BOK FINANCIAL CORP

Previous 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.

Current wording

BOK Financial reported net income of $155.8 million, or $2.58 per diluted share, for the first quarter of 2026 compared to $177.3 million, or $2.89 per diluted share, for the fourth quarter of 2025. Excluding the gain recognized on the sale of a merchant banking investment and the FDIC special assessment benefit 1, net income would have been $152.1 million, or $2.48 per diluted share, in the fourth quarter of 2025. PPNR 1, a non-GAAP measure, was $199.7 million for the first quarter of 2026, compared to $228.5 million in the fourth quarter of 2025.

Previous 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.

Current wording

•Net interest income totaled $342.6 million, a decrease of $2.7 million compared to the prior quarter. Net interest margin was 2.90% for the first quarter of 2026, compared to 2.98% for the prior quarter. For the first quarter of 2026, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.15% compared to 3.22% in the prior quarter.

Previous wording

•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 wording

•Period end outstanding loan balances totaled $26.2 billion at March 31, 2026, growing by $536 million over December 31, 2025, with broad-based growth across the loan portfolio, led by general business, energy, and multifamily commercial real estate loans. Average loan balances increased $683 million to $25.9 billion.

Previous 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.

Current wording

•No provision for expected credit losses was necessary for the first quarter of 2026. The favorable impact of higher projected oil prices on our energy loan portfolio and improved credit quality was offset by loan growth and a slight downward revision to economic forecast assumptions compared to the prior quarter. Net charge-offs in the first quarter were $1.9 million, or 0.03% of average loans on an annualized basis. The resulting combined allowance for credit losses totaled $323 million, or 1.23% of outstanding loans at March 31, 2026. The combined allowance for credit losses was $327 million, or 1.28% of outstanding loans at December 31, 2025.

Previous 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.

Current wording

•Nonperforming assets not guaranteed by U.S. government agencies were $52 million, a $14 million decrease compared to December 31, 2025. Accruing substandard loans decreased by $5.5 million while other loans especially mentioned decreased by $31 million compared to December 31, 2025.

Previous 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.

Current wording

•Period end deposits decreased by $758 million to $38.7 billion at March 31, 2026. Average deposits decreased $1.0 billion, including a $692 million decrease in average interest-bearing deposits and a $315 million reduction in demand deposit balances. The loan to deposit ratio was 68% at March 31, 2026, compared to 65% at December 31, 2025.

Previous 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.

Current wording

•Assets under management or administration totaled $123.6 billion at March 31, 2026, decreasing $3.0 billion compared to December 31, 2025, primarily driven by changes in the equity markets.

Previous 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.

Current wording

•The Company's tangible common equity ratio 1, a non-GAAP measure, was 9.29% at March 31, 2026, and 9.46% at December 31, 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 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%.

Current wording

•The common equity Tier 1 capital ratio at March 31, 2026, was 12.61%. Other regulatory capital ratios include the Tier 1 capital ratio at 12.61%, total capital ratio at 14.39%, and leverage ratio at 9.85%. At December 31, 2025, the common equity Tier 1 capital ratio was 12.90%, the Tier 1 capital ratio was 12.90%, the total capital ratio was 14.77%, and the leverage ratio was 9.86%.

Previous 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.

Current wording

•No shares of common stock were repurchased during the first quarter of 2026. The company repurchased 2,617,414 shares of common stock at an average price of $107.99 per share in the fourth 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 $36.1 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.

Current wording

•The Company paid a regular cash dividend of $38.1 million, or $0.63 per common share, during the first quarter of 2026. On May 5, 2026, the Board approved a quarterly cash dividend of $0.63 per common share payable on or about May 27, 2026, to shareholders of record as of May 13, 2026.

Previous wording

Highlights of the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, included:

Current wording

Highlights of the three months ended March 31, 2026, compared to the three months ended March 31, 2025 included:

Previous wording

•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 wording

•Net income for the three months ended March 31, 2026 totaled $155.8 million, or $2.58 per diluted share, compared to $119.8 million, or $1.86 per diluted share, for the three months ended March 31, 2025.

Previous 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.

Current wording

•Net interest income totaled $342.6 million for the three months ended March 31, 2026, and $316.3 million for the three months ended March 31, 2025. Net interest income increased $16.5 million from changes in interest rates and increased $9.9 million from changes in earning assets. Net interest margin was 2.90% compared to 2.78%. The AFS securities portfolio yield increased 11 basis points, while the yield on trading securities decreased 43 basis points. Funding costs decreased 50 basis points. The cost of interest-bearing deposits was down 53 basis points. Average earning assets increased $2.2 billion to $47.8 billion, largely driven by higher average balances for loans and AFS securities, partially offset by a decrease in average trading securities. Total interest-bearing deposits increased $1.1 billion, partially offset by a decrease of $462 million in demand deposit balances. Other borrowed funds increased $711 million and average subordinated debentures increased $265 million.

Previous 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.

Current wording

•Fees and commissions revenue totaled $209.8 million for the three months ended March 31, 2026, a $25.7 million increase over the three months ended March 31, 2025. Brokerage and trading revenue increased $12.5 million, largely due to higher trading volumes and improved trading margins on U.S. agency residential mortgage-backed securities. Fiduciary and asset management revenue increased $5.5 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 $1.9 million due to growth in commercial service charges.

Previous 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.

Current wording

Tax-equivalent net interest income totaled $345.2 million for the first quarter of 2026, compared to $347.8 million in the prior quarter. Net interest income increased $464 thousand from changes in interest rates and decreased $3.1 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

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.

Current wording

Total average deposits decreased $1.0 billion compared to the fourth quarter of 2025, including a $692 million decrease in interest-bearing deposits and a $315 million decrease in demand deposits. Average funds purchased and repurchase agreements decreased $261 million, while average other borrowings increased $2.3 billion. Average subordinated debentures increased $155 million, driven by the full quarter impact of the subordinated debt issued in the fourth quarter.

Previous 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%.

Current wording

Net interest margin was 2.90% compared to 2.98% in the fourth quarter of 2025. For the first quarter of 2026, our core net interest margin excluding trading activities 1, a non-GAAP measure, was 3.15% compared to 3.22% in the prior quarter. The tax-equivalent yield on average earning assets was 5.23%, a decrease of 13 basis points. The loan portfolio yield decreased 23 basis points to 6.25%. The yield on trading securities decreased 19 basis points to 4.64%, while the yield on restricted equity securities increased 17 basis points to 7.39%.

Previous 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.

Current wording

Funding costs were 2.92%, a 14 basis point decrease compared to the prior quarter. The cost of interest-bearing deposits decreased 20 basis points to 2.71%. The cost of funds purchased and repurchase agreements decreased 57 basis points to 2.90%, while the cost of other borrowings decreased 32 basis points to 3.90%. The benefit to net interest margin from assets funded by non-interest liabilities was 59 basis points, a decrease of 9 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 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.

Current wording

Our overall objective is to manage the Company's balance sheet for changes in interest rates as described in the Market Risk section of this report. Approximately 84% of our commercial and commercial real estate loan portfolios are either variable rate loans or fixed rate loans 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, meaning 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

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.

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 expected credit losses and fees and commissions revenue for the first quarter of 2026. 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 $5.1 million over the second quarter of 2025.

Current wording

Brokerage and trading revenue, which includes revenues from trading, customer hedging, retail brokerage, and investment banking, decreased $3.7 million compared to the fourth 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 $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.

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 decreased $1.6 million to $19.3 million, primarily due to a shift from fee revenue to net interest income on trading securities. 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 - Reportable Segments 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 $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.

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 $7.8 million for the first quarter of 2026, an increase of $1.1 million over the prior quarter, as our energy customers increased hedging activity in response to the rapid rise in crude oil prices during the quarter. 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 $16.1 million, an increase of $5.0 million over the prior quarter, largely driven by increased municipal underwriting activity.

Current wording

Investment banking revenue, which includes fees earned upon completion of underwriting, financial advisory services, and loan syndication fees, totaled $10.2 million, a decrease of $4.1 million compared to the prior quarter, driven by lower syndication fees and municipal underwriting activity, primarily due to seasonality and volume of transactions.

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 $29.5 million for the third quarter of 2025, unchanged from the prior 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 $32.0 million for the first quarter of 2026, consistent with 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 $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.

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 $66.5 million for the first quarter of 2026, a decrease of $1.9 million as the prior quarter included transaction-related fees that did not recur in the current quarter.

Previous 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.

Current 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, $23 billion, and $20 billion of such assets are excluded from assets under management or administration at March 31, 2026, December 31, 2025, and March 31, 2025, respectively.

Previous wording

A summary of changes in assets under management or administration for the three and nine months ended September 30, 2025, and 2024 follows:

Current wording

A summary of changes in assets under management or administration for the three months ended March 31, 2026, and 2025 follows:

Previous wording

Assets under management as of September 30, 2025, consist of 42% fixed income, 36% equities, 14% cash, and 8% alternative investments.

Current wording

Assets under management or administration as of March 31, 2026, consist of 42% fixed income, 35% equities, 15% cash, and 8% alternative investments.

Previous 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.

Current wording

Mortgage banking revenue increased $2.0 million over the fourth quarter of 2025 due to an increase in mortgage production volumes and higher refinancing activity. Mortgage production volume increased $53.9 million to $265 million. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, was 1.48% for the first quarter of 2026, compared to 0.93% for the fourth quarter of 2025.

Previous 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.

Current wording

Other gains (losses), net, were a net loss of $216 thousand for the first quarter of 2026, compared to a net gain of $28.1 million in the prior quarter. The fourth quarter included a $23.5 million pre-tax gain on the sale of a merchant banking investment. The current quarter included a net loss on investments related to deferred compensation of $1.8 million compared to a net gain of $3.7 million in the prior quarter.

Previous wording

Table 6 – Gain (Loss) on Mortgage Servicing Rights

Current wording

Table 6 – Gain (Loss) on Mortgage Servicing Rights, Net of Economic Hedge

Previous 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.

Current wording

Other operating expense for the first quarter of 2026 totaled $354.2 million, a decrease of $6.9 million compared to the fourth quarter of 2025. Our efficiency ratio 1 was 63.21% for the first quarter of 2026, compared to 60.71% in the prior quarter.

Previous wording

We operate three principal segments: Commercial Banking, Consumer Banking, and Wealth Management. Commercial Banking includes lending, treasury and cash management services, and customer risk management products for small businesses, middle market, and larger commercial customers. Commercial Banking also includes the TransFund EFT network. Consumer Banking includes retail lending and deposit services, lending and deposit services to small business customers served through our consumer branch network, and all mortgage loan origination and servicing activities. Wealth Management provides fiduciary services, private banking services, insurance, and investment advisory services in all markets. Wealth Management also underwrites state and municipal securities and engages in brokerage and trading activities.

Current wording

We operate three principal segments: Commercial Banking, Consumer Banking, and Wealth Management. Commercial Banking includes lending, treasury and cash management services, and customer risk management products for small businesses, middle market, and larger commercial customers. Commercial Banking also includes the TransFund EFT network. Consumer Banking includes retail lending and deposit services, lending and deposit services to small business customers served through our consumer branch network, and all mortgage loan origination and servicing activities. Wealth Management engages in brokerage and trading activities mainly related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts. Wealth Management also provides fiduciary services, private banking services, and investment advisory services in all markets. Additionally, Wealth Management underwrites state and municipal securities.

Previous wording

Commercial Banking contributed $139.8 million to consolidated net income before taxes in the third quarter of 2025, a decrease of $1.5 million, or 1%, over the second quarter of 2025.

Current wording

Commercial Banking contributed $134.8 million to consolidated net income before taxes in the first quarter of 2026, compared to $162.1 million in the fourth quarter of 2025.

Previous wording

Average outstanding loan balances attributed to Commercial Banking increased $386 million, or 2%, over the second quarter of 2025, to $20.3 billion. See the Loans section of Management's Discussion and Analysis of Financial Condition and Results of Operations following for additional discussion of changes in commercial and commercial real estate loans, which are primarily attributed to the Commercial Banking segment.

Current wording

Average outstanding loan balances attributed to Commercial Banking increased $582 million, or 3%, over the fourth quarter of 2025, to $21.2 billion. See the Loans section of Management's Discussion and Analysis of Financial Condition and Results of Operations following for additional discussion of changes in commercial and commercial real estate loans, which are primarily attributed to the Commercial Banking segment.

Previous wording

Average deposits attributed to Commercial Banking grew by $737 million, or 4%, over the second quarter of 2025, to $18.2 billion. See Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital for further discussion of changes.

Current wording

Average deposits attributed to Commercial Banking decreased $186 million, or 1%, compared to the fourth quarter of 2025, to $18.3 billion. See Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital for further discussion of changes.

Previous wording

Consumer Banking contributed $14.5 million to consolidated net income before taxes for the third quarter of 2025, compared to $24.7 million in the second quarter of 2025.

Current wording

Consumer Banking contributed $19.2 million to consolidated net income before taxes for the first quarter of 2026, compared to $15.1 million in the fourth quarter of 2025.

Previous wording

Net interest income from Consumer Banking was relatively consistent with the second quarter of 2025. Other operating revenue decreased $2.3 million, or 6%. The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $2.1 million, compared to a net benefit of $1.6 million for the second quarter of 2025. This was partially offset by an $855 thousand increase in mortgage banking revenue.

Current wording

Net interest income from Consumer Banking decreased $1.2 million, or 2%, compared to the fourth quarter of 2025. Other operating revenue increased $6.0 million, or 16%. Mortgage banking revenue grew $2.0 million, driven by stronger mortgage production performance. Other revenue increased $1.9 million due to higher card-network incentives. The net benefit from the changes in the fair value of mortgage servicing rights and related economic hedges was $2.0 million, compared to a net cost of $579 thousand for the fourth quarter of 2025.