicated: June 30, 2026 December 31, 2025 Change $ % (Dollars in thousands) Assets Cash and cash equivalents $ 204,375 $ 233,089 $ (28,714) (12.3) % Investment securities available for sale, at fair value, net 971,437 607,522 363,915 59.9 Investment securities held to maturity, at amortized cost, net 661,839 674,107 (12,268) (1.8) Loans receivable, net 5,688,268 4,730,682 957,586 20.2 Other real estate owned 755 — 755 100.0 Premises and equipment, net 98,034 74,690 23,344 31.3 Federal Home Loan Bank stock, at cost 12,653 5,163 7,490 145.1 Bank owned life insurance 146,350 105,974 40,376 38.1 Accrued interest receivable 23,056 19,280 3,776 19.6 Prepaid expenses and other assets 297,501 273,925 23,576 8.6 Other intangible assets, net 47,269 1,979 45,290 2,288.5 Goodwill 279,029 240,939 38,090 15.8 Total assets $ 8,430,566 $ 6,967,350 $ 1,463,216 21.0 % 51 Table of Contents June 30, 2026 December 31, 2025 Change $ % Liabilities and Stockholders' Equity Total deposits $ 7,038,706 $ 5,920,199 $ 1,118,507 18.9 % Borrowings 166,250 20,000 146,250 731.3 Junior subordinated debentures 22,497 22,350 147 0.7 Accrued expenses and other liabilities 93,421 83,297 10,124 12.2 Total liabilities 7,320,874 6,045,846 1,275,028 21.1 Common stock 707,889 531,100 176,789 33.3 Retained earnings 439,799 421,619 18,180 4.3 Accumulated other comprehensive loss, net (37,996) (31,215) (6,781) (21.7) Total stockholders' equity 1,109,692 921,504 188,188 20.4 Total liabilities and stockholders' equity $ 8,430,566 $ 6,967,350 $ 1,463,216 21.0 % Total assets increased during the six months ended June 30, 2026 primarily as a result of the Merger. Assets acquired, including goodwill, totaled $1.59 billion at the Merger closing date of January 31, 2026. Total liabilities and stockholders' equity also increased primarily as a result of the Merger. Total deposits acquired were $1.39 billion, and total common stock issued in the Merger was $185.0 million. Investment Activities Our investment policy is established by the Board and monitored by the Risk Committee of the Board. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring undue interest rate and credit risk, and complement the Company's lending activities. The policy permits investment in various types of liquid assets permissible under applicable regulations. Purchase of investments in sub-investment grade bonds is not permitted under the policy. The following table provides information regarding our investment securities at the dates indicated: June 30, 2026 December 31, 2025 Change Balance % of Total Balance % of Total $ % (Dollars in thousands) Investment securities available for sale, at fair value: U.S. government and agency securities $ 11,823 0.7 % $ 11,702 0.9 % $ 121 1.0 % Municipal securities 64,390 3.9 51,423 4.0 12,967 25.2 Residential CMO and MBS(1) 496,178 30.4 275,268 21.5 220,910 80.3 Commercial CMO and MBS(1) 363,713 22.2 252,164 19.7 111,549 44.2 Corporate obligations 16,423 1.0 10,532 0.8 5,891 55.9 Other asset-backed securities 18,910 1.2 6,433 0.5 12,477 194.0 Total $ 971,437 59.4 % $ 607,522 47.4 % $ 363,915 59.9 % Investment securities held to maturity, at amortized cost: U.S. government and agency securities $ 151,363 9.3 % $ 151,319 11.8 % $ 44 — % Residential CMO and MBS(1) 207,387 12.7 217,707 17.0 (10,320) (4.7) Commercial CMO and MBS(1) 303,089 18.6 305,081 23.8 (1,992) (0.7) Total $ 661,839 40.6 % $ 674,107 52.6 % $ (12,268) (1.8) % Total investment securities $ 1,633,276 100.0 % $ 1,281,629 100.0 % $ 351,647 27.4 % (1) U.S. government agency and government-sponsored enterprise CMO and MBS obligations. Total investment securities increased $351.6 million, or 27.4%, to $1.63 billion at June 30, 2026 from $1.28 billion at December 31, 2025. The increase was primarily due to the acquisition of investment securities balances of $312.0 million in the Merger. The Company repositioned a portion of the acquired portfolio during the six months ended June 30, 2026, with sales of $231.6 million and purchases of $359.9 million. Losses totaling $217,000 were recognized on the investment sales. Purchases exceeded sales in the repositioning due to the investment of excess cash acquired in the Merger, which was a result of the sale 52 Table of Contents of investment securities by Olympic during the month preceding the Merger. Investment maturities and repayments totaled $80.4 million during the six months ended June 30, 2026. Loan Portfolio Changes by loan type The Company originates a wide variety of loans with a focus on commercial business loans. In addition to originating loans, the Company may also acquire loans through pool purchases, participation purchases and syndicated loan purchases. The following table provides information about our loan portfolio by type of loan at the dates indicated: June 30, 2026 December 31, 2025 Change Amortized Cost % of Loans Receivable Amortized Cost % of Loans Receivable $ % (Dollars in thousands) Commercial business: Commercial and industrial $ 1,051,269 18.3 % $ 818,000 17.1 % $ 233,269 28.5 % Owner-occupied CRE 1,227,674 21.4 1,034,829 21.6 192,845 18.6 Non-owner occupied CRE 2,509,283 43.6 2,057,844 43.0 451,439 21.9 Total commercial business 4,788,226 83.3 3,910,673 81.7 877,553 22.4 Residential real estate 348,838 6.1 358,834 7.5 (9,996) (2.8) Real estate construction and land development: Residential 136,595 2.4 95,350 2.0 41,245 43.3 Commercial and multifamily 259,947 4.5 247,975 5.2 11,972 4.8 Total real estate construction and land development 396,542 6.9 343,325 7.2 53,217 15.5 Consumer 214,135 3.7 170,434 3.6 43,701 25.6 Total $ 5,747,741 100.0 % $ 4,783,266 100.0 % $ 964,475 20.2 % Loans receivable increased $964.5 million, or 20.2%, to $5.75 billion at June 30, 2026, from $4.78 billion at December 31, 2025 due primarily to loans acquired in the Merger. New loans funded during the six months ended June 30, 2026 were $259.1 million, which was higher than new loans funded during the same period in 2025 of $235.7 million. Loan prepayments were $175.0 million and loan payoffs were $96.4 million during the six months ended June 30, 2026. The following table summarizes the composition of acquired loans at the Merger closing date of January 31, 2026: January 31, 2026 Balance % of Total Merger - Loan Composition (Dollars in thousands) Commercial business: Commercial and industrial $ 251,819 26.4 % Owner-occupied CRE 172,141 18.0 % Non-owner occupied CRE 414,899 43.5 % Total commercial business 838,859 87.9 % Residential real estate 11,703 1.2 % Real estate construction and land development: Residential 26,765 2.8 % Commercial and multifamily 35,894 3.8 % Total real estate construction and land development 62,659 6.6 % Consumer 41,079 4.3 % Loans receivable 954,300 100.0 % 53 Table of Contents The following table provides information about owner occupied CRE and non-owner occupied CRE loans by collateral type at the dates indicated: June 30, 2026 December 31, 2025 Change Amortized Cost % of CRE Loans Amortized Cost % of CRE Loans $ % (Dollars in thousands) Owner occupied and non-owner occupied CRE loans by collateral type: Office $ 685,041 18.3 % $ 588,772 19.0 % $ 96,269 16.4 % Industrial 669,197 17.9 541,664 17.5 127,533 23.5 Multi-family 614,580 16.4 520,602 16.8 93,978 18.1 Retail store / shopping center 438,646 11.7 338,939 11.0 99,707 29.4 Mini-storage 275,123 7.4 155,130 5.0 119,993 77.3 Mixed use property 157,058 4.2 156,853 5.1 205 0.1 Motel / hotel 111,248 3.0 124,612 4.0 (13,364) (10.7) Warehouse 127,764 3.4 133,544 4.3 (5,780) (4.3) Single purpose 135,941 3.6 134,290 4.3 1,651 1.2 Recreational / school 90,375 2.4 83,047 2.7 7,328 8.8 Other 431,984 11.7 315,220 10.3 116,764 37.0 Total $ 3,736,957 100.0 % $ 3,092,673 100.0 % $ 644,284 20.8 % Office loans represented the largest segment of owner-occupied and non-owner occupied CRE loans, totaling $685.0 million, or 18.3% of total CRE loans, at June 30, 2026. Of this total, $316.0 million, or 46.1%, were owner-occupied CRE loans. Owner-occupied CRE loans have a lower risk profile than non-owner occupied CRE loans, as there is less tenant rollover risk and they generally include guarantees from the company occupying the space as well as the owners of the company. Loans classified as nonaccrual and nonperforming assets The following table provides information about our nonaccrual loans and nonperforming assets at the dates indicated: June 30, 2026 December 31, 2025 Change $ % (Dollars in thousands) Nonaccrual loans:(1) Commercial business $ 7,437 $ 6,886 $ 551 8.0 % Residential real estate 1,338 1,196 142 11.9 Real estate construction and land development 6,420 12,408 (5,988) (48.3) Consumer 315 486 (171) (35.2) Total nonaccrual loans 15,510 20,976 (5,466) (26.1) Accruing loans past due 90 days or more $ — $ 194 $ (194) (100.0) % Total nonperforming loans 15,510 21,170 (5,660) (26.7) Other real estate owned 755 — 755 100.0 Total nonperforming assets $ 16,265 $ 21,170 $ (4,905) (23.2) % Credit quality ratios: Nonaccrual loans to loans receivable 0.27 % 0.44 % (0.17) (38.6) Nonperforming loans to loans receivable 0.27 0.44 (0.17) (38.6) Nonperforming assets to total assets 0.19 0.30 (0.11) (36.7) (1) At June 30, 2026 and December 31, 2025, $4.2 million and $2.4 million, respectively, of nonaccrual loans, were guaranteed by government agencies. 54 Table of Contents The following table provides the changes in nonaccrual loans during the six months ended June 30, 2026: (Dollars in thousands) Balance, beginning of period $ 20,976 Additions 9,376 Net principal payments, and sales (541) Payoffs (12,956) Charge-offs (463) Transfer to OREO (741) Return to accrual (141) Balance, end of period $ 15,510 Nonaccrual loans decreased $5.5 million to $15.5 million at June 30, 2026, compared to $21.0 million at December 31, 2025. Payoffs during the six months ended June 30, 2026 consisted of eight loans totaling $13.0 million, including one $5.8 million residential construction loan, two CRE non-owner occupied loans totaling $2.0 million, three commercial business loans totaling $5.0 million, and two consumer loans totaling $0.2 million. These payoffs were partially offset by the migration of $9.4 million in loans to nonaccrual status including six commercial and industrial loans totaling $8.1 million and two residential loans totaling $1.0 million. Olympic had no nonaccrual loans as of the acquisition date of January 31, 2026. Allowance for Credit Losses on Loans The following table provides information regarding our ACL on loans for the periods indicated: At or For the Six Months Ended June 30, 2026 2025 Change (Dollars in thousands) ACL on loans at the end of period $ 59,473 $ 52,529 $ 6,944 Credit quality ratios: ACL on loans to loans receivable 1.03 % 1.10 % (0.07) % ACL on loans to nonaccrual loans 383.45 532.48 (149.03) Net charge-offs (recoveries) $ 786 $ 793 $ (7) Average balance of loans receivable during the period 5,577,841 4,781,167 796,674 Net charge-offs (recoveries) on loans to average loans receivable annualized 0.03 % 0.03 % — % The ACL on loans as a percentage of loans receivable was 1.03% at June 30, 2026 compared to 1.10% at December 31, 2025. The ACL on loans increased $6.9 million, or 13.1%, to $59.5 million at June 30, 2026, compared to $52.6 million at December 31, 2025 due primarily to the initial ACL recorded on the loans acquired in the Merger of $9.3 million. The ACL on loans as a percentage of loans receivable decreased seven basis points to 1.03% at June 30, 2026 from 1.10% at June 30, 2025, due primarily to a lower weighted average life of acquired loans which decreased the calculated reserves for these loans. The following table presents the ACL on loans by loan portfolio segment at the dates indicated: June 30, 2026 December 31, 2025 ACL on Loans ACL as a % of Loans in Loan Category % of Loans in Loan Category to Total Loans ACL on Loans ACL as a % of Loans in Loan Category % of Loans in Loan Category to Total Loans (Dollars in thousands) Commercial business $ 46,563 0.97 % 83.3 % $ 39,412 1.01 % 81.7 % Residential real estate 3,269 0.94 6.1 3,708 1.03 7.5 Real estate construction and land development 7,303 1.84 6.9 7,624 2.22 7.2 Consumer 2,338 1.09 3.7 1,840 1.08 3.6 Total ACL on loans $ 59,473 1.03 % 100.0 % $ 52,584 1.10 % 100.0 % 55 Table of Contents Deposits The following table summarizes the Company's deposits at the dates indicated: June 30, 2026 December 31, 2025 Change Balance % of Total Deposits Balance % of Total Deposits $ % (Dollars in thousands) Noninterest demand deposits $ 1,972,702 28.0 % $ 1,597,650 27.0 % $ 375,052 23.5 % Interest bearing demand deposits 1,854,634 26.3 1,627,259 27.5 227,375 14.0 Money market accounts 1,574,835 22.4 1,334,904 22.5 239,931 18.0 Savings accounts 581,259 8.3 422,523 7.1 158,736 37.6 Total non-maturity deposits 5,983,430 85.0 4,982,336 84.1 1,001,094 20.1 Certificates of deposit 1,055,276 15.0 937,863 15.9 117,413 12.5 Total deposits $ 7,038,706 100.0 % $ 5,920,199 100.0 % $ 1,118,507 18.9 % Total deposits increased $1.12 billion, or 18.9%, to $7.04 billion at June 30, 2026, from $5.92 billion at December 31, 2025 due primarily to deposits acquired in the Merger. The following table summarizes the composition of acquired deposits at the Merger date of January 31, 2026: January 31, 2026 Balance % of Total Merger - Deposit Composition (Dollars in thousands) Noninterest demand deposits $ 410,394 29.6 % Interest bearing demand deposits 336,742 24.2 % Money market accounts 217,685 15.7 % Savings accounts 175,032 12.6 % Total non-maturity deposits 1,139,853 82.1 % Certificates of deposit 249,143 17.9 % Total deposits $ 1,388,996 100.0 % Borrowings At June 30, 2026, the Bank maintained a credit facility with the FHLB with available borrowing capacity of $1.80 billion. The FHLB functions as a member-owned cooperative providing credit for member financial institutions. Advances are made pursuant to several different programs. Each credit program has its own interest rate and range of maturities. Limitations on the amount of advances are based on a percentage of the Bank's assets or on the FHLB’s assessment of the institution’s creditworthiness. The Bank had $166.3 million in FHLB advances outstanding at June 30, 2026, and $20.0 million in FHLB advances outstanding at December 31, 2025. Advances from the FHLB may be collateralized by FHLB stock owned by the Bank, deposits at the FHLB, certain commercial and residential real estate loans, investment securities or other assets. All FHLB advances at June 30, 2026 were short-term and mature in less than one year. The Bank maintains a credit facility with the FRB through the Discount Window with available borrowing capacity of $339.0 million at June 30, 2026. The Bank had no FRB borrowings outstanding at June 30, 2026 or December 31, 2025. The Company assumed trust preferred securities and the related junior subordinated debentures as part of a prior acquisition. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital. The junior subordinated debentures outstanding were $22.5 million at June 30, 2026 and $22.4 million at December 31, 2025, net of unaccreted discount. The Bank maintains available unsecured federal funds lines with four correspondent banks totaling $145.0 million, with no outstanding borrowings at June 30, 2026 or December 31, 2025. Stockholders' Equity Total stockholders' equity increased $188.2 million, or 20.4%, to $1.11 billion at June 30, 2026, compared to $921.5 million at December 31, 2025 due primarily to stock issued as consideration in the Merger. The Company’s stockholders' equity to assets ratio was 13.2% at both June 30, 2026 and at December 31, 2025. 56 Table of Contents The following table summarizes changes in stockholders' equity for the Company for the period indicated: Six Months Ended June 30, 2026 (Dollars in thousands) Balance, beginning of period $ 921,504 Common stock issued in Merger 184,996 Net income 36,493 Cash dividends declared on common stock (18,313) Common stock repurchased (11,072) Accumulated other comprehensive loss (6,781) Other 2,865 Balance, end of period $ 1,109,692 The Company has historically paid cash dividends to its common shareholders. Payments of future cash dividends, if any, will be at the discretion of our Board after taking into account various factors, including our business, operating results and financial condition, capital requirements, current and anticipated cash needs, plans for expansion, any legal or contractual limitation on our ability to pay dividends and other relevant factors. Dividends on common stock from the Company depend substantially upon the receipt of dividends from the Bank, which is the Company’s predominant source of income. On July 22, 2026, the Board declared a regular quarterly dividend of $0.25 per common share payable on August 19, 2026 to shareholders of record on August 5, 2026. On April 24, 2024, the Board authorized the Stock Repurchase Program. The Company is not obligated to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so. The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the Program’s expiration, without any prior notice. Regulatory Requirements The Company is a bank holding company under the supervision of the Federal Reserve. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve. The Bank is a federally insured institution and thereby is subject to the capital requirements established by the FDIC. The Federal Reserve capital requirements generally parallel the FDIC requirements. 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 in the unaudited Condensed Consolidated Financial Statements and operations. Additionally, the Company and the Bank are required to maintain a capital conservation buffer of common equity Tier 1 capital above 2.5% to avoid restrictions on certain activities including payment of dividends, stock repurchases and discretionary bonuses to executive officers. Management believes that, as of June 30, 2026, the Company and the Bank met all capital adequacy requirements to which they are subject. As of June 30, 2026 and December 31, 2025, the most recent regulatory notifications categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's categories. The following table summarizes the Company's (consolidated) and the Bank's actual capital ratios compared to the regulatory "adequately capitalized" capital ratios and the regulatory minimum capital ratios needed to qualify as a "well capitalized" institution, as calculated under regulatory guidelines at the dates presented: Actual Adequately Capitalized Well-Capitalized(1) (Dollars in thousands) June 30, 2026 Total capital ratio Company $ 904,750 13.4 % $ 541,367 8.0 % $ 676,709 10.0 % Bank 894,624 13.2 540,863 8.0 676,078 10.0 Tier 1 capital ratio Company 844,208 12.5 406,025 6.0 541,367 8.0 Bank 834,082 12.3 405,647 6.0 540,863 8.0 Common equity Tier 1 capital ratio Company 821,711 12.1 304,519 4.5 439,861 6.5 Bank 834,082 12.3 304,235 4.5 439,451 6.5 57 Table of Contents Actual Adequately Capitalized Well-Capitalized(1) (Dollars in thousands) Leverage ratio Company 844,208 10.4 326,256 4.0 407,820 5.0 Bank 834,082 10.2 326,019 4.0 407,523 5.0 December 31, 2025 Total capital ratio Company $ 786,057 14.1 % $ 446,102 8.0 % $ 557,628 10.0 % Bank 775,354 13.9 445,750 8.0 557,187 10.0 Tier 1 capital ratio Company 732,473 13.1 334,577 6.0 446,102 8.0 Bank 721,770 13.0 334,312 6.0 445,750 8.0 Common equity Tier 1 capital ratio Company 710,123 12.7 250,933 4.5 362,458 6.5 Bank 721,770 13.0 205,734 4.5 362,172 6.5 Leverage ratio Company 732,473 10.8 270,061 4.0 337,576 5.0 Bank 721,770 10.7 269,879 4.0 337,348 5.0 (1) The ratios to meet the requirements to be deemed “well-capitalized” under prompt corrective action regulations are only applicable to the Bank. However, the Company manages its capital position as if the requirements apply to the consolidated Company and has presented the ratios as if they also applied on a consolidated basis. Liquidity and Capital Resources We maintain sufficient cash and cash equivalents and investment securities to meet short-term liquidity needs and actively monitor our long-term liquidity position to ensure the availability of capital resources for contractual obligations, strategic loan growth objectives and to fund operations. Our funding strategy has been to focus on acquiring non-maturity deposits from our retail accounts, and noninterest bearing demand deposits from our commercial customers and to use our borrowing availability to fund growth in assets. Our liquidity policy permits the purchase of brokered deposits in an amount not to exceed 15% of the Company's total deposits as a secondary source for funding. The Company’s total uninsured deposits, which are the amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $2.75 billion, or 39.1% of total deposits, at June 30, 2026 and $2.43 billion, or 41.1% of total deposits, at December 31, 2025. These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes. At June 30, 2026, we had no brokered deposits, compared to $77.5 million, or 1.31% of total deposits, at December 31, 2025. Borrowings may be used on a short-term basis to compensate for reductions in other sources of funds (such as deposit inflows at less than projected levels). Borrowings may also be used on a longer-term basis to support expanded lending activities and match the maturity of repricing intervals of assets. While maturities and scheduled amortization of loans are a predictable source of funds, deposit flows and loan prepayments are greatly influenced by the level of interest rates, economic conditions and competition so we adhere to internal management targets assigned to the loan to deposit ratio, liquidity ratio, net short-term non-core funding ratio and non-core liabilities to total assets ratio to ensure an appropriate liquidity position. The Company regularly monitors liquidity, models liquidity stress scenarios to ensure that adequate liquidity is available, and has contingency funding plans in place, which are reviewed and tested on a regular, recurring basis. The following table summarizes the Company's available liquidity as of the dates indicated: June 30, 2026 December 31, 2025 (Dollars in thousands) On-balance sheet liquidity Cash and cash equivalents $ 204,375 $ 233,089 Unencumbered investment securities available for sale(1) 949,021 606,968 Total on-balance sheet liquidity $ 1,153,396 $ 840,057 58 Table of Contents June 30, 2026 December 31, 2025 (Dollars in thousands) Off-balance sheet liquidity FRB borrowing availability $ 339,029 $ 346,307 FHLB borrowing availability(2) 1,635,593 1,285,640 Fed funds line borrowing availability with correspondent banks 145,000 145,000 Total off-balance sheet liquidity $ 2,119,622 $ 1,776,947 Total available liquidity $ 3,273,018 $ 2,617,004 (1) Investment securities available for sale at fair value. (2) Includes FHLB borrowing availability of $1.80 billion at June 30, 2026 based on pledged assets; however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears, or $3.82 billion. Management believes the capital sources are adequate to meet all reasonably foreseeable short-term and long-term cash requirements and there has not been a material change in our capital resources since the information disclosed in our 2025 Annual Form 10-K. We are not aware of any reasonably likely material changes in the mix and relative cost of such resources. Critical Accounting Estimates Our critical accounting estimates are described in detail in the "Critical Accounting Estimates" section within Item 7 of our 2025 Annual Form 10-K. The SEC defines "critical accounting estimates" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. The Company's critical accounting estimates include estimates of the ACL on loans and goodwill. As a result of the recent acquisition of Olympic, the Company identified a new critical accounting estimate related to the fair value measurement of assets acquired and liabilities assumed. Management believes the estimates and assumptions used in determining these fair values, particularly for loans, intangible assets, and goodwill, are significant to understanding the Company's financial condition and results of operations. These estimates require complex and subjective judgments, and accordingly, management considers them to be critical accounting estimates. Non-GAAP Financial Measures and Reconciliations This document contains certain financial measures not presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") in addition to financial measures presented in accordance with GAAP. The Company has presented these non-GAAP financial measures in this document because it believes that they provide useful and comparative information to assess trends in the Company’s capital, performance and asset quality reflected in the current quarter and comparable period results and to facilitate comparison of its performance with the performance of its peers. These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of the non-GAAP financial measures used in this document to the comparable GAAP financial measures are presented below. The Company believes presenting loan yield and net interest margin excluding the effect of discount accretion on purchased loans is useful in assessing the impact of acquisition accounting on loan yield as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off our balance sheet. The following table presents the calculations of our non-GAAP financial measures as of the dates indicated: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 (Dollar amounts in thousands) Loan yield, excluding incremental accretion on purchased loans, annualized: Interest and fees on loans (GAAP) $ 81,935 $ 65,373 $ 158,380 $ 129,809 Exclude incremental accretion on purchased loans 1,772 76 3,395 229 Adjusted interest and fees on loans (non-GAAP) $ 80,163 $ 65,297 $ 154,985 $ 129,580 Average loans receivable, net (GAAP) $ 5,740,927 $ 4,768,558 $ 5,577,841 $ 4,781,167 Loan yield, annualized (GAAP) 5.72 % 5.50 % 5.73 % 5.48 % Loan yield, excluding incremental accretion on purchased loans, annualized (non-GAAP) 5.60 % 5.49 % 5.60 % 5.47 % 59 Table of Contents Net Interest Margin, excluding incremental accretion on purchased loans, annualized: Net interest income before provision (GAAP) $ 74,816 $ 54,983 $ 144,035 $ 108,673 Exclude incremental accretion on purchased loans 1,772 76 3,395 229 Adjusted net interest income before provision (non-GAAP) $ 73,044 $ 54,907 $ 140,640 $ 108,444 Average Interest earning assets (GAAP) $ 7,517,314 $ 6,286,309 $ 7,303,680 $ 6,309,872 Net interest margin (GAAP) 3.99 % 3.51 % 3.98 % 3.47 % Net interest margin, excluding incremental accretion on purchased loans (non-GAAP) 3.90 % 3.50 % 3.88 % 3.47 %