UVSP 10-K & 10-Q changes, risk factors and insider trading

We maintain an investment portfolio, including available-for-sale and held-to-maturity securities. We are required to record charges to earnings if we determine a decline in fair value of these investments has resulted from credit losses. Numerous factors, including changes in market interest rates, the lack of liquidity for resales of certain investment securities, the absence of reliable pricing information for investment securities, adverse changes in the business climate, the impact of the imposition of tariffs, adverse regulatory or political actions, any changes to the rating of the security by a rating agency, unanticipated changes in the competitive environment and limited investor demand, could have a negative effect on our investment portfolio. Credit loss charges would negatively impact our earnings and regulatory capital ratios.

At December 31, 2024,2025, the Corporation maintained a debt securities portfolio of $491.5$494.3 million, of which $357.4$371.3 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on changes in interest rates, the credit quality of the underlying issuer, market liquidity and other factors. Stockholders' equity is increasedincreases or decreaseddecreases by the amount of the change in the unrealized gain or loss (the difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulated other comprehensive income (loss). During the year endedAt December 31, 2024,2025, we incurredaccumulated other comprehensive lossesincome ofwas $796$13.6 thousandmillion related to net changes in unrealized holding lossesgains in the available-for-sale investment securities portfolio. A decline in the estimated fair value of this portfolio will result in a decline in stockholders' equity, as well as book value per common share. The decrease will occur even though the securities are not sold.

Risks associated with lending activitiesare include,impacted by, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans and the value of the associated collateral. Various laws and regulations also affect our lending activities, and failure to comply with such applicable laws and regulations could subject us to enforcement actions and civil monetary penalties.

At December 31, 2024,2025, approximately 78.8%79.7% of our loan and lease portfolio consisted of commercial, financial and agricultural, commercial real estate and construction loans and leases, which are generally perceived as having more risk of default than residential real estate loans. Commercial business, commercial real estate and construction loans are more susceptible to a risk of loss during a downturn in the business cycle. These types of loans involve larger loan balances to a single borrower or groups of related borrowers. These loans also expose us to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate. If we foreclose on these loans, our holding period for the collateral typically is longer than for a single or multi-family residential property because there are fewer potential purchasers of the collateral. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers' ability to repay their loans depends on successful development of their properties and the successful operation of the borrower's business.

If the evaluation we perform in connection with establishing loan and lease loss reserves is wrong,wrong or the assumptions on which we rely prove to be incorrect, our allowance for credit losses on loans and leases may not be sufficient to cover our losses,losses or adjustments may be necessary to address different economic conditions or adverse development in the loan portfolio, which would have an adverse effect on our operating results.

In the course of our business, we may foreclose and take title to real estate and could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or the release of hazardous or toxic substances at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Our policies and procedures require environmental factors to be considered during the loan application process. An environmental review is performed before initiating any commercial foreclosure action; however, these reviews may not be sufficient to detect all potential environmental hazards. Possible remediation costs and liabilities could have a material adverse effect on our financial condition.

We are dependent on the ability and experience of a number of key management personnel who have substantial experience with our operations, the financial services industry, and the markets in which we offer products and services. Competition for qualified employees and personnel in the banking industry is intense. The process of recruiting personnel with the combination of skills and attributes required to carry out our strategies is often lengthy. The loss of one or more senior executives or key managers may have an adverse effect on our businesses. We maintain change in control agreements and grant equity awards with time-based vesting with certain executive officers to aid in our retention of these individuals. Our success depends on our ability to continue to attract, manage, and retain these and other qualified management personnel.

Liquidity is essential to our business. We rely on itsour ability to generate deposits and effectively manage the repayment of itsour liabilities to ensure that there is adequate liquidity to fund operations. An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity. Our most important source of funds is our deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk adjusted return, which are strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments. Further, the demand for deposits may be reduced due to a variety of factors such as negative trends in the banking sector, the level of and/or composition of our uninsured deposits, demographic patterns, changes in customer preferences, reductions in consumers' disposable income, the monetary policy of the FRB or regulatory actions that decrease customer access to particular products. If customers move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, which would increase our funding costs and reduce net interest income. Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity. Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or FRB discount window, and unsecured borrowings. We also may borrow funds from third-party lenders, such as other financial institutions. Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level of our business activity as a result of a downturn in markets or by one or more adverse regulatory actions against us or the financial sector in general. Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

Our profitability depends in part on our success in attracting and retaining a stable base of low-cost deposits. At December 31, 2024,2025, 21%20% of our deposit base was comprised of noninterest-bearing deposits, of which 14%13% consisted of business deposits, which arewere primarily operating accounts for businesses, and 7% consisted of consumer deposits. The competition for these deposits is strong and customers are increasingly seeking investments with higher interest rates that are safe, including the purchase of U.S. Treasury securities and other government-guaranteed obligations, as well as the establishment of accounts at the largest, most well-capitalized banks. If we were to lose a significant portion of our low-cost deposits, it would negatively impact our liquidity and profitability.

We heavily rely on information technology systems, including the systems of third-party service providers, to conduct our business. Any failure, interruption, or breach in security or operational integrity of these systems could result in failures or disruptions in our customer relationship management and general ledger, deposit, loan, and other systems. While we have policies and procedures designed to prevent or limit the impact of any failure, interruption, or breach in itsour security systems (including cyber-attacks), there can be no assurance that such events will not occur or if they do occur, that they will be adequately addressed. Information security and cyber security risks have increased significantly in recent years because of new technologies and the increased number of employees working remotely and the increased use of the Internet and other electronic delivery channels (including mobile devices) to conduct financial transactions. Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures. The occurrence of any system failures, interruptions, or breaches in security could expose us to reputation risk, litigation, regulatory scrutiny and possible financial liability that could have a material adverse effect on our financial condition and results of operations.

Although we take protective measures to maintain the confidentiality, integrity and availability of information, itsour computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-attacks and other events that could have an adverse security impact. Furthermore, we may not be able to ensure that all of our clients, suppliers, counterparties and other third parties have appropriate controls in place to protect themselves from cyber-attacks or to protect the confidentiality of the information that they exchange with us, particularly where such information is transmitted by electronic means. Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyber-attacks, a breach of our systems and global payments infrastructure or those of our fintech partnersvendors and processors could result in: losses to us and our customers; loss of business and/or customers; damage to itsour reputation; the incurrence of additional expenses (including the cost of investigation and remediation and the cost of notification to consumers, credit monitoring and forensics, and fees and fines imposed by the card networks); disruption to our business; an inability to grow our online services or other businesses; additional regulatory scrutiny, investigation or penalties; and/or exposure to civil litigation and possible financial liability - any of which could have a material adverse effect on our reputation, business, financial condition and results of operations. Although the impact to date for these types of events has not had a material impact on us, we cannot be sure this will be the case in the future.

The Board of Directors has established an Enterprise-Wide Risk Management Committee, consisting of a minimum of four directors, at least three of which are independent directors.Committee. The Chief Risk Officer is the primary management liaison to the Enterprise-Wide Risk Management Committee. The Enterprise-Wide Risk Management Committee meets four times a year, or more frequently if needed, and provides minutes of its meetings to the Board of Directors. The Enterprise-Wide Risk Management Committee provides oversight, from a risk perspective, of information systems security, among other things. In that regard, the Chief Information Security Officer provides information security updates to the Enterprise-Wide Risk Management Committee at each Enterprise-Wide Risk Management Committee meeting. We also engage outside consultants to support our cybersecurity efforts. NotWhile all of our directors orselect members of the Enterprise-Wide Risk Management Committee have significant experience in cybersecurity risk management in other business entities comparable to the Corporation, and directors rely on the Chief Risk Officer, the Chief Information Security Officer and consultants for cybersecurity guidance.

We are a community bank, and our reputation is one of the most valuable components of our business. A key component of our business strategy is to rely on our reputation for integrity, reliability, customer service and knowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers in our market area and contiguous areas. Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity incidentsincidents, errors in the use of artificial intelligence and questionable or fraudulent activities of our customers. In addition, third parties with whom the Corporation has relationships may take actions over which the Corporation has limited control that could negatively impact perceptions about the Corporation or the financial services industry. The proliferation of social media may increase the likelihood that negative information about the Corporation, whether or not accurate, could impact the Corporation's reputation and business. Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers and employees, costly litigation and increased governmental regulation, all of which could adversely affect our business and operating results.

Inflation risk iscan thenegatively risk thatimpact the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. TheInflation FRBrose hadsharply raisedat certainthe benchmarkend interestof rates2021 and remained elevated through the first half of calendar 2024, before beginning to combatmoderate inflation.in the latter half of 2024 and into calendar 2025. However, ininflation September,levels continue to exceed the FRBFederal reducedReserve ratesBoard's bylong-term 50target basisof points and by an additional 25 basis points in November and December, respectively.2.0%. As discussed above under “Risks Related to Market Interest Rates – We are subject to interest rate risk,” as inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses. Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.

Unlike larger regional banks that operate in large geographies, we provide banking and financial services to customers primarily in 19 counties in the Southeastern, Central and Western regions of Pennsylvania, three counties in New Jersey and fourfive counties in Maryland. Because of our geographic concentration, a downturn in the local economyeconomies could make it more difficult to attract loans and deposits, and could cause higher losses and delinquencies on our loans than if the loans were more geographically diversified. Adverse economic conditions in the region, including, without limitation, declining real estate values or higher unemployment, could cause our levels of nonperforming assets and loan losses to increase. Regional economic conditions have a significant impact on the ability of borrowers to repay their loans as scheduled. A sluggish local economy could, therefore, result in losses that materially and adversely affect our financial condition and results of operations.

Any material interruption in our customers' supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, restrictions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us. In the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all. Additionally, changes in distribution of federal funds or freezing federal funds, including reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the FRB. An important function of the FRB is to regulate the money supply and credit environment. Among the instruments used by the FRB to implement these objectives are open market purchases and sales of U.S. Government securities, adjustments of the discount rate and changes in banks' reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits. The FRB's policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin. Its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.

We are subject to extensive regulation, supervision, and examination by our primary regulators, the Pennsylvania Department of Banking and Securities and the Federal Reserve Bank of Philadelphia, and by the FDIC, the regulating authority that insures customer deposits. The Bank also must comply with applicable regulations of the Federal Housing Finance Agency and the FHLB.regulators. Regulation by these agencies is intended primarily for the protection of our depositors and the deposit insurance fund and not for the benefit of our shareholders. The Bank's activities are also regulated under consumer protection laws applicable to our lending, deposit, and other activities. A material claim against the Bank under these laws or an enforcement action by our regulators could have a material adverse effect on our financial condition and results of operations. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financial institutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations and comment on the classification of our assets and the level of our allowance for credit losses. Changes in such regulation and oversight, whether in the form of regulatory or enforcement policy, new regulations, executive orders, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.

Many of these competing institutions have much greater financial and marketing resources than we have. Due to their size, many competitors can achieve larger economies of scale and may offer a broader range of products and servicesservices, more accessible branch locations, higher lending limits or more favorable pricing than we can. If we are unable to compete effectively in the offerings of our products and services, our business may be negatively affected. Additionally, these competitors may offer highermore favorable interest rates than we do, which could decrease the loans or deposits that we attract or require us to increaseadjust our rates to retain existing deposits and/or attract newloans or deposits. Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations. As a result, we may need to seek other sources of funds that may be more expensive to obtain, which could increase the cost of funds and decrease profitability.

Some of the financial services organizations with which we compete are not subject to the same degree of regulation or tax structure as iswe imposed on bank holding companies and federally insured financial institutions.are. As a result, these non-bank competitors have certain advantages over us in providing lower-cost products, accessing funding and in providing various services. The banking business in our primary market areas is very competitive, and the level of competition and their pricing structure facing us may increase further, which may limit our asset growth and financial results.

We regularly evaluate opportunities to acquire and invest in banks and in other complementary businesses. As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including on our short- and long-term liquidity and capital structure. Our acquisition activities could be material to us. For example, we could issue additional shares of common stock in a merger transaction, which could dilute current shareholders' ownership interest and the per share book value of our common stock. Further, an acquisition could require us to use a substantial amount of cash, other liquid assets, and/or incur debt.

While the Corporation's common stock is traded on the NASDAQ Global Select Market, the trading volume has historically been less than that of larger financial services companies.companies, Stock price volatilitywhich may make it more difficult for investors to sell their common stock when they want and at prices they find attractive.

Allowance for Credit Losses on Loan and Leases: The Allowance for Credit Losses ("ACL") on loans and leases uses techniques that estimate losses on pools of loans and leases that share similar risk characteristics and specifically identify losses on individual loans and leases that do not share similar risk characteristics with others. The adequacy of these allowances is sensitive to changes in current and forecasted economic conditions that may affect the ability of borrowers to make contractual payments as well as the value of the collateral securing such payments. Management 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 to determine its allowance for credit loss balance. The key assumptions used in the 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. Although management believes it uses the best information available to establish the ACL, future adjustments to the ACL may be necessary and the Corporation’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. While management believes it has established the ACL in conformity with U.S. GAAP, our regulators, in reviewing the loan portfolio, may request us to increase our ACL based on judgments different from ours. In addition, because future events affecting borrowers and collateral cannot be predicted without uncertainty, the existing ACL may not be adequate or increases may be necessary should the quality of any loans or leases deteriorate or if there are changes to the assumptions noted above. Any material increase in the ACL would adversely affect the Corporation’s financial condition and results of operations.

Reported net interest income for the year ended December 31, 2024 was $211.2 million, a decrease of $8.8 million, or 4.0%, from the prior year. Net interest income, on a tax-equivalent basis, for the year ended December 31, 2024 was $212.3 million, a decrease of $8.9 million, or 4.0%, from the prior year. An increase in tax-equivalent interest income of $40.6 million, driven by increases in asset yields, including loan and investment yields, and increases in the average balance of average interest-earning assets was outpaced by an increase in interest expense of $49.5 million, which was largely driven by an increase in the cost of, and the average balances of, interest-bearing deposits. The net interest margin on a tax-equivalent basis for the year ended December 31, 2024 was 2.86% compared to 3.12% for 2023. The net interest margin decrease was attributable to the increase in interest rates and the liability sensitivity of the Corporation's balance sheet.

The provision for credit losses for the years ended December 31, 2024,2025, 2024 and 2023 and 2022 was $5.9$11.7 million, $10.8$5.9 million and $12.2$10.8 million, respectively. Net loan and lease charge-offs for the years ended December 31, 2025, 2024, 2023, and 20222023 were $3.8$11.1 million, $5.4$3.8 million and $3.9$5.4 million, respectively. The year ended December 31, 2025 included a $6.8 million net charge-off recorded on a $23.7 million commercial loan relationship. The year ended December 31, 2023 included $2.4 million in charge-offs related to two nonaccrual commercial loans to one borrower. The following table details information pertaining to the Corporation's allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.

The provision for income taxes was $19.4$22.6 million, $17.6$19.4 million and $19.1$17.6 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively, at effective rates of 20.3%,19.9%, 19.8%20.3% and 19.6%,19.8%, respectively. The effective tax rates reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases. Excluding this impact, the effective tax rates were 22.1%,21.7%, 21.7%22.1% and 21.3%21.7% for the years ended December 31, 2024,2025, 20232024 and 2022.2023, respectively. The decrease in the effective tax rate for 2025 compared to 2024 was primarily due to the favorable impact from the proceeds of BOLI death benefits. The increase in the effective tax rate for 2024 compared to 2023 was primarily due to increases in state tax rates and the impact of stock-based compensation during the year.

Cash and interest-earning deposits increased $79.0$224.9 million, or 31.6%,68.4%, from December 31, 2023,2024, primarily due to increased interest-earning deposits at the Federal Reserve Bank of $82.5$231.7 million due to increases in deposits outpacing loan growth, partially offset by the repayment of subordinated notes and long-term debt.

Total investment securities at December 31, 20242025 decreasedincreased $6.6$2.3 million, or 1.3%,0.5%, from December 31, 2023.2024. Maturities and pay-downsPurchases of $69.8$60.3 million, saleswhich ofwere $5.4primarily millionresidential netmortgage-backed amortizationsecurities, of purchased premiums and discounts of $1.1 million, decreasesincreases in the fair value of available-for-sale investment securities of $1.0$17.2 million and a reversal of provision for credit losses of $108$828 thousand were partially offset by purchasesmaturities and pay-downs of $70.7$68.1 million, whichsales wereof primarily$6.9 residentialmillion mortgage-backedand securities.net amortization of purchased premiums and discounts of $1.0 million.

Gross loans and leases held for investment at December 31, 20242025 increased $259.4$88.2 million, or 3.9%,1.3%, from December 31, 2023.2024. The growth in gross loans and leases held for investment was primarily due to increases in commercial,construction, commercial real estate and residentialhome mortgageequity loans, partially offset by a decreasedecreases in constructioncommercial loans.and residential mortgage loans and lease financings.

At December 31, 2025, nonaccrual loans and leases were $13.7 million and had a related allowance for credit losses on loans and leases of $3.0 million. At December 31, 2024, nonaccrual loans and leases were $12.7 million and had a related allowance for credit losses on loans and leases of $1.9 million. AtDuring 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, loans totaling $13.9 million associated with this relationship were paid off and a $449 thousand recovery was recognized. As of December 31, 2023,2025, nonaccrualthe loans$1.4 million residential property remains in other real estate owned and leasesthe werecarrying $20.5 million and had a related allowance for credit losses on loans and leasesvalue of $1.8the million.asset Duringis supported by the year,appraised two nonaccrual modified construction loans to one borrower totaling $6.1 million were paid-off. At December 31, 2023, these loans had an individual reservevalue of $1.1real million.estate collateral. Individual reserves have been established based on current facts and management's judgments about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of the individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits.

Net loan and lease charge-offs for the year ended December 31, 20242025 were $3.8$11.1 million compared to net loan and lease charge-offs of $5.4$3.8 million for the year ended December 31, 2023.2024. Net charge-offs for the year ended December 31, 20232025 included $2.4a $6.8 million ofnet charge-offscharge-off recorded againston twoa nonaccrual$23.7 million commercial loansloan to one borrower.relationship.

Other real estate owned was $23.9 million at December 31, 2025, compared to $20.1 million at December 31, 2024, compared to $19.0 million at December 31, 2023.2024. During the year ended December 31, 2024,2025, onetwo nonaccrual residential real estate propertyloans with a total carrying value of $156$3.9 thousand and one commercial real estate property with a carrying value of $252 thousandmillion were transferred to OREO. Additionally, during the year ended December 31, 2024,2025, $824two residential real estate properties with a total carrying value of $226 thousand in capitalized costs were recordedsold. relatedAdditionally, towrite-downs anon existingrepossessed property.assets totaled $44 thousand during the year. Repossessed assets were $65 thousand at December 31, 2025, compared to $76 thousand at December 31, 2024. During the year ended December 31, 2024,2025, repossessed assets totaling $68$143 thousand were acquired and repossessed assets totaling $105 thousand were sold. The Corporation had no repossessed assets at December 31, 2023.

Total deposits increased $383.5$328.1 million, or 6.0%,4.9%, from December 31, 2023,2024, primarily due to increases in consumer, commercial, brokered and public funds deposits, partially offset by a decrease in consumer deposits. At December 31, 2024,2025, noninterest-bearing deposits totaled $1.4 billion and represented 20.9%20.2% of total deposits, compared to $1.5$1.4 billion representing 23.0%20.9% at December 31, 2023.2024. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.6 billion and $1.5 billion at December 31, 20242025 and 2023.2024, respectively. This represented 22.0%23.2% of total deposits at December 31, 2024,2025 downcompared fromto 23.3%22.0% at December 31, 2023.2024.

Total borrowings decreased $79.6$62.2 million from December 31, 2023,2024, primarily due to a $100.0 million redemption of previously issued subordinated notes partially offset by $50.0 million aggregate principal amount fixed-to-floating rate subordinated notes issued in the third quarter of 2025, and pay-downs of $85.0$25.0 million in long-term debt,debt. These decreases were partially offset by an increase of $4.9$13.2 million in customer repurchase agreements. These borrowings were replaced with lower cost deposits during the year.

The increase in shareholders' equity at December 31, 20242025 of $48.1$56.0 million from December 31, 20232024 was primarily related to an increase in retained earnings of $51.1$65.4 million. Retained earnings was impacted by net income of $75.9$90.8 million, partially offset by $24.6$25.0 million in cash dividends paid during the year. Accumulated other comprehensive loss decreased by $6.7$18.5 million, which was primarily attributable to increases in the fair value of available-for-sale investment securities of $13.6 million, net of tax, and an increase in unrecognized actuarial losses related to the Corporation's pension plan of $6.7$3.9 million, net of tax. Treasury stock increased by$29.1 $11.4million million,from December 31, 2024, related to purchasesrepurchases of 802,5351,129,217 shares on the open market under the stock repurchase plan and buybacks of 1,158 shares related to stock-based incentive plans, at a cost of $18.9$34.6 million, offset by $7.5$5.5 million of stock issued under the dividend reinvestment plan,plan and employee stock purchase plan, and stock-based incentive plan activity.

The Wealth Management segment reported pre-tax income of $8.3 million in 2025, $6.1 million in 2024,2024 and $5.0 million in 20232023, andwhich $7.9included noninterest income of $31.9 million in 2022.2025, $29.9 million in 2024 and $26.8 million in 2023. Noninterest expense was $23.7 million in 2025, $23.9 million in 2024 and $21.8 million in 2023. The pre-taxincreases in noninterest income increasefrom from2024 and 2023 waswere primarily due to new customer relationships and appreciation of assets under management and supervision. TheNoninterest pre-tax income decreaseexpense in 2023 as2025 compared to 20222024 was relatively unchanged, while the increase in noninterest expense from 2023 to 2024 was primarily due to an increase in employee salary expense as we continued to invest in revenue producing positions, and increases in data processing expensesalaries and consulting fees.commissions. Wealth Management assets under management and supervision were $5.9 billion as of December 31, 2025, $5.2 billion as of December 31, 2024,2024 and $4.7 billion as of December 31, 2023 and $4.2 billion as of December 31, 2022.2023.

The Insurance segment reported pre-tax income of $5.5 million in 2025, $5.7 million in 2024,2024 and $5.1 million in 2023 and $3.3 million in 2022,2023, which included noninterest income of $22.5 million in 2024,2025 and 2024 and $21.5 million in 20232023. andNoninterest $19.9expense was $16.9 million in 2022.2025, The$16.7 increasemillion in noninterest2024 and $16.4 million in 2023. Noninterest income in 20242025 compared to 20232024 was primarilyrelatively dueunchanged, toreflecting increasesan increase in revenue from commercial lines of $1.0$672 million.thousand being offset by a decrease in contingent commission income of $691 thousand. The increaseincreases in noninterest incomeexpense in 2023 compared to 2022 waswere primarily due to increases in revenue from commercial lines of $1.0 millionsalaries and contingent commission income of $600 thousand.commissions.

The primary functions of Asset/Liability Management are to minimize interest rate risk and to ensure adequate earnings, capital and liquidity while maintaining an appropriate balance between the maturity and rate sensitivity of interest-earning assets and interest-bearing liabilities. Management's objective with regard to interest rate risk is to understand the Corporation's sensitivity to changes in interest rates and develop and implement strategies to minimize volatility while maximizing net interest income.

Interest rate sensitivity is a function of the repricing characteristics of the Corporation's assets and liabilities. Minimizing the balance sheet's maturity and repricing risk is a continual focus in a changing interest rate environment.focus. The Corporation uses a variety of techniques to assist in identifying and evaluating the potential range of risk, including a maturity/repricing gap analysis as well as an Earnings at Risk analysis under various interest rate scenarios.

The gap analysis identifies repricing gaps in the Corporation’s balance sheet. All assets and liabilities are modeled to reflect some level of behavioral optionality, such as prepayments on loans, early call features on investments or potential pricing change and/or product change to interest-bearing deposits. The Corporation projects all non-interest bearingnoninterest-bearing deposits to be considered non-rate sensitive, while utilizing an all-encompassing deposit beta assumption that captures changes in interest expense that may occur as interest rates change or balances shift into other products. These assumptions are based upon historic behavior; however, they are inherently uncertain and thus cannot precisely predict the impact of changes in interest rates. While actual results will differ from simulated results due to customer behavioral change and/or market and regulatory influences, the following models are important tools to guide management.

Originating loans exposes the Corporation to credit risk, which is the risk that the principal balance of a loan and any related interest will not be collected due to the inability of the borrower to repay the loan. The Corporation manages credit risk in the loan portfolio through the adherence to consistent and conservative underwriting standards and policies established by the senior credit leadership and approved by the Board of Directors. Written loan policies establish underwriting standards, lending limits and other standards or limits as deemed necessary and prudent. While the Corporation has strict underwriting, review, and monitoring procedures in place, they cannot eliminate all of the risks related to these lending activities.

The Corporation and its subsidiaries maintain ample ability to meet the liquidity needs of its customers. Our most liquid asset,assets, unencumbered cash and cash equivalents, were $327.8$549.2 million and $241.5$327.8 million at December 31, 20242025 and December 31, 2023,2024, respectively. Unencumbered securities classified as available-for-sale, which provide additional sources of liquidity, totaled $55.4$37.3 million and $23.3$55.4 million at December 31, 20242025 and December 31, 2023,2024, respectively. Further, the Corporation and its subsidiaries had committed borrowing capacity from the Federal Home Loan Bank andBank, Federal Reserve Bank and a correspondent bank of $3.7$3.8 billion and $3.4$3.7 billion at December 31, 20242025 and December 31, 2023,2024, respectively, of which $2.1$2.3 billion and $1.9$2.1 billion was available as of December 31, 20242025 and December 31, 2023,2024, respectively. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $457.0 million at December 31, 2025 and $468.0 million at December 31, 2024 and $369.0 million at December 31, 2023.2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

CoreNon-brokered deposits continue to be the largest significant funding source for the Corporation. These deposits are primarily generated from individuals, businesses, public funds and non-profit customers located in our primary service areas. The Corporation faces increased competition for these deposits from a large array of financial market participants, including banks, credit unions, savings institutions, mutual funds, security dealers and others.

The Corporation has cash requirements for various financial obligations, including contractual obligations and commitments that require cash payments. The most significant contractual obligations, in both the under and over one-year time period, are for the Bank to repay certificates of deposit and short- and long-term borrowings. Certificates of deposit due within one year of December 31, 2025 totaled $960.1 million. If these deposits do not remain with the Bank, the Bank will be required to seek other sources of funds, which may be more expensive to obtain. The Bank anticipates meeting these obligations by utilizing on-balance sheet liquidity and continuing to provide convenient depository and cash management services through its financial center network, thereby replacing these contractual obligations with similar funding sources at rates that are competitive in our market. The Bank will also use borrowings and brokered deposits to meet its obligations.

(All dollar amounts presented in tables are in thousands, except per share data. “BP” equates to “basis points”; "NMN/M" equates to “not meaningful”; “—” equates to “zero” or “doesn’t round to a reportable number”; and “N/A” equates to “not applicable.” Certain prior period amounts have been reclassified to conform to the current-year presentation.)

This report may contain forward-looking statements.statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used or incorporated by reference in disclosure documents, the words "may," "will," "could," "should," "would," "believe," "anticipate," "plan," "estimate," "expect," "project," "target," and "goal," the negative of these terms and other similar expressions are intended to identify forward-looking statements, but are not the exclusive way to identify such statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.statements. These forward-looking statements may include but are not limited to: statements of goals, intentions and expectations; statements regarding business plans, prospects, growth and operating strategies; statements regarding the quality, growth and composition of loan, investment and deposit portfolios; statements regarding our financial performance, financial condition and liquidity; and estimates of our risks and future credit provision and noninterest expenses. These forward-looking statements are based on our current beliefs and expectations and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to certain risks, uncertainties and assumptions with respect to future business strategies and decisions that are subject to change, including but not limited to those set forth below:

•General economic conditions, either nationally or in our market areas, thatwhich are worse than expected, includedincluding as a result of employment levels and labor shortages, and the effect of a potential recession or slowed economic growth caused by supply chain disruptions or otherwise;

•The imposition of tariffs or other domestic or international governmental policiespolicies, trade restrictions and any retaliatory responsesmeasures impacting our borrowers and the broader economy;

•The impact of a potential federal government shutdownshutdown, debt ceiling impasses or fiscal uncertainty;

•Our ability to attractattract, develop and retain key employees;

The Bank is engaged in domestic banking services for individuals, businesses, municipalities and non-profit organizations. Through its wholly-ownedwholly owned subsidiaries, the Bank provides a variety of financial services throughout its markets of operation. 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 financial results for the threesix months ended MarchJune 31,30, 2026 included tax-free bank owned life insurance (BOLI) death benefit proceeds of $372$1.1 thousand,million, which represented $0.01$0.04 diluted earnings per share. In addition, the financial results for the quartersix months ended June 30, 2026 included a $427 thousand restructuring charge ($337 thousand after-tax), or $0.01 diluted earnings per share, related to the planned closure of two underutilized facilities: a financial center and a limited purpose banking office. The financial results for the threesix months ended MarchJune 31,30, 2025 included tax-free BOLI death benefit proceeds of $1.0$1.1 million, which represented $0.04 diluted earnings per share.

Net interest income is the difference between interest earned primarily on loans, leases and investment securities and interest paid on deposits, borrowings, long-term debt and subordinated notes. Net interest income is the principal source of the Corporation’s revenue. Table 1 presents the Corporation’s average balances, tax-equivalent interest income, interest expense, tax-equivalent yields earned on average assets, cost of average liabilities, and shareholders' equity on a tax-equivalent basis for the three and six months ended MarchJune 31,30, 2026 and 2025. The tax-equivalent net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets. The tax-equivalent net interest spread represents the weighted average tax-equivalent yield on interest-earning assets less the weighted average cost of interest-bearing liabilities. The effect of net interest-free funding sources represents the effect on the net interest margin of net funding provided by noninterest-earning assets, noninterest-bearing liabilities and shareholders' equity. Table 2 analyzes the changes in the tax-equivalent net interest income for the periods broken down by their rate and volume components.

Three and six months ended MarchJune 31,30, 2026 versus 2025

Net interest income on a tax-equivalent basis for the three months ended MarchJune 31,30, 2026 was $63.8$66.7 million, an increase of $6.7$6.8 million, or 11.7%,11.3%, compared to $57.2$60.0 million for the three months ended MarchJune 31,30, 2025. Net interest income on a tax-equivalent basis for the six months ended June 30, 2026 was $130.6 million, an increase of $13.5 million, or 11.5%, compared to $117.1 million for the six months ended June 30, 2025. The increase in tax-equivalent net interest income for the three and six months ended MarchJune 31,30, 2026 compared to the comparable periodperiods in the prior year was driven by higher average balances of loansinterest-earning assets, and cash and cash equivalents, as well as a reduction in our cost of fundsfunds, partially offset by higher average balances of interest-bearing liabilities.

The net interest margin, on a tax-equivalent basis, was 3.33%3.49% and 3.41% for the three and six months ended MarchJune 31,30, 2026, respectively, compared to 3.09%3.20% and 3.14% for the three and six months ended MarchJune 31,30, 2025.2025, respectively. Excess liquidity reduced net interest margin by approximately 11four and eight basis points for the three and six months ended MarchJune 31,30, 2026, respectively, and approximately threefour basis points for the three and six months ended MarchJune 31,30, 2025.

Net interest income includes net deferred costs amortization of $793$1.6 thousandmillion and $554$1.2 thousandmillion for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the threesix months ended MarchJune 31,30, 2026 and 2025 have been calculated using the Corporation's federal applicable rate of 21%.

The provision for credit losses for the three months ended MarchJune 31,30, 2026 and 2025 was $1.3$2.7 million and $2.3$5.7 million, respectively. The provision for credit losses for the six months ended June 30, 2026 and 2025 was $4.0 million and $8.0 million, respectively. The following table details information pertaining to the Corporation’s allowance for credit losses on loans and leases as a percentage of loans and leases held for investment at the dates indicated.

The following table presents noninterest income for the three and six months ended MarchJune 31,30, 2026 and 2025:

Three and six months ended MarchJune 31,30, 2026 versus 2025

Noninterest income for the three months ended MarchJune 31,30, 2026 was $24.1$18.1 million, ana increasedecrease of $1.7$3.4 million, or 7.5%,15.8%, from the three months ended MarchJune 31,30, 2025. Noninterest income for the six months ended June 30, 2026 was $42.2 million, a decrease of $1.7 million, or 3.9%, from the six months ended June 30, 2025.

InvestmentNet advisoryloss commissionon the sale and feewrite-down incomeof OREO increased $541$5.2 thousand, or 9.6%,million for the three and six months ended MarchJune 31,30, 2026 from the comparable periodperiods in the prior year,year drivendue byto appreciationthe invaluation assetsadjustment underrecorded managementduring andthe newquarter customeras relationships.previously mentioned.

NetInvestment gainadvisory oncommission mortgageand bankingfee activitiesincome increased $144$583 thousand, or 22.3%,10.7%, for the three months ended MarchJune 31,30, 2026 and $1.1 million, or 10.2%, for the six months ended June 30, 2026 from the comparable periodperiods in the prior year, primarilydriven dueby toappreciation increasedin salableassets volume.under management and new customer relationships.

BankBOLI ownedincreased life insurance income ("BOLI") decreased $627$686 thousand, or 32.0%,67.8%, for the three months ended MarchJune 31,30, 2026 from the comparable period in the prior year. The financial results for the three months ended MarchJune 31,30, 2026 included $372$708 thousand in BOLI death benefit proceeds compared to $1.0$71 millionthousand for the three months ended MarchJune 31,30, 2025.

The following table presents noninterest expense for the three and six months ended MarchJune 31,30, 2026 and 2025:

Three and six months ended MarchJune 31,30, 2026 versus 2025

Noninterest expense for the three months ended MarchJune 31,30, 2026 was $52.7$53.1 million, an increase of $3.3$2.8 million, or 6.8%,5.5%, from the three months ended MarchJune 31,30, 2025. Noninterest expense for the six months ended June 30, 2026 was $105.8 million, an increase of $6.1 million, or 6.2%, from the six months ended June 30, 2025.

Salaries, benefits and commissions increased $2.6$1.7 million, or 8.5%,5.3%, for the three months ended MarchJune 31,30, 2026 and $4.3 million, or 6.9%, for the six months ended June 30, 2026 from the comparable periodperiods in the prior year,year. The increases were primarily driven by higher salary expense of $1.3 million.million Additionally,and $2.6 million, respectively, due to annual merit increases, as well as increased medical claims expense increasedof by$375 $753 thousand, or 48.8%. The Corporation maintains a self-insured medical planthousand and is$1.1 responsiblemillion, for claim costs up to the stop loss limit. This results in expense volatility based on the timing and magnitude of claims.respectively.

Marketing and advertising expense increased $281$490 thousand, or 79.6%,98.4%, for the three months ended MarchJune 31,30, 2026 and $771 thousand, or 90.6%, for the six months ended June 30, 2026 from the comparable periodperiods in the prior year. ThisThese increaseincreases waswere partiallyprimarily driven by the inclusion of certain sponsorship activities that were historically reported in Other Expense and the Corporation's entry into a sponsorship agreement with a local university, enhancing community engagement and visibility.

Professional fees decreasedincreased $120$432 thousand, or 6.7%,27.1%, for the three months ended MarchJune 31,30, 2026 and $312 thousand, or 9.2%, for the six months ended June 30, 2026 from the comparable periodperiods in the prior year, primarily due to reducedincreased marketing consultant fees.

The Corporation recognized a tax expense of $6.4$5.6 million and $5.2$5.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, resulting in effective tax rates of 19.1%19.6% and 18.7%20.1% for the respective periods. The discreteCorporation recognized a tax effectexpense of vested$12.0 equitymillion compensationand awards$10.2 favorablymillion impactedfor the firstsix quartersmonths ended June 30, 2026 and 2025, respectively, resulting in effective tax rates of 19.3% and 19.4% for the respective periods. The effective tax rates for the three and six months ended June 30, 2026 and 2025 byreflected 132the benefits of tax-exempt income from investments in municipal securities and 71loans basisand points, respectively.leases. Additionally, the effective tax rates for the threesix months ended MarchJune 31,30, 2026 and 2025 were favorably impacted by 21 and 73 basis points, respectively, from the proceeds of BOLI death benefitbenefits proceeds. Excludingand the discrete impact of vested equity compensation awards and BOLI death benefit proceeds, the effective tax rate was 20.6% for the three months ended March 31, 2026 compared to 20.2% for the three months ended March 31, 2025.awards.

Cash and interest-earning deposits decreased $331.4$358.4 million, or 59.8%,64.7%, from December 31, 2025, primarily due to a decrease in interest-earning deposits at the Federal Reserve Bank of $332.1$369.9 million due to seasonal decreases in public funds,funds reflectingand decreasesgrowth in depositsloans and long-termleases debt.held for investment.

Total investment securities at MarchJune 31,30, 2026 increased $5.1$1.2 million, or 1.0%,0.2%, from December 31, 2025 as purchases of $29.5$50.5 million, which were primarily residential mortgage-backed securities, were offset by maturities and pay-downs of $20.1$39.8 million, sales of $2.3$5.7 million, decreases in the fair value of available-for-sale investment securities of $1.2$2.4 million, calls of $500$999 thousand, net amortization of purchased premiums and discounts of $216$429 thousand and a provision for credit losses of $19$23 thousand.

Gross loans and leases held for investment increased $25.4$127.2 million, or 0.4%,1.8%, from December 31, 2025. The increase in gross loans and leases held for investment was primarily due to increases in commercialcommercial, construction and commercial real estate loans, partially offset by decreasesa decrease in construction and residential mortgage loans. For more information on the composition of the commercial loan portfolio, see "Table 4 - Loan Portfolio Overview."

Nonaccrual loans and leases are loans or leases for which it is probable that not all principal and interest payments due will be collectible in accordance with the original contractual terms. Factors considered by management in determining accrual status include payment status, borrower cash flows, collateral valuevalue, and the probability of collecting scheduled principal and interest payments when due.

At MarchJune 31,30, 2026, nonaccrual loans and leases were $13.3$43.9 million and had a related allowance for credit losses on loans and leases of $3.1$10.9 million. At December 31, 2025, nonaccrual loans and leases were $13.7 million and had a related allowance for credit losses on loans and leases of $3.0 million. During the first quarter of 2026, a $3.9 million commercial real estate loan and a $1.0 million residential real estate loan secured for business purpose million werewas placed on nonaccrual status. Subsequent to theirits nonaccrual designation, thesethe loan incurred a $195 thousand charge-off. During the second quarter of 2026, a commercial loan relationship totaling $28.6 million was placed on nonaccrual status with a specific reserve of $9.8 million. Additionally, during the second quarter of 2026, two nonaccrual commercial loans incurred charge-offs totaling $652$1.7 thousand andmillion were transferredcharged-off. These loans were fully reserved prior to held-for-sale status.charge-off. Individual reserves have been established based on current facts and management's judgments about the ultimate outcome of these credits, including the most recent known data available on any related underlying collateral and the borrower's cash flows. The amount of individual reserve needed for these credits could change in future periods subject to changes in facts and judgments related to these credits.

Net loan and lease charge-offs for the three months ended MarchJune 31,30, 2026 were $1.3$1.9 million compared to $1.7$7.8 million for the same period in the prior year. Net loan and lease charge-offs for the six months ended June 30, 2026 were $3.2 million compared to $9.5 million for the same period in the prior year. The three and six months ended June 30, 2025 included a $7.3 million charge-off on a commercial loan relationship.

Other real estate owned (OREO) was $24.1$18.9 million at MarchJune 31,30, 2026, compared to $23.9 million at December 31, 2025. During the second quarter of 2026, a commercial real estate property incurred a $5.2 million valuation adjustment. The adjustment was recorded based on an updated appraisal which reflects the property's estimated fair value less costs to sell. Repossessed assets were $124$10 thousand and $65 thousand at MarchJune 31,30, 2026 and December 31, 2025, respectively. During the threesix months ended MarchJune 31,30, 2026, repossessed assets totaling $78$88 thousand were acquired andacquired, repossessed assets totaling $19 thousand were written down.down and repossessed assets totaling $124 thousand were sold.

The following table provides summarized detail related to outstanding commercial loan balances segmented by industry description as of MarchJune 31,30, 2026:

Goodwill and other intangible assets have been recorded on the books of the Corporation in connection with acquisitions. The Corporation 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 amortization of core deposit and customer-related intangibles was $93$92 thousand and $130$131 thousand for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The amortization of core deposit and customer-related intangibles was $185 thousand and $261 thousand for the six months ended June 30, 2026 and 2025, respectively. See Note 5 to the Condensed Unaudited Consolidated Financial Statements, "Goodwill and Other Intangible Assets," for a summary of intangible assets at MarchJune 31,30, 2026 and December 31, 2025.

The Corporation also has goodwill with a net carrying value of $175.5 million at MarchJune 31,30, 2026 and December 31, 2025, which is deemed to be an indefinite intangible asset and is not amortized. The Corporation completes a goodwill impairment analysis on an annual basis, or more often if events and circumstances indicate that there may be impairment. The Corporation also completes an impairment test for other identifiable intangible assets on an annual basis or more often if events and circumstances indicate there may be impairment. There was no impairment of goodwill or identifiable intangibles during the threesix months ended MarchJune 31,30, 2026 or 2025. There can be no assurance that future impairment assessments or tests will not result in a charge to earnings.

Total deposits decreased $273.6$154.3 million, or 3.9%,2.2%, from December 31, 2025 primarily due to decreases in commercial, consumer, brokered deposits,consumer and public funds, primarily reflecting seasonal public funds runoffdeposits, duringpartially theoffset quarter.by increases in commercial and brokered deposits. At MarchJune 31,30, 2026, noninterest bearingnoninterest-bearing deposits totaling $1.5 billion represented 21.7%21.1% of total deposits compared to $1.4 billion representing 20.2% of total deposits at December 31, 2025. At MarchJune 31,30, 2026 and December 31, 2025, unprotected deposits, which excludesexclude insured, internal, and collateralized deposit accounts, totaled $1.7 billion and $1.6 billion, respectively, which represented 23.7%24.6% and 23.2% of total deposits for the respective periods.

Total borrowings decreased $23.2$80.5 million, or 7.2%,24.9%, from December 31, 2025, primarily due to maturities of long-term FHLB advances totaling $50.0$100.0 million, offset by a $25.0 million long-term FHLB advance, partially offset byand a $1.7$5.6 million increasedecrease in customer repurchase agreements.

Total shareholders' equity increased $8.6$10.9 million, or 0.9%,1.2%, from December 31, 2025. Retained earnings at MarchJune 31,30, 2026 increased by $20.6$37.1 million primarily due to net income of $27.1$50.0 million offset by $6.2$12.6 million in cash dividends paid during the threesix months ended MarchJune 31,30, 2026. Accumulated other comprehensive loss increased by $484$1.3 thousand,million, which was primarily attributable to decreases in the fair value of available-for-sale investment securities of $1.2$1.9 million, net of tax. Treasury stock increased $8.6$23.5 million from December 31, 2025, related to repurchases of 351,138776,677 shares at a cost of $11.9$28.5 million, offset by $3.3$5.1 million of stock issued under the dividend reinvestment and employee stock purchase plans and stock-based incentive plan activity.

The Banking segment reported pre-tax income of $29.1$28.1 million and $26.1$26.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and pre-tax income of $57.2 million and $52.7 million for the six months ended June 30, 2026 and 2025, respectively. See the section of this Management's Discussion and Analysis under the headings "Results of Operations" and "Financial Condition" for a discussion of key items impacting the Banking Segment.

The Wealth Management segment reported pre-tax income of $2.5$2.4 million and $2.0$1.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, which included noninterest income of $8.5$8.4 million in 2026 and $7.7 million in 2025, and pre-tax income of $4.9 million and $7.8$3.8 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.respectively, which included noninterest income of $16.9 million in 2026 and $15.5 million in 2025. The increase in pre-tax income and noninterest income for the three and six months ended MarchJune 31,30, 2026 was driven by appreciation in assets under management compared to the previous year and new customer relationships. Assets under management and supervision were $6.2 billion as of June 30, 2026, $5.8 billion as of March 31, 2026, $5.9$5.4 billion as of DecemberJune 31,30, 2025,2025 and $5.2 billion as of March 31, 2025 and $5.2 billion as of December 31, 2024.2025.

The Insurance segment reported pre-tax income of $3.0$1.1 million and $2.4$964 millionthousand for the three months ended MarchJune 31,30, 2026 and 2025, respectively, which included noninterest income of $7.4$5.4 million in 2026 and $5.3 million in 2025, and pre-tax income of $4.1 million and $6.9$3.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.respectively, which included noninterest income of $12.8 million in 2026 and $12.2 million in 2025. The increase in pre-tax income and noninterest income for the three months ended MarchJune 31,30, 2026 was primarily due to an increase of $342$154 thousand in life and health overrides, partially offset by a decrease of $74 thousand in premiums on commercial lines. The increase in pre-tax income and noninterest income for the six months ended June 30, 2026 was primarily due to increases of $268 thousand and $161 thousand in premiums on commercial lines and life and health overrides, respectively. Additionally, contingent income increased $194$208 thousand for the quarter,six months ended June 30, 2026, from $1.6 million for the threesix months ended MarchJune 31,30, 2025 to $1.8 million for the threesix months ended MarchJune 31,30, 2026. Contingent income is largely recognized in the first quarter of the year.

Under 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 at MarchJune 31,30, 2026.

The Corporation's and Bank's actual and required capital ratios as of MarchJune 31,30, 2026 and December 31, 2025 under regulatory capital rules were as follows.