COMMERCE BANCSHARES INC /MO/
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
CBSH$55.04-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000022356-26-000133
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000022356-26-000190
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 142 current paragraphs.
76 unchanged; 54 reworded; 10 added; 5 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 27 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Net income for the first six months of 2026 totaled $301.4 million, an increase of $17.3 million, or 6.1% from the same period last year. Diluted earnings per common share was $2.06, an increase of 1.98% compared to $2.02 per share in the same period last year. For the first six months of 2026, the annualized return on average assets was 1.73%, the annualized return on average equity was 13.96%, and the efficiency ratio was 59.19%. Net interest income increased $65.7 million, or 12.0%, over the same period last year. This growth was largely due to an increase in interest income on loans of $65.2 million. Interest expense on deposits increased $7.4 million, while interest expense on borrowings decreased $5.2 million, over the same period last year. The provision for credit losses was $19.7 million for the first six months of 2026, compared to a provision of $20.1 million in the same period last year. Non-interest income increased $35.1 million, or 10.8%, from the first six months of last year largely due to increases in trust fees and deposit account fees, partly offset by lower gains of sales on assets. Non-interest expense increased $105.4 million, or 21.8%, over the first six months of last year, mainly due to higher salaries and benefits expense of $52.6 million, primarily a result of onboarding FineMark team members at the beginning of 2026. Professional and other services expense increased $12.3 million, partly due to acquisition-related legal and professional fees, while data processing and software expense increased $11.4 million. Additionally, other non-interest expense increased $22.6 million over the same period in the prior year, mainly due to $12.0 million in litigation expense and an increase of $10.7 million in acquisition-related intangible amortization expense.
Current report
Total interest income (FTE) for the first six months of 2026 increased $65.8 million over the same period last year mainly due to higher interest income on loans (FTE), securities purchased under agreements to resell and deposit balances at the Federal Reserve, slightly offset by lower interest income on investment securities (FTE). Loan interest income (FTE) increased $65.5 million, or 12.6%, due to a $3.1 billion, or 17.6%, increase in average loan balances, partly offset by a decline of 25 basis points in the average rate earned. Most of the increase in interest income was due to loan balances acquired in the FineMark acquisition. Increases in interest income occurred in the personal real estate, revolving home equity, business real estate, business and consumer loan categories, while decreases occurred in the construction and land and consumer credit card loan categories. Interest income on investment securities (FTE) decreased $1.6 million mainly due to decreases in average balances of asset-backed securities and mortgage-backed securities, partly offset by an increase in average balances of U.S. government and federal agency obligations. Interest earned on asset-backed securities decreased $7.6 million mainly due to a decline in average balances of $491.7 million, while interest earned on mortgage-backed securities decreased $5.7 million mainly due to lower average balances of $601.7 million. These decreases in interest income on investment securities were partly offset by increases in interest earned on U.S. government and federal agency securities of $14.2 million due to higher average balances of $672.9 million, or 25.8%. Higher interest income of $1.9 million was earned on securities purchased under agreements to resell, which saw growth in both average balances and rates earned. Interest income on balances at the Federal Reserve increased $2.2 million due to a $573.8 million increase in the average balance invested, partly offset by a 76 basis point decline in the average rate earned.
Current report
Total interest expense for the first six months of 2026 increased $2.2 million compared to the same period last year. Interest expense on deposits increased $7.4 million, due to a $2.1 billion increase in average balances, partly offset by an 11 basis point decline in the average rate paid. Interest expense on borrowings decreased $5.2 million, due to lower interest expense on securities sold under agreements to repurchase of $6.8 million resulting from lower average rates paid and average balances. This decrease was partly offset by higher interest expense on federal funds purchased of $770 thousand, mainly due to lower average rates paid, partly offset by an increase in average balances, while interest expense on other borrowings increased $845 thousand mainly due to higher average balances. The overall cost of total interest bearing liabilities decreased to 1.70% compared to 1.87% in the same period last year.
Current report
Non-interest income for the first six months of 2026 was $359.7 million compared to $324.6 million in the first six months of 2025, which was an increase of $35.1 million, or 10.8%. The increase was mainly due to higher trust fees, deposit account fees and bank card fees. Trust fees increased $30.4 million, or 27.1%, mainly due to higher private client and institutional trust fees. Bank card transaction fees for the current year increased $1.8 million, or 1.9%, over the same period last year, mainly due to growth of $859 thousand in net corporate card fees, $631 thousand in net credit card fees and $233 thousand in net debit card fees. Deposit account fees increased $5.0 million, or 9.4%, mainly due to higher corporate cash management and overdraft and return item fees. Consumer brokerage service fees increased $1.1 million, or 11.2%, mainly due to higher advisory fees. Capital market fees decreased $282 thousand, or 2.5%, while loan fees and sales decreased $306 thousand, or 4.5%, mainly due to lower loan commitment fees. Other non-interest income decreased $2.5 million, or 6.5%, mainly due to decreases of $5.7 million in gains on the sales of assets and $1.4 million in tax credit sales fees. In addition, a decrease in fair value adjustments of $723 thousand was recorded on the Company's deferred compensation plan assets and liabilities. These decreases were partly offset by increases in cash sweep commissions of $2.4 million, bank-owned life insurance income of $936 thousand, and ACH network fees of $814 thousand.
Current report
Net gains and losses on investment securities, which were recognized in earnings during the three months ended June 30, 2026 and 2025, are shown in the table above. Net securities gains of $12.8 million were reported in the second quarter of 2026, compared to net gains of $437 thousand in the same period last year. The net gains in the second quarter of 2026 were mainly comprised of net gains of $114.1 million on equity securities, primarily related to gains recorded on the Company's shares of Visa, as described in Note 4, Investment Securities. The $114.1 million gain on equity securities during the second quarter of 2026 was mainly comprised of $34.5 million in gains on sales of the Company's Visa common stock and gains in fair value of $71.0 million recorded on the Company's Visa common stock still held at June 30 2026. Additionally, the Company recorded $8.6 million in net gains on other equity securities. These gains were largely offset by net losses of $97.7 million on sales of available for sale debt securities, related to the Company's available for sale debt portfolio repositioning, in which the Company sold bonds with an amortized cost of $904.7 million and subsequently reinvested the proceeds into higher yielding available for sale debt securities. Additional information about the Company's available for sale debt portfolio repositioning transactions is discussed in Note 4, Investment Securities. In addition to losses on available for sale debt securities, losses in fair value of $4.0 million were recorded on private equity investments during the second quarter of 2026. During the second quarter of 2025, the net gains on investment securities were primarily comprised of net gains in fair value of $4.4 million recorded on private equity investments and net gains of $1.9 million on equity investments, mostly offset by net losses of $4.2 million on sales of available for sale debt securities.
Current report
Non-interest expense amounted to $588.2 million for the first six months of 2026, an increase of $105.4 million, or 21.8%, over the first six months of 2025. Salaries and benefits expense increased $52.6 million, or 17.1%, mainly due to an accrual for retention bonuses, acquisition-related compensation payments and the onboarding of FineMark's team members. Salaries and benefits expense included acquisition-related costs of $10.3 million for the first six months of 2026. Full-time salaries, incentive compensation and stock compensation expense increased $28.2 million, $12.9 million and $4.3 million, respectively, over the prior year. Data processing and software expense increased $11.4 million, or 17.5%, due to increased costs for service providers and software expense. Professional and other services expense increased $12.3 million, or 53.5%, and included $6.1 million in acquisition-related legal and professional fees. Occupancy expense increased $2.3 million, or 8.2%, and equipment expense increased $1.1 million, or 10.9%, both mainly due to higher depreciation expense. Marketing expense increased $1.6 million, or 13.1%, and supplies and communication expense increased $714 thousand, or 7.1%, mainly due to higher supplies and data network expense. Other non-interest expense increased $22.6 million, mainly due to increases of $12.0 million in litigation expense, $10.7 million in acquisition-related intangible amortization expense and $1.2 million in travel an entertainment expense.
Current report
For the six months ended June 30, 2026 and June 30, 2025, total annualized net loan charge-offs were .24% for each period. Net loan charge-offs were $24.5 million in the first six months of 2026, an increase of $4.0 million over net loan charge-offs of $20.5 million in the first six months of 2025. The increase in net loan charge-offs during the first six months of 2026 was mainly driven by higher net charge-offs business real estate loans.
Current report
The allowance for credit losses decreased $3.2 million compared to prior quarter. The allowance for credit losses in the commercial portfolio decreased $1.6 million primarily due to decreases in the allowance on construction loans due to continued low loss rates and lower outstanding loan balances. Additionally, decreases in the allowance for credit losses in business loans lowered the overall allowance for credit losses in the commercial portfolio, due to lower business loan balances in certain industries and improvement in certain economic indicators, partially offset by an overall increase in outstanding business loan balances. The allowance for credit losses on the personal banking portfolio also decreased $1.6 million primarily due to a decrease in the allowance on the personal real estate loans, mostly due to improvements in home sale trends in certain markets. The decrease in allowance caused the allowance as a percentage of outstanding loans to decrease compared to the prior quarter. The forecast utilized to estimate the allowance for credit losses on loans at June 30, 2026 assumes slowing economic expansion and stable unemployment, and changes in the forecast utilized to estimate the allowance at June 30, 2026 did not significantly change the allowance estimate during the quarter.
Current report
At June 30, 2026, total loans were $20.8 billion, an increase of $3.1 billion compared to balances at December 31, 2025. The increase was primarily due to the acquisition of FineMark, which added $2.7 billion in loan balances. The balances of personal real estate, business, business real estate, and revolving home equity loans grew $1.3 billion, $676.6 million, $389.7 million, and $274.2 million, respectively, compared to December 31, 2025. Consumer loans, which includes automobile, marine and RV, fixed rate home equity and other consumer loans, increased $330.6 million, mainly due to growth in other consumer loans.
Current report
Six Months Ended June 30, 2026 and 2025
Removed paragraphs (5)
Previous report
Visa Class B-2 common shares exchange offer
Previous report
On April 13, 2026, Visa, Inc. (“Visa”) announced the commencement of a public offering to exchange Class B-2 common stock for a combination of shares of Class B-3 common stock and Class C common stock (“2026 Exchange Offer”). The Company tendered all of its Visa Class B-2 shares and is awaiting notification of acceptance of that tender and the closing of the 2026 Exchange Offer. If the Company’s tendered shares are accepted and the exchange occurs in the second quarter of 2026, the Company expects to record a significant gain during the second quarter of 2026 based on the conversion privilege of the Class C common stock and the closing price of Visa Class A common stock. A full description of the terms of the 2026 Exchange Offer is set forth in Visa’s related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 6, 2026, publicly filed with the U. S. Securities and Exchange Commission.
Previous report
As described in Note 4 "Investment Securities," the Company previously entered into a Makewhole Agreement with Visa related to its participation in the 2024 Exchange Offer. In order to continue preserving the economic benefit of those same adjustments for Visa's Class A and Class C common stockholders in relation to the Class B-2 and Class B-3 conversion ratios following the 2026 Exchange Offer, and as a condition of participating in the 2026 Exchange Offer, the Company entered into a Makewhole Agreement (2026 Makewhole Agreement) with Visa that provides for similar cash payments to Visa under the same circumstances as described above for the 2024 Makewhole Agreement. As further described in Visa’s related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 13, 2026, publicly filed with the U. S. Securities and Exchange Commission, both the 2026 Makewhole Agreement and the related escrow fund and transfer restrictions on Visa’s Class B-2 common stock and the new Class B-3 common stock will terminate whenever the covered litigation is ultimately resolved, at which future date outstanding shares of Visa Class B-3 common stock will be convertible into shares of its Class A common stock at the then-applicable conversion ratio. The 2026 Makewhole Agreement also includes limited transfer restrictions, such that the Company may only transfer up to one-third of the shares of Visa Class C common stock received in the exchange within the first 45 days following the 2026 Exchange Offer acceptance date, and may only transfer up to two-thirds of the Class C common stock received within the first 90 days following the 2026 Exchange Offer acceptance date.
Previous report
Additionally, if the Company’s tendered shares are accepted and the exchange occurs in the second quarter of 2026, the Company may consider a plan to reposition a portion of its available for sale debt securities portfolio through the sale of securities, which may result in a significant loss during the second quarter of 2026. The timing and amount of the loss ultimately realized on the available for sale debt securities and the reinvestment assumptions may depend on many considerations, including market conditions, the amount of the gain recognized on the conversion privilege of the Visa shares, and other factors.
Previous report
During the first quarter of 2026, average loans totaled $20.3 billion, an increase of $2.7 billion over the prior quarter, and an increase of $3.1 billion over the same quarter last year. The increase in average balances over both periods was primarily due to the acquisition of FineMark, which added $2.7 billion in loan balances. Compared to the previous quarter, average balances of personal real estate, business, business real estate, revolving home equity and consumer loans grew $1.4 billion, $369.3 million, $315.0 million, $238.9 million and $221.0 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $26.2 million, compared to $27.0 million in the prior quarter.
Reworded paragraphs (54)
Previous wording
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and with the statistical information and financial data appearing in this report as well as the Company's 2025 Annual Report on Form 10-K. Results of operations for the three months ended March 31, 2026 are not necessarily indicative of results to be attained for any other period.
Current wording
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and with the statistical information and financial data appearing in this report as well as the Company's 2025 Annual Report on Form 10-K. Results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results to be attained for any other period.
Previous wording
On January 1, 2026, the Company completed its previously announced acquisition of FineMark Holdings, Inc. ("FineMark"), a bank holding company headquartered in Fort Myers, Florida, pursuant to the Agreement and Plan of Merger dated June 16, 2025. Immediately after the merger, FineMark's wholly-owned subsidiary, FineMark National Bank & Trust, merged into the Bank, with the Bank continuing as the surviving bank. The acquisition added total assets of approximately $3.9 billion, including loans of $2.7 billion, total deposits of $3.1 billion, and assets under administration of $8.7 billion, as well as 13 banking offices in Florida, Arizona and South Carolina.
Current wording
On January 1, 2026, the Company completed its previously announced acquisition of FineMark Holdings, Inc. ("FineMark"), a bank holding company headquartered in Fort Myers, Florida, pursuant to the Agreement and Plan of Merger dated June 16, 2025. Immediately after the merger, FineMark's wholly-owned subsidiary, FineMark National Bank & Trust, merged into the Bank, with the Bank continuing as the surviving bank. The acquisition added total assets of approximately $4.0 billion, including loans of $2.6 billion, total deposits of $3.1 billion, and assets under administration of $8.7 billion, as well as 13 banking offices in Florida, Arizona and South Carolina.
Previous wording
For the quarter ended March 31, 2026, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $141.6 million, an increase of $10.0 million, or 7.6%, compared to the first quarter of the previous year. For the current quarter, the annualized return on average assets was 1.62%, the annualized return on average equity was 13.22%, and the efficiency ratio was 60.00%. Diluted earnings per common share was $.96 per share in the current quarter, an increase of 3.2% compared to $.93 per share in the first quarter of 2025, and decreased 5.0% compared to $1.01 per share in the previous quarter.
Current wording
For the quarter ended June 30, 2026, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $159.8 million, an increase of $7.3 million, or 4.8%, compared to the second quarter of the previous year. For the current quarter, the annualized return on average assets was 1.84%, the annualized return on average equity was 14.70%, and the efficiency ratio was 58.40%. Diluted earnings per common share was $1.10 per share in the current quarter, an increase of .92% compared to $1.09 per share in the second quarter of 2025, and increased 14.6% compared to $.96 per share in the previous quarter.
Previous wording
Compared to the first quarter of last year, net interest income increased $30.7 million, or 11.4%, mainly due to increases in interest income on loans and securities purchased under agreements to resell (“resale agreements”) of $34.2 million and $1.0 million, respectively, partly offset by a decrease in interest income on investment securities of $4.2 million. Interest expense on deposits increased $4.1 million, while interest expense on borrowings decreased $2.7 million. The provision for credit losses decreased $3.5 million compared to the same quarter in the prior year. Non-interest income increased $16.9 million, or 10.6%, compared to the first quarter of 2025, mainly due to increases in trust fees, deposit account fees and brokerage fees of $14.5 million, $2.0 million and $659 thousand, respectively. Net gains on investment securities totaled $11.6 million in the current quarter compared to net losses of $7.6 million in the same quarter of last year. Securities gains in the current quarter primarily resulted from net gains in fair value of $10.9 million recorded on private equity investments. Non-interest expense increased $52.8 million, or 22.1%, over the first quarter of 2025, mainly due to higher salaries and benefits expense of $27.7 million, primarily a result of onboarding FineMark team members and acquisition-related compensation payments. Professional and other services expense increased $8.8 million, which included $4.7 million in acquisition-related legal and professional services expense. Other non-interest expense increased $6.4 million, primarily due an increase of $5.4 million in intangible amortization expense related to the FineMark acquisition. Data processing expense expense increased $5.1 million compared to the same quarter of last year.
Current wording
Compared to the second quarter of last year, net interest income increased $34.9 million, or 12.5%, mainly due to increases in interest income on loans and interest income on investment securities of $31.0 million and $2.7. million, respectively. Interest expense on deposits increased $3.3 million, while interest expense on borrowings decreased $2.5 million. The provision for credit losses increased $3.1 million compared to the same quarter in the prior year. Non-interest income increased $18.2 million, or 11.0%, compared to the second quarter of 2025, mainly due to increases in trust fees and deposit account fees of $15.9 million and $3.0 million, respectively. Net gains on investment securities totaled $12.8 million in the current quarter compared to net gains of $437 thousand in the same quarter of last year. Securities gains in the current quarter primarily resulted from net gains of $114.1 million recorded on equity securities, largely offset by net losses of $97.7 million on sales of available for sale debt securities. Non-interest expense increased $52.6 million, or 21.5%, over the second quarter of 2025, mainly due to higher salaries and benefits expense of $24.9 million, primarily a result of onboarding FineMark team members at the beginning of 2026. Data processing and software expense and professional and other services expense also increased $5.3 million and $3.5 million, respectively. Additionally, other non-interest expense increased $15.6 million, primarily due to $12.0 million in litigation expense and $5.4 million in intangible amortization expense related to the FineMark acquisition.
Previous wording
Net interest income in the first quarter of 2026 was $299.8 million, an increase of $30.7 million over the first quarter of 2025. On a fully taxable-equivalent (FTE) basis, net interest income totaled $302.2 million in the first quarter of 2026, up $30.8 million over the same period last year and up $16.4 million over the previous quarter. The increase in net interest income compared to the first quarter of 2025 was mainly due to an increase in average loan balances in connection with the acquisition of FineMark on January 1, 2026. Accretion income on FineMark's loans resulting from purchase accounting adjustments totaled $6.9 million. Interest income earned on loans (FTE) increased over the same period in the prior year mainly due to higher average loan balances, partly offset by lower average rates earned. The decrease in total interest earned on investment securities (FTE) was mainly the result of lower average rates earned on U.S. government and federal agency obligations and lower average balances of asset-backed and mortgage-backed securities. The increase in deposit interest expense was mainly due to higher average balances, partly offset by lower average rates paid. Interest expense on securities sold under agreements to repurchase decreased mainly due to lower average rates paid. The Company's net yield on earning assets (FTE) was 3.59% in the current quarter compared to 3.56% in the first quarter of 2025.
Current wording
Net interest income in the second quarter of 2026 was $315.1 million, an increase of $34.9 million over the second quarter of 2025. On a fully taxable-equivalent (FTE) basis, net interest income totaled $317.5 million in the second quarter of 2026, up $35.0 million over the same period last year and up $15.3 million over the previous quarter. The increase in net interest income compared to the second quarter of 2025 was mainly due to an increase in average loan balances in connection with the acquisition of FineMark on January 1, 2026. Accretion income on FineMark's loans resulting from purchase accounting adjustments totaled $6.2 million in the second quarter of 2026. Interest income earned on loans (FTE) increased over the same period in the prior year mainly due to higher average loan balances, partly offset by lower average rates earned. Total interest earned on investment securities (FTE) increased mainly due to higher average rates earned, while the increase in deposit interest expense was mainly due to higher average balances, partly offset by lower average rates paid. Interest expense on securities sold under agreements to repurchase decreased mainly due to lower average rates paid. The Company's net yield on earning assets (FTE) was 3.77% in the current quarter compared to 3.70% in the second quarter of 2025.
Previous wording
Total interest income (FTE) increased $32.2 million over the first quarter of 2025. Interest income on loans (FTE) was $290.3 million during the first quarter of 2026, an increase of $34.3 million, or 13.4%, over the same quarter last year. The increase in loan interest income over the same quarter of last year was primarily due to growth of $3.1 billion, or 18.0%, in average loan balances and higher average rates earned on personal real estate loans. Most of the increase in interest income was due to the acquisition of FineMark, which added $2.7 billion in loan balances. The largest increase to interest income occurred in personal real estate loan interest, which grew $20.4 million due to a $1.4 billion, or 45.0%, increase in average balances coupled with a 54 basis point increase in the average rate earned. Revolving home equity loan interest income increased $4.6 million mainly due to a $252.4 million, or 70.4%, increase in average balances. Business real estate loan interest income increased $4.2 million due to higher average balances of $377.8 million, or 10.3%, partly offset by a decrease of 13 basis points in the average rate earned. The $3.6 million increase in consumer loan interest income was due to a $339.2 million, or 16.3%, increase in average balances, partly offset by a decline of 32 basis points in the average rate earned. Business loan interest income grew $2.6 million due to higher average balances of $580.9 million, or 9.5%, partly offset by a 34 basis point decrease in the average rate earned. Interest income on construction and land loans increased $402 thousand mainly due to growth in average balances of $177.0 million, or 12.5%, partly offset by a 71 basis point decrease in the average rate earned. These increases in interest income were slightly offset by a decrease in consumer credit card loan interest income of $1.3 million mainly due to an 85 basis point decrease in the average rate earned.
Current wording
Total interest income (FTE) increased $35.8 million over the second quarter of 2025. Interest income on loans (FTE) was $293.3 million during the second quarter of 2026, an increase of $31.2 million, or 11.9%, over the same quarter last year. The increase in loan interest income over the same quarter of last year was primarily due to growth of $3.0 billion, or 17.3%, in average loan balances, partly offset by lower average rates earned, which declined 28 basis points. Most of the increase in interest income was due to the acquisition of FineMark, which added $2.7 billion in loan balances. The largest increase to interest income occurred in personal real estate loan interest, which grew $19.6 million due to a $1.3 billion, or 43.9%, increase in average balances coupled with a 49 basis point increase in the average rate earned. Revolving home equity loan interest income increased $4.7 million mainly due to a $267.7 million, or 73.9%, increase in average balances. Business real estate loan interest income increased $3.3 million due to higher average balances of $370.3 million, or 10.0%, partly offset by a decrease of 22 basis points in the average rate earned. The $3.3 million increase in consumer loan interest income was due to a $324.3 million, or 15.1%, increase in average balances, partly offset by a decline of 31 basis points in the average rate earned. Business loan interest income grew $3.2 million due to higher average balances of $617.1 million, or 9.9%, partly offset by a 33 basis point decrease in the average rate earned. These increases in interest income were slightly offset by decreases in construction and land loan and consumer credit card loan interest income. Interest income on construction and land loans decreased $1.7 million due to a 99 basis point decrease in the average rate earned, partly offset by an increase in average balances of $114.9 million, or 8.0%. Consumer credit card loan interest income declined $1.3 million due to a 60 basis point decrease in the average rate earned and a $15.2 million, or 2.7% decrease in the average balance.
Previous wording
Interest income on investment securities (FTE) was $72.8 million during the first quarter of 2026, which was a decrease of $4.3 million from the same quarter last year. The largest decreases in interest income occurred in interest earned on asset-backed and mortgage-backed securities, which declined $2.9 million and $2.6 million, respectively. Interest income earned on asset-backed securities declined due to a $454.5 million decrease in average balances, partly offset by a 34 basis point increase in the average rate earned. A decrease of $577.0 million, or 12.1%, in average balances led to the decline in interest income on mortgage-backed securities. In addition, the Company recorded a $940 thousand adjustment to premium amortization at March 31, 2026, which increased interest income and reflected slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $539 thousand adjustment increasing income in the same quarter last year. These decreases to interest income were partly offset by growth of $2.3 million in interest income on U.S. government and federal agency obligations, driven by higher average balances of $603.9 million, or 23.3%, partly offset by a decline of 49 basis points in the average rate earned. Interest income related to the Company's U.S. Treasury inflation-protected securities, which is tied to the non-seasonally adjusted Consumer Price Index (CPI-U), decreased $3.1 million from the same quarter last year. The average balance of the total investment portfolio (excluding unrealized fair value adjustments on available for sale debt securities) was $9.9 billion in the first quarter of 2026 and $10.5 billion in the first quarter of 2025.
Current wording
Interest income on investment securities (FTE) was $83.2 million during the second quarter of 2026, which was an increase of $2.6 million over the same quarter last year. The largest increase in interest income occurred in interest earned on U.S. government and federal agency obligations, which grew $11.9 million, driven by higher average balances of $741.1 million, or 28.2%, and an increase of 48 basis points in the average rate earned. Interest income related to the Company's U.S. Treasury inflation-protected securities (TIPS), which is tied to the non-seasonally adjusted Consumer Price Index (CPI-U), increased $5.0 million over the same quarter last year. During the second quarter of 2026, the Company sold its TIPS portfolio as part of its available for sale debt securities portfolio repositioning. The increase in interest income was partly offset by a decline in interest income earned on asset-backed and mortgage-backed securities, which declined $4.8 million and $3.1 million, respectively. Interest income earned on asset-backed securities declined due to a $528.4 million, or 33.3%, decrease in average balances. A decrease of $626.0 million, or 13.5%, in average balances led to the decline in interest income on mortgage-backed securities. In addition, the Company recorded a $1.1 million adjustment to premium amortization at June 30, 2026, which increased interest income and reflected slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $1.0 million adjustment increasing income in the same quarter last year. The average balance of the total investment portfolio (excluding unrealized fair value adjustments on available for sale debt securities) was $9.8 billion in the second quarter of 2026 and $10.2 billion in the second quarter of 2025.
Previous wording
Interest income on securities purchased under agreements to resell increased $1.0 million over the same quarter last year, due to an increase of 22 basis points in the average rate earned and growth of $61.1 million in the average balance. Interest income on deposits at the Federal Reserve increased $1.1 million due to an increase of $608.8 million in the average balance, partly offset by a decline of 76 basis points in the average rate earned.
Current wording
Interest income on securities purchased under agreements to resell increased $876 thousand over the same quarter last year, mainly due to the growth of $84.6 million in the average balance. These resale agreements were structured with floor spreads to protect against falling interest rates. Interest income on deposits at the Federal Reserve increased $1.1 million due to an increase of $539.2 million in the average balance, partly offset by a decline of 76 basis points in the average rate earned.
Previous wording
The average fully taxable-equivalent yield on total interest earning assets was 4.74% in the first quarter of 2026, down from 4.81% in the first quarter of 2025.
Current wording
The average fully taxable-equivalent yield on total interest earning assets was 4.87% in the second quarter of 2026, down from 4.90% in the second quarter of 2025.
Previous wording
Total interest expense increased $1.4 million compared to the first quarter of 2025 due an increase of $4.1 million in interest expense on interest bearing deposits, partly offset by a decrease of $2.7 million in interest expense on borrowings. The increase in deposit interest expense was primarily due to the acquisition of FineMark, which added $2.7 billion in interest bearing deposit balances. Compared to the same quarter last year, interest expense on interest checking and money market deposit balances increased $6.1 million due to growth of $2.1 billion, or 15.2%, in average balances, partly offset by a four basis point decline in the average rate paid. Interest expense on certificate of deposit accounts decreased $2.1 million due to a 56 basis point decline in average rates paid, partly offset by an increase of $144.8 million, or 6.1%, in average balances. The overall rate paid on total deposits decreased 11 basis points from the same quarter last year. Interest expense on customer repurchase agreements decreased $3.4 million due to a 47 basis point decline in the average rate paid and a decrease of $48.7 million, or
Current wording
Total interest expense increased $757 thousand compared to the second quarter of 2025 due an increase of $3.3 million in interest expense on interest bearing deposits, partly offset by a decrease of $2.5 million in interest expense on borrowings. The increase in deposit interest expense was primarily due to the acquisition of FineMark, which added $2.7 billion in interest bearing deposit balances. Compared to the same quarter last year, interest expense on interest checking and money market deposit balances increased $5.3 million due to growth of $1.9 billion, or 13.4%, in average balances, partly offset by a four basis point decline in the average rate paid. Interest expense on certificate of deposit accounts decreased $2.1 million due to a 45 basis point decline in average rates paid, partly offset by an increase of $69.4 million, or 2.9%, in average balances. The overall rate paid on total deposits decreased ten basis points from the same quarter last year. Interest expense on customer repurchase agreements decreased $3.4 million due to a 50 basis point decline in the average rate paid and a decrease of $71.9 million, or 3.0%, in the average balance. The overall average rate incurred on all interest bearing liabilities was 1.68% and 1.83% in the second quarters of 2026 and 2025, respectively.
Previous wording
The table below is a summary of net bank card transaction fees for the three month periods ended March 31, 2026 and 2025.
Current wording
The table below is a summary of net bank card transaction fees for the six month periods ended June 30, 2026 and 2025.
Previous wording
For the first quarter of 2026, total non-interest income amounted to $175.9 million compared to $158.9 million in the same quarter last year, which was an increase of $16.9 million, or 10.6%. The increase was mainly due to higher trust fees and deposit account fees. Trust fees increased $14.5 million, or 25.5%, mainly due to growth of $13.5 million in private client trust fees. Bank card transaction fees for the current quarter were flat compared to the same period last year. Net credit card fees decreased $173 thousand mainly due to higher rewards expense and net merchant fees decreased $184 thousand. Net corporate card fees were flat compared to the same period last year, while net debit card fees increased $301 thousand mainly due to higher interchange income. Compared to the first quarter of last year, deposit account fees increased $2.0 million, or 7.3%, mainly due to higher corporate cash management fees of $1.5 million. Capital market fees increased $226 thousand, or 4.4%, while consumer brokerage service fees increased $659 thousand, or 13.8%, mainly due to higher advisory fees. Other non-interest income decreased $227 thousand, or 1.3%, mainly due to a decrease of $911 thousand in gains on the sales of assets and a decrease of $1.3 million in fair value adjustments recorded on the Company's deferred compensation plan assets and liabilities. These decreases were partly offset by an increase of $1.2 million in cash sweep commissions.
Current wording
For the second quarter of 2026, total non-interest income amounted to $183.8 million compared to $165.6 million in the same quarter last year, which was an increase of $18.2 million, or 11.0%. The increase was mainly due to higher trust fees and deposit account fees. Trust fees increased $15.9 million, or 28.7%, mainly due to growth of $14.9 million in private client trust fees. Bank card transaction fees for the current quarter increased $1.8 million, or 3.8%, over the same period last year, mainly due to growth in net corporate card and net credit card fees. Net corporate card fees increased $811 thousand compared to the same period last year primarily due to higher interchange fees. Net credit card fees increased $804 thousand mainly due to lower rewards expense and higher interchange fees. Net merchant fees increased $212 thousand mainly due to lower royalty expense and lower network expense, while net debit card fees declined $68 thousand. Compared to the second quarter of last year, deposit account fees increased $3.0 million, or 11.5%, mainly due to higher corporate cash management fees of $2.7 million. Consumer brokerage service fees increased $479 thousand, or 8.9%, mainly due to higher advisory fees, while capital market fees decreased $508 thousand, or 8.2%, mainly due to lower underwriting income. Other non-interest income decreased $2.3 million, or 10.3%, mainly due to decreases of $4.7 million in gains on the sales of assets and $1.0 million in tax credit sales fees. These decreases were partly offset by increases in cash sweep commissions and interest rate swap fees of $1.3 million and $577 thousand, respectively.
Previous wording
Net gains and losses on investment securities, which were recognized in earnings during the three months ended March 31, 2026 and 2025, are shown in the table above. Net securities gains of $11.6 million were reported in the first quarter of 2026, compared to net losses of $7.6 million in the same period last year. The net gains in the first quarter of 2026 were mainly comprised of net gains in fair value of $10.9 million recorded on private equity investments and net gains of $597 thousand on sales of private equity investments. The net losses on investment securities for the same quarter last year were primarily comprised of net losses in fair value of $8.5 million recorded on private equity investments, partly offset by net gains of $1.0 million on sales of private equity investments. The portion of private equity activity attributable to minority interests is reported as non-controlling interest in the consolidated statements of income and resulted in expense of $2.3 million during the first three months of 2026 and income of $1.5 million during the first three months of 2025.
Current wording
Net gains on investment securities of $24.5 million were recognized in earnings for the six months ended June 30, 2026, compared to net losses of $7.2 million for the same period in 2025. Net gains in the first half of 2026 were mainly comprised of net gains of $114.3 million on equity securities, mainly Visa common stock as described above, and net gains in fair value of $6.9 million recorded on private equity investments, partially offset by net losses of $97.7 million on sales of available for sale debt securities related to the available for sale debt securities portfolio repositioning. Net losses in the first half of 2025 were mainly comprised of net losses of $4.2 million on sales of available for sale debt securities and net losses in fair value of $4.1 million recorded on private equity investments, partly offset by net gains of $1.8 million on equity securities. The portion of private equity activity attributable to minority interests is reported as non-controlling interest in the consolidated statements of income and resulted in expense of $1.6 million during the first six months of 2026 and income of $943 thousand during the first six months of 2025.
Previous wording
Non-interest expense for the first quarter of 2026 amounted to $291.1 million, an increase of $52.8 million, or 22.1%, compared to expense of $238.4 million in the first quarter of last year. The current quarter included $14.0 million in acquisition-related expense, as well as acquisition-related intangible amortization expense of $5.4 million. The increase in expense over the same period last year was mainly due to higher salaries and employee benefits expense, data processing and software expense, professional and other services expense and intangible amortization expense. Salaries and employee benefits expense increased $27.7 million, or 18.1%, mainly due to an accrual for retention bonuses, acquisition-related compensation payments and the onboarding of FineMark's team members. Salaries and benefits expense included acquisition-related costs of $6.6 million in the current quarter. Full-time salaries, incentive compensation and healthcare expense increased $13.4 million, $7.7 million and $2.2 million, respectively, over the prior year. Full-time equivalent employees totaled 4,960 at March 31, 2026, compared to 4,662 at March 31, 2025. Data processing and software expense increased $6.1 million, or 18.9%, mainly due to higher costs for service providers and software. Professional and other services expense, which increased $8.8 million, or 87.4%, included $4.7 million of acquisition-related legal and professional services expense. Net occupancy expense increased $1.3 million, or 9.2%, mainly due to higher building depreciation expense. Other non-interest expense increased $7.0 million, or 76.6%, mainly due to increases of $5.4 million in intangible amortization expense related to the FineMark acquisition and $2.0 million in other acquisition-related expense. In addition, travel and entertainment expense increased $1.0 million, while a decrease in fair value adjustments of $1.3 million was recorded on the Company's deferred compensation plan assets and liabilities.
Current wording
Non-interest expense for the second quarter of 2026 amounted to $297.1 million, an increase of $52.6 million, or 21.5%, compared to expense of $244.4 million in the second quarter of last year. The increase in expense over the same period last year was mainly due to higher salaries and employee benefits expense, data processing and software expense, professional and other services expense, litigation expense and intangible amortization expense. Salaries and employee benefits expense increased $24.9 million, or 16.1%, mainly due to the onboarding of FineMark's team members at the beginning of 2026. Acquisition-related salaries and benefits expense was $3.7 million in the current quarter. Full-time equivalent employees totaled 4,976 at June 30, 2026, compared to 4,658 at June 30, 2025. Data processing and software expense increased $5.3 million, or 16.2%, mainly due to higher costs for service providers and software. Professional and other services expense, which increased $3.5 million, or 27.2%, included $1.5 million of acquisition-related legal and professional services expense. Net occupancy expense increased $984 thousand, or 7.2%, and equipment expense increased $713 thousand, or 13.8%, both mainly due to higher depreciation expense. Supplies and communication expense increased $522 thousand, or 10.5%, mainly due to higher supplies and postage and courier expense. Other non-interest expense increased $15.6 million, mainly due to increases of $12.0 million in litigation expense and $5.4 million in intangible amortization expense related to the FineMark acquisition.
Previous wording
Net loan charge-offs in the first quarter of 2026 amounted to $15.0 million, compared to $9.9 million in the prior quarter and $10.8 million in the first quarter of last year. Comp ared to the same period last year, net loan charge-offs in thefirst quarter of 2026 increased $4.2 million, and increased $5.1 million from the previous quarter. The increase from the prior year was mainly driven by an increase of $5.0 million in business real estate loan net charge-offs, offset by a decrease of $1.1 million in consumer loan net charge-offs. The increase in net loan charge-offs for the three months ended March 31, 2026 from the previous quarter was driven by increases of $5.4 million and $651 thousand in net charge-offs on business real estate and consumer credit card loans, respectively, partially offset by a decrease of $730 thousand in net charge-offs on consumer loans.
Current wording
Net loan charge-offs in the second quarter of 2026 amounted to $9.5 million, compared to $15.0 million in the prior quarter and $9.7 million in the second quarter of last year. Comp ared to the same period last year, net loan charge-offs in thesecond quarter of 2026 decreased $149 thousand and decreased $5.4 million from the previous quarter. The decrease from the prior year was mainly driven by a decrease of $418 thousand in business real estate loan recoveries, offset by a decrease of $570 thousand in consumer loan net charge-offs. The decrease in net loan charge-offs for the three months ended June 30, 2026 from the previous quarter was driven by decreases of $5.4 million, $110 thousand and $170 thousand in net charge-offs on business real estate, consumer credit card, and consumer loans, respectively, partially offset by an increase of $201 thousand in net charge-offs on personal real estate loans.
Previous wording
For the three months ended March 31, 2026, annualized net charge-offs on average consumer credit card loans were 5.21%, compared to 4.55% in the previous quarter and 5.04% in the same period last year. Consumer loan annualized net charge-offs in the current quarter amounted to .30%, compared to .45% in the prior quarter and .56% in the same period last year. In thefirst quarter of 2026, total annualized net loan charge-offs were .30%, compared to .22% in the previous quarter and .25% in the same period last year.
Current wording
For the three months ended June 30, 2026, annualized net charge-offs on average consumer credit card loans were 5.18%, compared to 5.21% in the previous quarter and 5.08% in the same period last year. Consumer loan annualized net charge-offs in the current quarter amounted to .26%, compared to .30% in the prior quarter and .40% in the same period last year. In thesecond quarter of 2026, total annualized net loan charge-offs were .19%, compared to .30% in the previous quarter and .22% in the same period last year.
Previous wording
For the three months ended March 31, 2026, the provision for credit losses on loans was $11.3 million, which was a decrease of $2.4 million from the provision recorded in the prior quarter. Compared to the same period in the prior year, the provision for credit losses on loans for the three months ended March 31, 2026 decreased $3.8 million. Changes in the provision are driven by changes in the estimate for the allowance for credit losses on loans.
Current wording
For the three months ended June 30, 2026, the provision for credit losses on loans was $6.3 million, which was a decrease of $5.0 million from the provision recorded in the prior quarter. Compared to the same period in the prior year, the provision for credit losses on loans for the three months ended June 30, 2026 decreased $1.6 million. For the six months ended June 30, 2026, the provision for credit losses on loans was $17.6 million, which was a $5.4 million decrease from the $23.0 million provision recorded in the same period last year. Changes in the provision are driven by changes in the estimate for the allowance for credit losses on loans.
Previous wording
At March 31, 2026, the allowance for credit losses increased $19.1 million compared to the allowance for credit losses on loans at December 31, 2025. The most significant driver of the increase in the allowance for credit losses is due to an increase in loan balances as a result of the acquisition of FineMark, as the initial allowance for FineMark loans acquired was $22.8 million. The allowance for credit losses on loans increased $8.4 million in the commercial portfolio, and the allowance for credit losses on the Company's personal banking portfolio increased $10.8 million. The allowance as a percentage of outstanding loans decreased compared to the prior quarter due to the change in mix of loans, as the acquired loan portfolio included more personal real estate loans which carry a lower allowance for credit losses than other classes. The forecast utilized to estimate the allowance for credit losses on loans at March 31, 2026 assumes a slow but continued economic expansion, and changes in the forecast utilized to estimate the allowance at March 31, 2026 did not significantly change the allowance estimate during the quarter. The allowance for credit losses on loans was $198.6 million at March 31, 2026 and was .97%, 1.01% and .96% of total loans at March 31, 2026, December 31, 2025 and March 31, 2025, respectively.
Current wording
At June 30, 2026, the allowance for credit losses increased $15.9 million compared to the allowance for credit losses on loans at December 31, 2025. The most significant driver of the increase in the allowance for credit losses is due to an increase in loan balances as a result of the acquisition of FineMark, as the initial allowance for FineMark loans acquired was $22.8 million. This increase was partially offset by a decrease in the allowance on the consumer and consumer credit card loan portfolios. The allowance as a percentage of outstanding loans decreased compared to December 31, 2025 due to the change in mix of loans caused by the acquisition which included more personal real estate loans that carry a lower allowance for credit losses than other classes. The allowance for credit losses on loans was $195.4 million at June 30, 2026 and was .94%, .97%, and 1.01% of total loans at June 30, 2026, March 31, 2026, and December 31, 2025, respectively.
Previous wording
In the current quarter, the provision for credit losses on unfunded lending commitments was a benefit of $323 thousand, compared to a benefit of $608 thousand for the three months ended March 31, 2025. At March 31, 2026, the liability for unfunded lending commitments was $17.7 million, compared to $17.7 million at December 31, 2025 and $18.3 million at March 31, 2025. At March 31, 2026, the liability for unfunded lending commitments remained largely unchanged from December 31, 2025, because the initial liability recorded related to the FineMark acquisition of $362 thousand was largely offset by a decrease in the provision for the liability for unfunded lending commitments. The Company's unfunded lending commitments primarily relate to construction loans, and the Company's estimate for credit losses in its unfunded lending commitments utilizes the same model and forecast as its estimate for credit losses on loans. See Note 3 for further discussion of the model inputs utilized in the Company's estimate of credit losses.
Current wording
In the current quarter, the provision for credit losses on unfunded lending commitments was $2.4 million, compared to a benefit of $2.3 million for the three months ended June 30, 2025. At June 30, 2026, the liability for unfunded lending commitments was $20.1 million, compared to $17.7 million at December 31, 2025 and $16.0 million at June 30, 2025. At June 30, 2026, the liability for unfunded lending commitments remained largely consistent with the liability as of December 31, 2025. The Company's unfunded lending commitments primarily relate to construction loans, and the Company's estimate for credit losses in its unfunded lending commitments utilizes the same model and forecast as its estimate for credit losses on loans. See Note 3 for further discussion of the model inputs utilized in the Company's estimate of credit losses.
Previous wording
Non-accrual loans totaled $10.9 million at March 31, 2026, a decrease of $4.8 million from the balance at December 31, 2025. The decrease occurred mainly in business real estate non-accrual loans, which decreased $5.4 million. At March 31, 2026, non-accrual loans were comprised of business real estate (85.8%), personal real estate (12.1%), business (1.8%), and revolving home equity (0.3%) loans. Foreclosed real estate totaled $678 thousand at March 31, 2026, a decrease of $540 thousand compared to December 31, 2025. Total loans past due 90 days or more and still accruing interest totaled $22.8 million as of March 31, 2026, a decrease of $1.8 million from December 31, 2025. Balances by class for non-accrual loans and loans past due 90 days and still accruing interest are shown in the "Delinquent and non-accrual loans" section in Note 3 to the consolidated financial statements.
Current wording
Non-accrual loans totaled $11.6 million at June 30, 2026, a decrease of $4.1 million from the balance at December 31, 2025. The decrease occurred mainly in business real estate non-accrual loans, which decreased $5.4 million. At June 30, 2026, non-accrual loans were comprised of business real estate (80.6%), personal real estate (18.3%), and business loans (0.8%). Foreclosed real estate totaled $1.2 million at June 30, 2026, a decrease of $7 thousand compared to December 31, 2025. Total loans past due 90 days or more and still accruing interest totaled $23.7 million as of June 30, 2026, a decrease of $956 thousand from December 31, 2025. Balances by class for non-accrual loans and loans past due 90 days and still accruing interest are shown in the "Delinquent and non-accrual loans" section in Note 3 to the consolidated financial statements.
Previous wording
In addition to the non-performing and past due loans mentioned above, the Company also has identified loans for which management has concerns about the ability of the borrowers to meet existing repayment terms. They are classified as substandard under the Company's internal rating system. The loans are generally secured by either real estate or other borrower assets, reducing the potential for loss should they become non-performing. Although these loans are generally identified as potential problem loans, they may never become non-performing. Such loans totaled $296.2 million at March 31, 2026 compared to $264.9 million at December 31, 2025, resulting in an increase of $31.3 million, or 11.8%.
Current wording
In addition to the non-performing and past due loans mentioned above, the Company also has identified loans for which management has concerns about the ability of the borrowers to meet existing repayment terms. They are classified as substandard under the Company's internal rating system. The loans are generally secured by either real estate or other borrower assets, reducing the potential for loss should they become non-performing. Although these loans are generally identified as potential problem loans, they may never become non-performing. Such loans totaled $316.6 million at June 30, 2026 compared to $264.9 million at December 31, 2025, resulting in an increase of $51.8 million, or 19.5%.
Previous wording
When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. At March 31, 2026, the Company held $66.9 million of loans that had been modified during the three months ended March 31, 2026. These loans are further discussed in the"Modifications for borrowers experiencing financial difficulty"section in Note 3 to the consolidated financial statements.
Current wording
When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. At June 30, 2026, the Company held $110.9 million of loans that had been modified during the six months ended June 30, 2026. These loans are further discussed in the"Modifications for borrowers experiencing financial difficulty"section in Note 3 to the consolidated financial statements.
Previous wording
The Company's portfolio of construction and land loans, as shown in the table below, amounted to 7.7% of total loans outstanding at March 31, 2026. The largest component of construction and land loans was commercial construction, which decreased $26.6 million during the three months ended March 31, 2026. At March 31, 2026, multi-family residential construction loans totaled approximately $529.5 million, or 44.1%, of the commercial construction loan portfolio, compared to $553.1 million, or 45.1%, at December 31, 2025.
Current wording
The Company's portfolio of construction and land loans, as shown in the table below, amounted to 7.2% of total loans outstanding at June 30, 2026. The largest component of construction and land loans was commercial construction, which decreased $87.8 million during the six months ended June 30, 2026. At June 30, 2026, multi-family residential construction loans totaled approximately $493.8 million, or 43.4%, of the commercial construction loan portfolio, compared to $553.1 million, or 45.1%, at December 31, 2025.
Previous wording
Total business real estate loans were $4.1 billion at March 31, 2026 and comprised 19.8% of the Company's total loan portfolio. These loans include properties such as manufacturing and warehouse buildings, small office and medical buildings, churches, hotels and motels, shopping centers, and other commercial properties. At March 31, 2026, 37.1% of business real estate loans were for owner-occupied real estate properties, which have historically resulted in lower net charge-off rates than non-owner-occupied commercial real estate loans.
Current wording
Total business real estate loans were $4.1 billion at June 30, 2026 and comprised 19.5% of the Company's total loan portfolio. These loans include properties such as manufacturing and warehouse buildings, small office and medical buildings, churches, hotels and motels, shopping centers, and other commercial properties. At June 30, 2026, 35.5% of business real estate loans were for owner-occupied real estate properties, which have historically resulted in lower net charge-off rates than non-owner-occupied commercial real estate loans.
Previous wording
The Company had $619.2 million in revolving home equity loans at March 31, 2026 that were collateralized by residential real estate. Most of these loans (94.9%) are written with terms requiring interest-only monthly payments. These loans are offered in three main product lines: LTV up to 80%, 80% to 90%, and 90% to 100%. As of March 31, 2026, the outstanding principal of loans with an original LTV higher than 80% was $78.6 million, or 12.6% of the portfolio, compared to $27.7 million as of December 31, 2025. Total revolving home equity loan balances over 30 days past due were $4.8 million at March 31, 2026 and $1.9 million at December 31, 2025, and the outstanding balance for revolving home equity loans on non-accrual status was $34 thousand at March 31, 2026 compared to no balance at December 31, 2025. The weighted average FICO score for the total portfolio balance at March 31, 2026 is 776. At maturity, the accounts are re-underwritten, and if they qualify under the Company's credit, collateral and capacity policies, the borrower is given the option to renew the line of credit or convert the outstanding balance to an amortizing loan. If criteria are not met, amortization is required, or the borrower may pay off the loan. During the remainder of 2026 through 2029, approximately 20.5% of the Company's current outstanding balances are expected to mature. Of these balances, approximately 83.2% have a FICO score of 700 or higher. The Company does not expect a significant increase in losses as these loans mature, due to their high FICO scores, low LTVs, and low historical loss levels.
Current wording
The Company had $649.3 million in revolving home equity loans at June 30, 2026 that were collateralized by residential real estate. Most of these loans (96.2%) are written with terms requiring interest-only monthly payments. These loans are offered in three main product lines: LTV up to 80%, 80% to 90%, and 90% to 100%. As of June 30, 2026, the outstanding principal of loans with an original LTV higher than 80% was $85.2 million, or 13.1% of the portfolio, compared to $27.7 million as of December 31, 2025. Total revolving home equity loan balances over 30 days past due were $2.1 million at June 30, 2026 and $1.9 million at December 31, 2025, and the outstanding balance for revolving home equity loans on non-accrual status was $33 thousand at June 30, 2026 compared to no balance at December 31, 2025. The weighted average FICO score for the total portfolio balance at June 30, 2026 is 778. At maturity, the accounts are re-underwritten, and if they qualify under the Company's credit, collateral and capacity policies, the borrower is given the option to renew the line of credit or convert the outstanding balance to an amortizing loan. If criteria are not met, amortization is required, or the borrower may pay off the loan. During the remainder of 2026 through 2029, approximately 19.5% of the Company's current outstanding balances are expected to mature. Of these balances, approximately 84.0% have a FICO score of 700 or higher. The Company does not expect a significant increase in losses as these loans mature, due to their high FICO scores, low LTVs, and low historical loss levels.
Previous wording
The consumer loans category is mostly comprised of private banking loans and automobile loans. Private banking loans comprised of 48.2% of the consumer loan portfolio at March 31, 2026. The Company's private banking loans are mostly executive lines of credit, which are secured primarily by assets held by the Company's trust department, and insurance premium finance loans, which are primarily secured by life insurance policies. Automobile loans, which include direct and indirect product lines, comprised 30.5% of the consumer loan portfolio at March 31, 2026, and outstanding balances for auto loans were $754.3 million and $773.6 million at March 31, 2026 and December 31, 2025, respectively. The balances over 30 days past due amounted to $8.4 million at March 31, 2026 and $11.0 million at December 31, 2025, respectively, and comprised 1.1% of the outstanding balances of these loans at March 31, 2026 and 1.4% at December 31, 2025. For the three months ended March 31, 2026, $88.2 million of new auto loans were originated, compared to $98.0 million during the first three months of 2025. At
Current wording
The consumer loans category is mostly comprised of private banking loans and automobile loans. Private banking loans comprised of 49.3% of the consumer loan portfolio at June 30, 2026. The Company's private banking loans are mostly executive lines of credit, which are secured primarily by assets held by the Company's trust department, and insurance premium finance loans, which are primarily secured by life insurance policies. Automobile loans, which include direct and indirect product lines, comprised 29.5% of the consumer loan portfolio at June 30, 2026, and outstanding balances for auto loans were $744.3 million and $773.6 million at June 30, 2026 and December 31, 2025, respectively. The balances over 30 days past due amounted to $8.2 million at June 30, 2026 and $11.0 million at December 31, 2025, respectively, and comprised 1.1% of the outstanding balances of these loans at June 30, 2026 and 1.4% at December 31, 2025. For the six months ended June 30, 2026, $173.4 million of new auto loans were originated, compared to $190.2 million during the first six months of 2025. At June 30,
Previous wording
March 31, 2026, the automobile loan portfolio had a weighted average FICO score of 759, and net charge-offs on auto loans were .5% of average auto loans.
Current wording
2026, the automobile loan portfolio had a weighted average FICO score of 763, and net charge-offs on auto loans were .5% of average auto loans.
Previous wording
The Company's consumer loan portfolio also includes fixed rate home equity loans, typically for home repair or remodeling, and these loans comprised 8.5% of the consumer loan portfolio at March 31, 2026. Losses on these loans have historically been low, and the Company saw net recoveries of $591 thousand for the first three months of 2026. The remaining portion of the Company's consumer loan portfolio is comprised of healthcare financing, boat, RV, motorcycle, other equipment, and unsecured consumer loans. Net charge-offs on consumer loans, other than automobile and fixed rate home equity loans, totaled $755 thousand in the first three months of 2026 and were .2% of the average balances of these loans at March 31, 2026.
Current wording
The Company's consumer loan portfolio also includes fixed rate home equity loans, typically for home repair or remodeling, and these loans comprised 8.0% of the consumer loan portfolio at June 30, 2026. Losses on these loans have historically been low, and the Company saw net charge offs of $9 thousand for the first six months of 2026. The remaining portion of the Company's consumer loan portfolio is comprised of healthcare financing, boat, RV, motorcycle, other equipment, and unsecured consumer loans. Net charge-offs on consumer loans, other than automobile and fixed rate home equity loans, totaled $1.4 million in the first six months of 2026 and were .2% of the average balances of these loans at June 30, 2026.
Previous wording
The Company offers low promotional rates on selected consumer credit card products. Out of a portfolio at March 31, 2026 of $557.7 million in consumer credit card loans outstanding, approximately $120.5 million, or 21.6%, carried a low promotional rate. Within the next six months, $54.5 million of these loans are scheduled to convert to the ongoing higher contractual rate. To mitigate some of the risk involved with this credit card product, the Company performs credit checks and detailed analysis of the customer borrowing profile before approving the loan application. Management believes that the risks in the consumer loan portfolio are reasonable and the anticipated loss ratios are within acceptable parameters.
Current wording
The Company offers low promotional rates on selected consumer credit card products. Out of a portfolio at June 30, 2026 of $561.3 million in consumer credit card loans outstanding, approximately $119.5 million, or 21.3%, carried a low promotional rate. Within the next six months, $54.7 million of these loans are scheduled to convert to the ongoing higher contractual rate. To mitigate some of the risk involved with this credit card product, the Company performs credit checks and detailed analysis of the customer borrowing profile before approving the loan application. Management believes that the risks in the consumer loan portfolio are reasonable and the anticipated loss ratios are within acceptable parameters.
Previous wording
The Company's energy lending portfolio is comprised of lending to the petroleum and natural gas sectors and totaled $369.6 million, or 1.8% of total loans at March 31, 2026, an increase of $66.5 million from December 31, 2025, as shown in the table below.
Current wording
The Company's energy lending portfolio is comprised of lending to the petroleum and natural gas sectors and totaled $373.0 million, or 1.8% of total loans at June 30, 2026, an increase of $69.9 million from December 31, 2025, as shown in the table below.
Previous wording
The Company participates in credits of large, publicly traded companies which are defined by regulation as shared national credits, or SNCs. Regulations define SNCs as loans exceeding $100 million that are shared by three or more financial institutions. The Company typically participates in these loans when business operations are maintained in the local communities or regional markets and opportunities to provide other banking services are present. The balance of SNC loans totaled $1.7 billion at March 31, 2026 and $1.5 billion December 31, 2025. Additional unfunded commitments at March 31, 2026 totaled $2.4 billion.
Current wording
The Company participates in credits of large, publicly traded companies which are defined by regulation as shared national credits, or SNCs. Regulations define SNCs as loans exceeding $100 million that are shared by three or more financial institutions. The Company typically participates in these loans when business operations are maintained in the local communities or regional markets and opportunities to provide other banking services are present. The balance of SNC loans totaled $1.6 billion at June 30, 2026 and $1.5 billion December 31, 2025. Additional unfunded commitments at June 30, 2026 totaled $2.7 billion.
Previous wording
Income tax expense was $40.9 million in the first quarter of 2026, compared to $40.6 million in the fourth quarter of 2025 and $37.0 million in the first quarter of 2025. The Company's effective tax rate, including the effect of non-controlling interest, was 22.4% in the first quarter of 2026, 22.4% in the fourth quarter of 2025, and 21.9% in the first quarter of 2025.
Current wording
Income tax expense was $45.8 million in the second quarter of 2026, compared to $40.9 million in the first quarter of 2026 and $42.4 million in the second quarter of 2025. The Company's effective tax rate, including the effect of non-controlling interest, was 22.3% in the second quarter of 2026, 22.4% in the first quarter of 2026, and 21.8% in the second quarter of 2025.
Previous wording
Total assets of the Company were $35.7 billion at March 31, 2026 and $32.9 billion at December 31, 2025. Earning assets (excluding the allowance for credit losses on loans and fair value adjustments on available for sale debt securities) amounted to $34.3 billion at March 31, 2026 and $31.4 billion at December 31, 2025, and consisted of 60% in loans and 28% in investment securities at March 31, 2026.
Current wording
Total assets of the Company were $35.3 billion at June 30, 2026 and $32.9 billion at December 31, 2025. Earning assets (excluding the allowance for credit losses on loans and fair value adjustments on available for sale debt securities) amounted to $33.6 billion at June 30, 2026 and $31.4 billion at December 31, 2025, and consisted of 62% in loans and 28% in investment securities at June 30, 2026.
Previous wording
Total average available for sale debt securities decreased $269.0 million from the previous quarter to $8.9 billion, at fair value. The decrease in available for sale debt securities was mainly the result of lower average balances of mortgage-backed and asset-backed securities. During the first quarter of 2026, the unrealized loss on available for sale debt securities increased $40.7 million to $687.5 million, at period end. Also, during the first quarter of 2026, maturities and pay downs of available for sale debt securities were $410.7 million. At March 31, 2026, the duration of the available for sale investment portfolio was 4.2 years, and maturities and pay downs of approximately $1.2 billion are expected to occur during the next 12 months.
Current wording
Total available for sale debt securities, excluding fair value adjustments, decreased $801.0 million at June 30, 2026 compared to December 31, 2025. Sales, maturities and pay downs of available for sale debt securities during this period totaled $1.2 billion, partly offset by purchases of $810.0 million. The decline in available for sale debt securities was mainly the result of lower balances of mortgage-backed securities and asset-backed securities, which decreased $742.7 million and $255.6 million, respectively, at June 30, 2026 compared to December 31, 2025. These decreases were partly offset by an increase of $246.1 million in the balance of U.S. government and federal agency obligations. At June 30, 2026, the duration of the available for sale investment portfolio was 4.2 years, and maturities and pay downs of approximately $1.1 billion are expected to occur during the next 12 months.
Previous wording
Average interest earning deposits with banks increased $210.4 million over average balances in the previous quarter, and the average balance within other assets increased $374.4 million mainly due to increases in goodwill, intangible assets, and premises and equipment related to the Company’s acquisition of FineMark.
Current wording
Interest earning deposits with banks decreased $484.2 million from December 31, 2025 and the balance of other assets increased $176.2 million mainly due to increases in goodwill, intangible assets and premises and equipment related to the Company's acquisition of FineMark. These increases were partly offset by a decline in the cash and due from banks balance.
Previous wording
Total average deposits increased $2.1 billion over the previous quarter. The increase in average balances was primarily due to the FineMark acquisition, which added $2.7 billion in interest bearing and $425 million in non-interest bearing deposit balances. Shortly after the acquisition, the Company moved $1.0 billion of FineMark’s high-cost, money market deposit balances off-balance sheet. Compared to the prior quarter, average interest checking and money market deposits and demand deposits increased $1.7 billion and $282.1 million, respectively. Additionally, average balances of certificates of deposit of $100,000 and over increased $76.0 million compared to the prior quarter, mainly due to deposit balances acquired from FineMark. Compared to the previous quarter, total average wealth and retail banking deposits grew $2.3 billion and $251.0 million, respectively, while commercial deposits declined $408.3 million. The average loans to deposits ratio was 73.4% in the current quarter and 69.0% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.7 billion, increased $345.7 million to $2.9 billion in the first quarter of 2026. Federal Home Loan Bank advances of $350.0 million, which the Company acquired from the FineMark acquisition, were paid off in January 2026.
Current wording
Total deposits at June 30, 2026 amounted to $27.9 billion, an increase of $2.2 billion compared to December 31, 2025. The balance increase was primarily due to the FineMark acquisition, which added $2.7 billion in interest bearing and $425 million in non-interest bearing deposit balances. Shortly after the acquisition, the Company moved $1.0 billion of FineMark’s high-cost, money market deposit balances off-balance sheet. Compared to December 31, 2025, interest checking and money market deposit balances increased $2.3 billion. The Company’s borrowings, which included customer repurchase agreements of $2.3 billion, totaled $2.5 billion at June 30, 2026, a decrease of $547.9 million from balances at December 31, 2025. Federal Home Loan Bank advances of $350.0 million, which the Company acquired from the FineMark acquisition, were paid off in January 2026.
Previous wording
Interest earning balances at the Federal Reserve Bank, which have overnight maturities and are used for general liquidity purposes, totaled $3.3 billion at March 31, 2026 and increased $526 million from December 31, 2025. At March 31, 2026, the Company's balance of federal funds sold totaled $630 thousand, which are funds lent to the Company's correspondent bank customers with overnight maturities. The fair value of the available for sale debt portfolio was $8.6 billion at March 31, 2026 and included an unrealized net loss of $687.5 million. The total net unrealized loss included net losses of $620.0 million on mortgage-backed and asset-backed securities and $51.0 million on state and municipal obligations.
Current wording
Interest earning balances at the Federal Reserve Bank, which have overnight maturities and are used for general liquidity purposes, totaled $2.3 billion at June 30, 2026 and decreased $484.2 million from December 31, 2025. At June 30, 2026, the Company's balance of federal funds sold totaled $2.0 million, which are funds lent to the Company's correspondent bank customers with overnight maturities. The fair value of the available for sale debt portfolio was $8.3 billion at June 30, 2026 and included an unrealized net loss of $618.6 million. The total net unrealized loss included net losses of $535.0 million on mortgage-backed and asset-backed securities and $49.7 million on state and municipal obligations.
Previous wording
The Company holds securities purchased under agreements to resell (“resale agreements”) which totaled $850.0 million at March 31, 2026, with maturities in 2028 through 2030. Under these agreements, the Company lends funds to upstream financial institutions and holds marketable securities, safe-kept by a third-party custodian, as collateral. This collateral totaled $871.1 million in fair value at March 31, 2026.
Current wording
The Company holds securities purchased under agreements to resell (“resale agreements”) which totaled $1.2 billion at June 30, 2026, with maturities in 2028 through 2031. Under these agreements, the Company lends funds to upstream financial institutions and holds marketable securities, safe-kept by a third-party custodian, as collateral. This collateral totaled $1.2 billion in fair value at June 30, 2026.
Previous wording
The Company's available for sale debt securities portfolio has a diverse mix of high quality and liquid investment securities with a duration of 4.2 years at March 31, 2026. Approximately $1.2 billion of the Company's available for sale debt portfolio is expected to mature or pay down during the next 12 months, and these funds offer substantial resources to meet either new loan demand or offset potential reductions in the Company's deposit funding base. The Company pledges portions of its investment securities portfolio to secure public fund deposits, securities sold under agreements to repurchase, trust funds, letters of credit issued by the FHLB, and borrowing capacity at the FHLB and the Federal Reserve Bank. Total investment securities pledged for these purposes were as follows:
Current wording
The Company's available for sale debt securities portfolio has a diverse mix of high quality and liquid investment securities with a duration of 4.2 years at June 30, 2026. Approximately $1.1 billion of the Company's available for sale debt portfolio is expected to mature or pay down during the next 12 months, and these funds offer substantial resources to meet either new loan demand or offset potential reductions in the Company's deposit funding base. The Company pledges portions of its investment securities portfolio to secure public fund deposits, securities sold under agreements to repurchase, trust funds, letters of credit issued by the FHLB, and borrowing capacity at the FHLB and the Federal Reserve Bank. Total investment securities pledged for these purposes were as follows:
Previous wording
The average loans to deposits ratio is a measure of a bank's liquidity, and the Company’s average loans to deposits ratio was 73.4% for the three months ended March 31, 2026. Core customer deposits, defined as non-interest bearing, interest checking, savings, and money market deposit accounts totaled $25.9 billion and represented 91.4% of the Company's total deposits at March 31, 2026. These core deposits are normally less volatile, as they are often with customer relationships tied to other products offered by the Company, promoting long lasting relationships and stable funding sources. Core deposits increased $2.7 billion at March 31, 2026 compared to December 31, 2025, primarily due to an increase in wealth deposits from the acquisition of FineMark Holdings, Inc. While the Company considers core retail banking and wealth deposits less volatile, corporate deposits could decline if interest rates increase significantly, encouraging corporate customers to increase investing activities, or if the economy deteriorates and companies experience lower cash inflows, reducing deposit balances. If these corporate deposits decline, the Company's funding needs may be met by liquidity supplied by investment security maturities and pay downs expected to total $1.2 billion over the next year, as noted above. In addition, as shown in the table of collateral available for future advances below, the Company has borrowing capacity of $6.9 billion through advances from the FHLB and the Federal Reserve.
Current wording
The average loans to deposits ratio is a measure of a bank's liquidity, and the Company’s average loans to deposits ratio was 73.9% for the six months ended June 30, 2026. Core customer deposits, defined as non-interest bearing, interest checking, savings, and money market deposit accounts totaled $25.5 billion and represented 91.5% of the Company's total deposits at June 30, 2026. These core deposits are normally less volatile, as they are often with customer relationships tied to other products offered by the Company, promoting long lasting relationships and stable funding sources. Core deposits increased $2.2 billion at June 30, 2026 compared to December 31, 2025, primarily due to an increase in wealth deposits of $1.8 billion. While the Company considers core retail banking and wealth deposits less volatile, corporate deposits could decline if interest rates increase significantly, encouraging corporate customers to increase investing activities, or if the economy deteriorates and companies experience lower cash inflows, reducing deposit balances. If these corporate deposits decline, the Company's funding needs may be met by liquidity supplied by investment security maturities and pay downs expected to total $1.1 billion over the next year, as noted above. In addition, as shown in the table of collateral available for future advances below, the Company has borrowing capacity of $6.4 billion through advances from the FHLB and the Federal Reserve.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS
Current report — wording carried from elsewhere
(A) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
1.8%, in the average balance. The overall average rate incurred on all interest bearing liabilities was 1.72% and 1.89% in the first quarters of 2026 and 2025, respectively.