BOK FINANCIAL CORP
For the period ended Sep 30, 2025. Filed Oct 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 29, 2025
BOKF$129.48-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-30.
0000875357-25-000045
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0000875357-25-000057
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 264 previous paragraphs and 263 current paragraphs.
158 unchanged; 92 reworded; 13 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 35 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
•Fees and commissions revenue totaled $204.4 million, an increase of $7.1 million over the prior quarter led by growth in investment banking revenue driven by increased municipal underwriting activity.
Current report
•Other operating expense totaled $369.8 million, an increase of $15.3 million over the prior quarter. Personnel expense was up $11.6 million due to higher incentive compensation and regular compensation. Non-personnel expense increased $3.6 million led by greater mortgage banking costs.
Current report
•Period end outstanding loan balances totaled $24.9 billion at September 30, 2025, growing by $573 million over June 30, 2025, with broad-based growth across the loan portfolio. Average loan balances increased $650 million to $24.8 billion.
Current report
•Net income for the nine months ended September 30, 2025 totaled $400.7 million, or $6.27 per diluted share, compared to $387.4 million, or $6.01 per diluted share, for the nine months ended September 30, 2024.
Current report
Other operating revenue was $210.7 million for the third quarter of 2025, an increase of $3.6 million over the second quarter of 2025, led by growth in investment banking revenue driven by increased municipal underwriting activity.
Current report
Non-personnel expense was $143.4 million, an increase of $3.6 million. Mortgage banking costs increased $4.0 million. Expenses in the prior quarter were below typical seasonal levels, primarily due to lower mortgage servicing related costs. Other expense decreased by $1.9 million due to lower operational losses.
Current report
Net interest income increased by $3.4 million, or 2%, primarily attributable to loan growth during the quarter. Net loans charged off increased by $2.6 million during the quarter. Other operating revenue decreased $2.7 million compared to the prior quarter, primarily due to a decrease in loan syndication fees and lower gains on merchant banking investments.
Current report
Other operating expense increased $1.5 million, or 2%, compared to the second quarter of 2025. Personnel expense increased $1.9 million, or 4%, primarily related to incentive compensation reflecting the growth in loan origination activity. Non-personnel expense was consistent with the prior quarter at $29.6 million. Corporate allocations decreased $1.9 million to $17.3 million.
Current report
Other operating expenses increased $8.6 million, or 15%. Mortgage banking costs increased $4.0 million as the prior quarter's expenses were below typical seasonal levels, primarily due to lower mortgage servicing related costs. Other expense increased $2.2 million related to operational losses, and business promotion expense increased $1.9 million due to increased advertising costs.
Current report
Combined net interest income and fee revenue increased $6.6 million, or 4%, over the second quarter of 2025. Investment banking revenue grew $6.2 million driven by the timing and volume of municipal underwriting transactions. Trading fees and commissions increased $1.1 million, largely driven by higher municipal bond trading, partially offset by lower U.S. agency residential mortgage-backed securities trading volumes. Fiduciary and asset management revenue was consistent with the prior quarter. The current quarter benefited from increased trust fees driven by higher market valuations and continued growth in client relationships, while the prior quarter was impacted by seasonal tax preparation fees. Personnel expense increased $6.7 million as a result of increased incentive compensation reflecting stronger underwriting activity. Non-personnel expense grew $3.0 million led by higher professional fees and services for ongoing projects.
Current report
The aggregate loan portfolio before allowance for loan losses totaled $24.9 billion at September 30, 2025, an increase of $573 million over June 30, 2025, driven by broad-based growth across the loan portfolio.
Current report
Loans to non-depository financial institutions included in services and general business loans totaled $506 million, or 2% of total loans at September 30, 2025. The majority of these loans are in the two highest credit quality subcategories, subscription lines and residential mortgage warehouse lines.
Current report
Average Wealth Management deposits decreased $52 million compared to the second quarter of 2025. Interest-bearing transaction account balances decreased $302 million, partially offset by $221 million of growth in interest-bearing time deposits and a $23 million increase in demand deposit balances.
Removed paragraphs (14)
Previous report
•Fees and commissions revenue totaled $197.3 million, an increase of $13.2 million over the prior quarter with broad-based growth across our fee income lines. Brokerage and trading revenue increased $7.1 million, fiduciary and asset management revenue grew $3.0 million, and transaction card revenue increased $2.5 million.
Previous report
•Other operating expense totaled $354.5 million, an increase of $7.0 million compared to the prior quarter. Personnel expense was relatively unchanged and non-personnel expense increased $6.4 million, led by higher operational losses combined with increased costs related to ongoing technology projects.
Previous report
•Other gains (losses), net, were a net gain of $8.1 million for the second quarter of 2025, compared to a net loss of $725 thousand in the first quarter of 2025. Net gains on merchant banking investments were $5.2 million and net gains on investments related to deferred compensation were $3.4 million for the second quarter of 2025. The prior quarter included net gains on merchant banking investments of $678 thousand and net losses of $1.1 million on investments related to deferred compensation.
Previous report
•Period end outstanding loan balances totaled $24.3 billion at June 30, 2025, an increase of $602 million compared to March 31, 2025. Growth in commercial real estate loans and loans to individuals was slightly offset by a decrease in energy portfolio balances. Average loan balances increased $108 million to $24.2 billion.
Previous report
Other operating revenue was $207.1 million for the second quarter of 2025, an increase of $21.1 million over the first quarter of 2025, from broad-based growth across our fee income lines combined with net gains on merchant banking activities.
Previous report
Non-personnel expense was $139.8 million, an increase of $6.4 million. Other expense increased by $4.1 million due to higher operational losses. Professional fees and services expense increased $2.1 million and data processing expense increased $2.0 million, largely related to ongoing technology project costs. In the second quarter of 2025, the FDIC updated their estimate of the special assessment, resulting in a benefit of $523 thousand, compared to $523 thousand of expense in the prior quarter.
Previous report
Net interest income decreased $2.4 million, or 1%, primarily related to lower average deposit balances during the quarter. Other operating revenue increased $8.9 million over the prior quarter, driven by increased gains on merchant banking activities, higher loan syndication fees, and growth in transaction card revenue.
Previous report
Other operating expense increased $2.9 million, or 4%, compared to the first quarter of 2025. Personnel expense increased $1.5 million, or 3%, primarily attributable to increased incentive compensation and the full quarter impact of annual merit increases that were effective for most employees in March. Non-personnel expense increased $1.4 million, or 5%, largely related to ongoing technology project costs.
Previous report
Combined net interest income and fee revenue increased $7.7 million, or 5%, compared to the first quarter of 2025, primarily resulting from increased trading activities driven by steady customer demand and higher seasonal mortgage origination volumes. Personnel expense decreased $936 thousand and non-personnel expense was largely unchanged compared to the prior quarter.
Previous report
The aggregate loan portfolio before allowance for loan losses totaled $24.3 billion at June 30, 2025, an increase of $602 million compared to March 31, 2025, largely due to increases in commercial real estate loans and loans to individuals. Decreases in energy loan and services loan balances were largely offset by increases in general business and healthcare loans.
Previous report
Average Wealth Management deposits increased $81 million over the first quarter of 2025. Interest-bearing transaction account balances increased $100 million and demand deposit balances increased $28 million. Time deposit balances decreased $43 million.
Previous report
As a result of the acquisition of CoBiz Financial, we obtained $60 million of subordinated debt issued in June 2015 that was set to mature on June 25, 2030. We also acquired $72 million of junior subordinated debentures with maturity dates from
Previous report
September 17, 2033 through September 30, 2035. The subordinated debentures were subject to early redemption prior to maturity. All subordinated debt and junior subordinated debentures were redeemed during the second quarter of 2025. The redemption price was 100% of the principal amount, plus accrued interest up to the redemption date. No subordinated debt remained outstanding at June 30, 2025. As shown in Table 22 below, the redemption of the subordinated debt and junior subordinated debentures caused the total capital ratio to decrease as these qualified as tier 2 capital instruments.
Previous report
On July 29, 2025, the board of directors approved a new share repurchase authorization of up to five million shares, which replaces the previous authorization from November 1, 2022 under which 869,682 shares remain. The new repurchase authorization does not have an expiration date, may be suspended at any time, does not include specific price targets, may be executed from time to time through open market purchases or one or more private negotiated transactions, including Rule 10b5-1 programs, and other transactions or arrangements as officers may determine.
Reworded paragraphs (92)
Previous wording
BOK Financial reported net income of $140.0 million, or $2.19 per diluted share, for the second quarter of 2025 compared to $119.8 million, or $1.86 per diluted share, for the first quarter of 2025. PPNR 1, a non-GAAP measure, was $180.7 million for the second quarter of 2025, compared to $154.8 million in the first quarter of 2025.
Current wording
BOK Financial reported net income of $140.9 million, or $2.22 per diluted share, for the third quarter of 2025 compared to $140.0 million, or $2.19 per diluted share, for the second quarter of 2025. PPNR 1, a non-GAAP measure, was $178.6 million for the third quarter of 2025, compared to $180.7 million in the second quarter of 2025.
Previous wording
Highlights of the second quarter of 2025 compared to the first quarter of 2025 included:
Current wording
Highlights of the third quarter of 2025 compared to the second quarter of 2025 included:
Previous wording
•Net interest income totaled $328.2 million, an increase of $11.9 million over the prior quarter. Net interest margin expanded to 2.80% for the second quarter of 2025, compared to 2.78% for the prior quarter. For the second quarter of 2025, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.12% compared to 3.05% in the prior quarter.
Current wording
•Net interest income totaled $337.6 million, an increase of $9.5 million over the prior quarter. Net interest margin expanded 11 basis points to 2.91% for the third quarter of 2025, compared to 2.80% for the prior quarter. For the third quarter of 2025, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.16% compared to 3.12% in the prior quarter.
Previous wording
•No provision for expected credit losses was necessary for the second quarter of 2025, primarily due to further improvements in portfolio credit quality offset by the impact of loan growth during the quarter. Net charge-offs in the second quarter remained historically low at $561 thousand, or less than 0.01% of average loans on an annualized basis. The resulting combined allowance for credit losses totaled $330 million, or 1.36% of outstanding loans, at June 30, 2025. The combined allowance for credit losses was $331 million, or 1.40% of outstanding loans, at March 31, 2025.
Current wording
•The provision for expected credit losses of $2.0 million in the third quarter of 2025 reflects the impact of loan growth during the quarter, partially offset by a slight improvement in economic forecast scenario assumptions. Net charge-offs in the third quarter were $3.6 million, or 0.06% of average loans on an annualized basis. The resulting combined allowance for credit losses totaled $328 million, or 1.32% of outstanding loans, at September 30, 2025. The combined allowance for credit losses was $330 million, or 1.36% of outstanding loans, at June 30, 2025.
Previous wording
•Nonperforming assets not guaranteed by U.S. government agencies were $74 million, a $4.4 million decrease compared to March 31, 2025. Potential problem loans decreased by $10 million while other loans especially mentioned increased by $22 million compared to March 31, 2025.
Current wording
•Nonperforming assets not guaranteed by U.S. government agencies were $67 million, a $7.3 million decrease compared to June 30, 2025. Accruing substandard loans increased by $68 million while other loans especially mentioned decreased by $32 million compared to June 30, 2025.
Previous wording
•Period end deposits were relatively unchanged at $38.2 billion at June 30, 2025. Average deposits decreased $222 million, including a $198 million reduction in demand deposit balances and a $25 million decrease in average interest-bearing deposits. The loan to deposit ratio was 64% at June 30, 2025, compared to 62% at March 31, 2025.
Current wording
•Period end deposits grew by $254 million to $38.5 billion at September 30, 2025. Average deposits increased $345 million, including a $408 million increase in average interest-bearing deposits and a $64 million reduction in demand deposit balances. The loan to deposit ratio was 65% at September 30, 2025, compared to 64% at June 30, 2025.
Previous wording
•Assets under management or administration totaled $117.9 billion at June 30, 2025, increasing $3.9 billion compared to March 31, 2025, primarily driven by improvements in the equity markets during the second quarter.
Current wording
•Assets under management or administration totaled $122.7 billion at September 30, 2025, increasing $4.8 billion compared to June 30, 2025, primarily driven by improvements in the equity markets and growth in customer relationships during the third quarter.
Previous wording
•The Company's tangible common equity ratio 1, a non-GAAP measure, was 9.63% at June 30, 2025, and 9.48% at March 31, 2025. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on AFS securities. Adjusted for all securities portfolio losses, including the tax adjusted losses in the investment portfolio, the tangible common equity ratio 1 would be 9.40% at June 30, 2025, and 9.23% at March 31, 2025.
Current wording
•The Company's tangible common equity ratio 1, a non-GAAP measure, was 10.06% at September 30, 2025, and 9.63% at June 30, 2025. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on AFS securities.
Previous wording
•The common equity Tier 1 capital ratio at June 30, 2025, was 13.59%. Other regulatory capital ratios include the Tier 1 capital ratio at 13.60%, total capital ratio at 14.48%, and leverage ratio at 9.88%. At March 31, 2025, the common equity Tier 1 capital ratio was 13.31%, the Tier 1 capital ratio was 13.31%, the total capital ratio was 14.54%, and the leverage ratio was 10.02%.
Current wording
•The common equity Tier 1 capital ratio at September 30, 2025, was 13.60%. Other regulatory capital ratios include the Tier 1 capital ratio at 13.61%, total capital ratio at 14.48%, and leverage ratio at 10.19%. At June 30, 2025, the common equity Tier 1 capital ratio was 13.59%, the Tier 1 capital ratio was 13.60%, the total capital ratio was 14.48%, and the leverage ratio was 9.88%.
Previous wording
•The Company repurchased 663,298 shares of common stock at an average price of $93.99 per share in the second quarter of 2025 and 10,000 shares of common stock at an average price of $98.45 per share in the first quarter of 2025. We view share buybacks opportunistically, but within the context of maintaining our strong capital position. On July 29, 2025, the board of directors approved a new share repurchase authorization of up to five million shares, which replaces the previous authorization from November 1, 2022 under which 869,682 shares remain. The new repurchase authorization does not have an expiration date, may be suspended at any time, does not include specific price targets, may be executed from time to time through open market purchases or one or more private negotiated transactions, including Rule 10b5-1 programs, and other transactions or arrangements as officers may determine.
Current wording
•The Company repurchased 365,547 shares of common stock at an average price of $111.00 per share in the third quarter of 2025, and 663,298 shares of common stock at an average price of $93.99 per share in the second quarter of 2025. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.
Previous wording
•The Company paid a regular cash dividend of $36.3 million, or $0.57 per common share, during the second quarter of 2025. On July 29, 2025, the board of directors approved a quarterly cash dividend of $0.57 per common share payable on or about August 27, 2025, to shareholders of record as of August 13, 2025.
Current wording
•The Company paid a regular cash dividend of $36.1 million, or $0.57 per common share, during the third quarter of 2025. On October 28, 2025, the Board approved an increase in the quarterly cash dividend to $0.63 per common share payable on or about November 26, 2025, to shareholders of record as of November 12, 2025.
Previous wording
Highlights of the six months ended June 30, 2025, compared to the six months ended June 30, 2024, included:
Current wording
Highlights of the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, included:
Previous wording
•Net interest income totaled $644.4 million for the six months ended June 30, 2025, and $589.6 million for the six months ended June 30, 2024. Net interest income increased $41.6 million from changes in interest rates and increased $14.1 million from changes in earning assets. Net interest margin was 2.79% compared to 2.59% reflecting the funding shift from wholesale borrowings to interest-bearing deposits, along with improving yields on the AFS securities portfolio. The AFS securities portfolio yield increased 26 basis points while loan yields decreased 69 basis points. Funding costs decreased 71 basis points. Average earning assets increased $866 million to $46.3 billion, driven largely by higher average trading securities and AFS securities balances. Total interest-bearing deposits increased $3.4 billion, partially offset by a decrease of $452 million in demand deposit balances. Other borrowed funds decreased $2.4 billion.
Current wording
•Net interest income totaled $982.1 million for the nine months ended September 30, 2025, and $897.7 million for the nine months ended September 30, 2024. Net interest income increased $61.5 million from changes in interest rates and increased $23.9 million from changes in earning assets. Net interest margin was 2.83% compared to 2.62% reflecting the funding shift from wholesale borrowings to interest-bearing deposits, along with improving yields on the AFS securities portfolio. The AFS securities portfolio yield increased 23 basis points, while loan yields decreased 71 basis points. Funding costs decreased 74 basis points. Average earning assets increased $749 million to $46.3 billion, driven largely by higher average balances for trading securities, loans, and AFS securities. Total interest-bearing deposits increased $2.9 billion, partially offset by a decrease of $428 million in demand deposit balances. Other borrowed funds decreased $2.1 billion.
Previous wording
•Fees and commissions revenue totaled $381.4 million for the six months ended June 30, 2025, a $19.1 million decrease compared to the six months ended June 30, 2024. Brokerage and trading revenue decreased $43.0 million, largely due to a shift in fee revenue to interest income combined with lower trading volumes and compressed trading margins. Fiduciary and asset management revenue increased $12.1 million led by growth in trust fees related to higher market valuations and continued growth in client relationships. Transaction card revenue increased $3.9 million led by growth in the volume of transactions processed. Other revenue increased $3.3 million, primarily related to higher fees earned on derivative counterparty margin and deposit service charges increased $3.3 million due to growth in commercial service charges.
Current wording
•Fees and commissions revenue totaled $585.9 million for the nine months ended September 30, 2025, a $17.2 million decrease compared to the nine months ended September 30, 2024. Brokerage and trading revenue decreased $50.2 million, largely due to a shift in fee revenue to interest income combined with lower trading volumes and compressed trading margins. Fiduciary and asset management revenue increased $18.5 million led by growth in trust fees related to higher market valuations and continued growth in client relationships. Transaction card revenue increased $4.9 million due to disciplined pricing strategies, targeted customer acquisition efforts, and an increase in the volume of transactions processed during the period. Deposit service charges increased $4.8 million due to growth in commercial service charges.
Previous wording
•Other gains (losses), net, were a net gain of $7.4 million for the six months ended June 30, 2025, compared to a net gain of $61.6 million for the six months ended June 30, 2024. The six months ended June 30, 2024 included a $53.8 million pre-tax gain on the conversion of our Visa B shares. Gain on merchant banking investments was $5.9 million and gains on investments related to deferred compensation were $2.3 million for the six months ended June 30, 2025. The six months ended June 30, 2024, included net gains on merchant banking investments of $1.3 million and a gain of $5.7 million on investments related to deferred compensation. The six months ended June 30, 2024 also included a loss of $45.1 million on the repositioning of the AFS securities portfolio.
Current wording
•Other gains (losses), net, were a net gain of $15.7 million for the nine months ended September 30, 2025, compared to a net gain of $74.7 million for the nine months ended September 30, 2024. The nine months ended September 30, 2024 included a $56.9 million pre-tax gain on the conversion of our Visa B shares. The nine months ended September 30, 2024 also included a net loss of $45.8 million on the repositioning of the AFS securities portfolio.
Previous wording
•Total operating expense was $702.0 million for the six months ended June 30, 2025, an increase of $25.0 million compared to the six months ended June 30, 2024. Personnel expense increased $35.2 million. Regular compensation increased $15.9 million, largely related to annual merit increases, salary adjustments, and business expansion. Incentive compensation expense was up $10.1 million, primarily due to cash-based incentive compensation costs. Employee benefits expense increased $9.2 million related to higher employee healthcare costs and an increase in payroll taxes. Non-personnel expense decreased $10.2 million to $273.1 million. The six months ended June 30, 2024 included charitable contributions to the BOKF Foundation of $13.6 million and FDIC insurance special assessment costs of $7.6 million. These decreases in expense were partially offset by increases in data processing expense, net occupancy and equipment expense, and professional fees and services expense.
Current wording
•Total operating expense was $1.1 billion for the nine months ended September 30, 2025, an increase of $53.7 million over the nine months ended September 30, 2024. Personnel expense increased $54.7 million. Regular compensation increased $25.7 million, largely related to annual merit increases, salary adjustments, and business expansion. Incentive compensation expense was up $14.9 million, primarily due to cash-based incentive compensation costs. Employee benefits expense increased $14.0 million related to higher employee healthcare costs combined with smaller increases in payroll taxes and employee retirement plan costs. Non-personnel expense was relatively unchanged compared to the nine months ended September 30, 2024 at $416.6 million. The nine months ended September 30, 2024 included charitable contributions to the BOKF Foundation of $13.6 million and FDIC insurance special assessment costs of $6.2 million. These decreases in expense were offset by increases in data processing expense, net occupancy and equipment expense, professional fees and services expense, and business promotion costs.
Previous wording
•No provision for expected credit losses was necessary for the six months ended June 30, 2025. A $16.0 million provision for expected credit losses was recorded for the six months ended June 30, 2024.
Current wording
•A $2.0 million provision for expected credit losses was necessary for the nine months ended September 30, 2025. An $18.0 million provision for expected credit losses was recorded for the nine months ended September 30, 2024.
Previous wording
Tax-equivalent net interest income totaled $330.7 million for the second quarter of 2025, up from $318.8 million in the prior quarter. Net interest income increased $7.9 million from changes in interest rates and increased $4.0 million from changes in earning assets. Table 1 shows the effect on net interest income from changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities.
Current wording
Tax-equivalent net interest income totaled $340.2 million for the third quarter of 2025, up from $330.7 million in the prior quarter. Net interest income increased $7.6 million from changes in interest rates and increased $1.9 million from changes in earning assets. Table 1 shows the effect on net interest income from changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities.
Previous wording
Average earning assets increased $1.4 billion over the first quarter of 2025. The average balance of trading securities increased $995 million, while average AFS securities grew by $256 million. Average loan balances increased $108 million due to growth in commercial real estate loans and loans to individuals, largely offset by a decrease in commercial loan balances. Average fair value options securities increased $71 million and restricted equity securities increased $42 million.
Current wording
Average earning assets decreased $555 million compared to the second quarter of 2025. The average balance of trading securities decreased $1.3 billion, average investment securities decreased $57 million, and average restricted equity securities decreased $53 million. Average loan balances increased $650 million, primarily due to growth in commercial real estate loans and loans to individuals. Average AFS securities grew by $168 million.
Previous wording
Total average deposits decreased $222 million compared to the first quarter of 2025, including a $198 million decrease in demand deposits and a $25 million decrease in interest-bearing deposits. Average funds purchased and repurchase agreements decreased $154 million, while average other borrowings increased $1.4 billion.
Current wording
Total average deposits increased $345 million over the second quarter of 2025, including a $408 million increase in interest-bearing deposits, partially offset by a $64 million decrease in demand deposits. Average funds purchased and repurchase agreements increased $92 million, while average other borrowings decreased $972 million. Average subordinated debentures decreased $100 million, reflecting the full quarter impact of redemptions completed in the second quarter.
Previous wording
Net interest margin was 2.80% compared to 2.78% in the first quarter of 2025. For the second quarter of 2025, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.12% compared to 3.05% in the prior quarter. The tax-equivalent yield on earning assets was 5.47%, an increase of 2 basis points. The yield on the AFS securities portfolio increased 7 basis points to 3.89%. Loan yields were unchanged at 6.71%. The yield on trading securities decreased 2 basis points to 5.05%. The yield on fair value option securities increased 218 basis points to 5.90% and the yield on restricted equity securities expanded 22 basis points to 7.73%.
Current wording
Net interest margin was 2.91% compared to 2.80% in the second quarter of 2025. For the third quarter of 2025, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.16% compared to 3.12% in the prior quarter. The tax-equivalent yield on earning assets was 5.53%, an increase of 6 basis points. The yield on the AFS securities portfolio increased 4 basis points to 3.93%. The yield on trading securities was up 20 basis points to 5.25%. The yield on restricted equity securities expanded 11 basis points to 7.84%. Loan yields decreased 1 basis point to 6.70%.
Previous wording
Funding costs were 3.40%, a 2 basis point decrease compared to the prior quarter. The cost of interest-bearing deposits decreased 7 basis points to 3.17%. The cost of funds purchased and repurchase agreements increased 45 basis points to 3.50% while the cost of other borrowings decreased 8 basis points to 4.49%. The cost of subordinated debentures was down 6 basis points to 6.38%. All outstanding subordinated debentures were called during the second quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 73 basis points, a decrease of 2 basis points.
Current wording
Funding costs were 3.33%, a 7 basis point decrease compared to the prior quarter. The cost of interest-bearing deposits decreased 3 basis points to 3.14%. The cost of funds purchased and repurchase agreements decreased 21 basis points to 3.29% while the cost of other borrowings increased 5 basis points to 4.54%. The cost of subordinated debentures was down 638 basis points as all outstanding subordinated debentures were called during the second quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 71 basis points, a decrease of 2 basis points.
Previous wording
Our overall objective is to manage the Company's balance sheet for changes in interest rates as is further described in the Market Risk section of this report. Approximately 82% of our commercial and commercial real estate loan portfolios are either variable rate or fixed rate that will reprice within one year. These loans are funded primarily by deposit accounts that are either non-interest bearing, or that reprice more slowly than the loans. The result is a balance sheet that is asset sensitive, which means that assets generally reprice more quickly than the liabilities. One of the strategies that we use to manage toward a relative rate-neutral position is to purchase fixed-rate residential mortgage-backed securities issued primarily by U.S. government agencies and fund them with market rate-sensitive liabilities. The liability-sensitive nature of this strategy provides an offset to the asset-sensitive characteristics of our loan portfolio. We also may use derivative instruments to manage our interest rate risk.
Current wording
Our overall objective is to manage the Company's balance sheet for changes in interest rates as is further described in the Market Risk section of this report. Approximately 84% of our commercial and commercial real estate loan portfolios are either variable rate or fixed rate that will reprice within one year. These loans are funded primarily by deposit accounts that are either non-interest bearing, or that reprice more slowly than the loans. The result is a balance sheet that is asset sensitive, which means that assets generally reprice more quickly than the liabilities. One of the strategies that we use to manage toward a relative rate-neutral position is to purchase fixed-rate residential mortgage-backed securities issued primarily by U.S. government agencies and fund them with market rate-sensitive liabilities. The liability-sensitive nature of this strategy provides an offset to the asset-sensitive characteristics of our loan portfolio. We also may use derivative instruments to manage our interest rate risk.
Previous wording
Certain percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.
Current wording
Percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.
Previous wording
Diversified sources of fees and commissions revenue are a significant part of our business strategy and represented 38% of combined net interest income before provision for credit losses and fees and commissions revenue for the second quarter of 2025. We believe that a variety of fee revenue sources provides diversification to changes resulting from market or economic conditions such as interest rates, values in the equity markets, commodity prices, and consumer spending, all of which can be volatile. Many of the economic factors, such as decreasing interest rates, that we expect will result in a decline in net interest income or fiduciary and asset management revenue may also increase mortgage banking production volumes and related trading. The velocity of changes in market conditions and interest rates may result in timing differences between when offsetting impacts and benefits are realized. Generally, for operating revenues not as directly related to movement in interest rates, we expect growth to come through offering new products and services and by further development of our presence in other markets. However, current and future economic conditions, regulatory constraints, increased competition, and saturation in our existing markets could affect the rate of future increases.
Current wording
Diversified sources of fees and commissions revenue are a significant part of our business strategy and represented 38% of combined net interest income before provision for credit losses and fees and commissions revenue for the third quarter of 2025. We believe that a variety of fee revenue sources provides diversification to changes resulting from market or economic conditions such as interest rates, values in the equity markets, commodity prices, and consumer spending, all of which can be volatile. Many of the economic factors, such as decreasing interest rates, that we expect will result in a decline in net interest income or fiduciary and asset management revenue may also increase mortgage banking production volumes and related trading. The velocity of changes in market conditions and interest rates may result in timing differences between when offsetting impacts and benefits are realized. Generally, for operating revenues not as directly related to movement in interest rates, we expect growth to come through offering new products and services and by further development of our presence in other markets. However, current and future economic conditions, regulatory constraints, increased competition, and saturation in our existing markets could affect the rate of future increases.
Previous wording
Brokerage and trading revenue, which includes revenues from trading, customer hedging, retail brokerage, and investment banking, increased $7.1 million compared to the first quarter of 2025.
Current wording
Brokerage and trading revenue, which includes revenues from trading, customer hedging, retail brokerage, and investment banking, increased $5.1 million over the second quarter of 2025.
Previous wording
Trading revenue includes net realized and unrealized gains and losses primarily related to residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments that enable our mortgage banking customers to manage their production risk. Trading revenue also includes net realized and unrealized gains and losses on municipal securities and other financial instruments that we sell to institutional customers, along with changes in the fair value of financial instruments we hold as economic hedges against market risk of our trading securities. Trading revenue was $14.4 million, a $6.3 million increase compared to the prior quarter, driven by steady customer demand and higher mortgage origination volumes from seasonal production. Interest rate levels and curve steepness can result in a shift from trading revenue to net interest income from trading securities. See further discussion on a total revenue basis in the Wealth Management discussion in Management's Discussion and Analysis - Segment Reporting following.
Current wording
Trading revenue includes net realized and unrealized gains and losses primarily related to residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments that enable our mortgage banking customers to manage their production risk. Trading revenue also includes net realized and unrealized gains and losses on municipal securities and other financial instruments that we sell to institutional customers, along with changes in the fair value of financial instruments we hold as economic hedges against market risk of our trading securities. Trading revenue was $15.5 million, up $1.1 million over the prior quarter, largely driven by higher municipal bond trading, partially offset by a decrease in U.S. agency residential mortgage-backed securities trading volumes. Interest rate levels and curve steepness can result in a shift between trading revenue and net interest income from trading securities. See further discussion on a total revenue basis in the Wealth Management discussion in Management's Discussion and Analysis - Segment Reporting following.
Previous wording
Customer hedging revenue is based primarily on realized and unrealized changes in the fair value of derivative contracts held for customer risk management programs. As more fully discussed under Customer Risk Management Programs in Note 3 of the Consolidated Financial Statements, we offer commodity, interest rate, foreign exchange, and equity derivatives to our customers. Customer hedging revenue totaled $7.5 million for the second quarter of 2025, a decrease of $879 thousand compared to the prior quarter, primarily attributed to our energy derivative customers. Customer hedging revenue includes credit valuation adjustments of the fair value of derivatives to reflect the risk of counterparty default.
Current wording
Customer hedging revenue is based primarily on realized and unrealized changes in the fair value of derivative contracts held for customer risk management programs. As more fully discussed under Customer Risk Management Programs in Note 3 of the Consolidated Financial Statements, we offer commodity, interest rate, foreign exchange, and equity derivatives to our customers. Customer hedging revenue totaled $5.7 million for the third quarter of 2025, a decrease of $1.8 million compared to the prior quarter, primarily related to lower energy derivative volumes. Customer hedging revenue includes credit valuation adjustments of the fair value of derivatives to reflect the risk of counterparty default.
Previous wording
Investment banking, which includes fees earned upon completion of underwriting, financial advisory services, and loan syndication fees, totaled $11.1 million, an increase of $1.5 million over the prior quarter, largely related to the timing and volume of completed loan syndication transactions.
Current wording
Investment banking, which includes fees earned upon completion of underwriting, financial advisory services, and loan syndication fees, totaled $16.1 million, an increase of $5.0 million over the prior quarter, largely driven by increased municipal underwriting activity.
Previous wording
Transaction card revenue includes revenues from processing transactions on behalf of members of our TransFund electronic fund transfer network, merchant services fees paid by customers for account management and electronic processing of card transactions, and interchange fees from our corporate card program. Transaction card revenue totaled $29.6 million for the second quarter of 2025, a $2.5 million increase, primarily due to growth in transaction volumes processed during the quarter.
Current wording
Transaction card revenue includes revenues from processing transactions on behalf of members of our TransFund electronic fund transfer network, merchant services fees paid by customers for account management and electronic processing of card transactions, and interchange fees from our corporate card program. Transaction card revenue totaled $29.5 million for the third quarter of 2025, unchanged from the prior quarter.
Previous wording
Fiduciary and asset management revenue is earned through managing or holding of assets for customers and executing transactions or providing related services. Fiduciary and asset management revenue is largely based on the fair value of assets. Rates applied to asset values vary based on the nature of the relationship. Fiduciary relationships and managed asset relationships generally have higher fee rates than non-fiduciary and/or non-managed relationships. Fiduciary and asset management revenue was $64.0 million for the second quarter of 2025, an increase of $3.0 million over the first quarter of 2025, led by higher seasonal tax preparation fee income.
Current wording
Fiduciary and asset management revenue is earned through managing or holding of assets for customers and executing transactions or providing related services. Fiduciary and asset management revenue is largely based on the fair value of assets. Rates applied to asset values vary based on the nature of the relationship. Fiduciary relationships and managed asset relationships generally have higher fee rates than non-fiduciary and/or non-managed relationships. Fiduciary and asset management revenue was $63.9 million for the third quarter of 2025, consistent with the second quarter of 2025. The current quarter benefited from increased trust fees driven by higher market valuations and continued growth in client relationships, while the prior quarter was impacted by seasonal tax preparation fees.
Previous wording
1 Assets under management or administration balance excludes certain assets under custody held by a sub-custodian where minimal revenue is recognized. $22 billion, $20 billion, and $21 billion of such assets are excluded from assets under management or administration at June 30, 2025, March 31, 2025, and June 30, 2024, respectively.
Current wording
1 Assets under management or administration balance excludes certain assets under custody held by a sub-custodian where minimal revenue is recognized. $23 billion, $22 billion, and $21 billion of such assets are excluded from assets under management or administration at September 30, 2025, June 30, 2025, and September 30, 2024, respectively.
Previous wording
A summary of changes in assets under management or administration for the three and six months ended June 30, 2025, and 2024 follows:
Current wording
A summary of changes in assets under management or administration for the three and nine months ended September 30, 2025, and 2024 follows:
Previous wording
Deposit service charges and fees totaled $31.3 million for the second quarter of 2025, an increase of $1.0 million over the first quarter of 2025, primarily due to growth in commercial service charges and check card fees.
Current wording
Deposit service charges and fees totaled $31.9 million for the third quarter of 2025, an increase of $577 thousand over the second quarter of 2025, primarily due to a combination of growth in overdraft fees and commercial service charges.
Previous wording
Mortgage banking revenue was relatively unchanged from the first quarter of 2025. Mortgage production volume increased $39.6 million to $223 million. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, was 0.76% for the second quarter of 2025, compared to 1.43% for the first quarter of 2025.
Current wording
Mortgage banking revenue increased $771 thousand over the second quarter of 2025. Mortgage production volume increased $9.9 million to $233 million. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, was 1.02% for the third quarter of 2025, compared to 0.76% for the second quarter of 2025.
Previous wording
Other gains (losses), net, were a net gain of $8.1 million for the second quarter of 2025, compared to a net loss of $725 thousand in the prior quarter. Net gains on merchant banking investments were $5.2 million and net gains on investments related to deferred compensation were $3.4 million for the second quarter of 2025. During the second quarter of 2025, a loss of $956 thousand was realized on the redemption of our subordinated debentures. The prior quarter included a net gain on merchant banking investments of $678 thousand and a net loss of $1.1 million on investments related to deferred compensation.
Current wording
Other gains (losses), net, were a net gain of $8.3 million for the third quarter of 2025, compared to a net gain of $8.1 million in the prior quarter. Net gains on merchant banking investments were $2.7 million and net gains on investments related to deferred compensation were $4.5 million for the third quarter of 2025. The prior quarter included a net gain on merchant banking investments of $5.2 million and net gains of $3.4 million on investments related to deferred compensation. During the second quarter of 2025, a loss of $956 thousand was realized on the redemption of our subordinated debentures.
Previous wording
Other operating expense for the second quarter of 2025 totaled $354.5 million, an increase of $7.0 million over the first quarter of 2025. Our efficiency ratio 1 was 65.42% for the second quarter of 2025, compared to 68.31% in the prior quarter.
Current wording
Other operating expense for the third quarter of 2025 totaled $369.8 million, an increase of $15.3 million over the second quarter of 2025. Our efficiency ratio 1 was 66.66% for the third quarter of 2025, compared to 65.42% in the prior quarter.
Previous wording
Personnel expense was $214.7 million, consistent with the first quarter of 2025. Employee benefits expense decreased $3.1 million, primarily due to a seasonal decrease in payroll taxes. Cash-based incentive compensation decreased $1.4 million. Regular compensation costs grew $1.2 million reflecting the full quarter impact of standard annual merit increases effective for most employees in March. Deferred compensation, which is offset by changes in the fair value of deferred compensation investments included in Other gains (losses), net, increased $4.0 million.
Current wording
Personnel expense was $226.3 million, an increase of $11.6 million compared to the second quarter of 2025. Cash-based incentive compensation increased $5.4 million driven by stronger underwriting and loan origination activity. Regular compensation costs grew $3.1 million, largely reflecting transitional personnel expenses associated with aligning our talent base to future growth objectives. Deferred compensation, which is offset by changes in the fair value of deferred compensation investments included in Other gains (losses), net, was $5.8 million for the third quarter of 2025, an increase of $2.5 million.
Previous wording
The effective tax rate was 22.51% for the second quarter of 2025, 22.61% for the first quarter of 2025, and 22.41% for the second quarter of 2024. When compared to the first quarter of 2025, the effective tax rate decreased due to a decrease in forecasted pre-tax income. The effective tax rate for the six months ended June 30, 2025 and June 30, 2024 was 22.56% and 22.17%, respectively.
Current wording
The effective tax rate was 20.22% for the third quarter of 2025, 22.51% for the second quarter of 2025, and 19.22% for the third quarter of 2024. When compared to the second quarter of 2025, the effective tax rate decreased primarily due to the release of reserves for uncertain tax positions as the statute of limitations had expired. The effective tax rate for the nine months ended September 30, 2025 and September 30, 2024 was 21.75% and 21.13%, respectively.
Previous wording
As shown in Table 8, net income before taxes attributable to our segments increased $12.2 million compared to the first quarter of 2025. Net interest income decreased $1.2 million, due to lower commercial deposit balances and lower spreads earned on deposits, partially offset by loan growth. Other operating revenue increased $15.3 million, primarily driven by broad-based growth across our fee income lines coupled with increased gains on merchant banking investments. Other operating expense remained consistent at $227.9 million and corporate expense allocations increased $2.3 million.
Current wording
As shown in Table 8, net income before taxes attributable to our segments was $190.9 million in the third quarter of 2025 compared to $206.9 million in the second quarter of 2025. Net interest income increased $2.5 million due to higher balances in commercial real estate and loans to individuals, partially offset by lower spreads earned on deposits. Other operating revenue increased $2.8 million, primarily driven by growth in investment banking revenue, reflecting the timing and volume of municipal underwriting transactions. Other operating expense increased $19.8 million to $248.3 million. Personnel expense increased $8.7 million from cash-based incentive compensation reflecting strong underwriting and loan origination activity, as well as transitional personnel expenses associated with aligning our talent base to future growth objectives. Corporate expense allocations decreased $1.5 million.
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