FIRST BANCORP /NC/

Previous wording

Highlights of the results for the second quarter and year-to-date period of 2025 are presented below. Refer also to additional discussion in the "Results of Operations" and "Financial Condition" sections following.

Current wording

Highlights of the results for the third quarter and year-to-date period of 2025 are presented below. Refer also to additional discussion in the "Results of Operations" and "Financial Condition" sections following.

Previous wording

We earned net income of $38.6 million, or $0.93 diluted EPS, during the second quarter of 2025 compared to net income of $28.7 million, or $0.70 diluted EPS, for the second quarter of 2024. The $15.6 million increase in net interest income in the second quarter of 2025 from the like quarter was driven primarily by a lower cost of funds and a higher yield on interest earning assets, both of which were driven by the overall interest rate environment throughout the past year. Adjusting for the impact of the $3.5 million reversal of provision related to Hurricane Helene, our adjusted net income, which is a non-GAAP financial measure, was $35.9 million, or $0.87 per diluted share, for the second quarter.

Current wording

We earned net income of $20.4 million, or $0.49 diluted EPS, during the third quarter of 2025 compared to net income of $18.7 million, or $0.45 diluted EPS, for the third quarter of 2024. The $19.4 million increase in net interest income in the third quarter of 2025 from the like quarter was driven primarily by a higher yield on interest earning assets and a lower cost of funds, both of which were driven by the overall interest rate environment throughout the past year. Adjusting for the impact of the $27.9 million loss related to a securities loss-earnback transaction, our adjusted net income, which is a non-GAAP financial measure, was $41.8 million, or $1.01 per diluted share, for the third quarter of 2025. The results for the third quarter of 2025 also include a $4.0 million reduction to the potential impacts to the allowance for credit losses from Hurricane Helene ($3.1 million after-taxes or $0.07 per diluted share).

Previous wording

•Net interest income for the second quarter of 2025 was $96.7 million, a 19.2% increase from the $81.1 million recorded in the second quarter of 2024. The increase in net interest income from the like quarter was driven by lower cost of funds and higher yields on earning assets. We also grew deposits and repaid the majority of our short-term borrowings during the second quarter of 2024, thereby further reducing the cost of funding.

Current wording

•Net interest income for the third quarter of 2025 was $102.5 million, a 23.4% increase from the $83.0 million recorded in the third quarter of 2024. The increase in net interest income from the like quarter was driven by higher yields on earning assets and lower cost of funds.

Previous wording

•Net interest margin ("NIM") increased 48 basis points to 3.32% in the second quarter of 2025 from 2.84% in the second quarter of 2024 as a result of the lower cost of funds and higher yields on loans and securities. The aforementioned decrease in short-term borrowings along with a reduction in deposit costs further enhanced NIM from the prior year's like quarter.

Current wording

•Net interest margin ("NIM") increased 58 basis points to 3.46% in the third quarter of 2025 from 2.88% in the third quarter of 2024 as a result of the higher yields on loans and securities and lower cost of funds.

Previous wording

•We remained well-capitalized by all regulatory standards. Capital grew during the quarter with a total common equity Tier 1 ratio of 14.64%, Tier 1 risk-based capital ratio of 15.45% and total risk-based capital ratio of 16.90% at June 30, 2025, all increasing from June 30, 2024.

Current wording

•We remained well-capitalized by all regulatory standards. Risk-based capital ratios contracted during the quarter with a total common equity Tier 1 ratio of 14.35%, Tier 1 risk-based capital ratio of 15.14% and total risk-based capital ratio of 16.58% at September 30, 2025, all down slightly from September 30, 2024. The decreases during the quarter were driven by loan growth, which carries a higher risk weight than short term investments.

Previous wording

•The provision for credit losses for the second quarter of 2025 was $2.2 million, driven by loan growth and $1.2 million of net charge-offs, partially offset by a $3.5 million reduction in the incremental provision related to potential exposure from Hurricane Helene.

Current wording

•The provision for credit losses for the third quarter of 2025 was $3.4 million, driven by loan growth and $3.0 million of net charge-offs, partially offset by a $4.0 million reduction in the incremental allowance for credit losses related to potential exposure from Hurricane Helene.

Previous wording

•Noninterest expense of $59.0 million increased $0.7 million, or 1.2%, for the quarter ended June 30, 2025 from the prior year. The increase is attributable to a $0.7 million increase in personnel costs resulting from increased incentives and commissions driven by improved performance.

Current wording

•Noninterest expense of $60.2 million increased $0.4 million, or 0.6%, for the quarter ended September 30, 2025 from the prior year. The increase is attributable to a $0.4 million increase in personnel costs resulting from increased incentives and commissions driven by improved performance.

Previous wording

See the discussion and reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS for the quarter ended June 30, 2025 in the Overview and Highlights for the Six Months Ended June 30, 2025 section below.

Current wording

See the discussion and reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS for the quarter ended September 30, 2025 in the Overview and Highlights for the Nine Months Ended September 30, 2025 section below.

Previous wording

We earned net income of $75.0 million, or $1.81 diluted EPS, during the six months ended June 30, 2025 compared to net income of $54.0 million, or $1.31 diluted EPS, for the six months ended June 30, 2024. Adjusting for the potential impact from Hurricane Helene, our adjusted net income was $70.7 million, or $1.71 per diluted share, for the six months ended June 30, 2025.

Current wording

We earned net income of $95.3 million, or $2.30 diluted EPS, during the nine months ended September 30, 2025 compared to net income of $72.7 million, or $1.76 diluted EPS, for the nine months ended September 30, 2024. Adjusting for the impact of the $27.9 million loss related to the loss-earnback transaction, our adjusted net income was $116.8 million, or $2.82 per diluted share, for the nine months ended September 30, 2025.

Previous wording

•Net interest income for the six months ended June 30, 2025 was $189.6 million, an 18.2% increase from the $160.4 million recorded for the comparable period of 2024. The increase in net interest income was driven by lower cost of funds and higher yields on interest earning assets.

Current wording

•Net interest income for the nine months ended September 30, 2025 was $292.0 million, a 20.0% increase from the $243.4 million recorded for the comparable period of 2024. The increase in net interest income was driven by higher yields on interest earning assets and lower cost of funds.

Previous wording

•NIM increased 48 basis points to 3.29% for the six months ended June 30, 2025 from 2.81% for the six months ended June 30, 2024 as a result of the lower cost of funds and higher yields on loans and securities

Current wording

•NIM increased 51 basis points to 3.34% for the nine months ended September 30, 2025 from 2.83% for the nine months ended September 30, 2024 as a result of the higher yields on loans and securities and lower cost of funds as well as the repayment of short-term borrowings which contributed to the reduced cost of funds from the prior period.

Previous wording

• For the six months ended June 30, 2025, the Company recorded $3.3 million in provision for credit losses as compared to $1.7 million for the six months ended June 30, 2024. The higher provision in 2025 was significantly impacted by loan growth in 2025, net charge off activity of $4.5 million, partially offset by a $5.5 million reduction in the incremental provision related to potential exposure from Hurricane Helene. The 2024 provision was dampened by lower loan balances as of June 30, 2024

Current wording

• For the nine months ended September 30, 2025, the Company recorded $6.8 million in provision for credit losses as compared to $15.9 million for the nine months ended September 30, 2024. The higher provision in 2024 was significantly impacted by the $13.0 million provision related to Hurricane Helene. The provision for credit losses in 2025 was significantly impacted by loan growth in 2025, net charge off activity of $7.5 million, partially offset by a $9.5 million reduction in the incremental provision related to potential exposure from Hurricane Helene. The 2024 provision was dampened by lower loan balances as of September 30, 2024.

Previous wording

•Noninterest expense decreased $0.6 million to $116.9 million for the six months ended June 30, 2025 as compared to the prior year period, primarily driven by a $1.1 million decrease in Other operating expenses. Personnel expenses increased $1.5 million between the periods resulting from an increase in incentives expense.

Current wording

•Noninterest expense decreased $0.2 million to $177.1 million for the nine months ended September 30, 2025 as compared to the prior year period, primarily driven by a $1.2 million decrease in Other operating expenses and a $0.7 million decrease in Intangible amortization expense, partially offset by an increase in Personnel expenses of $1.9 million arising from increased salaries and wages.

Previous wording

Adjusted net income and adjusted diluted EPS are non-GAAP financial measures that exclude the effect of the $3.5 million and $5.5 million reversals of provision related to Hurricane Helene for the three and six months ended June 30, 2025, respectively, to GAAP basis net income and diluted EPS. Management believes these non-GAAP financial measures provide additional information that is useful to investors in evaluating our performance and may facilitate comparisons with other institutions in the banking industry as well as period-to-period comparisons. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, are not audited, and may not be comparable to other similarly titled financial measures used by other companies. Investors should not consider non-GAAP measures in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP. The following table reconciles net income and diluted EPS to adjusted net income and adjusted diluted EPS for the three and six ended June 30, 2025:

Current wording

Adjusted net income and adjusted diluted EPS are non-GAAP financial measures that exclude the effect of the $27.9 million securities loss resulting from the securities loss-earnback transaction for the three and nine months ended September 30, 2025, respectively, from the GAAP basis net income and diluted EPS for those periods. Management believes these non-GAAP financial measures provide additional information that is useful to investors in evaluating our performance and may facilitate comparisons with other institutions in the banking industry as well as period-to-period comparisons. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, are not audited, and may not be comparable to other similarly titled financial measures used by other companies. Investors should not consider non-GAAP measures in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP. The following table reconciles net income and diluted EPS to adjusted net income and adjusted diluted EPS for the three and nine ended September 30, 2025:

Previous wording

Total assets were $12.6 billion at June 30, 2025, a 3.8% increase from December 31, 2024. The increase was driven primarily by deposit growth generating investable funds that were deployed in interest-bearing cash, securities and loan balances. The primary balance sheet changes are presented below.

Current wording

Total assets were $12.8 billion at September 30, 2025, a 5.0% increase from December 31, 2024. The increase was driven primarily by deposit growth generating investable funds that were deployed in interest-bearing cash, securities and loan balances. The primary balance sheet changes are presented below.

Previous wording

•Total cash and cash equivalents amounted to $711.3 million at June 30, 2025, representing a $203.8 million, or 40.2%, increase from December 31, 2024. Interest-bearing cash comprised $142.9 million of this increase.

Current wording

•Total cash and cash equivalents amounted to $598.0 million at September 30, 2025, representing a $90.5 million, or 17.8%, increase from December 31, 2024. Noninterest-bearing cash comprised $59.8 million of this increase.

Previous wording

•Total loans amounted to $8.2 billion at June 30, 2025, reflecting an increase of $131.0 million, or 1.6%, from December 31, 2024.

Current wording

•Total loans amounted to $8.4 billion at September 30, 2025, reflecting an increase of $324.5 million, or 4.0%, from December 31, 2024.

Previous wording

•Total deposits were $10.8 billion at June 30, 2025, an increase of $299.9 million, or 2.85%, from December 31, 2024. Deposit growth during the period was split between noninterest-bearing deposits, which saw an increase of $175.0 million, and interest-bearing deposits, which increased $124.9 million.

Current wording

•Total deposits were $10.9 billion at September 30, 2025, an increase of $350.6 million, or 3.33%, from December 31, 2024. Deposit growth during the period was split between noninterest-bearing deposits, which saw an increase of $212.9 million, and interest-bearing deposits, which increased $137.7 million.

Previous wording

•Credit quality continued to be strong at June 30, 2025, with NPAs of 0.28% of total assets as of June 30, 2025, down 2 basis points from 0.30% at December 31, 2024.

Current wording

•Credit quality continued to be strong at September 30, 2025, with NPAs of 0.31% of total assets as of September 30, 2025, up 1 basis point from 0.30% at December 31, 2024.

Previous wording

•Our on-balance sheet liquidity ratio was 20.0% at June 30, 2025. Available off-balance sheet sources totaled $2.3 billion at quarter end, resulting in a total liquidity ratio of 36.1%.

Current wording

•Our on-balance sheet liquidity ratio was 18.2% at September 30, 2025. Available off-balance sheet sources totaled $2.5 billion at quarter end, resulting in a total liquidity ratio of 35.3%.

Previous wording

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). Changes in the net interest income are the result of changes in volume and the net interest spread which affects NIM. Volume refers to the average dollar levels of interest-earning assets and interest-bearing liabilities. Net interest spread refers to the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. NIM refers to net interest income divided by average interest-earning assets and is influenced by the level and relative mix of interest-earning assets and interest-bearing liabilities. Net interest income is also influenced by external factors such as local economic conditions, competition for loans and deposits, and market interest rates.

Current wording

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (primarily loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (primarily deposits and borrowed funds). Changes in the net interest income are the result of changes in volume and the net interest spread which affects NIM. Volume refers to the average dollar levels of interest-earning assets and interest-bearing liabilities. Net interest spread refers to the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. NIM refers to net interest income divided by average interest-earning assets and is influenced by the level and relative mix of interest-earning assets and interest-bearing liabilities. Net interest income is also influenced by external factors such as local economic conditions, competition for loans and deposits, and market interest rates.

Previous wording

Net interest income for the second quarter of 2025 amounted to $96.7 million, an increase of $15.6 million, or 19.2%, from the $81.1 million recorded in the second quarter of 2024. The increase was primarily driven by higher yields on interest-earning assets and lower cost of funds.

Current wording

Net interest income for the third quarter of 2025 amounted to $102.5 million, an increase of $19.4 million, or 23.4%, from the $83.0 million recorded in the third quarter of 2024. The increase was primarily driven by higher yields on interest-earning assets and lower cost of funds.

Previous wording

For the second quarter of 2025, average interest-earning assets increased $216.6 million, or 1.9%, from the comparable period of the prior year, with average loans and taxable securities growing $116.8 million and $105.7 million, respectively.

Current wording

For the third quarter of 2025, average interest-earning assets increased $304.8 million, or 2.7%, from the comparable period of the prior year, with average loans and taxable securities growing $277.9 million and $143.8 million, respectively while average short term investments contracted by $112.7 million.

Previous wording

The cost of interest bearing deposits decreased 40 basis points from the second quarter of 2024 to the second quarter of 2025, with the biggest impact coming from the cost of Other time deposits, which decreased $3.0 million and the cost of Money market deposits, which decreased $2.5 million. Additionally, the cost of short-term borrowings decreased $0.9 million between the periods, mostly attributable to the payoff of Federal Reserve Bank Term Funding Program borrowings, which decreased the average borrowing balance by $68.1 million from the like quarter.

Current wording

The cost of interest bearing deposits decreased 41 basis points from the third quarter of 2024 to the third quarter of 2025, with the biggest decrease coming from the cost of Money market deposits, which declined $3.2 million and the cost of Other time deposits, which declined $1.7 million.

Previous wording

These changes resulted in the 48 basis point improvement in our NIM (see discussion below) from the like quarter to 3.32% for the second quarter of 2025.

Current wording

These changes resulted in the 58 basis point improvement in our NIM (see discussion below) from the like quarter to 3.46% for the third quarter of 2025.

Previous wording

The following table presents an analysis of net interest income for the second quarter of 2025 and 2024:

Current wording

The following table presents an analysis of net interest income for the third quarter of 2025 and 2024:

Previous wording

(2) Includes accretion of discount on acquired loans of $1.5 million and $2.3 million for three months ended June 30, 2025 and 2024, respectively.

Current wording

(2) Includes accretion of discount on acquired loans of $1.6 million and $2.0 million for three months ended September 30, 2025 and 2024, respectively.

Previous wording

Overall, as demonstrated in the table above, the growth in earning assets and a decrease in the cost of liabilities drove the expansion in NIM and net interest income.

Current wording

Overall, as demonstrated in the table above, the growth in earning assets, the yield on those assets and a decrease in the cost of liabilities drove the expansion in NIM and net interest income.

Previous wording

•Net interest income for the second quarter of 2025 was $96.7 million, an increase of $15.6 million from the like quarter. The increase in net interest income was primarily driven by our focused efforts to increase interest-earning assets and to manage deposit costs after the rate cuts by the Federal Reserve between September and December of 2024, which saw the federal funds rate fall 100 basis points. We also focused on increasing loan yields as new originations were at higher rates than older loans. Further, securities yields increased as a result of the loss-earnback transaction in the fourth quarter of 2024 along with continued paydowns and payoffs on lower-yielding bonds.

Current wording

•Net interest income for the third quarter of 2025 was $102.5 million, an increase of $19.4 million from the like quarter. The increase in net interest income was primarily driven by our focused efforts to increase interest-earning assets and to manage deposit costs after the rate cuts by the Federal Reserve between September and December of 2024, which saw the federal funds rate fall 100 basis points and an additional rate cut of 25 basis points in September 2025. We also focused on increasing loan yields as new originations were at higher rates than older loans. Further, securities yields increased as a result of the loss-earnback transactions in the fourth quarter of 2024 and the third quarter of 2025 along with continued paydowns and payoffs on lower-yielding bonds.

Previous wording

•The Company’s NIM for the second quarter of 2025 was 3.32%, an increase of 48 basis points from the like quarter. Within interest-earning assets, the securities loss-earnback transaction during the fourth quarter of 2024 resulted in an increase of 69 basis points as compared to the like quarter. In addition, loan yields increased 3 basis points to 5.53%. Following the rate cuts by the Federal Reserve in late 2024, the rate on interest-bearing deposits fell 40 basis points from the like quarter to the second quarter of 2025.

Current wording

•The Company’s NIM for the third quarter of 2025 was 3.46%, an increase of 58 basis points from the like quarter. Within interest-earning assets, the securities loss-earnback transactions during the fourth quarter of 2024 and the third quarter of 2025 resulted in an increase of 84 basis points on the yield on total securities as compared to the like quarter. In addition, loan yields increased 18 basis points to 5.69%. Following the rate cuts by the Federal Reserve in late 2024 and third quarter of 2025, the rate on interest-bearing deposits fell 41 basis points from the like quarter to the third quarter of 2025.

Previous wording

•Average loan volumes for the three months ended June 30, 2025 were $116.8 million higher than the same period in 2024. In addition, interest rates on loans increased 3 basis points to 5.53% for the second quarter of 2025, resulting in an increase in interest income on loans of $2.5 million.

Current wording

•Average loan volumes for the three months ended September 30, 2025 were $277.9 million higher than the same period in 2024. In addition, interest rates on loans increased 18 basis points to 5.69% for the third quarter of 2025, resulting in an increase in interest income on loans of $7.7 million.

Previous wording

•Due to the impact of the aforementioned Federal Reserve rate cuts in 2024 and the resulting decreased market rates partially offset by higher average balances, deposit interest expense for the three months ended June 30, 2025 decreased $6.3 million compared to the same period in 2024. Average interest-bearing deposit balances increased $130.9 million while rates on those deposits decreased 40 basis points as compared to the like quarter.

Current wording

•Due to the impact of the aforementioned Federal Reserve rate cuts in 2024 and 2025 and the resulting decreased market rates partially offset by higher average balances, deposit interest expense for the three months ended September 30, 2025 decreased $6.4 million compared to the same period in 2024. Average interest-bearing deposit balances increased $159.0 million while rates on those deposits decreased 41 basis points as compared to the like quarter. Average money market deposits increased $336.8 million while the rate on those deposits fell 53 basis points, accounting for $3.2 million of the decrease in interest expense. Average Other time deposits contracted $108.6 million while the rate on those deposits fell 68 basis points, resulting in a $1.7 million decrease in interest expense on these deposits.

Previous wording

Net interest income for the six months ended June 30, 2025 amounted to $189.6 million, an increase of $29.2 million, or 18.2%, from the $160.4 million recorded in the six months ended June 30, 2024. As described above, the rate cuts by the Federal Reserve in the second half of 2024 affected market rates which had resulting impacts on the rates we paid or received in 2024 and 2025. Similar to the impact during the three months ended June 30, 2025, the increase for the six months ended June 30, 2025 was also driven by lower cost of funds, and increased yields on interest-earning assets. Our NIM increased to 3.29% for the six months ended June 30, 2025 from 2.81% for the six months ended June 30, 2024 as discussed further below.

Current wording

Net interest income for the nine months ended September 30, 2025 amounted to $292.0 million, an increase of $48.6 million, or 20.0%, from the $243.4 million recorded in the nine months ended September 30, 2024. As described above, the rate cuts by the Federal Reserve in the second half of 2024 and third quarter of 2025 affected market rates which had resulting impacts on the rates we paid or received in 2024 and 2025. Similar to the impact during the three months ended September 30, 2025, the increase for the nine months ended September 30, 2025 was also driven by lower cost of funds, and increased yields on interest-earning assets. Our NIM increased to

Previous wording

The following table presents an analysis of net interest income for the six months ended June 30, 2025 and 2024.

Current wording

The following table presents an analysis of net interest income for the nine months ended September 30, 2025 and 2024.

Previous wording

(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and deferred loan (cost)/fee amortization (including deferred PPP fees), in the amounts of $(590,000), and $(886,000) for six months ended June 30, 2025 and 2024, respectively.

Current wording

(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and deferred loan (cost)/fee amortization (including deferred PPP fees), in the amounts of $(0.9) million, and $(1.3) million for nine months ended September 30, 2025 and 2024, respectively.

Previous wording

(2) Includes accretion of discount on acquired loans of $3.2 million and $4.7 million for six months ended June 30, 2025 and 2024, respectively.

Current wording

(2) Includes accretion of discount on acquired loans of $4.8 million and $6.7 million for nine months ended September 30, 2025 and 2024, respectively.

Previous wording

•During the second half of 2024, the Federal Reserve decreased the fed funds rate a total of 100 basis points, after substantial increases occurring in 2022 and 2023. During the first six months of 2025, the Federal Reserve has not changed fed funds rates, resulting in a 100 basis points decrease in fed funds rates between June 2024 and June 2025. The average prime rate was 7.50% for the six months ended June 30, 2025, compared to 8.50% for the prior year period. During much of 2024, the market yield curve was inverted, while during 2025, the yield curve has been positively sloping beyond three years, although longer term treasury rates are still fairly close to fed funds rates.

Current wording

•After substantial increases occurring in 2022 and 2023, during the second half of 2024, the Federal Reserve decreased the fed funds rate a total of 100 basis points. Coupled with the 0.25% decrease late in the third quarter of 2025, the fed funds rate has seen a 75 basis points decrease between September 2024 and September 2025. The average prime rate was 7.49% for the nine months ended September 30, 2025, compared to 8.48% for the prior year period. During much of 2024, the market yield curve was inverted, while during 2025, the yield curve has been positively sloping beyond three years, although longer term treasury rates are still fairly close to fed funds rates.

Previous wording

•Average loan volumes for the six months ended June 30, 2025 were $60.6 million higher than the same period in 2024 due to organic loan growth. In addition, interest rates on loans increased 5 basis points to 5.52% for the six months ended June 30, 2025, collectively resulting in an increase in loan interest income of $3.2 million.

Current wording

•Average loan volumes for the nine months ended September 30, 2025 were $133.8 million higher than the same period in 2024 due to organic loan growth. In addition, interest rates on loans increased 9 basis points to 5.58% for the nine months ended September 30, 2025, collectively resulting in an increase in loan interest income of $10.9 million.

Previous wording

•Due to lower market rates and a shift from higher costing deposits to lower costing deposits, partially offset by an overall growth of deposits, interest expense on deposits for the six months ended June 30, 2025 decreased $7.4 million compared to the same period in 2024. Average total interest-bearing deposit balances increased $292.0 million while rates on those deposits decreased 30 basis points as compared to the same period in the prior year. Within this population, average balances on Money market deposits increased $493.8 million while rates on those accounts decreased 40 basis points as compared to the same period in the prior year, both resulting in a $1.1 million decrease in interest expense. Average balances on Other time deposits decreased $177.5 million and rates on these accounts decreased 82 basis points as compared to the same period in the prior year, collectively resulting in a $5.1 million decrease in interest expense.

Current wording

•Due to lower market rates and a shift from higher costing deposits to lower costing deposits, partially offset by an overall growth of deposits, interest expense on deposits for the nine months ended September 30, 2025 decreased $13.7 million compared to the same period in 2024. Average total interest-bearing deposit balances increased $247.4 million while rates on those deposits decreased 34 basis points as compared to the prior year. Within this population, average balances on Money market deposits increased $441.3 million while rates on those accounts decreased 45 basis points as compared to the prior year, both resulting in a $4.3 million decrease in interest expense. Average balances on Other time deposits decreased $154.4 million and rates on these accounts decreased 78 basis points as compared to the prior year, collectively resulting in a $6.8 million decrease in interest expense.

Previous wording

•Interest expense on borrowings decreased $7.9 million for the six months ended June 30, 2025 as compared to the same period in 2024 due to the $280.9 million decrease in the average volume of borrowings between periods, partially offset by a 125 basis point increase in the rates on the remaining borrowings. The lower balances were due in large part to a decreased reliance on short-term borrowings during as deposit growth provided additional liquidity. The remaining borrowings are longer term in nature and generally carry higher interest rates than those that were paid off.

Current wording

•Interest expense on borrowings decreased $8.1 million for the nine months ended September 30, 2025 as compared to the same period in 2024 due to the $188.2 million decrease in the average volume of borrowings between periods, partially offset by a 99 basis point increase in the rates on total borrowings. The lower balances were due in large part to a decreased reliance on short-term borrowings as deposit growth provided additional liquidity. The remaining borrowings are longer term in nature and generally carry higher interest rates than those that were paid off.