Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the inclusion in the Registration Statements on Form S-8 (Nos. 333-293087, 333-292594, 333-271774, 333-204071, and 333-195785) of National Bank Holdings Corporation of our report dated April 18, 2025, relating to the consolidated financial statements of Vista Bancshares, Inc. and Subsidiaries as of and for the years ended December 31, 2024 and 2023 appearing in this Current Report on Form 8-K of National Bank Holdings Corporation.

/s/ Whitley Penn LLP

Plano, Texas

February 5, 2026

Exhibit 99.1

VISTA BANCSHARES, INC. AND SUBSIDIARIES

Consolidated Financial Statements

Years Ended December 31, 2024 and 2023

To the Board of Directors and Stockholders of

Vista Bancshares, Inc. and Subsidiaries

Opinion

We have audited the consolidated financial statements of Vista Bancshares, Inc. and Subsidiaries (the “Company”) which comprise the consolidated balance sheet as of December 31, 2024 and 2023, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with GAAP, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audits.

Report on Internal Controls Over Financial Reporting

We also have audited, in accordance with auditing standards generally accepted in the United States of America, the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated April 18, 2025, expressed an unmodified opinion.

Supplementary Information

Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplementary consolidating information is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Plano, Texas

April 18, 2025

VISTA BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

As of December 31, 2024 and 2023

(Dollars in thousands)

See accompanying notes to consolidated financial statements.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Years Ended December 31, 2024 and 2023

(Dollars in thousands)

See accompanying notes to consolidated financial statements.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Years Ended December 31, 2024 and 2023

(Dollars in thousands, except share data)

See accompanying notes to consolidated financial statements.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ended December 31, 2024 and 2023

(Dollars in thousands)

See accompanying notes to consolidated financial statements.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Vista Bancshares, Inc. (“VBI”), a Texas bank holding company, conducts its principal activities through its banking subsidiary, Vista Bank, a Texas state chartered, Federal Reserve Bank member bank. Vista has locations in Abernathy, Austin, Dallas, Hale Center, Idalou, Lubbock, Petersburg, Plainview, Ralls, Haskell and Fort Worth, Texas. Vista also has a location in Palm Beach, Florida, opened in July of 2023. Principal activities include commercial and retail banking.

References in this annual report to “we,” “us,” “our,” “our company,” or the “Company” refers to Vista Bancshares, Inc. and our wholly-owned banking subsidiary, Vista Bank, and the terms “bank” or “Vista” refer to Vista Bank.

VBI owns 100% of the outstanding common stock of Vista. During 2016, the Bank formed NWHWY 5840 HWY LLC (“5840”) for the purpose of acquiring property in Dallas, Texas for a Bank branch site. 5840 is owned 100% by the Bank. During September of 2023, the Bank created TVPX (“Trust”), a Trust whereby the bank is trustor and sole beneficiary of the Trust. The Trust was designed to create a business trust so the owner trustor may hold title to contributed aircraft until such time as Vista, as the Trustor, directs the owner trustor to distribute the aircraft in accordance with written instructions. VBI and these subsidiaries (collectively referred to herein as the “Company”) are included in the accompanying consolidated financial statements.

Accounting Standards Codification

Since 1973, the Financial Accounting Standards Board (“FASB”) has been the private sector organization designated to establish standards for financial accounting and presentation of financial statements known as accounting principles generally accepted in the United States of America (“GAAP”). GAAP is officially recognized as authoritative by the American Institute of Certified Public Accountants (“AICPA”) and the banking regulators.

The FASB’s Accounting Standards Codification™ (“ASC”) constitutes GAAP in its entirety. All other accounting literature (not included in ASC) are nonauthoritative. FASB issues Accounting Standards Updates which serve to update ASC and provide background information about the guidance and the basis for conclusions.

Basis of Presentation

Management strives to prepare and present these notes and the accompanying consolidated financial statements in accordance with GAAP, in all material respects. The Company consolidates (a) subsidiaries in which it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control, when benefits outweigh costs and/or material, and (b) variable interest entities (“VIE”) in which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation.

Comprehensive Income

GAAP defines comprehensive income (“CI”) as the change in stockholders’ equity of a business enterprise during a period from transactions and other events and circumstances, other than from stockholder sources. Therefore, Cl includes all changes in stockholders’ equity for a specified period (e.g., a year) except those resulting from investments by stockholders and distributions to stockholders; Cl is comprised of net income or loss (“earnings”) and other comprehensive income or loss (“OCI”). GAAP generally requires recognized revenue, expenses, gains, and losses be included in the determination of earnings. However, certain changes in assets and liabilities are classified as OCI and presented as a separate component of comprehensive income; accumulated OCI (“AOCI”) is reported as a separate component of stockholders’ equity. AOCI, OCI, and components of OCI are presented net of income taxes. OCI includes unrealized holding gains and losses on investment securities available for sale.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Use of Estimates

The preparation of consolidated financial statements (“CFS”) in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the CFS. Actual results could differ from those estimates. Material estimates particularly susceptible to significant change in the near term relate to the determination of: (a) impairments of: (i) loans, (ii) investment securities, and (b) fair values, including acquired loans. The Company uses fair values to measure certain assets, determine earnings and OCI, and value underlying collateral to estimate impairments of loans, foreclosed assets and repossessed assets. Fair value estimates involve uncertainties and other matters requiring management to exercise significant judgments; changes in assumptions, market conditions, or myriad other factors could significantly affect fair value estimates.

Cash and Cash Equivalents

The Company presents all cash on hand and balances due from other banks, interest-bearing deposits and term certificates of other banks, federal funds sold, and securities purchased under agreements to resell, which have original maturities less than ninety days, as cash and cash equivalents. Federal regulations require banks to set aside specified amounts of cash as reserves against transaction and time deposits, which fluctuate daily. These reserves may be held as vault cash, in a non-interest-bearing account with a district Federal Reserve Bank, or as deposits with correspondents. Management believes the Company complies with these requirements.

Investment Securities

Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities not classified held to maturity or trading are classified as available for sale. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Management determines the appropriate classification of securities at the time of purchase or transfer. Interest income includes amortization and accretion of purchase premiums and discounts. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities in an unrealized loss position for credit-related factors in order to determine if an allowance for credit losses is required. This evaluation is performed on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, any previous allowance for credit loss is written off and the amortized cost basis of the securities is written down to fair value through earnings. For debt securities that do not meet the aforementioned criteria, management will determine if the decline in fair value has resulted from a credit loss or other factors and apply the following: 1) recognize an allowance for credit loss by a charge to earnings for the credit-related component of the decline in fair value (subject to a floor of the excess of the amortized cost over fair value) and 2) recognize the noncredit-related component of the fair value decline, if any, in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. To the extent expected cash flows improve, the standard permits reversal of allowance amounts in the current period earnings.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Investments in Non-Marketable Equity Securities

Vista has the following investments in various non-marketable equity securities, carried at cost, as these securities do not have a readily determinable fair value:

Federal Reserve Bank (“FRB”) Stock Subscription. As a state member bank in the Federal Reserve System, the Company is required to subscribe to the capital stock of the Federal Reserve Bank of Dallas in an amount equal to six percent (6%) of its paid-up capital and surplus, and must pay in half of the amount (3%) to the FRB; the other half is subject to call by the Board of Governors of the Federal Reserve System. Regulations also specify procedures a member bank must follow to purchase or redeem FRB capital stock; the subscription to the FRB stock is restricted and can only be liquidated upon withdrawal from membership. Therefore, Vista carries its FRB stock subscription at the amount deposited with the FRB (which equals one-half (1/2) of the required subscription). An equal amount, which is unrecorded, is subject to call by the Board of Governors of the Federal Reserve System.

Federal Home Loan Bank (“FHLB”) Stock. Vista owns an equity interest in the FHLB. FHLB stock does not have a readily determinable fair value because ownership is restricted, and lacks a market; it can only be sold back to the FHLB at its par value ($100 per share). Therefore, Vista carries its investment in FHLB stock at cost. Management does not believe the value is impaired. FHLB stock is generally pledged as collateral for FHLB advances when any are outstanding.

The Independent Bankers Bank (“TIB”) Stock. Vista is a TIB customer and purchased TIB stock. As a stockholder, Vista participates in certain benefits, including preferential rates and service fees, and dividends. TIB stock does not have a readily determinable fair value because ownership is restricted, it lacks a market and TIB management has the right to determine the redemption price. Vista carries its investment in TIB stock at cost. Management does not believe the value is impaired.

BlueHenge Capital Partners (“BHCP”). Vista has made a $500 investment in BHCP, which includes potential credit for investment under the CRA and related regulations. BHCP is a SBIC licensed by the SBA, privately owned and operated to make long-term investments in American small businesses. Vista’s interest is accounted for at cost.

BlueHenge Capital Partners Fund II (“BHCPII”). Vista has made a $1,000 investment in BHCPII, which includes potential credit for investment under the CRA and related regulations. BHCPII is a SBIC licensed by the SBA, privately owned and operated to make long-term investments in American small businesses. Vista’s interest is accounted for at cost.

Valesco Fund II, LP (“VFII”). Vista has made an investment in VFII, which includes potential credit for investment under the Community Reinvestment Act (“CRA”) and related regulations. VFII is a Small Business Investment Company (“SBIC”), licensed by the United States Small Business Administration (“SBA”), privately owned and operated to make long-term investments in American small business. Vista’s interest is accounted for at cost.

Valesco Fund III, LP (“VFIII”). Vista has made a $1,000 investment in VFIII, which includes potential credit for investment under the Community Reinvestment Act (“CRA”) and related regulations. VFIII is a Small Business Investment Company (“SBIC”), licensed by the United States Small Business Administration (“SBA”), privately owned and operated to make long-term investments in American small business. Vista’s interest is accounted for at cost.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Allowance for Credit Losses — Held to Maturity Debt Securities

The allowance for credit losses on held to maturity securities is a contra-asset valuation account deducted from the amortized cost basis of held to maturity securities to present management’s best estimate of the net amount expected to be collected. Held to maturity securities are charged-off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in our statement of income as a component of provision for credit losses. Management measures expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information adjusted for current conditions and reasonable and supportable forecasts. As of December 31, 2024 and 2023, our held to maturity securities consisted of municipal bonds, corporate bonds, treasury securities, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies. With regard to the treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government and management has no expectation of credit loss. For corporate bonds, which consist solely of bank subordinated debt, management reviewed periodic financial reporting, key risk indicators, including ratings by credit agencies when available, and determined there is $7 current expectation of credit loss as of December 31, 2024 and none as of December 31, 2023. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined there is $17 current expectation of credit loss as of December 31, 2024 and none as of December 31, 2023. Management made the accounting policy election to exclude accrued interest receivable on held to maturity securities from the estimate of credit losses.

Allowance for Credit Losses — Available for Sale Debt Securities

For available for sale debt securities in an unrealized loss position, the Company first assesses whether or not it intends to sell, or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the securities amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If the assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected are less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount the fair value is less than the amortized cost basis. Any impairment not recorded through an allowance for credit losses is recognized in other comprehensive income (loss). Based on evaluation of available evidence, management believes the unrealized losses on the securities as of December 31, 2024 and 2023 are not credit related. Management does not have the intent to sell any of these securities and believes it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date, or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities.

Changes in the allowance for credit losses are recorded as provisions for or reversal of credit loss expense. Losses are charged against the allowance when management believes a security is uncollectible, or when either of the criteria regarding intent to sell or required to sell is met. Accrued interest receivable on securities is excluded from the estimate of credit losses.

Allowance for Credit Losses — Off Balance Sheet Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Allowance for Credit Losses — Loans

The majority of loans and leases (loans and leases are collectively referred to hereinafter as “loans”) are made to customers to finance asset acquisitions, to provide working capital to finance business operations, and other purposes in exchange for interest on outstanding principal balances from origination to maturity or pay-off. Decisions about whether to extend credit to customers are based on anticipated sources of repayment, credit history, availability of collateral, and other considerations. Loans are stated at the amount of unpaid principal, reduced by unearned income and an allowance for credit losses. Interest on loans is recognized using the simple interest method on the daily balances of the principal amounts outstanding. Deferred fees and costs associated with originating loans, except for net deferred fees associated with loans originated under Main Street Lending government programs, are recognized in income and expense generally in the period in which the fees were received and/or costs were incurred. Under GAAP, the net of such fees and costs generally are deferred and recognized over the life of the loan as an adjustment of yield. For the years ended December 31, 2024 and 2023, management believes not deferring the net of such fees and costs and amortizing them over the life of the related loans does not materially affect the consolidated financial position or results of operations of the Company. The net of such deferred fees and costs for loans originated under the Main Street Lending government programs are accounted for under GAAP.

Loans that do not share risk characteristics are evaluated for an allowance for credit losses on an individual basis. Loans evaluated individually are excluded from the collective evaluation. Management routinely identifies significant credits (individual loans or relationships not part of groups of smaller balance homogenous type loans with similar credit risks) to evaluate collectability based on consideration of the following:

When a loan is identified for individual evaluation, management considers factors specific to the credit including scheduled timing and amounts of principal and interest payments in relation to actual payment status (past due status is based on contractual terms), and demonstrated and projected sources of repayment to determine the expected credit losses.

Loans are individually evaluated using either a) the present value of expected future cash flows discounted at the loan’s effective interest rate, b) the loan’s obtainable market price, or c) the fair value of the collateral, if foreclosure is probable or the loan is otherwise considered collateral dependent. A loan is collateral dependent when repayment of the loan is expected to be provided solely by the underlying collateral. Regulatory guidance requires use of the collateral method for loans that are collateral dependent. The collateral method is the predominant method used by management. In general, any portion of the recorded investment in a collateral dependent loan in excess of the fair value of the collateral is recognized as impairment. If repayment of a collateral dependent loan depends on the sale of the collateral, the fair value of the collateral is reduced by estimated selling costs to measure impairment. When management determines foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

The allowance for credit losses (“ACL”) is a valuation account established through a provision for credit losses charged against income and deducted from the loans’ amortized cost basis to present the net amount expected to be collected over the lifetime of the loans. Loans are charged off against the allowance when management determines the loan balance to be uncollectible. Recoveries do not exceed the aggregate amount previously charged-off and expected to be charged-off. Subsequent recoveries, if any, are credited to the allowance.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. We use the weighted-average remaining maturity method (WARM method) as the basis for the estimation of expected credit losses. The WARM method uses a historical average annual charge-off rate. This average annual charge-off rate contains loss content over a historical look back period and is used as a foundation for estimating the credit loss reserve for the remaining outstanding balances of loans in a segment at the balance sheet date. The average annual charge-off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge-off rate. The calculation of the unadjusted historical charge-off rate is then adjusted for current conditions and for reasonable and supportable forecast periods. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio and not reflected in our historic loss factors.

Loan Types

The Company’s management identified the following segments and classes (segment subgroups) of the loan portfolio based on borrower categories and the nature and purpose of loans and underlying collateral as groups of loans with similar risk characteristics used to develop the estimated impairment in the loan portfolio for loans not specifically identified as deteriorated:

Real Estate — Loans secured by real estate (“R/E”). The source of repayment for these loans may be from sale of or rents from the underlying R/E, business operations in the R/E, or other sources. The repayment sources and collateral values are sensitive to economic and other environment factors which may vary based on the type of R/E or related operations, geographically, or both, as well as the quality of borrowers and other managers responsible for operations. Construction and development loans also present risks related to existence of collateral that should result from advances for construction or development activities and require additional monitoring.

Construction, development, and other land — To finance land under development or to be developed, or on- site construction of industrial, commercial, residential, or farm buildings.

Farmland — Secured by farmland and improvements thereon, as evidenced by mortgages or other liens. Includes land known to be used or usable for agricultural purposes, such as crop and livestock production. Includes grazing or pasture land, whether tillable or not and whether wooded or not. Excludes loans for farm property construction and land development purposes.

1 – 4 family residential property — Secured by mortgages or other liens on dwelling units including single family residences, vacation homes, condominiums, interest in individual cooperative housing units, and mobile homes. Loans in this class are considered to be part of a group of smaller balance relatively homogenous loans that are not individually evaluated for classification as deteriorated, although unusually significant loans in this class may be evaluated if they are identified as presenting risk of loss that would be an outlier compared to the historical range of loss.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Multifamily (5+) residential property — Secured by mortgages or other liens on dwelling units for five or more family units such as apartments.

Non-farm non-residential owner-occupied property — Secured by non-farm, non-residential property, including business and industrial, hotels, motels, churches, hospitals, educational and charitable institutions, dormitories, clubs, lodges, association buildings, group homes for aged persons and orphans, golf courses, recreational facilities, and other similar properties occupied by the owner (e.g., not rental properties).

Non-farm non-residential non-owner occupied property — Same as previous, except not occupied by the owner (e.g., rental properties).

Commercial and industrial — Loans to legal entities (corporations, partnerships, limited liability entities, sole proprietorships, and other business enterprises and individuals (except for loans to individuals for investing or personal expenditures), but not to nonprofit organizations. Includes loans to finance construction not secured by real estate and loans to farmers for business purposes other than farming. Includes leases to the same types of borrowers for the same purposes. Includes loans originated under the Paycheck Protection Program and Main Street Lending Program. These loans are underwritten and originated in accordance with program guidelines.

Agricultural production — Loans to finance agricultural production, regardless of the borrower. Agricultural production includes growing and storing of crops; marketing and carrying of agricultural products by the producers thereof; breeding, raising, fattening, or marketing of livestock; fisheries; and forestry. Includes loans to purchase related equipment, machinery, or implements.

Consumer — Loans to individuals for household, family, and other personal expenditures, except home mortgages (1 – 4 family residential) and loans to purchase or carry investment securities. Includes other revolving credits, passenger and recreational vehicles, household appliances and furnishings, and others. Includes leases to the same types of borrowers for the same purposes.

Main Street Loan Program

The Federal Reserve established the Main Street Lending Program (“MSLP”) under The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), that provided for up to $600 billion of new or expanded credit facilities to small and medium-sized businesses. MSLP loans are funded by a combination of the Company and the Federal Reserve Bank of Boston special purpose vehicle (“SPV”). Under the program, the SPV purchased 95% participation in each MSLP loan originated by the Company with the remainder of the loan retained by the Company. As of December 31, 2024, the Company had total MSLP loans of $192,923, sold participations to the SPV of $183,277, and retained $9,646 in MSLP loans. As of December 31, 2023, the Company had total MSLP loans of $280,633, sold participations to the SPV of $266,601, and retained $14,031 in MSLP loans. The Company earned servicing fees for the years ended December 31, 2024 and 2023 of $1,068 and $1,206, respectively.

All others — Loans to financial institutions (banks and other depository institutions and other associations, companies, and financial intermediaries whose primary business is to accept deposits and to extend credit); US state and local governments and subdivisions (other than investment securities, loans to United States government and agencies, the fifty states and District of Columbia, and their municipalities, school and other districts, Puerto Rico and US territories and possessions and their political subdivisions and Indian tribes in the US); foreign governments and institutions; and loans to individuals for investment purposes (other than loans secured by real estate).

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Credit Quality Indicators

The majority of the loan portfolio is comprised of loans to businesses and individuals throughout Texas, primarily in West Texas, Austin and the Dallas-Fort Worth metropolitan areas. In the third quarter of 2023 we opened a single branch in Palm Beach, Florida. These geographic concentrations subject the loan portfolio to the general economic conditions within their respective geographic areas. The risks created by these concentrations have been considered by management in the determination of the adequacy of the ACL. Management believes the ACL is adequate to cover estimated losses on loans at December 31, 2024 and 2023.

From a credit risk standpoint, the Company classifies its loans in one of five categories: (i) pass, (ii) mention, (iii) substandard, (iv) doubtful, or (v) loss.

The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on credits quarterly. Ratings are adjusted to reflect the degree of risk and loss felt to be inherent in each credit as of each quarterly reporting period. The Company’s methodology is structured so specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

As loans progress down the above classification scheme, the frequency of review increases. In some cases, management may determine an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded form the collective evaluation.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

The Company designates loans as collateral dependent if repayment of the loan is expected to be provided substantially through the operation or sale of the collateral when the borrower, based on management’s assessment, is experiencing financial difficulty as of the reporting date. These loans do not share common risk characteristics and are not included within the pooled loans for determining the allowance for credit losses. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the estimate of expected credit losses by comparing the amortized cost basis of a financial asset and the fair value of collateral securing the financial asset as of the reporting date. The allowance for credit losses is calculated on an individual loan basis based on the difference between the amount of the amortized cost basis greater than the fair value of the collateral securing the loan, which is adjusted for liquidation costs/discounts. If the fair value of the collateral exceeds the amortized cost basis, no allowance is required.

The fair value of individually evaluated collateral dependent loans is generally based on the fair value of collateral, less costs to sell. The fair value of real estate collateral is determined using recent real estate appraisals for residential and commercial properties. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Non-real estate or business asset collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.

Identification and classification of significant credits and determination of a collateral dependent loan is inherently subjective and requires judgments and estimates susceptible to significant revision as more information becomes available due to changing circumstances and/or the passage of time. Judgments by knowledgeable professionals are subject to variations, even given the same facts and circumstances. The Company’s regulators routinely review the adequacy of the Company’s ACL and may require the Company to increase its ACL based on their policies and/or judgments about individual borrowers, economic conditions, and other factors available to them at the time of their examinations.

From time to time, we modify our loan agreements for borrowers experiencing financial difficulty. Modifications to loan terms may include a lower interest rate, a reduction of principal, or a longer term to maturity. We review each such modified loan and determine on a case-by-case basis if the loan can be grouped with its like segment for allowance consideration or whether it should be individually evaluated for a specific allowance for credit loss allocation. If individually evaluated, an allowance for credit loss allocation is based on either the present value of estimated future cash flows or the estimated fair value of the underlying collateral.

The accrual of interest on loans is discontinued when there is a clear indication the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed. Interest income is subsequently recognized on a cash basis if the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current, and it is probable we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.

Method of Accounting for Loans Acquired

Acquired loans are recorded at their estimated fair value at the acquisition date and are initially classified as either purchased credit deteriorated (“PCD”) loans (i.e. loans that reflect credit deterioration since origination and it is probable at acquisition the Company will be unable to collect all contractually required payments) or non-purchased credit deteriorated loans (“Non-PCD”).

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except share and per share amounts)

Performance of certain loans may be monitored and based on management’s assessment of the cash flows and other facts available, portions of the accretable difference may be delayed or suspended if management deems appropriate. The Company’s policy for determining when to discontinue accruing interest on acquired performing loans and the subsequent accounting for such loans is essentially the same as the policy for originated loans described above.

An ACL for Non-PCD loans is recorded using a methodology similar to that described for originated loans. The establishment of the allowance is based on the loan’s amortized basis and established through a charge to provision for credit losses. An ACL is established for PCD loans by adding the estimated ACL to the loan’s fair value at the date of acquisition rather than through a provision for credit losses. Subsequent deterioration of PCD loans after the date of acquisition is recognized through the provision for credit losses.

Credit-Related Financial Instruments

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under commercial letters of credit and standby letters of credit.

Transfers of Financial Assets

Transfers of financial assets (primarily “loan participations sold” and SBA loans sold at Vista) must be evaluated to determine whether the transfer meets all of the following conditions to qualify for sale accounting: (a) isolation of the transferred assets from the transferor, (b) the transferee has the right to pledge or exchange the assets received and (c) the transferor’s lack of effective control over the transferred assets.

Foreclosed and Repossessed Assets

Assets acquired through, or in lieu of, loan foreclosure or repossession (“FandR”), if any, are held for sale and are initially recorded at fair value less cost to sell at the date of FandR, establishing a cost basis for the asset(s). Differences between the loan investment carrying value and the cost basis of the FandR asset(s) are charged against the ACL. Subsequent to FandR, capital improvements to FandR assets that increase the value, if any, are added to the FandR cost basis and management performs periodic valuations and the assets are carried at the lower of the FandR cost basis or estimated fair value less cost to sell. Revenue and expenses from holding and/or operating foreclosed assets and changes in the valuation allowance are netted and included in earnings.

Premises and Equipment

Buildings and improvements and furniture and equipment are recorded at cost. Depreciation on depreciable assets is provided over the estimated useful life of the asset, except for assets under capital lease obligations, which are depreciated over the shorter of the non-cancelable lease term or the estimated useful life of the leased asset, under the straight-line method. Maintenance, repairs, renewals, and betterment that do not significantly extend the useful life of the asset are recognized as expense as incurred. Book value (cost less accumulated depreciation at disposal) of asset disposals are removed from the accounts and the difference between the proceeds, if any, and the book value are netted and reported as gain or loss in earnings for the corresponding period. The proceeds from trade-ins are added to the cost basis of the new asset and any difference between the proceeds and book value of the trade-in is reflected as gain or loss in earnings.

Leases

Operating leases in which we are the lessee are recorded as right-of-use assets with corresponding lease liabilities. The right-of-use asset represents our right to utilize the underlying asset during the lease term, while the lease liability represents the present value of the obligation of the Company to make periodic lease payments over the life of the lease. The associated operating lease costs are comprised of the amortization of the right-of-use asset and the implicit interest accreted on the lease liability, which is recognized on a straight-line basis over the life of the lease.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Goodwill and Intangible Assets

Goodwill represents the excess of the cost of entities acquired at inception over the fair value of the net assets acquired, net of amortization. Goodwill in VBI and Vista have been assigned to the banking subsidiary and operations reporting units, respectively, and are tested for impairment if an annual qualitative assessment (of whether it is likely the fair value of these reporting units are less than their carrying value) indicates the need for an impairment test, but may be tested for impairment if any event occurs or circumstances change that would more-likely-than-not reduce the fair value of the banking operations reporting unit below its carrying value. Intangible assets consist of core deposit intangibles and servicing assets.

Core deposit intangibles are initially recognized based on a valuation performed as of the consummation date. Core deposit intangibles are amortized over the average remaining life of the acquired customer deposits, normally 10 years, using the straight-line method.

GAAP requires servicing rights acquired through the origination of loans, which are sold with servicing rights retained, are recognized as separate assets. Servicing assets are recorded as the difference between the contractual servicing fees and adequate compensation for performing the servicing and are periodically reviewed and adjusted for any impairment. The amount of impairment recognized, if any, is the amount by which the servicing assets exceed their fair value. Fair value of the servicing assets is estimated using discounted cash flows based on current market interest rates. Servicing rights are amortized over their estimated lives.

All intangible assets are tested annually for potential impairment or when triggering events occur. No impairment charges were recorded during the years ended December 31, 2024 and 2023.

Derivative Financial Instruments

Derivatives are recorded on our consolidated balance sheets as assets and liabilities measured at their fair value. The accounting for increases and decreases in the value of derivatives depends upon the use of the derivatives and whether the derivatives qualify for hedge accounting. At inception of the derivative, we designate the derivative as one of two types based on our intention and belief as to the likely effectiveness as a hedge. These two types are (1) a hedge of the fair value of a recognized asset or liability (“Fair Value Hedge”), and (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“Cash Flow Hedge”). As of December 31, 2024 and 2023, the Company did not have any derivatives designated as a Cash Flow Hedge.

For certain Fair Value Hedges, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in noninterest income or expense in our consolidated statements of income. Fair Value Hedge instruments offered by the Company which are included in noninterest income or expense include pass-through interest rate swap products to qualified commercial banking customers. Under this type of contract, the Company enters into an interest rate swap contract with a customer, while at the same time entering into an offsetting interest rate swap contract with a financial institution counterparty. Changes in the fair value of the underlying derivatives are designed to offset each other so they would not significantly impact the Company’s operating results.

All derivatives are carried at fair value in either other assets or other liabilities in the accompanying consolidated balance sheets. At December 31, 2024, the Company’s derivative assets and liabilities each totaled $446. There were no derivatives at December 31, 2023.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Income Taxes

The Company files a consolidated Federal income tax (“FIT”) return and recognizes FIT for the tax effects of the transactions reported in the CFS. FIT expense or benefit in earnings consists of taxes currently due or refunds receivable plus deferred tax effects from differences between the basis of assets and liabilities for CFS and FIT purposes, except that the deferred FIT expense or benefit on components of OCI are netted against those items. Deferred tax assets and liabilities represent the future Federal income tax return consequences of those differences, which will be deductible or taxable when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. The Company accounts for interest or penalties related to Internal Revenue Service (“IRS”) assessments, if any, as income tax expense.

Texas margin taxes are considered income taxes for financial reporting purposes. Texas margin taxes due annually in May are based on the preceding calendar year’s income and expenses; accrued expenses and other liabilities in the accompanying CFS include an accrual for estimated Texas margin taxes. Related deferred taxes are insignificant.

Advertising Costs

Advertising costs are recognized when incurred and are recorded as marketing expenses on the consolidated statement of income and comprehensive income.

Stock Option Expense

Compensation expense for stock options is based on the fair value of the award on the measurement date, which, for the Company, is the date of the grant and is recognized ratably over the service period of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model.

Restricted Stock Expense

Compensation expense for restricted stock awards is based on the fair value of the award on the measurement date, which, for the Company, is the date of the grant and is recognized using the straight-line method over the service period of the award.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation and had no effect on prior year net income or stockholders’ equity.

Subsequent Events

The Company has evaluated all subsequent events for potential recognition and disclosure through April 18, 2025, the date of which the consolidated financial statements were available to be issued and noted the following subsequent events requiring financial statement recognition or disclosure.

In December of 2024, we entered into a multi-branch purchase and assumption agreement (“Agreement”) whereby we agreed to sell seven rural West Texas branches including Abernathy, Hale Center, Haskell, Idalou, Petersburg, Plainview, and Ralls to First United Bank including the real estate and buildings, furniture and equipment and generally all the branches’ loans and deposits. Immediately prior to the consummation of the sale on February 28, 2025, the branches reported total loans of $118.9 million, fixed assets and prepaids of $3.3 million and deposits of $370.0 million. The Company received a premium on deposits sold of approximately 4.0%.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

In March of 2025, the company charged off approximately $9.1 million of agriculture loans (“Credit Relationship”) to a single borrower. The credit relationship had an aggregate remaining balance of approximately $1.4 million. There was no specific reserve on this credit relationship as the 2024 crop inspection and appraisal information indicated that the credit relationship was fully collateralized. In January 2025, the borrower informed the bank that the harvest was complete and payments should begin to be received from commodity processors. Later in 2025, the borrower ceased all communications with the bank which then began collection efforts. Collection efforts are ongoing but indicate that harvest proceeds will be significantly less than the crop inspection based on challenging farming conditions, falling commodity prices and less than anticipated harvested amounts. Other collateral including a 1 – 4 family residence, farm equipment, FSA guarantees and FSA disaster payments are all being pursued as potential sources of proceeds for recovery of the charge off. The potential for litigation related to defending the bank’s first-lien security interest in the farm equipment is likely as other creditors are making claims on that collateral. The Company’s head of special assets is managing the liquidation, collection and litigation aspects of this credit relationship.

Recently Issued Accounting Standards — Adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. The Company adopted CECL on January 1, 2023, using a modified retrospective transition approach. The impact of adopting CECL resulted in an allowance for credit losses for loans and leases increase of $4,950 from December 31, 2022. The Company recorded a decrease to retained earnings of $3,911, which was net of tax effects of $1,039, as of January 1, 2023, for the cumulative effect of adopting ASC 326. The increase was primarily due to recognizing expected lifetime losses in the portfolio and adding an economic forecast based upon our assumptions on January 1, 2023. The Company adopted ASC 326 using the weighted average remaining maturity method (WARM) method. Results for reporting periods beginning after January 1, 2023, are presented under ASC 326.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) by creditors in ASC 310-40. The update also enhances disclosure requirements for certain loan restructurings by creditors when a borrower is experiencing financial difficulty. Specially, rather than applying the recognition and measurement guidance for TDRs, an entity will apply the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or a continuation of an existing loan. The Company adopted this ASU effective on January 1, 2023, and used the prospective method, which did not have a significant impact on its consolidated financial statements.

Recently Issued Accounting Standards — Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 720), Improvements to Income Tax Disclosures.” ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions.

The standard is not expected to have a significant impact on the Company’s financial statements.

2.     Acquisitions

The acquisition described below was accounted for under the purchase method of accounting in accordance with FASB ASC 805, “Business Combinations”. The purchased assets and assumed liabilities were recorded at their respective estimated fair values as of the date of acquisition with any excess of fair value of the net tangible and intangible assets acquired over the cost of the acquisition recorded as a bargain purchase gain. Additional information related to core deposit intangible assets is included in Note 7 — Intangible assets.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

The operating results of the acquired bank are included with the Company’s results of operations since the date of acquisition. Acquisition-related costs of $400 are included in the consolidated statement of income and comprehensive income in Other noninterest expense for the year ended December 31, 2023. These costs, which include advisory, legal, accounting, valuation, and other professional fees, were reflected as expenses in the periods in which the costs were incurred, or services received.

Effective April 1, 2023, VBI acquired 100% of the outstanding common stock of Charis Holdings, Inc., including its wholly owned subsidiary, Charis Bank, in exchange for VBI common stock, issued at estimated fair value as defined in the purchase agreement, amounting to total consideration of approximately $30,154. Under the terms of the acquisition, 323,588 shares of VBI were issued to shareholders of Charis Holdings, Inc. plus cash of $5 for partial shares. The purpose of the acquisition was to continue to grow the Company in terms of assets, deposits, and market area.

As a result of the acquisition, the Company expanded its market area in the Dallas, Texas and surrounding metroplex area including the city of Justin, Texas. A bargain purchase gain of $4,475 was recognized as a result of the acquisition and is a result of the excess of fair value of net assets acquired over consideration paid. Below is a summary of total consideration paid:

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition, April 1, 2023.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Below is a reconciliation of net cash received from the acquisition as stated in the accompanying consolidated statement of cash flows for the year ended December 31, 2023.

3.     Investment Securities — Available for Sale and Held to Maturity

Investment securities have been classified in the consolidated balance sheet according to management’s intent. The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale and held to maturity are as follows:

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

“GSE” stands for government sponsored enterprise, formed by the US Government, but does not have “full faith and credit” of US Government backing credit: considered higher risk than US Government agencies.

For available for sale debt securities in an unrealized loss position, the Company first assesses whether or not it intends to sell, or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the securities amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. With regard to available for sale debt securities; treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Management has determined there is no expectation for credit loss on securities back by the U.S. government, or agencies thereof. For corporate bonds, which consist solely of bank subordinated debt, management reviewed periodic financial reporting, key risk indicators, including ratings by credit agencies when available, and determined there is no current expectation of credit loss. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined there is no current expectation of credit loss.

If this assessment indicates a credit loss exists, the present value of the cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected are less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount the fair value is less than the amortized cost basis. Any unrealized loss that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss). Based on evaluation of available evidence management believes the unrealized losses on the securities as of December 31, 2024 and 2023 are not credit-related. Management does not have the intent to sell any of these securities and believes it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities.

With regard to held to maturity debt securities; treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. For corporate bonds, which consist solely of bank subordinated debt, management reviewed periodic financial reporting, key risk indicators, including ratings by credit agencies when available, and determined there is $24 current expectation of credit loss. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined there is no current expectation of credit loss.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

The following tables disclose the Company’s available for sale investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position:

The number of investment positions in an unrealized loss position at December 31, 2024 and December 31, 2023 totaled 64 and 39, respectively. The Company does not believe these unrealized losses are credit related and the Company has the intent and ability to hold the securities prior to recovery and/or maturity. The unrealized losses noted are interest rate-related due to the level of interest rates at December 31, 2024. The Company has reviewed the ratings of the issuers and has not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. As a result of this assessment, no allowance for credit loss was recorded on investment securities available-for-sale as of December 31, 2024.

Sales of Investment Securities

The Company sold $2,450 of investment securities available for sale during the year ended December 31, 2024. The Company had total proceeds of $2,462 and realized gross gains of $12 and no gross losses. The Company did not sell any investment securities available for sale during the year ended December 31, 2023.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

AFS Securities Pledged

At December 31, 2024 and 2023, Vista had pledged securities with carrying values of approximately $55,158 and $24,549, respectively, to secure public deposits and our Federal Reserve Bank discount window line.

Contractual Maturities

The amortized cost and estimated fair value of debt securities, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations typically are issued with stated principal amounts and are backed by pools of mortgage loans that have varying maturities. The expected maturities can differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The term of mortgage-backed securities and collateralized mortgage obligations thus approximates the term of the underlying mortgages and can vary significantly due to prepayments; therefore, the securities are not included in the maturity categories below.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

4.     Loans and Leases, and Allowance for Credit Losses

Major Classifications of Loans

Loans in the accompanying consolidated balance sheet consisted of the following:

Loan balances as of December 31, 2024 and December 31, 2023 are stated net of $321,886 and $350,721 of participations sold, respectively. Of these balances, as of December 31, 2024 and 2023, MSLP participations sold to the Federal Reserve Bank of Boston special purpose vehicle totaled, $183,277 and $266,601, respectively. The net outstanding balance of MSLP loans included in the total balance of loans as of December 31, 2024 and 2023 totaled $9,646 and $14,032, respectively.

Nonaccrual Loans

During the years ended December 31, 2024 and 2023, interest income not recognized on nonaccrual loans was $403 and $140, respectively.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. As mentioned in Note 1, the accrual of interest on loans is discontinued when there is a clear indication the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. Nonaccrual loans, segregated by class of loans were as follows:

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

During the year ended December 31, 2024, the Company wrote off accrued interest receivables by reversing interest income of $24 on commercial and industrial loans, $10 on construction, development & vacant loans, $4 on 1 – 4 family residential loans, and $1 on other loans. During the year ended December 31, 2023, the Company wrote off accrued interest receivables by reversing interest income of $67 on commercial and industrial loans and $2 on 1 – 4 family residential loans.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Past Due Loans

Age analyses of past due loans segregated by class of loans were as follows:

As of December 31, 2024 the Company had $12 loans over 90 days past due and still accruing. As of December 31, 2023 the Company had no loans over 90 days past due and still accruing.

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Credit Quality Indicators

The following summarizes the Company’s internal ratings of its loan, segregated by class of loans:

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Allowance for Credit Losses

The following tables detail the activity in the allowance for credit losses by portfolio segment:

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Collateral Dependent Loans

The Company designates loans as collateral dependent if repayment of the loan is expected to be provided substantially through the operation or sale of the collateral when the borrower, based on management’s assessment, is experiencing financial difficulty as of the reporting date. These loans do not share common risk characteristics and are not included within the pooled loans for determining the allowance for credit losses. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the estimate of expected credit losses by comparing the amortized cost basis of a financial asset and the fair value of collateral securing the financial asset as of the reporting date. The allowance for credit losses is calculated on an individual loan basis based on the difference between the amount of the amortized cost basis greater than the fair value of the collateral securing the loan, which is adjusted for liquidation costs/discounts. If the fair value of the collateral exceeds the amortized cost basis, no allowance is required.

The fair value of individually evaluated collateral dependent loans is generally based on the fair value of collateral, less costs to sell. The fair value of real estate collateral is determined using recent real estate appraisals for residential and commercial properties. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Non-real estate or business asset collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.

The following table presents an analysis of collateral dependent loans and related collateral types of the Company:

VISTA BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
(Dollars in thousands, except share and per share amounts)

Modifications Made to Borrowers Experiencing Financial Difficulty

From time to time, the Company modifies its loan agreement with a borrower. A modified loan is considered a modification made to a borrower experiencing financial difficulty when two conditions are met: (i) the borrower is experiencing financial difficulty and (ii) the modification is in the form of principal forgiveness, an interest rate reduction, an other than-insignificant payment delay, a term extension or a combination of these modifications. The Company had no loans modified due to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024 and December 31, 2023.

During the twelve months ended December 31, 2024 and December 31, 2023, there were no modifications to borrowers in financial difficulty that had a payment default. A default for purposes of this disclosure is a modification made to borrower experiencing financial difficulty in which the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral. These loans have no unfunded commitments.

5.    Premises and Equipment

Premises and equipment in the accompanying consolidated balance sheet consisted of the following: