BANK OF HAWAII CORP

Previous wording

The following MD&A is intended to help the reader understand the Company and its operations and is focused on our financial results for the second quarter of 2026, including comparisons of year-to-year performance, trends, and updates from the Company’s most recent 10-K filing. Discussion and analysis of our 2025 fiscal year, as well as the year-to-year comparison between fiscal years 2025 and 2024, are included in Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.

Current wording

The following MD&A is intended to help the reader understand the Company and its operations and is focused on our financial results for the third quarter of 2026, including comparisons of year-to-year performance, trends, and updates from the Company’s most recent 10-K filing. Discussion and analysis of our 2025 fiscal year, as well as the year-to-year comparison between fiscal years 2025 and 2024, are included in Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.

Previous wording

For the first six months of 2026, the median price of single-family home sales on Oahu increased by 2.6% while the median price of condominiums increased by 1.5% compared to the same period in 2025. The volume of single-family homes sales on Oahu increased 3.9% and condominium sales decreased 2.3% compared to the same period in 2025. Inventory of single-family homes and condominiums on Oahu was 3.2 months and 7.0 months, respectively, for the second quarter of 2026.

Current wording

For the first nine months of 2026, the median price of single-family home sales on Oahu increased by 3.1% while the median price of condominiums increased by 2.0% compared to the same period in 2025. The volume of single-family homes sales on Oahu increased 5.9% and condominium sales decreased 2.4% compared to the same period in 2025. Inventory of single-family homes and condominiums on Oahu was 3.2 months and 7.0 months, respectively, for the third quarter of 2026.

Previous wording

Net income for the second quarter of 2026 was $63.8 million, an increase of $16.2 million, or 33.9%, compared to the same period in 2025. Diluted earnings per common share was $1.47 for the second quarter of 2026, an increase of $0.41, or 38.7%, compared to the same period in 2025.

Current wording

Net income for the third quarter of 2026 was $64.3 million, an increase of $10.9 million, or 20.5%, compared to the same period in 2025. Diluted earnings per common share was $1.49 for the third quarter of 2026, an increase of $0.29, or 24.2%, compared to the same period in 2025.

Previous wording

•The return on average common equity for the second quarter of 2026 was 15.47% compared with 12.50% in the same period last year.

Current wording

•The return on average common equity for the third quarter of 2026 was 15.38% compared with 13.59% in the same period last year.

Previous wording

•Net interest income for the second quarter of 2026 was $153.6 million, an increase of 18.4% compared to the same period last year.

Current wording

•Net interest income for the third quarter of 2026 was $156.1 million, an increase of 14.2% compared to the same period last year.

Previous wording

•Net interest margin was 2.78% in the second quarter of 2026, an increase of 39 basis points from the same period last year.

Current wording

•Net interest margin was 2.82% in the third quarter of 2026, an increase of 36 basis points from the same period last year.

Previous wording

•The provision for credit losses for the second quarter of 2026 and 2025 was $3.6 million and $3.3 million, respectively.

Current wording

•The provision for credit losses for the third quarter of 2026 and 2025 was $2.8 million and $2.5 million, respectively.

Previous wording

•Noninterest expense was $111.2 million in the second quarter of 2026 and remained flat compared to the same period last year.

Current wording

•Noninterest expense was $112.3 million in the third quarter of 2026 and remained flat compared to the same period last year.

Previous wording

•Total assets were $23.8 billion as of June 30, 2026, a decrease of 1.4% from December 31, 2025.

Current wording

•Total assets were $23.8 billion as of September 30, 2026, a decrease of 1.5% from December 31, 2025.

Previous wording

•The allowance for credit losses on loans and leases was $147.0 million as of June 30, 2026, an increase of $0.2 million from December 31, 2025. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.03% at the end of the quarter, down 1 basis point from December 31, 2025.

Current wording

•The allowance for credit losses on loans and leases was $146.2 million as of September 30, 2026, a decrease of $0.6 million from December 31, 2025. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.02% at the end of the quarter, down 2 basis points from December 31, 2025.

Previous wording

•Net loan and lease charge-offs during the second quarter of 2026 were $3.4 million, comprised of charge-offs of $4.7 million partially offset by recoveries of $1.3 million. Compared to the same quarter of 2025, net loan and lease charge-offs increased by $0.8 million. Net loan and lease charge-offs to average loans and leases outstanding during the second quarter of 2026 was 0.10% compared to 0.07% in the same period last year.

Current wording

•Net loan and lease charge-offs during the third quarter of 2026 were $3.3 million, comprised of charge-offs of $4.7 million partially offset by recoveries of $1.4 million. Compared to the same quarter of 2025, net loan and lease charge-offs increased by $0.7 million. Net loan and lease charge-offs to average loans and leases outstanding during the third quarter of 2026 was 0.09% compared to 0.07% in the same period last year.

Previous wording

•Total non-performing assets (“NPAs”) were $11.5 million as of June 30, 2026, down $2.7 million from December 31, 2025. NPAs were 8 basis points of total loans and leases and foreclosed real estate at the end of the quarter, down 2 basis points from December 31, 2025.

Current wording

•Total non-performing assets (“NPAs”) were $43.4 million as of September 30, 2026, up $29.2 million from December 31, 2025. NPAs were 30 basis points of total loans and leases and foreclosed real estate at the end of the quarter, up 20 basis points from December 31, 2025.

Previous wording

•The investment securities portfolio was $7.7 billion as of June 30, 2026, a decrease of 0.9% from December 31, 2025. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Current wording

•The investment securities portfolio was $7.5 billion as of September 30, 2026, a decrease of 3.3% from December 31, 2025. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Previous wording

•Total deposits were $20.9 billion as of June 30, 2026 and $21.2 billion as of December 31, 2025.

Current wording

•Total deposits were $20.5 billion as of September 30, 2026 and $21.2 billion as of December 31, 2025.

Previous wording

•Total shareholders’ equity was $1.9 billion as of June 30, 2026 and December 31, 2025.

Current wording

•Total shareholders’ equity was $1.8 billion as of September 30, 2026 and $1.9 billion as of December 31, 2025.

Previous wording

•During the three months ended June 30, 2026, we repurchased 215,995 shares of common stock at an average cost per share of $78.60 and a total cost of $17.0 million under the share repurchase program. Total remaining buyback authority under the share repurchase program was $88.9 million at June 30, 2026.

Current wording

•During the three months ended September 30, 2026, we repurchased 255,874 shares of common stock at an average cost per share of $78.96 and a total cost of $20.2 million under the share repurchase program. Total remaining buyback authority under the share repurchase program was $68.7 million at September 30, 2026. In October 2026, the Board of Directors increased the authorization under the share repurchase program by $200 million to $268.7 million.

Previous wording

2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1.4 million and $2.8 million for the three and six months ended June 30, 2026, respectively, and $1.6 million and $3.1 million for the three and six months ended June 30, 2025, respectively.

Current wording

2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1.3 million and $4.1 million for the three and nine months ended September 30, 2026, respectively, and $1.7 million and $4.8 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

The average balance of our earning assets for the three and six months ended June 30, 2026 increased by $346.1 million or 2% and $351.6 million or 2%, respectively, compared to the same periods in 2025. These increases were primarily due to an increase in the average balance of available-for-sale investment securities. As compared to the same periods last year, yields on our investment securities portfolio increased by 29 basis points during both the three and six months ended June 30, 2026 primarily due to the amortization of lower yielding investments being reinvested into new investments at higher current interest rates, as well as the impact of the repositioning of a portion of our AFS securities portfolio in the fourth quarter of 2025, which resulted in a higher-yielding securities mix. As compared to the same period last year, yields on our loan and lease portfolio decreased by 1 basis point during the three months ended June 30, 2026, primarily due to a decrease in rates resulting in the repricing of certain variable‑rate loans. Yields on our loan and lease portfolio increased by 1 basis point during the six months ended June 30, 2026, primarily due to the continued amortization of lower‑yielding loans along with the origination of new loans at higher prevailing interest rates, partially offset by a decrease in rates resulting in the repricing of certain variable‑rate loans following Federal Reserve rate cuts.

Current wording

The average balance of our earning assets for the three and nine months ended September 30, 2026 decreased by $139.7 million or 1% and increased by $186.0 million or 1%, respectively, compared to the same periods last year. The decrease during the three months ended September 30, 2026 compared to the same period last year was primarily due to a decrease in the average balance of cash and cash equivalents partially offset by an increase in the average balance of total loans and leases. The increase during the nine months ended September 30, 2026 compared to the same period last year was primarily due to an increase in the average balance of available-for-sale investment securities and total loans and leases. As compared to the same periods last year, yields on our investment securities portfolio increased by 22 basis points and 26 basis points during the three and nine months ended September 30, 2026, respectively. These increases were primarily due to the amortization of lower yielding investments being reinvested into new investments at higher current interest rates, as well as the impact of the repositioning of a portion of our AFS securities portfolio in the fourth quarter of 2025, which resulted in a higher-yielding securities mix. As compared to the same periods last year, yields on our loan and lease portfolio decreased by 4 basis points and 1 basis point during the three and nine months ended September 30, 2026, respectively. These decreases were primarily due to a decrease in interest rates that resulted in the repricing of variable-rate commercial loans and the placement of a single commercial mortgage on non-accrual status in the third quarter of 2026. The decrease was partially offset by the continued amortization of lower‑yielding loans along with the origination of new loans at higher prevailing interest rates.

Previous wording

The average balance of our interest-bearing deposits for the three and six months ended June 30, 2026 decreased by $94.8 million or 1% and $94.5 million or 1%, respectively, compared to the same periods in 2025. As compared to the same periods last year, the cost of our interest-bearing deposits decreased by 43 basis points during both the three and six months ended June 30, 2026 primarily due to a decrease in the prevailing interest rate environment.

Current wording

The average balance of our interest-bearing deposits for the three and nine months ended September 30, 2026 decreased by $478.5 million or 3% and $223.9 million or 1%, respectively, compared to the same periods last year. As compared to the same periods last year, the cost of our interest-bearing deposits decreased by 42 basis points during both the three and nine months ended September 30, 2026 primarily due to a decrease in the prevailing interest rate environment.

Previous wording

Trust and asset management income is comprised of fees earned from the management and administration of trusts and other customer assets. The management fees are largely based upon the market value of the assets and the fee rate charged to customers. Total trust assets under administration were $14.3 billion and $12.6 billion as of June 30, 2026 and June 30, 2025, respectively. Trust and Asset Management income increased by $1.6 million or 13% in the second quarter of 2026 and by $2.3 million or 10% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher agency and trust-related fees.

Current wording

Trust and asset management income is comprised of fees earned from the management and administration of trusts and other customer assets. The management fees are largely based upon the market value of the assets and the fee rate charged to customers. Total trust assets under administration were $14.2 billion and $12.6 billion as of September 30, 2026 and September 30, 2025, respectively. Trust and asset management income increased by $0.8 million or 7% in the third quarter of 2026 and by $3.1 million or 9% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to the increase in trust assets under management.

Previous wording

Fees, exchange, and other service charges decreased by $3.3 million or 23% in the second quarter of 2026 and by $6.8 million or 23% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to lower merchant income following the sale of our merchant services portfolio in the fourth quarter of 2025.

Current wording

Fees, exchange, and other service charges decreased by $4.4 million or 29% in the third quarter of 2026 and by $11.1 million or 25% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to lower merchant income following the sale of our merchant services portfolio in the fourth quarter of 2025.

Previous wording

Annuity and insurance income increased by$0.6 million or 40%in the second quarter of 2026 and by$0.5 million or 17% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher production resulting from expanded product offerings and improved referral activity during 2026.

Current wording

Annuity and insurance income increased by $1.0 million or 93% in the third quarter of 2026 and by $1.5 million or 37% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to higher production resulting from expanded product offerings and improved referral activity during the three and nine months ended September 30, 2026.

Previous wording

Total salaries and benefits expense increased by$1.3 million or 2% in the second quarter of 2026, primarily due to an increase in medical, dental, and life insurance expense, base salaries, and commission expense. Total salaries and benefits expense increased by$6.9 million or 6% for the six months ended June 30, 2026 compared to the same period last year, primarily due to an increase in share-based compensation related to the accelerated vesting in the first quarter of 2026 of restricted stock awards pursuant to the retirement provisions of performance-based restricted stock awards granted in 2024 and 2025. Base salaries increased by$1.6 million or 2% primarily due to annual merit increases, while incentive compensation increased by$1.2 million or 11% during the six months ended June 30, 2026 compared to the same period last year.

Current wording

Total salaries and benefits expense decreased by $0.6 million or 1% in the third quarter of 2026, primarily due to decreases in separation expense, share-based compensation expense, and incentive compensation, partially offset by an increase in medical, dental, and life insurance expense which was driven by higher costs incurred in connection with medical insurance. Total salaries and benefits expense increased by $6.3 million or 3% for the nine months ended September 30, 2026 compared to the same period last year, primarily due to increases in base salaries primarily due to annual merit increases, medical, dental, and life insurance expense, and share-based compensation related to the accelerated vesting during the nine months ended September 30, 2026 of restricted stock awards pursuant to the retirement provisions of performance-based restricted stock awards granted in 2024 and 2025. Medical, dental, and life insurance expense increased by$2.4 million or 20% for the nine months ended September 30, 2026 compared to the same period last year, primarily due to higher costs incurred in connection with medical insurance.

Previous wording

Net equipment expense increased by $0.6 million or 6% in the second quarter of 2026 and by $1.0 million or 5% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher software license fees and maintenance.

Current wording

Net equipment expense increased by $1.0 million or 10% in the third quarter of 2026 and by $2.1 million or 7% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to higher depreciation expense and software license fees and maintenance.

Previous wording

Professional fees increased by$1.0 million or 24% in the second quarter of 2026 and by$1.0 million or 11% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to an increase in consulting costs incurred.

Current wording

Professional fees increased by $1.5 million or 39% in the third quarter of 2026 and by $2.5 million or 20% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to an increase in consulting costs incurred.

Previous wording

Total other expense decreased by $2.3 million or 14.6% in the second quarter of 2026 and by $4.2 million or 14% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to lower merchant transaction and card processing fees following the sale of our merchant services portfolio in the fourth quarter of 2025, as well as a decrease in operational losses due to fewer dispute charge-offs.

Current wording

Total other expense decreased by $1.7 million or 11% in the third quarter of 2026 and by $5.9 million or 13% for the nine months ended September 30, 2026 compared to the same periods last year, primarily due to lower merchant transaction and card processing expenses following the sale of our merchant services portfolio in the fourth quarter of 2025, as well as a decrease in operational losses due to fewer dispute charge-offs.

Previous wording

The provision for income taxes was $18.3 million in the second quarter of 2026, an increase of $5.5 million compared to the same period last year. The effective tax rate for the second quarter of 2026 was 22.3%, an increase from 21.2% for the same period last year. The higher effective tax rate for the second quarter of 2026 compared to the same period last year was primarily due to an increase in nondeductible compensation and a decrease in tax benefits from discrete items.

Current wording

The provision for income taxes was $19.4 million in the third quarter of 2026, an increase of $5.0 million compared to the same period last year. The effective tax rate for the third quarter of 2026 was 23.2%, an increase from 21.3% for the same period last year. The higher effective tax rate for the third quarter of 2026 compared to the same period last year was primarily due to a decrease in tax exempt income and a decrease in tax benefits from discrete items.

Previous wording

The provision for income taxes was $35.4 million in the six months ended June 30, 2026, an increase of $10.4 million compared to the same period last year. The effective tax rate for the six months ended June 30, 2026 was 22.6%, an increase from 21.4% for the same period last year. The higher effective tax rate for the six months ended June 30, 2026 compared to the same period last year was primarily due to an increase in nondeductible compensation, a decrease in tax benefits from discrete items, and a decrease in tax exempt income.

Current wording

The provision for income taxes was $54.8 million in the nine months ended September 30, 2026, an increase of $15.4 million compared to the same period last year. The effective tax rate for the nine months ended September 30, 2026 was 22.8%, an increase from 21.4% for the same period last year. The higher effective tax rate for the nine months ended September 30, 2026 compared to the same period last year was primarily due to higher pretax book income, which reduced the benefit of tax advantaged investments, as well as an increase in non-deductible compensation and a decrease in tax benefits from discrete items.

Previous wording

Cash and cash equivalents were $452.8 million as of June 30, 2026, a decrease of $493.7 million or 52.2% from the prior year. The decrease was primarily due to a net decrease in deposits and loan growth during the period.

Current wording

Cash and cash equivalents were $442.0 million as of September 30, 2026, a decrease of $504.5 million or 53.3% from the prior year. The decrease was primarily due to a decline in deposits and loan growth during the period.

Previous wording

The carrying value of our investment securities portfolio was $7.7 billion and $7.8 billion as of June 30, 2026 and December 31, 2025, respectively. The decrease was primarily due to portfolio runoff, including maturities and paydowns, partially offset by the purchase of $445.4 million in available-for-sale investment securities during the six months ended June 30, 2026.

Current wording

The carrying value of our investment securities portfolio was $7.5 billion and $7.8 billion as of September 30, 2026 and December 31, 2025, respectively. The decrease was primarily due to portfolio runoff, including maturities and paydowns, a decline in the fair value of our available-for-sale ("AFS") investment portfolio, partially offset by the purchase of $544.2 million in AFS investment securities during the nine months ended September 30, 2026.

Previous wording

Net unrealized losses in our AFS and HTM investment securities were $784.7 million as of June 30, 2026 and $739.8 million as of December 31, 2025. In addition, we transferred AFS investment securities to the HTM category in 2022. At the time of transfer, these securities had a fair value of $1.3 billion. The unrealized losses at the time of transfer remain in accumulated other comprehensive income and are amortized over the estimated remaining life of the securities through an adjustment to the effective yield of the HTM portfolio. The unamortized balance of these losses was $144.4 million and $155.0 million as of June 30, 2026 and December 31, 2025, respectively. See Note 7 Accumulated Other Comprehensive Incometo the unaudited Consolidated Financial Statements for more information.

Current wording

Net unrealized losses in our AFS and HTM investment securities were $1.0 billion as of September 30, 2026 and $739.8 million as of December 31, 2025. The increase in net unrealized losses was primarily due to changes in interest rates during the nine months ended September 30, 2026. In addition, we transferred AFS investment securities to the HTM category in 2022. At the time of transfer, these securities had a fair value of $1.3 billion. The unrealized losses at the time of transfer remain in accumulated other comprehensive income and are amortized over the estimated remaining life of the securities through an adjustment to the effective yield of the HTM portfolio. The unamortized balance of these losses was $139.3 million and $155.0 million as of September 30, 2026 and December 31, 2025, respectively. See Note 7 Accumulated Other Comprehensive Incometo the unaudited Consolidated Financial Statements for more information.

Previous wording

Total loans and leases as of June 30, 2026 increased by $204.6 million or 1.5% from December 31, 2025, due to growth in both our commercial and consumer loans.

Current wording

Total loans and leases as of September 30, 2026 increased by $289.3 million or 2.1% from December 31, 2025, due to growth in both our commercial and consumer loans.

Previous wording

Commercial loans and leases as of June 30, 2026 increased by $158.7 million or 2.6% from December 31, 2025. The increase was primarily due to growth in our commercial mortgage and commercial and industrial portfolios, which increased by $113.4 million or 2.7% and $92.3 million or 5.8%, respectively. This increase was partially offset by a decrease in our construction portfolio, which decreased by $44.1 million or 21.1%, primarily due to the completion of several construction projects during the second quarter. Consumer loans and leases as of June 30, 2026 increased by $45.9 million or 0.6% from December 31, 2025, primarily due to growth in our residential mortgage portfolio, which increased by $89.4 million or 1.9%, largely attributable to condominium project lending. This was partially offset by paydowns in our home equity and automobile loans portfolios.

Current wording

Commercial loans and leases as of September 30, 2026 increased by $232.1 million or 3.8% from December 31, 2025. The increase was primarily due to growth in our commercial mortgage and commercial and industrial portfolios, which increased by $261.5 million or 6.2% and $68.1 million or 4.3%, respectively. This increase was partially offset by a decrease in our construction portfolio, which decreased by $90.7 million or 43.5%, primarily due to the completion of several construction projects during the nine months ended September 30, 2026. Consumer loans and leases as of September 30, 2026 increased by $57.2 million or 0.7% from December 31, 2025, primarily due to growth in our residential mortgage portfolio, which increased by $82.4 million or 1.7%, largely attributable to growth in residential mortgage loans secured by new condominium units. This was partially offset by paydowns in our home equity and automobile loans portfolios.

Previous wording

Our commercial and consumer lending activities are concentrated primarily in Hawai‘i and the West Pacific. Our commercial loan and lease portfolio to borrowers based on the U.S. Mainland includes participation in shared national credits for customers whose operations and assets extend beyond Hawai‘i.

Current wording

Our commercial and consumer lending activities are concentrated primarily in Hawai‘i. Our commercial loan and lease portfolio to borrowers based on the U.S. Mainland includes participation in shared national credits for customers whose operations and assets extend beyond Hawai‘i.

Previous wording

Low-income housing investments decreased by $18.8 million or 8% due to the amortization of existing investments. Derivative financial instruments increased by $9.5 million or 10%, primarily due to increasing fair values of our interest rate swaps impacted by prevailing interest rates. Deferred compensation plan assets decreased by $3.2 million or 20%, primarily due to distributions from the executive deferred compensation plan during the six months ended June 30, 2026.

Current wording

Low-income housing investments decreased by $28.2 million or 13% due to the amortization of existing investments. Deferred tax assets and tax receivable increased by $27.2 million or 20% primarily due to book-to-tax differences related to an increase in unrealized losses on investment securities during the nine months ended September 30, 2026. Derivative financial instruments increased by $55.2 million or 55%, primarily due to increasing fair values of our interest rate swaps impacted by prevailing interest rates. Federal Home Loan Bank of Des Moines stock increased by $13.3 million or 38% primarily due to an increase in overnight borrowings.

Previous wording

The increase in Regular Savings was primarily due to increases in consumer deposits of $112.6 million, commercial deposits of $10.2 million, and public deposits of $82.3 million. The decrease in Money Market was primarily due to decreases in commercial deposits of $230.2 million and consumer deposits of $10.8 million.

Current wording

The increase in Regular Savings was primarily due to increases in consumer deposits of $122.4 million, public deposits of $23.0 million, and commercial deposits of $11.2 million. The decrease in Money Market was primarily due to decreases in commercial deposits of $283.9 million and consumer deposits of $18.8 million.

Previous wording

Securities sold under agreements to repurchase were $50.0 million as of both June 30, 2026 and December 31, 2025. As of June 30, 2026, our remaining repurchase agreement was at a fixed interest rate of 3.89% with a remaining maturity of 3.38 years. Our repurchase agreement was accounted for as a collateralized financing arrangement (i.e., a secured borrowing) and not as a sale and subsequent repurchase of securities. Our remaining repurchase agreement with a private institution may be terminated at earlier specified dates by either the private institution or the Company. See Note 6 Securities Sold Under Agreements to Repurchase to the unaudited Consolidated Financial Statements for more information.

Current wording

Securities sold under agreements to repurchase were $50.0 million as of both September 30, 2026 and December 31, 2025. As of September 30, 2026, our remaining repurchase agreement was at a fixed interest rate of 3.89% with a remaining maturity of 3.13 years. Our repurchase agreement was accounted for as a collateralized financing arrangement (i.e., a secured borrowing) and not as a sale and subsequent repurchase of securities. Our remaining repurchase agreement with a private institution may be terminated at earlier specified dates by either the private institution or the Company. See Note 6 Securities Sold Under Agreements to Repurchase to the unaudited Consolidated Financial Statements for more information.

Previous wording

Net income increased by $8.5 million or 29% in the second quarter of 2026 compared to the same period last year, primarily due to increases in net interest income and in noninterest income, partially offset by increases in noninterest expense and in the provision for credit losses. Net interest income increased by $14.4 million or 15%, primarily due to higher deposit spreads on higher deposit balances. Noninterest income increased by $2.2 million or 6%, primarily due to higher trust and asset management fees and higher annuity and insurance fees. Noninterest expense increased by $4.2 million or 5%, primarily due to higher allocated administrative and support unit costs and higher salaries & benefits expense. The provision for credit losses increased by $0.8 million or 30%, primarily due to higher net charge-offs in the auto loan, installment loan, and home equity portfolios.

Current wording

Net income increased by $10.0 million or 33% in the third quarter of 2026 compared to the same period last year, primarily due to increases in net interest income and noninterest income, partially offset by increases in noninterest expense and the provision for loan losses. Net interest income increased by $16.5 million or 17%, primarily due to higher deposit spreads on savings and interest-bearing checking balances. Noninterest income increased by $2.1 million or 6%, primarily due to higher annuity and insurance fees, trust and asset management fees, and investment advisor fees, partially offset by lower debit card income. Noninterest expense increased by $4.5 million or 5%, primarily due to higher administrative and support unit costs and higher salaries and benefits expenses.

Previous wording

Net income increased by $11.0 million or 19% in the first six months of 2026 compared to the same period last year, primarily due to increases in net interest income and in noninterest income, partially offset by an increase in noninterest expense. Net interest income increased by $25.0 million or 12%, primarily due to higher deposit spreads on higher deposit balances. Noninterest income increased by $2.1 million or 3% primarily due to higher trust and asset management fees, overdraft fees, and annuity and insurance fees. This was partially offset by lower credit card commissions and lower debit card income. Noninterest expense increased by $12.1 million or 7%, primarily due to higher salaries & benefits expense, mobile and online banking platform costs, operational losses, card production costs, and allocated administrative and support unit costs.

Current wording

Net income increased by $20.9 million or 23% in the first nine months of 2026 compared to the same period last year, primarily due to increases in net interest income and noninterest income, partially offset by an increase in noninterest expense. Net interest income increased by $41.6 million or 13%, primarily due to higher deposit spreads on savings and interest-bearing checking balances. Noninterest income increased by $4.3 million or 4% primarily due to higher trust and asset management fees, annuity and insurance fees, and overdraft fees. These increases were partially offset by lower debit card income and credit card commissions. Noninterest expense increased by $16.6 million or 6%, primarily due to higher administrative and support unit costs and higher salaries and benefits expense.

Previous wording

Net income increased by $14.1 million or 23% in the first six months of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest income increased by $16.7 million or 13%, primarily due to higher average deposit balances and spreads on interest-bearing and savings deposits, which increased segment net interest income under our funds transfer pricing methodology, partially offset by a decline in time deposits. Noninterest income decreased by $5.7 million or 41%, primarily due to a reduction in merchant revenue following the sale of the Bank’s merchant services portfolio in the fourth quarter of 2025, partially offset by increased customer derivative program revenue. Noninterest expense decreased by $5.8 million or 15%, primarily due to lower merchant transaction processing fees, salaries & benefits, professional fees, and allocated administrative, support unit and treasury expenses, partially offset by increases in data processing, excise taxes, and customer derivative broker charges.

Current wording

Net income increased by $4.4 million or 13% in the third quarter of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest income increased by $9.1 million or 17%, primarily due to higher spreads on deposits, which increased segment net interest income under our funds transfer pricing methodology, and average balances on interest bearing and noninterest bearing demand deposits, commercial and industrial loans, and commercial mortgages. These increases were partially offset by declines in construction loan balances, savings and time deposits, and lower loan spreads. Noninterest income decreased by $5.2 million or 54%, primarily due to a reduction in merchant revenue following the sale of the Bank’s merchant services portfolio in the fourth quarter of 2025, lower customer derivative program revenue, loan fees, and money market fund shareholder servicing fees, partially offset by increased account analysis fees. Noninterest expense decreased by $2.2 million or 11%, primarily due to lower merchant transaction processing fees, salaries and benefits, professional fees, and administrative and support unit costs, and treasury expenses. These decreases were partially offset by increases in equipment and branch expenses.