FNB CORP/PA/

Previous wording

This MD&A represents an overview of, and highlights, material changes to our financial condition and consolidated results of operations at and for the six-month periods ended June 30, 2026 and 2025. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained herein and our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026. Our results of operations for the six months ended June 30, 2026 are not necessarily indicative of results expected for the full year.

Current wording

This MD&A represents an overview of, and highlights, material changes to our financial condition and consolidated results of operations at and for the nine-month periods ended September 30, 2026 and 2025. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained herein and our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026. Our results of operations for the nine months ended September 30, 2026 are not necessarily indicative of results expected for the full year.

Previous wording

•the impact of shifts in local and regional commercial real estate market conditions, interest rate fluctuations, geographic commercial office space availability and tenant demand and independent appraisal revisions and other factors beyond our control may have on our branch and headquarters properties and other real estate we own;

Current wording

•the impact that shifts in local and regional commercial real estate market conditions, interest rate fluctuations, geographic commercial office space availability and tenant demand and independent appraisal revisions and other factors beyond our control may have on our branch and headquarters properties and other real estate we own;

Previous wording

•our ability to continue to invest in technological improvements as they become appropriate or necessary;

Current wording

•our ability to continue to invest in technological improvements and artificial intelligence solutions as they become appropriate or necessary;

Previous wording

•risks associated with reliance on third-party vendors and artificial intelligence;

Current wording

•risks associated with reliance on third-party vendors and related to our use of artificial intelligence in connection with business and operations;

Previous wording

To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), efficiency ratio and net interest margin (FTE) to provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures and key performance indicators we use may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to assess their performance and trends.

Current wording

To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as operating net income available to common shareholders, operating earnings per diluted common share, return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), operating pre-provision net revenue, efficiency ratio and net interest margin (FTE) to provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures and key performance indicators we use may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to assess their performance and trends.

Previous wording

•Net interest income totaled $365.7 million, an increase of $18.5 million, or 5.3%, from the year-ago quarter, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets.

Current wording

•Net interest income totaled $376.5 million, an increase of $17.3 million, or 4.8%, from the year-ago quarter, reflecting growth in average earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets (non-GAAP).

Previous wording

•The net interest margin (FTE) (non-GAAP) increased 6 basis points to 3.25% from the year-ago quarter primarily driven by a decrease in cost of funds by 27 basis points, partially offset by a decrease of 20 basis points in the yield on earning assets. The FOMC has lowered the target federal funds rate by 175 basis points since August 2024.

Current wording

•The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29% from the year-ago quarter primarily driven by a decrease in cost of funds by 22 basis points, partially offset by a decrease of 18 basis points in the yield on earning assets. The FOMC increased the target federal funds rate by 25 basis points in September 2026.

Previous wording

•The provision for credit losses was $21.4 million, a decrease of 16.6% from the year-ago quarter, with net charge-offs of $17.0 million, or 0.19% annualized of total average loans, compared to $21.8 million, or 0.25% annualized, in the year-ago quarter, reflecting continued proactive management of the loan portfolio.

Current wording

•The provision for credit losses was $19.6 million, a decrease of 18.1% from the year-ago quarter, with net charge-offs of $11.0 million, or 0.12% annualized of total average loans, compared to $19.7 million, or 0.22% annualized of total average loans, in the year-ago quarter.

Previous wording

Other non-interest income increased $1.0 million, or 16.8%, primarily due to higher residual gains on equipment leases.

Current wording

•Non-interest income totaled $92.6 million benefiting from our diversified business model and related revenue generation, with a decrease of $4.4 million, or 4.5%, linked quarter, due mainly to higher residual gains on equipment leases in the prior quarter.

Previous wording

•Total revenue equaled $462.7 million, a 5.6% increase from the year-ago quarter, driven by continued solid non-interest income generation and growth in net interest income.

Current wording

•Total revenue equaled $469.1 million, a 2.6% increase from the year-ago quarter, driven by growth in net interest income.

Previous wording

•Non-interest expense totaled $253.2 million, an increase of $7.0 million, or 2.9%, compared to the year-ago quarter, primarily due to increases in salaries and employee benefit costs, net occupancy and equipment expense and outside services expense.

Current wording

•Non-interest expense totaled $256.9 million, an increase of $13.4 million, or 5.5%, compared to the year-ago quarter, primarily due to increases in net occupancy and equipment expense, outside services expense and FDIC insurance expense. When adjusting for a ($2.3) million significant item in the third quarter of 2025, operating non-interest expense (non-GAAP) increased $11.1 million, or 4.5%.

Previous wording

•Pre-provision net revenue (non-GAAP) totaled $209.4 million, an 8.8% increase from the prior quarter, driven by record total revenue and well-managed non-interest expenses.

Current wording

•Pre-provision net revenue (non-GAAP) totaled $212.2 million, with the 1.3% increase from the prior quarter; driven by record net interest income.

Previous wording

•On a linked-quarter basis, total average consumer loans and average commercial loans and leases increased $362.6 million, or 10.5% annualized, and $238.6 million, or 4.6% annualized, respectively.

Current wording

•On a linked-quarter basis, period-end total loans and leases increased $768.0 million, or 8.5% annualized, with growth in consumer loans and commercial loans and leases of $435.3 million and $332.7 million, respectively.

Previous wording

•Average deposits totaled $38.7 billion, an increase of $1.5 billion, or 4.1%, from the year-ago quarter with growth in average money market deposits of $727.3 million, average interest-bearing demand deposits of $541.0 million, average non-interest-bearing demand deposits of $129.8 million, average time deposits of $71.0 million and $65.4 million in average savings deposits.

Current wording

•For the quarter ending September 30, 2026, average deposits totaled $38.8 billion, an increase of $914.1 million, or 2.4%, over the quarter ending September 30, 2025, reflecting growth in average interest-bearing demand deposits of $640.6 million, average money market deposits of $443.8 million, average non-interest-bearing demand deposits of $134.0 million, and average savings deposits of $30.6 million more than offsetting the decline in average time deposits of $334.8 million.

Previous wording

•On a linked-quarter basis, total average deposits increased $293.3 million driven by growth in average non-interest-bearing demand deposits of $114.0 million, average time deposits of $119.3 million and average interest-bearing deposits of $75.8 million.

Current wording

•On a linked-quarter basis, period-end total deposits increased $870.6 million, or 8.9% annualized, driven by growth in money market deposits of $710.9 million, interest-bearing demand deposits of $239.0 million and non-interest-bearing demand deposits of $77.5 million more than offsetting the decline in time deposits of $121.4 million.

Previous wording

•The loan-to-deposit ratio was 92.5% at June 30, 2026, compared to 90.3% at March 31, 2026 and 91.9% at June 30, 2025.

Current wording

•The loan-to-deposit ratio was 92.4% at September 30, 2026, compared to 92.5% at June 30, 2026 and 90.9% at September 30, 2025.

Previous wording

•The ratio of non-performing loans plus OREO to total loans and leases plus OREO decreased 3 basis points from the prior quarter to 0.31%. Total delinquency was 0.71%, a 3 basis point decline from the prior quarter. The overall asset quality metrics remain at solid levels, reflecting continued proactive management of the loan portfolio.

Current wording

•The ratio of non-performing loans plus OREO to total loans and leases plus OREO increased 2 basis points from the prior quarter to 0.33%. Total delinquency was 0.75%, a 4 basis point increase from the prior quarter. The overall asset quality metrics remain at satisfactory levels.

Previous wording

•The ACL on loans and leases was $447.3 million, an increase of $15.3 million compared to June 30, 2025, driven primarily by loan growth, with the ratio of the ACL to total loans and leases remaining stable at 1.25%.

Current wording

•The ACL on loans and leases was $455.5 million, an increase of $18.2 million compared to September 30, 2025, driven primarily by loan growth, with the ratio of the ACL to total loans and leases remaining stable at 1.25%.

Previous wording

•Tangible book value per common share (non-GAAP) of $12.24 increased $1.10, or 9.9%, compared to June 30, 2025, and 1.5% compared to March 31, 2026. Reflecting the impact of unrealized losses on AFS securities, AOCI reduced the tangible book value per common share (non-GAAP) by $0.29 as of June 30, 2026, compared to a reduction of $0.26 as of June 30, 2025, and $0.24 as of March 31, 2026.

Current wording

•Tangible book value per common share (non-GAAP) of $12.28 increased $0.80, or 7.0%, compared to September 30, 2025, and $0.04, or 0.3%, compared to June 30, 2026. AOCI reduced the tangible book value per common share (non-GAAP) by $0.53 as of September 30, 2026, primarily due to the impact of higher rates on the fair value of AFS securities, compared to a reduction of $0.22 as of September 30, 2025, and $0.29 as of June 30, 2026.

Previous wording

•The CET1 capital ratio was 11.4%, compared to 10.8% at June 30, 2025 and 11.4% at March 31, 2026. The tangible common equity to tangible assets ratio (non-GAAP) was 8.9%, compared to 8.5% at June 30, 2025 and 8.9% at March 31, 2026.

Current wording

•The CET1 capital ratio was 11.3%, compared to 11.1% at September 30, 2025 and 11.4% at June 30, 2026. The tangible common equity to tangible assets ratio (non-GAAP) was 8.7%, compared to 8.7% at September 30, 2025 and 8.9% at June 30, 2026.

Previous wording

•During the second quarter of 2026, we repurchased $47 million, or 2.7 million shares, of our common stock at a weighted average share price of $17.46.

Current wording

•During the third quarter of 2026, we repurchased $50.9 million, or 2.7 million shares, of our common stock at a weighted average share price of $18.69. For the year-to-date period ending September 30, 2026, we repurchased $133 million, or 7.4 million shares, of common stock at a weighted average share price of $17.90, representing 2.1% of shares outstanding at the beginning of the year.

Previous wording

Net income for the three months ended June 30, 2026 was $148.7 million, or $0.42 per diluted common share, compared to $130.7 million, or $0.36 per diluted common share, for the three months ended June 30, 2025. There were no significant items impacting earnings for the second quarters of 2026 and 2025.

Current wording

Net income for the three months ended September 30, 2026 was $152.9 million, or $0.43 per diluted common share, compared to $149.5 million, or $0.41 per diluted common share, for the three months ended September 30, 2025. On an operating basis, there were no significant items impacting earnings for the third quarter of 2026. By comparison, third quarter of 2025 operating earnings per diluted common share (non-GAAP) was $0.41, excluding a $(2.3) million (pre-tax) significant item impacting earnings due to a reduction in an FDIC special assessment.

Previous wording

Net interest income totaled $365.7 million, an increase of $18.5 million, or 5.3%, reflecting growth in earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 6 basis points to 3.25%. The provision for credit losses was $21.4 million, compared to $25.6 million. Non-interest income increased $5.9 million, or 6.5%, primarily due to increases in wealth management revenue, bank owned life insurance, capital markets income and other non-interest income. Non-interest expense for the second quarter of 2026 increased $7.0 million, or 2.9%, primarily due to increases in salaries and employee benefit costs, net occupancy and equipment expense and outside services expense.

Current wording

Net interest income totaled $376.5 million, an increase of $17.3 million, or 4.8%, reflecting growth in earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29%. The provision for credit losses was $19.6 million, compared to $24.0 million. Non-interest income decreased $5.6 million, or 5.7%, primarily due to decreases in mortgage banking operations income, capital markets income and other non-interest income. Non-interest expense for the third quarter of 2026 increased $13.4 million, or 5.5%, primarily due to increases in net occupancy and equipment expense, outside services expense and FDIC insurance expense.

Previous wording

(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

Current wording

(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.

Previous wording

Net interest income on an FTE basis (non-GAAP) totaled $731.3 million, increasing $54.2 million, or 8.0%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 14 basis points to 3.25%. The yield on earning assets (non-GAAP) decreased 15 basis points to 5.13%, driven by a 19 basis point decline in yields on loans to 5.54%, partially offset by a 15 basis point increase in yields on investment securities to 3.58%. Total cost of funds decreased 29 basis points to 2.00%, with a 33 basis point decrease in interest-bearing deposit costs to 2.38% and a 53 basis point decrease in total borrowing costs. The FOMC has lowered the target federal funds rate by 175 basis points since August 2024.

Current wording

Net interest income on an FTE basis (non-GAAP) totaled $379.7 million, increasing $17.3 million, or 4.8%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29%. The yield on earning assets (non-GAAP) decreased 18 basis points to 5.18%, driven by a 23 basis point decline in yields on loans to 5.56%, partially offset by a 15 basis point increase in yields on investment securities to 3.73%. Total cost of funds decreased 22 basis points to 2.01%, with a 47 basis point decrease in total borrowing costs to 4.17% and a 29 basis point decrease in interest-bearing deposit costs to 2.37%. The FOMC increased the target federal funds rate by 25 basis points in September 2026.

Previous wording

Interest income on an FTE basis (non-GAAP) of $581.1 million, decreased $4.6 million, or 0.8%, resulting from lower yields on loans and leases of 27 basis points, partially offset by growth in average earning assets of $1.4 billion. The increase in average earning assets was primarily driven by a $1.0 billion, or 2.9%, increase in average loans and leases and an increase of $378.5 million in average investment securities.

Current wording

Interest income on an FTE basis (non-GAAP) was $599.1 million for both the third quarters of 2026 and 2025, resulting in a lower yield on earning assets (non-GAAP) of 18 basis points, despite the growth in average earning assets of $1.5 billion. The increase in average earning assets was primarily driven by a $1.3 billion, or 3.7%, increase in average loans and leases and an increase of $431.8 million in average investment securities.

Previous wording

Interest expense of $212.3 million for the second quarter of 2026 decreased $23.2 million from the same quarter of 2025, primarily due to a 27 basis point reduction in the cost of funds, partially offset by the growth in average interest-bearing deposits. Average total deposits increased $1.5 billion, or 4.1%, reflecting solid organic growth in new and existing customer relationships. The funding mix was stable with non-interest-bearing demand deposits comprising 26% of total deposits at both June 30, 2026 and June 30, 2025. Average short-term borrowings increased $229.6 million, or 12.2%, at lower rates paid, while average long-term borrowings decreased $740.0 million, or 27.0%, which included the maturity of $350 million in senior notes in August 2025 and $100 million in subordinated notes in October 2025, combined with decreases in average long-term FHLB borrowings. The decrease in total cost of funds is comprised of a 50 basis point decrease in total borrowing costs and a 30 basis point decrease in interest-bearing deposit costs to 2.36%.

Current wording

Interest expense of $219.5 million for the third quarter of 2026 decreased $17.2 million from the same quarter of 2025, primarily due to a 22 basis point reduction in the cost of funds, partially offset by the growth in average interest-bearing deposits. Average total deposits increased $914.1 million, or 2.4%, reflecting solid organic growth in new and existing customer relationships. The funding mix was stable with non-interest-bearing demand deposits comprising 26% of total deposits at both September 30, 2026 and 2025. Average short-term borrowings increased $961.7 million, or 57.2%, at lower rates paid, while average long-term borrowings decreased $659.7 million, or 26.3%, which included the maturity of $350 million in senior notes in August 2025 and $100 million in subordinated notes in October 2025, combined with decreases in average long-term FHLB borrowings. The decrease in total cost of funds is comprised of a 47 basis point decrease in total borrowing costs and a 29 basis point decrease in interest-bearing deposit costs to 2.37%.

Previous wording

(2)Interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

Current wording

(2)Interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.

Previous wording

Provision for credit losses on loans and leases for the second quarter of 2026 declined $4.4 million, or 17.3%, and reflected net charge-offs of $17.0 million, or 0.19% annualized of total average loans, compared to $21.8 million, or 0.25% annualized, in the second quarter of 2025, reflecting continued proactive management of the loan portfolio. For additional information relating to the allowance and provision for credit losses, refer to the “Allowance for Credit Losses on Loans and Leases” section of this MD&A.

Current wording

Provision for credit losses on loans and leases for the third quarter of 2026 declined $4.5 million, or 18.7%, and reflected net charge-offs of $11.0 million, or 0.12% annualized of total average loans, compared to $19.7 million, or 0.22% annualized, in the third quarter of 2025. For additional information relating to the allowance and provision for credit losses, refer to the “Allowance for Credit Losses on Loans and Leases” section of this MD&A.

Previous wording

Total non-interest income increased by $5.9 million, or 6.5%, to $97.0 million for the second quarter of 2026, compared to $91.0 million for the second quarter of 2025. The variances in the individual non-interest income items are explained in the following paragraphs.

Current wording

Total non-interest income decreased $5.6 million, or 5.7%, to $92.6 million for the third quarter of 2026, compared to $98.2 million for the third quarter of 2025. The variances in the individual non-interest income items are explained in the following paragraphs.

Previous wording

Mortgage banking operations income decreased $1.0 million, or 15.7%, primarily driven by net fair value adjustments from pipeline hedging activity given the volatility of interest rates during the quarter.

Current wording

Mortgage banking operations income decreased $3.6 million, or 39.4%, primarily driven by tighter gain-on-sale margins and net fair value adjustments given the volatility of interest rates during the quarter.

Previous wording

Total non-interest expense for the second quarter of 2026 increased $7.0 million, or 2.9%, from the same period of 2025. The variances in the individual non-interest expense items are explained in the following paragraphs.

Current wording

Total non-interest expense for the third quarter of 2026 increased $13.4 million, or 5.5%, from the same period of 2025. On an operating basis (non-GAAP), non-interest expense increased $11.1 million, or 4.5%, when excluding a significant item of $(2.3) million in the third quarter of 2025. The variances in the individual non-interest expense items are explained in the following paragraphs.

Previous wording

Net occupancy and equipment increased $2.4 million, or 5.1%, primarily due to technology-related investments and higher occupancy costs.

Current wording

Net occupancy and equipment increased $6.2 million, or 13.9%, primarily due to technology-related investments and higher occupancy costs.

Previous wording

Outside services increased $2.9 million, or 11.6%, driven by higher third-party legal and consulting costs.

Current wording

Outside services increased $4.0 million, or 15.3%, driven by higher third-party legal and consulting costs.

Previous wording

Marketing expense decreased $1.1 million, or 21.2%, due to the timing of various marketing promotions.

Current wording

Marketing expense decreased $1.2 million, or 21.5%, due to the timing of various marketing promotions.

Previous wording

Net income for the first six months of 2026 was $285.8 million, or $0.80 per diluted common share, compared to $247.2 million, or $0.68 per diluted common share, for the first six months of 2025. There were no significant items impacting earnings for the first six months of 2026 and 2025.

Current wording

Net income for the first nine months of 2026 was $438.6 million, or $1.23 per diluted common share, compared to $396.7 million, or $1.09 per diluted common share, for the first nine months of 2025. There were no significant items impacting earnings for the first nine months of 2026. For the first nine months of 2025, operating earnings per diluted common share (non-GAAP) was $1.09, excluding $(2.3) million (pre-tax) of a significant item impacting earnings due to a reduction in an FDIC special assessment.

Previous wording

Net interest income totaled $725.0 million, an increase of $54.0 million, or 8.0%, compared to $671.0 million, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by a lower yield on interest earning assets. The net interest margin (FTE) (non-GAAP) increased 14 basis points to 3.25%. The provision for credit losses for the first six months of 2026 totaled $39.8 million, compared to $43.1 million. Net charge-offs for the first six months of 2026 totaled $32.8 million, or 0.19% annualized of total average loans, compared to $34.3 million, or 0.20% annualized. Non-interest income totaled $187.9 million, an increase of $9.2 million, or 5.1%, compared to $178.8 million, reflecting increased capital markets income, wealth management revenue and other non-interest income. Non-interest expense totaled $511.1 million, increasing $18.1 million, or 3.7%, reflecting increased salaries and employee benefit costs, net occupancy and equipment expense and outside services expense.

Current wording

Net interest income totaled $1.1 billion, an increase of $71.2 million, or 6.9%, compared to $1.0 billion, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by a lower yield on interest earning assets. The net interest margin (FTE) (non-GAAP) increased 10 basis points to 3.26%. The provision for credit losses for the first nine months of 2026 totaled $59.5 million, compared to $67.1 million. Net charge-offs for the first nine months of 2026 totaled $43.9 million, or 0.17% annualized of total average loans, compared to $54.0 million, or 0.21% annualized of total average loans. Non-interest income totaled $280.5 million, an increase of $3.6 million, or 1.3%, compared to $277.0 million, reflecting increased revenue from wealth management, service charges, insurance commissions and fees, capital markets income and higher dividends on non-marketable equity securities, partially offset by decreased income from mortgage banking operations. Non-interest expense totaled $768.1 million, increasing $31.5 million, or 4.3%, reflecting increased salaries and employee benefit costs, net occupancy and equipment expense, outside services expense and other non-interest expense.

Previous wording

(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

Current wording

(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.

Previous wording

Net interest income on an FTE basis (non-GAAP) totaled $368.8 million, increasing $18.6 million, or 5.3%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 6 basis points to 3.25%. The yield on earning assets (non-GAAP) decreased 20 basis points to 5.13%, driven by a 27 basis point decline in yields on loans to 5.52%, partially offset by a 16 basis point increase in yields on investment securities to 3.62%. Total cost of funds decreased 27 basis points to 1.99%, with a 50 basis point decrease in total borrowing costs to 4.21% and a 30 basis point decrease in interest-bearing deposit costs to 2.36%. The FOMC has lowered the target federal funds rate by 175 basis points since August 2024.

Current wording

Net interest income on an FTE basis (non-GAAP) totaled $1.1 billion, increasing $71.5 million, or 6.9%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 10 basis points to 3.26%. The yield on earning assets (non-GAAP) decreased 16 basis points to 5.15%, driven by a 20 basis point decline in yields on loans to 5.55%, partially offset by a 15 basis point increase in yields on investment securities to 3.63%. Total cost of funds decreased 27 basis points to 2.00%, with a 31 basis point decrease in interest-bearing deposit costs to 2.38% and a 51 basis point decrease in total borrowing costs. The FOMC increased the target federal funds rate by 25 basis points in September 2026 but cut the target federal funds rate by 75 basis points during the second half of 2025.

Previous wording

Interest income on an FTE basis (non-GAAP) of $1.2 billion, increased $5.4 million, or 0.5%, resulting from growth in average earning assets of $1.4 billion, partially offset by a decrease in yield. The increase in average earning assets was primarily driven by a $924.5 million, or 2.7%, increase in average loans and leases and an increase of $399.6 million in average investment securities.

Current wording

Interest income on an FTE basis (non-GAAP) of $1.8 billion, increased $5.5 million, or 0.3%, resulting from growth in average earning assets of $1.5 billion, partially offset by a decrease of 16 basis points in the yield on earning assets (non-GAAP). The increase in average earning assets was primarily driven by a $1.1 billion, or 3.1%, increase in average loans and leases and an increase of $410.4 million in average investment securities.