HANCOCK WHITNEY CORP
For the period ended Mar 31, 2025. Filed May 9, 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.
Mar 31, 2025 · Filed May 9, 2025
HWC$71.48+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-123302
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067254
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 228 previous paragraphs and 222 current paragraphs.
111 unchanged; 89 reworded; 19 added; 25 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 18 previous and 17 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 (19)
Current report
uncertainties surrounding geopolitical events, trade policy, taxation policy, and monetary policy which continue to impact the outlook for future economic growth; impacts from recently announced U.S. imposition of tariffs against China, Mexico, Canada and other nations; consideration of responsive actions by these nations, including retaliatory tariffs, or the expansion of import fees and tariffs among a larger group of nations is bringing greater ambiguity to the outlook for future economic growth, including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, impacts from decreased international tourism, decreased demand for other banking products and services, and negative credit quality developments arising from the foregoing or other factors;
Current report
the potential implementation of a regulatory reform agenda impacting rulemaking, supervision, examination and enforcement priorities of the federal banking agencies; and
Current report
The first quarter of 2025 brought notable economic shifts as the new presidential administration swiftly began implementing its second-term agenda. Tariffs quickly became the most influential factor, creating cost pressures across supply chains and introducing additional risk of fallout from retaliatory actions from key trading partners. Concerns over the pace and scale of tariffs and federal spending cuts have created increased uncertainty as to near and long-term effects that led to volatility in equity markets and other economic impacts. Real gross domestic product (GDP), a key metric of the pace of economic activity, contracted 0.3% on an annualized basis in the first quarter of 2025. Longer-term interest rates experienced volatility, with the 10-year U.S. Treasury yield ranging from 4.1% to nearly 4.8% during the period as the market responded to changing edicts on tariffs, among other economic indicators and developments. However, the labor market showed signs of resilience, with unemployment rising only modestly to 4.2% in March 2025, and inflation markers trended favorably through the quarter, receding to 2.4% in March. The Federal Reserve remains committed to its dual mandate of maximum employment and price stability. Because of the substantial uncertainty over economic consequences of tariffs and other initiatives of the current administration, the Federal Reserve’s policy committee has made clear its intention to take a wait and see approach to further changes in monetary policy.
Current report
Within the financial services industry, inflationary pressures and prolonged elevated interest rates continue to present headwinds in terms of loan demand and deposit behavior. Within our markets, loan growth remains tempered due in part to demand, the credit health of borrowers, and a strategic reduction of exposure to syndicated credits as we focus on full-service relationships. Funding costs have further benefited from recent interest rate cuts, contributing to net interest margin expansion during the first quarter of 2025.
Current report
Management has deemed certain assumptions underlying the S-2 scenario to be somewhat more likely to occur in the near term than those underlying the baseline scenario, and as such, the baseline scenario and the S-2 scenario were given probability weightings of 40% and 60%, respectively, in the calculation of our allowance for credit losses calculation at March 31, 2025.
Current report
Recent and expected changes in fiscal and other policies with the current administration create significant uncertainty as to the impact on the U.S and global economies. The effects of continued elevated inflation, and the Federal Reserve’s actions to counter these effects, as well as to respond to other economic concerns, could reduce economic growth in the near term. The full extent of the impact of these and other influential factors are uncertain and may have an adverse effect on the U.S. economy, including the possibility of an economic recession or slower growth in the near or midterm.
Current report
Highlights of the First Quarter 2025
Current report
Net income of $119.5 million, or $1.38 per diluted share
Current report
Period-end loans totaled $23.1 billion, down $201.3 million, or 1%
Current report
Criticized commercial loans decreased and nonaccrual loans increased; annualized net charge-offs as a percentage of average loans decreased to 0.18% compared to 0.20%
Current report
Period-end deposits totaled $29.2 billion, down $298.1 million, or 1%
Current report
Our results for the first quarter of 2025 reflect a strong start to the year. Our net interest margin expanded, fee income grew, and solid earnings facilitated substantial growth in our capital ratios. We enhanced shareholder value through an increased common share dividend and share repurchases during the quarter. We continue to maintain a robust allowance for credit loss coverage to total loans of 1.49% in light of the current credit and economic environment. We remain focused on balance sheet optimization and effective expense control, and believe we are well positioned to continue to enhance shareholder value. We continued to execute on our organic growth plan with the addition of four bankers and the selection of four of the five planned locations in the northern Dallas metropolitan area. We look forward to continued progress as we carry out our multi-year growth plan and add the Sabal Trust Company associates and clients to our organization.
Current report
The $3.7 million increase in net interest income (te) compared to the first quarter of 2024 reflects a decline in prevailing rates on interest-bearing liabilities outpacing lower yields on interest earning assets, partially offset by the impact of one less accrual day. Interest income (te) decreased $26.4 million, driven largely by lower yields on loans and loan contraction, partially offset by higher yields on mortgage-backed securities. Interest expense decreased $30.1 million, driven largely by lower rates on deposits, a decrease in the volume of deposits, including a $510.6 million decrease in average brokered deposits, and a decrease in the level of short-term borrowings. The net interest margin for the first quarter of 2025 of 3.43% increased 11 bps from 3.32% for the first quarter of 2024. The year-over-year improvement in the net interest margin also reflects a decrease in the cost of funds outpacing the decline in yield on earning assets. The rate on interest-bearing liabilities was down 52 bps from the first quarter of 2024, primarily driven by the impact of interest rate movement on the overall cost of funds that also fostered some shifting to a more favorable mix of retail deposits. The cost of funds further benefited from changes in funding mix as all brokered deposits matured and short-term FHLB borrowings were repaid during the period. The yield on average earning assets was down 22 bps, primarily driven by a 32 bp decline in the loan yield, partially offset by a 22 bp increase in securities yields as maturing securities were reinvested into instruments with higher yields, and the favorable impact from the fair value hedges described above.
Current report
We expect our full year 2025 net interest income (te) to be up between 3% to 4% when compared to 2024; with modest and consistent expansion in net interest margin throughout 2025. The forecasted improvement is expected to be driven by lower deposit costs, low single-digit loan growth and continued repricing of cash flows from both the securities and fixed rate loan portfolios. Our guidance assumes 25 bp rate cuts by the Federal Reserve in June, July and October 2025, however, modeling no rate cuts for 2025 yielded similar results.
Current report
During the first quarter of 2025, we recorded a provision for credit losses of $10.5 million, compared to $11.9 million in the fourth quarter of 2024 and $13.0 million in the first quarter of 2024. The provision for credit loss in the first quarter of 2025 included net charge-offs of $10.3 million and a reserve build of $0.2 million, compared to net charge-offs of $11.7 million and a reserve build of $0.2 million in the fourth quarter of 2024. While the provision for credit losses for the first quarter of 2025 was down slightly from the previous period, the allowance coverage to total loans reflected a slight increase. The first quarter of 2024 provision for credit loss included net charge-offs of $9.0 million and a reserve build of $4.0 million.
Current report
The effective income tax rate for the first quarter of 2025 was approximately 19.9% compared to 18.9% in the fourth quarter of 2024 and 18.5% in the first quarter of 2024. The linked-quarter increase in the effective tax rate is due primarily to a $1.4 million income tax benefit in the fourth quarter of 2024 related to various discrete items, such as share-based compensation. The first quarter of 2025 effective income tax is higher than the first quarter of 2024 primarily due to higher forecasted annual pre-tax earnings.
Current report
Total loans at March 31, 2025 were $23.1 billion, down $201.3 million, or 1%, from December 31, 2024. The net decrease in loans largely reflective of softer demand and an increase in payoffs of large healthcare and commercial non-real estate credits, discussed in more detail below.
Current report
Commercial and industrial (“C&I”) loans include both non-real estate and owner occupied real estate secured loans. C&I totaled $12.6 billion at March 31, 2025, down $251.0 million, or 2%, from December 31, 2024. The decrease is reflective of an increase in payoffs of large healthcare and commercial non-real estate credits, as mentioned above.
Current report
Interest-bearing transaction and savings accounts totaled $11.4 billion at March 31, 2025, up $91.7 million, or 1%, from December 31, 2024. Interest-bearing public fund deposits totaled $3.0 billion at March 31, 2025, down $208.2 million, or 6%, from December 31, 2024. The decrease in public funds deposits is mostly reflective of typical seasonal outflows during the first quarter. Retail time deposits totaled $4.2 billion at March 31, 2025, down $192.1 million, or 4%, from December 31, 2024. The decline in retail time deposits is mostly attributable to maturities that did not renew, some of which shifted into interest-bearing transaction and savings accounts. We had no brokered time deposits at March 31, 2025, compared to $6.9 million at December 31, 2024, as a result of maturities of instruments that were not replaced.
Removed paragraphs (25)
Previous report
The Federal Reserve signaled in its July 2024 meeting that it will be attentive to both sides of a dual mandate of maximum employment and stable prices and cut the benchmark interest rate by 50 basis points in September, indicating a shift in focus to maintenance of a strong labor market. Inflation remains a key driver of economic conditions and monetary policy, with headline and core (excluding food and energy) inflation at an annual rate of 2.4% and 3.3%, respectively, in September 2024, still above the Federal Reserve's target inflation rate of 2.0%. The labor market has shown signs of weakening in recent months, with the unemployment rate rising to a nearly three-year high of 4.3% in July 2024. Despite the migration in employment statistics, the relative health of the labor market remains solid, with wage growth and a reduction in the unemployment rate to 4.1% in September, serving as positive economic indicators. Consumer spending remains robust, leading to healthy Gross Domestic Product (GDP) growth of 2.8% on an annualized basis in the third quarter of 2024. U.S. economic activity has remained resilient through substantial burden in recent years, where a continuation of strong consumer spending, the overall health of the labor market and the most recent and anticipated future interest rate cuts may help prevent or reduce the severity of a potential recession in the near-term. However, ongoing price pressures, some volatility in labor markets and uncertainty surrounding the Federal Reserve's future actions with respect to monetary policy may adversely affect capital markets and could result in below-trend economic growth. Economic trends may be further influenced by factors outside of inflation, such as continued pressure on the commercial real estate sector, uncertainty surrounding the impact of change in presidential administration, and ongoing geopolitical conflicts.
Previous report
Within the financial services sector, institutions continue to contend with industry-specific headwinds. The elevated interest rate environment and heightened competition for deposits has fostered a shift within deposit composition toward higher cost products, although the pace of movement has continued to slow, allowing deposit costs to stabilize. The interest rate environment has also steadily affected the affordability of credit to consumers and businesses, moderating loan demand. At the same time, economic uncertainty and industry turmoil have prompted financial institutions to tighten credit standards. Many financial institutions, including ours, have also experienced some degree of deterioration in credit quality metrics from the mostly-benign credit environment experienced during the majority of the last three years.
Previous report
Within our markets, loan growth remains tempered in response to heightened interest rates and increased insurance costs. Further, we have continued to reduce exposure to syndicated credits as we focus on full-service relationships. However, interest rates on new, renewed and repricing variable rate loans continue to result in higher yields on earning assets that, coupled with stabilization in funding costs, has contributed to net interest margin expansion during the quarter.
Previous report
Management applied a weighting of 40% to the baseline and 60% to the mild recessionary S-2 scenario in the computation of the allowance for credit losses at September 30, 2024, consistent with the scenarios and respective weighting used at June 30, 2024. Our overall credit loss outlook has not changed significantly, and we continue to believe slower near-term growth or a mild recession is reasonably possible due to uncertainty in current economic conditions.
Previous report
There are a number of uncertainties in the current economic outlook, including the Federal Reserve's actions with respect to monetary policy. The full extent of the impact of these factors, among others, is uncertain and may have a negative impact on the U.S. economy, including the possibility of slower growth or an economic recession in the near or mid-term.
Previous report
Highlights of the Third Quarter 2024
Previous report
Net income of $115.6 million, or $1.33 per diluted share, up $1.0 million, or $0.02 per diluted share
Previous report
Period-end loans totaled $23.5 billion, down $456.0 million, or 2%; reflects continued reduction of shared national credit portfolio
Previous report
Criticized commercial loans and nonaccrual loans continued to normalize from the recent benign credit environment; annualized net charge-offs increased to 0.30% compared to 0.12%
Previous report
Period-end deposits totaled $29.0 billion, down $217.8 million, or 1%
Previous report
Our results for the third quarter of 2024 represent solid performance that again reflected improved profitability and efficiency. Net interest income increased, reflecting higher loan and securities yields and a flat cost of funds, fee income continued to increase and operating expenses were down. Strong earnings facilitated continued growth in our capital ratios that generally compare favorably to our peers. Credit metrics continued to normalize compared to the earlier post-pandemic benign environment. As a result, we remain focused on identifying specific and broader risk indicators that may be impacting certain segments in our portfolio. However, we have not seen signs of significant weakening, in any particular industry, sector or geographic segment, beyond what we believe has been experienced by the banking industry as a whole, and we continue to maintain a robust allowance for credit loss coverage of 1.46% in light of the current credit and economic environment. We remain focused on balance sheet optimization and effective expense control, and we believe we are well positioned to continue to enhance shareholder value.
Previous report
The $19.7 million decrease in net interest income (te) for the nine months ended September 30, 2024 compared to the same period in 2023 reflects the growth in and prevailing rates on interest-bearing liabilities outpacing those of earning assets. The decline in net interest income (te) includes a $104.8 million increase in interest expense, partially offset by an $85.1 million increase in interest income (te). The increase in interest expense is largely due to a shift in the mix of deposits from noninterest-bearing and low interest-bearing transaction and savings deposits into higher cost products at competitive interest rates, partially offset by a decrease in the cost of borrowings, largely the result of the decrease in average FHLB advances. The increase in interest income (te) was largely driven by higher loan yields. The net interest margin for the nine months ended September 30, 2024 was down 1 bp from the comparative period in 2023, driven largely by the increase in cost of deposits outpacing the yield on earning assets. The rate on interest-bearing liabilities was up 63 bps compared to the first nine months of 2023, with the rate on interest-bearing deposits up 82 bps. The yield on average earning assets was up 46 bps, primarily driven by a 43 bp improvement in the loan yield.
Previous report
We expect modest expansion in the net interest margin in the fourth quarter of 2024, with this guidance assuming two 25 bp rate cuts by the Federal Reserve during the period.
Previous report
(a)
Previous report
(b)
Previous report
Includes nonaccrual loans.
Previous report
(c)
Previous report
(d)
Previous report
We recorded a provision for credit losses of $40.3 million for the nine months ended September 30, 2024, compared to $42.2 million for the same period in 2023. The provision for credit losses in the first nine months of 2024 included net charge-offs of $34.3 million and a reserve build of $6.0 million, compared to net charge-offs of $47.3 million and a reserve release of $5.2 million in the same period in 2023. The provision for credit losses for the nine months ended September 30, 2023 includes a $29.7 million charge-off attributable to a single individually evaluated credit that stemmed from borrower-specific circumstances. Net charge-offs in the first nine months of 2024 of $34.3 million, or 0.19% of average loans, is comprised of net charge-offs of $23.8 million in the commercial portfolio and $10.7 million in the consumer portfolio, partially offset by net recoveries of $0.2 million in the residential mortgage portfolio. Net charge-offs in the first nine months of 2023 of $47.3 million, or 0.27% of average loans, is comprised of net charge-offs of $40.1 million in the commercial portfolio and $8.1 million in the consumer portfolio, partially offset by net recoveries of $0.8 million in the residential mortgage portfolio.
Previous report
September 30, 2024 totaled $32.5 million, up $6.9 million, or 27%, from the same period in 2023. The year over year increase includes a $3.0 million increase in investment fees, and a $4.3 million increase in annuity fees and other investment fees, reflective of continued strong annuity sales performance and fixed-income trading commissions amid the elevated interest rate environment and favorable market conditions, partially offset by a $0.5 million decline in corporate underwriting fees.
Previous report
The effective income tax rate for the third quarter of 2024 was 20.4% compared to 20.9% in the second quarter of 2024. The effective income tax rate for the nine months ended September 30, 2024 was 20.0%, relatively unchanged from the same period in 2023.
Previous report
Brokered time deposits at September 30, 2024 totaled $190.5 million, down $9.6 million from June 30, 2024 and down $399.3 million from December 31, 2023. The brokered deposits held at September 30, 2024 bear interest at a weighted average rate of 5.53% with maturities between November 2024 and February 2025. The decrease from both comparative periods is attributable to net maturities of instruments that were not replaced. The use of brokered deposits as a funding source is subject to certain policies regarding the amount, term and interest rate.
Previous report
Total loans at September 30, 2024 were $23.5 billion, down $456.0 million, or 2%, from June 30, 2024 and down $466.3 million, or 2%, from December 31, 2023. The decrease in loans from both comparative periods reflects a decline in our shared national credit portfolio as we remain focused on originating more granular loans and higher pay-offs on income producing commercial real estate loans, discussed in more detail below.
Previous report
Commercial and industrial (“C&I”) loans includes both non-real estate and owner occupied real estate secured loans. The Bank lends mainly to middle market and smaller commercial entities, although it participates in larger shared credit loan facilities. C&I totaled $12.7 billion at September 30, 2024, down $257.5 million, or 2%, from June 30, 2024 and down $366.6 million, or 3%, from December 31, 2023. The decreases from both comparative periods are reflective of our strategic reduction of exposure to shared national credits. In addition, loan growth in this portfolio segment has tempered, as demand has been affected by the interest rate environment.
Previous report
Interest-bearing transaction and savings accounts totaled $10.9 billion at September 30, 2024, up $78.6 million, or 1%, from June 30, 2024 and $222.0 million, or 2%, from December 31, 2023. Interest-bearing public fund deposits totaled $2.7 billion at September 30, 2024, down $217.6 million, or 7%, from June 30, 2024 and down $438.9 million, or 14%, from December 31, 2023. The decrease in public funds deposits from both comparative periods is mostly reflective of typical seasonal outflows as the calendar year approaches the fourth quarter. Retail time deposits totaled $4.7 billion at September 30, 2024, up $73.5 million, or 2%, from June 30, 2024 and $440.1 million, or 10%, from December 31, 2023. Despite maturity concentrations and promotional rate reductions during the period, retail time deposits increased linked-quarter as rate offerings remain attractive. Brokered time deposits totaled $190.5 million at September 30, 2024, down $9.6 million from June 30, 2024 and $399.3 million from December 31, 2023 as a result of net maturities of instruments that were not replaced. Our brokered deposits bear interest at a weighted average rate of 5.53% with maturities between November 2024 and February 2025.
Reworded paragraphs (89)
Previous wording
The objective of this discussion and analysis is to provide material information relevant to the assessment of the financial condition and results of operations of Hancock Whitney Corporation and its subsidiaries during the nine months ended September 30, 2024 and selected comparable prior periods, including an evaluation of the amounts and certainty of cash flows from operations and outside sources. This discussion and analysis is intended to highlight and supplement financial and operating data and information presented elsewhere in this report, including the consolidated financial statements and related notes. The discussion contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC include, but are not limited to, the following:
Current wording
The objective of this discussion and analysis is to provide material information relevant to the assessment of the financial condition and results of operations of Hancock Whitney Corporation and its subsidiaries during the three months ended March 31, 2025 and selected comparable prior periods, including an evaluation of the amounts and certainty of cash flows from operations and outside sources. This discussion and analysis is intended to highlight and supplement financial and operating data and information presented elsewhere in this report, including the consolidated financial statements and related notes. The discussion contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC include, but are not limited to, the following:
Previous wording
the impact of future business combinations upon our performance and financial condition including our ability to successfully integrate the businesses;
Current wording
the impact of current and future business combinations upon our performance and financial condition including our ability to successfully integrate the businesses;
Previous wording
our ability to identify and address potential cybersecurity risks, which may be exacerbated by recent developments in generative artificial intelligence, on our systems and/or third party vendors and service providers on which we rely, a material failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage to our systems, increased costs, losses, or adverse effects to our reputation;
Current wording
our ability to identify and address potential cybersecurity risks and/or breaches, which may be exacerbated by recent developments in generative artificial intelligence, on our systems and/or third party vendors and service providers on which we rely, a material failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage to our systems, increased costs, losses, or adverse effects to our reputation;
Previous wording
the effects of war or other conflicts, acts of terrorism, climate change, natural disasters such as hurricanes, freezes, flooding, man-made disasters, such as oil spills in the Gulf of Mexico, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions, and/or increase costs, including, but not limited to, property and casualty and other insurance costs;
Current wording
the effects of war or other conflicts, acts of terrorism, climate change, natural disasters such as hurricanes, freezes, flooding, man-made disasters, such as oil spills, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions, and/or increase costs, including, but not limited to, property and casualty and other insurance costs;
Previous wording
risks related to environmental, social and governance ("ESG") legislation, rulemaking, activism and litigation, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations;
Current wording
risks related to diversity, equity and inclusion, and environmental, social and governance legislation, rulemaking, activism and litigation, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations;
Previous wording
changes in laws and regulations affecting our businesses, including governmental monetary and fiscal policies, legislation and regulations relating to bank products and services, increased regulatory scrutiny resulting from bank failures, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses; and
Current wording
changes in laws and regulations affecting our businesses, including governmental monetary and fiscal policies, legislation and regulations relating to bank products and services, increased regulatory scrutiny resulting from bank failures, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses;
Previous wording
We utilize economic forecasts produced by Moody’s that provide various scenarios to assist in the development of our economic outlook. This outlook discussion utilizes the September 2024 Moody’s forecasts, the most current available at the time of our computation of the September 30, 2024 allowance for credit losses. The forecasts are anchored on a baseline forecast scenario, which Moody’s defines as the “most likely outcome” of where the economy is headed based on current conditions. Several upside and downside scenarios are produced that are derived from the baseline scenario that display varying depictions of economic performance as compared to the baseline.
Current wording
We utilize economic forecasts produced by Moody’s Analytics (Moody’s) that provide various scenarios to assist in the development of our economic outlook. This outlook discussion utilizes the March 2025 Moody’s forecast, the most current available at March 31, 2025. The forecasts are anchored on a baseline forecast scenario, which Moody’s defines as the “most likely outcome” of where the economy is headed based on current conditions. Several upside and downside scenarios are produced that are derived from the baseline scenario and incorporate varying degrees of favorable and unfavorable adjustments to economic indicators and circumstances as compared to the baseline.
Previous wording
The baseline scenario continues to incorporate the belief that the Federal Reserve will bring inflation at or near its target rate of 2.0% without precipitating a recession. Key assumptions within the September 2024 baseline forecast include the following: (1) the Federal Reserve will make 25-basis point cuts to its benchmark interest rate in both September and December 2024, with subsequent cuts occurring until the benchmark rate reaches 3.0% in 2027; (2) the economy is at near full-employment, and the unemployment rate will remain near its current level of 4% in the coming years; (3) GDP will display modest annual growth of 2.6% in 2024, 2.1% in 2025, and 2.0% in 2026; and (4) the 10-year U.S. Treasury yield will average 4.2% in 2024, and will remain near this level through the end of the decade.
Current wording
The baseline scenario continues to maintain an overall optimistic tenor with respect to economic outcomes, though recent progress in reducing inflation has slowed and potential inflationary pressures from the current administration’s fiscal, tariff and immigration actions and plans suggest a longer road to normalization than previously expected. Key assumptions within the March 2025 baseline forecast include the following: (1) the Federal Reserve will issue rate cuts of 25 basis points each in September and December 2025, with further gradual reductions in 2026 until the benchmark rate reaches 3%; (2) though the labor market has softened, the economy remains near full-employment with the current unemployment rate of 4%, and is forecasted to rise only modestly to 4.1% in 2025 and 4.3% through 2027 before improving slightly to 4.2% in 2028; (3) GDP will display modest annual below-trend growth in the coming years of 1.9% in 2025, 1.7% in 2026, and 2.3% in 2027; and, (4) the 10-year U.S. Treasury yield will remain elevated near its current rate, and is forecasted to average 4.4% in 2025 and only gradually decline through the end of the decade.
Previous wording
The S-2 scenario presents a downside alternative to the baseline. Compared to baseline, the S-2 scenario assumes that elevated interest rates weaken credit-sensitive spending more than anticipated, fiscal disputes in Congress lead to declines in business and consumer sentiment, geopolitical conflicts will create longer and farther-reaching disturbances, and continued disruption in the financial services industry will lead to additional tightening of credit standards. Further, the scenario assumes the unemployment rate will increase considerably to 6.7% in 2025 before improving to 4.9% in 2026 and 4.0% in 2027. As the economy weakens, the Federal Reserve commences rate cuts in the third quarter of 2024, deeper than those assumed in the baseline. As a result of these pressures, the U.S. falls into a mild recession beginning in the fourth quarter of 2024 that lasts for three quarters, with the stock market contracting 21% and a peak-to-trough decline in GDP of 1%.
Current wording
The S-2 scenario presents a downside alternative to the baseline. The S-2 scenario assumes the impacts of current administration tariffs and immigrations actions and plans on the economy are worse than expected, causing inflation to rise in the second quarter of 2025. Further, elevated interest rates weaken credit-sensitive spending more than anticipated and there is longer and farther-reaching disturbance from geopolitical conflict. The scenario assumes the unemployment rate will rise considerably to 5.5% in 2025 and 6.5% in 2026 (peaking at 7.1% in the first quarter) before improving to 4.4% in 2027 and 4.2% in 2028. As a result of these pressures, the U.S. falls into a mild recession beginning in the second quarter of 2025 that lasts for three quarters, with the stock market contracting 20% and a peak-to-trough decline in GDP of 1%. Despite the onset of the recession, rising inflation prompts the Federal Reserve to raise its benchmark rate in the second quarter of 2025 before resuming easement in the third quarter of 2025.
Previous wording
The credit loss outlook for our portfolio as a whole has not changed materially since June 30, 2024. We continue to closely monitor our portfolio for customers that are sensitive to prolonged inflation, the elevated interest rate environment and/or other economic circumstances that may impact credit quality. We expect end-of-period loan balances at December 31, 2024 to be flat or slightly down from the previous year end.
Current wording
The credit loss outlook for our portfolio as a whole has not changed materially since December 31, 2024. We continue to closely monitor our portfolio for customers that are sensitive to prolonged inflation, the elevated interest rate environment, tariffs and/or other economic circumstances that may impact credit quality. We have adjusted our expected full year 2025 loan growth percentage downward, now forecasted to be in the low single digits relative to December 31, 2024, reflecting current client sentiment.
Previous wording
We reported net income for the third quarter of 2024 of $115.6 million, or $1.33 per diluted common share, compared to $114.6 million, or $1.31 per diluted common share, in the second quarter of 2024 and $97.7 million, or $1.12 per diluted common share, in the third quarter of 2023.
Current wording
We reported net income for the first quarter of 2025 of $119.5 million, or $1.38 per diluted common share, compared to $122.1 million, or $1.40 per diluted common share, in the fourth quarter of 2024 and $108.6 million, or $1.24 per diluted common share, in the first quarter of 2024. The first quarter of 2024 included a $3.8 million, or $0.04 per diluted share, supplemental disclosure item. There were no supplemental disclosure items in the first quarter of 2025 or the fourth quarter of 2024.
Previous wording
Third quarter 2024 results compared to second quarter 2024:
Current wording
First quarter 2025 results compared to fourth quarter 2024:
Previous wording
Pre-provision net revenue, a non-GAAP measure, totaled $166.5 million, up $10.1 million, or 6%
Current wording
Pre-provision net revenue, a non-GAAP measure, totaled $162.4 million, compared to $165.2 million
Previous wording
Allowance for credit losses coverage of 1.46%, up 3 basis points (bps)
Current wording
Allowance for credit losses coverage to total loans of 1.49%, up 2 basis points (bps)
Previous wording
Net interest margin of 3.39%, up 2 bps from 3.37%
Current wording
Net interest margin of 3.43%, up 2 bps from 3.41%
Previous wording
Common equity tier 1 ratio of 13.78%, up 53 bps, and tangible common equity ratio of 9.56%, up 79 bps
Current wording
Common equity tier 1 ratio of 14.48%, up 34 bps, and tangible common equity ratio of 10.01%, up 54 bps
Previous wording
Efficiency ratio, a non-GAAP measure, improved to 54.42%, compared to 56.18%
Current wording
Efficiency ratio, a non-GAAP measure, was 55.22%, compared to 54.46%
Previous wording
The efficiency ratio is noninterest expense to total net interest (te) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosure items.
Current wording
The efficiency ratio, a non-GAAP financial measure, is noninterest expense to total net interest (te) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosure items.
Previous wording
Net interest income (te) for the third quarter of 2024 was $274.5 million, up $1.2 million, or less than 1%, compared to the second quarter of 2024, and was $816.7 million for the first nine months of 2024, down $19.7 million, or 2%, from the comparable period in 2023.
Current wording
Net interest income (te) for the first quarter of 2025 was $272.7 million, down $3.6 million, or 1%, compared to the fourth quarter of 2024, and up $3.7 million, or 1%, from the comparable period in 2024.
Previous wording
The $1.2 million increase in net interest income (te) compared to the second quarter of 2024 is largely attributable to an additional accrual day, higher loan and securities yields, and lower rates on borrowings, partially offset by an increase in deposit costs. Interest income (te) was up $1.8 million, primarily due to the additional accrual day, with increases in loan and securities yields more than offset by the decline in average loan balances. Interest expense was up $0.6 million, largely due to the additional accrual day and a net increase of 1 bp in the rate paid on interest-bearing deposits, partially offset by both a decrease in the average balance and rates paid on short-term borrowings. The net interest margin for the third quarter of 2024 was 3.39%, up 2 bps from 3.37% in the second quarter of 2024. The increase in the net interest margin from the prior quarter was largely driven by higher loan yields, higher securities yields, and lower borrowing costs, partially offset by an increase in deposit costs.
Current wording
The $3.6 million decrease in net interest income (te) compared to the fourth quarter of 2024 is largely attributable to two fewer accrual days, lower loan yields and volume, largely offset by a decrease in deposit costs and volume. Interest income (te) was down $18.9 million, primarily due to lower loan and short-term investment yields and volumes, and two fewer accrual days, partially offset by higher securities yields. Interest income on securities for the first quarter of 2025 includes $0.7 million of interest associated with certain fair value hedges that became effective during the quarter, favorably impacting the securities yield by 4 bps. Interest expense was down $15.3 million, largely due to lower cost of deposits, two fewer accrual days, and lower volumes of both deposits and borrowings. The net interest margin for the first quarter of 2025 was 3.43%, up 2 bps from 3.41% in the fourth quarter of 2024. The increase in the net interest margin from the prior quarter was largely driven by lower deposit costs, higher securities yields, and a more favorable funding mix, partially offset by lower loan yields.
Previous wording
Included in interest income is net purchase accounting accretion of $0.5 million, $0.8 million, and $0.6 million for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
Current wording
Included in interest income is net purchase accounting accretion of $0.5 million and $0.3 million for the three months ended December 31, 2024 and March 31, 2024, respectively. There was no purchase accounting accretion in 2025.
Previous wording
During the third quarter of 2024, we recorded a provision for credit losses expense of $18.6 million, compared to $8.7 million in the second quarter of 2024. The provision in the third quarter of 2024 included net charge-offs of $18.0 million and a reserve build of $0.6 million, compared to net charge-offs of $7.3 million and a reserve build of $1.4 million in the second quarter of 2024. A higher level of net charge-offs was the primary driver of the increase in provision expense linked quarter. Annualized net charge-offs as a percentage of average loans in the second quarter of 2024 was 0.30%, up from 0.12%, in the second quarter of 2024. The third quarter of 2024 net charge-offs included $14.5 million in the commercial portfolio, $3.5 million in the consumer portfolio and less than $0.1 million in the residential mortgage portfolio. The second quarter of 2024 net charge-offs included $4.1 million in the commercial portfolio and $3.3 million in the consumer portfolio, partially offset by net recoveries of $0.1 million in the residential mortgage portfolio.
Current wording
Annualized net charge-offs as a percentage of average loans in the first quarter of 2025 were 0.18%, down from 0.20%, in the fourth quarter of 2024, and up from 0.15% in the first quarter of 2024. Net charge-offs in the first quarter of 2025 included $7.1 million in the commercial portfolio and $3.4 million in the consumer portfolio, partially offset by net recoveries of $0.2 million in the residential mortgage portfolio. Net charge-offs in the fourth quarter of 2024 included $7.5 million in the commercial portfolio and $4.3 million in the consumer portfolio, partially offset by net recoveries of less than $0.1 million in the residential mortgage portfolio. For the first quarter of 2024, net charge-offs included $5.2 million in the commercial portfolio and $3.9 million in the consumer portfolio, partially offset by a net recovery of $0.1 million in the residential mortgage portfolio.
Previous wording
We expect to see modest charge-offs and provision for credit losses in the remainder of 2024. However, loan growth, portfolio mix, asset quality metrics and future assumptions in economic forecasts will drive the level of credit loss reserves.
Current wording
We expect to continue to see modest charge-offs and provision for credit losses during the remainder of 2025. However, loan growth, portfolio mix, asset quality metrics and future assumptions in economic forecasts will drive the level of credit loss reserves.
Previous wording
Noninterest income totaled $95.9 million for the third quarter of 2024, up $6.7 million, or 8%, from the second quarter of 2024. The increase in noninterest income from the second quarter of 2024 is primarily driven by increases in our specialty lines, with growth across most revenue lines. For the nine months ended September 30, 2024, noninterest income totaled $272.9 million, up $23.4 million, or 9%, from the same period in 2023. The increase is attributable to most fee income lines, partially offset by a decline in derivative income. A more detailed discussion of these and other noninterest income variances follows.
Current wording
Noninterest income totaled $94.8 million for the first quarter of 2025, up $3.6 million, or 4%, from the fourth quarter of 2024 and $6.9 million, or 8%, from the same period in 2024. The increase in noninterest income from the fourth quarter of 2024 was driven by growth in most revenue lines that were partially offset by declines in bank card and ATM fees and trust fees. The increase from the first quarter of 2024 is also attributable to growth in most lines that was partially offset by declines in gains on sales of assets, investment and annuity fees and credit-related fees. A more detailed discussion of these and other noninterest income variances follows.
Previous wording
Service charges on deposit accounts are composed of overdraft fees, nonsufficient funds fees on business accounts, business and corporate account analysis fees, overdraft protection fees and other customer transaction-related charges. Service charges on deposits totaled $23.1 million for the third quarter of 2024, up $0.9 million, or 4%, compared to the second quarter of 2024, primarily driven by an increase in both consumer and business overdraft fees. For the nine months ended September 30, 2024, services charges on deposits totaled $67.7 million, up $3.3 million, or 5%, from the same period in 2023. The year over year increase was driven primarily by analysis fees on business accounts as a result of activity levels, balance outflows and sales performance, and consumer and business overdraft fees, partially offset by a decline in consumer service charges as a result of the elimination of paper statement fees.
Current wording
Service charges on deposit accounts include consumer, business, and corporate deposit account servicing fees, as well as nonsufficient funds fees on non-consumer accounts, overdraft and overdraft protection fees, and other customer transaction-related fees. Service charges on deposits totaled $24.1 million for the first quarter of 2025, up $0.7 million, or 3%, compared to the fourth quarter of 2024 and up $1.9 million, or 8%, from the same period in 2024. The linked-quarter increase was primarily driven by an increase in analysis fees on business accounts. The increase from the same period in 2024 was also largely attributable to analysis fees, and to consumer overdraft fees, driven by higher instances of overdrafts.
Previous wording
Trust fee income represents revenue generated from a full range of trust services, including asset management and custody services provided to individuals, businesses and institutions. Trust fees totaled $18.0 million for the third quarter of 2024, down $0.5 million, or 2%, from the second quarter of 2024, largely attributable to decreases in personal trust revenue as a result of seasonal tax preparation fees recorded in the prior quarter. For the nine months ended September 30, 2024, trust fees totaled $53.6 million, an increase of $2.8 million, or 6%, from the same period in 2023. The year over year increase was primarily attributable to personal and institutional trust revenue, driven by market value and sales volumes.
Current wording
Trust fee income represents revenue generated from a full range of trust services, including asset management and custody services provided to individuals, businesses and institutions. Trust fees totaled $18.0 million for the first quarter of 2025, down $0.1 million, or 1%, from the fourth quarter of 2024 and up $0.9 million, or 6%, from the same period in 2024. The year-over-year increase was primarily attributable to personal, institutional, and corporate trust revenue, driven by market value and sales volumes. These increases were partially offset by a decline in employee benefits trust revenue.
Previous wording
Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled $21.6 million for the third quarter of 2024, down $0.2 million, or 1%, from the second quarter of 2024. The linked quarter decrease was primarily driven by a decline in merchant fees. Bank card and ATM fees for the nine months ended September 30, 2024 totaled $64.1 million, up $1.8 million, or 3%, from the same period in 2023. The year over year change was driven primarily by increases in purchasing card activity and merchant fees, partially offset by a decline in ATM fees.
Current wording
Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled $20.7 million for the first quarter of 2025, down $0.7 million, or 3%, from the fourth quarter of 2024 and up $0.1 million, or less than 1%, from the same period in 2024. The linked-quarter decrease was primarily driven by a seasonal decline in credit and debit card and ATM fees, partially offset by an increase in merchant fees that was largely due to pricing adjustments. The increase from the same period in 2024 was largely driven by increases in merchant and debit card fees, partially offset by a decline in ATM and credit card fees.
Previous wording
Investment and annuity fees and insurance commissions, which include both fees earned from sales of annuity and insurance products, as well as managed account fees, totaled $10.9 million, up $1.1 million, or 11%, from the second quarter of 2024. The linked-quarter increase was largely driven by sales volume for annuities, fixed income trading and insurance, and to an increase in recurring fees as a result of higher market values of securities. Investment and annuity fees and insurance commissions for the nine months ended
Current wording
Investment and annuity fees and insurance commissions, which include both fees earned from sales of annuity and insurance products, as well as managed account fees, totaled $11.4 million, up $0.5 million, or 5%, from the fourth quarter of 2024 and down $0.4 million, or 4%, from the same period in 2024. The linked-quarter increase was largely driven by annuity sales volume and corporate underwriting fees, partially offset by a decrease in fixed income trading and insurance commissions. The decrease from the same period in 2024 was driven by a $1.1 million decrease in annuity fees that was partially offset by a $0.7 million increase in investment management fees.
Previous wording
Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. We offer a full range of mortgage products to our customers and typically sell longer-term fixed-rate loans while retaining the majority of adjustable-rate loans, as well as loans generated through programs to support customer relationships. Secondary mortgage market operations income will vary based on mortgage application volume, pull through rates, the percentage of loans ultimately sold in the secondary market and the timing of such sales. Income from secondary mortgage market operations was $3.4 million in the third quarter of 2024, down $0.2 million, or 5%, from the second quarter of 2024. For the nine months ended September 30, 2024, income from secondary mortgage market operations totaled $9.8 million, up $2.7 million, or 39%, from the same period in 2023. The year over year increase was largely driven by an upward trend in the percentage of mortgage loans sold in the secondary market as opposed to those held in our portfolio.
Current wording
Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. We offer a full range of mortgage products to our customers and typically sell longer-term fixed-rate loans while retaining the majority of adjustable-rate loans, as well as loans generated through programs to support customer relationships. Secondary mortgage market operations income will vary based on mortgage application volume, pull through rates, the percentage of loans ultimately sold in the secondary market and the timing of such sales. Income from secondary mortgage market operations was $3.5 million in the first quarter of 2025, up $0.9 million, or 36%, from the fourth quarter of 2024 and up $0.6 million, or 20%, from the same period in 2024. The linked-quarter increase was primarily attributable to a higher percentage of loans sold in the secondary market. The year-over-year increase was driven by an increase in the level of mortgage loan production, reflective of a more favorable interest rate environment and the addition of lenders, as well as a higher percentage of loans sold in the secondary market.
Previous wording
Income from bank-owned life insurance (BOLI) is typically generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from BOLI was $4.4 million for the third quarter of 2024, up $0.6 million, or 16%, from the second quarter of 2024, primarily attributable to an increase in mortality gains. Income from BOLI for the nine months ended September 30, 2024 totaled $12.4 million, up $2.1 million, or 20%, from the same period in 2023 and is reflective of increases in both income from mortality gains and changes in cash surrender value.
Current wording
Income from bank-owned life insurance (BOLI) is typically generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from BOLI was $4.9 million for the first quarter of 2025, up $0.3 million, or 6%, from the fourth quarter of 2024 and up $0.6 million, or 15%, from the same period in 2024. The linked-quarter increase was driven by income from changes in cash surrender value. The year-over-year increase is largely attributable to mortality gains.
Previous wording
Credit-related fees include fees assessed on letters of credit and unused portions of loan commitments. Credit-related fees were $2.9 million for the third quarter of 2024, down $0.2 million, or 7%, compared to the second quarter of 2024, primarily driven by a decrease in standby letter of credit fees. Credit-related fees for the nine months ended September 30, 2024 totaled $9.2 million, down $0.1 million, or 1%, from the same period in 2023. Income from these products will vary based on letters of credit issued, credit line utilization and prevailing assessment rates.
Current wording
Credit-related fees include fees assessed on letters of credit and unused portions of loan commitments. Credit-related fees were $2.8 million for the first quarter of 2025, virtually flat compared to the fourth quarter of 2024 and down $0.3 million, or 9%, from the same period in 2024. The decrease from the same period in 2024 was primarily driven by a decrease in unused commitment fees.
Previous wording
Income or loss from customer and other derivatives is largely from our customer interest rate derivative program. Income from customer and other derivatives totaled $0.9 million for the third quarter of 2024, compared to a loss of $1.1 million in the second quarter of 2024. Derivative income can be volatile and is dependent upon the composition of the portfolio, volume and mix of sales and termination activity, and market value adjustments due to market interest rate movement. The linked-quarter improvement is largely reflective of $1.4 million of expense resulting from assumption changes to the Visa B derivative liability recorded in the prior quarter that did not recur. For the nine months ended September 30, 2024, loss from customer and other derivatives totaled $2.9 million, compared to income of $1.6 million for the same period in 2023. The current period includes a $1.5 million loss resulting from assumption changes associated with customer derivatives recorded in the first quarter of 2024 and a $0.5 million unfavorable variance in income from the Visa B derivative liability. The remainder of the year-over-year decline is largely a result of changes in the interest rate environment in each of the comparative periods, which affects demand for variable rate loans and related derivative products, valuation adjustments, and related collateral income/expense for the program as a whole.
Current wording
Income or loss from customer and other derivatives is largely from our customer interest rate derivative program. Loss from customer and other derivatives totaled $0.3 million for the first quarter of 2025, compared to a loss of $0.9 million in the fourth quarter of 2024 and $2.8 million in the first quarter of 2024. Derivative income can be volatile and is dependent upon the composition of the portfolio, volume and mix of sales and termination activity, and market value adjustments due to market interest rate movement. The variance compared to the fourth quarter was largely due to lower losses related to our Visa B derivative of $1.0 million, partially offset by lower earnings on customer derivatives of $0.4 million. The variance compared to the same quarter in the prior year reflects a $1.6 million improvement in earnings from customer derivatives, largely interest rate driven, and lower losses related to our Visa B derivative of $0.9 million.
Previous wording
Net gains on sales of premises, equipment and other assets consists primarily of net revenue earned from sales of excess-bank owned facilities and equipment no longer in use, gains on sales of Small Business Administration (SBA) and other non-residential mortgage loans, and leases and other assets associated with the equipment finance line of business. Net gains on sales of premises, equipment and other assets totaled $2.9 million for the third quarter of 2024, compared to $1.0 million for the second quarter of 2024. The linked-quarter increase was largely driven by gains on sales of SBA loans. Net gains on sales of premises, equipment and other assets for the nine months ended September 30, 2024 totaled $6.8 million, compared to $2.3 million in the same period in 2023. The year over year increase was largely driven by an increase in the volume of SBA loan sales and income earned from such, and gains on the sale of bank premises and equipment. The level of net gains or losses on sales of these assets in a given reporting period will vary based on a variety of circumstances.
Current wording
Net gains on sales of premises, equipment and other assets consist primarily of net revenue earned from sales of excess-bank owned facilities and equipment no longer in use, gains on sales of Small Business Administration (SBA) and other non-residential mortgage loans, and leases and other assets associated with the equipment finance line of business. Net gains on sales of premises, equipment and other assets totaled $1.9 million for the first quarter of 2025, compared to $1.1 million for the fourth quarter of 2024 and $2.8 million in the same period in 2024. The linked-quarter increase was largely driven by gains on sales of SBA loans. The year-over-year decrease was largely driven by a gain on the sale of bank premises and equipment recorded in the first quarter of 2024, partially offset by an increase in gains on sales of SBA loans. The level of net gains or losses on sales of these assets in a given reporting period will vary based on a variety of circumstances.
Previous wording
Other miscellaneous income is comprised of various items, including income from investments in small business investment companies (SBIC), Federal Home Loan Bank (FHLB) stock dividends, and fees from loan syndication and other specialty lines of business. Other miscellaneous income totaled $7.7 million, up $1.3 million, or 20%. The linked-quarter change was largely driven by increases of $0.7 million in SBIC income and $0.2 million in loan syndication fees. For the nine months ended September 30, 2024, other miscellaneous income totaled $19.9 million, up $3.9 million, or 24%, from the same period in 2023, the primary driver of which was a $2.2 million increase in dividends on FHLB stock.
Current wording
Other miscellaneous income is comprised of various items, including income from investments in small business investment companies (SBIC), Federal Home Loan Bank (FHLB) stock dividends, and fees from loan syndication and other specialty lines of business. Other miscellaneous income totaled $7.8 million, up $0.7 million, or 10% from the fourth quarter of 2024 and up $1.9 million, or 33%, from the first quarter of 2024. The linked-quarter change was largely driven by increases of $1.5 million in syndication fees and $1.1 million in SBIC income, partially offset by a $1.6 million decrease in dividends on FHLB stock, and a net $0.3 million decrease in other miscellaneous income. The year over year change was driven by an increase of $2.4 million of SBIC income and $1.3 million of syndication fees, partially offset by a $1.7 million decrease in FHLB stock dividends, and a net $0.1 million decrease in other miscellaneous income. The decrease in dividends on FHLB stock reflects a decline in the level of stock owned.
Previous wording
We expect noninterest income to be up six to seven percent for the full year of 2024 from the 2023 adjusted noninterest income of $337.7 million.
Current wording
We expect noninterest income to be up 9% to 10% for the full year of 2025 from the 2024 noninterest income of $364.1 million. This guidance has been updated to include the impact of the acquisition of Sabal Trust Company that closed on May 2, 2025.
Previous wording
Noninterest expense for the third quarter of 2024 was $203.8 million, down $2.2 million, or 1%, from the second quarter of 2024, with decreases in personnel expense, other miscellaneous losses and deposit insurance and regulatory fees, partially offset by an increase in professional services expense and a decrease in net gains from other real estate and foreclosed asset. For the nine months ended September 30, 2024, noninterest expense totaled $617.6 million, up $9.9 million, or 2%, from the same period in 2023. Year to date noninterest expense includes a $3.8 million supplemental disclosure item attributable to an FDIC special assessment. Excluding the impact of the supplemental disclosure item, noninterest expense for the nine months ended September 30, 2024 was up $6.1 million, or 1%, from the same period in 2023. The year over year increase was largely driven by personnel expense and data processing expense, partially offset by a decrease in net other retirement expense. A more detailed discussion of these and other noninterest expense variances follows.
Current wording
Noninterest expense for the first quarter of 2025 was $205.1 million, up $2.7 million, or 1%, from the fourth quarter of 2024 and down $2.7 million, or 1%, from the same period in 2024. The linked-quarter increase was largely driven by other real estate and foreclosed assets expense, regulatory fees, personnel expense and data processing expense, partially offset by a decrease in business development expense, tax credit investment amortization and other miscellaneous expenses. The first quarter of 2024 included a $3.8 million supplemental disclosure item attributable to an FDIC special assessment. Excluding the impact of the supplemental disclosure item, noninterest expense was up $1.1 million, or 1%, driven largely by professional services, data processing expense, other real estate and foreclosed assets expense and other retirement expense, partially offset by a decrease in personnel expense. A more detailed discussion of these and other noninterest expense variances follows.
Previous wording
Personnel expense consists of salaries, incentive compensation, long-term incentives, payroll taxes, and other employee benefits such as 401(k), pension, and insurance for medical, life and disability. Personnel expense totaled $115.8 million for the third quarter of 2024, down $3.0 million, or 2%, from the previous quarter. The linked quarter variance reflects a decrease in full-time equivalent employees and higher salary deferrals, partially offset by an increase in incentive-based compensation. For the nine months ended September 30, 2024, personnel expense totaled $355.7 million, up $9.2 million, or 3%, from the same period in 2023. The year over year change reflects annual increases across most salary and benefit categories that were partially offset by savings attributable to a decrease in headcount.
Current wording
Personnel expense consists of salaries, incentive compensation, long-term incentives, payroll taxes, and other employee benefits such as 401(k), pension, and insurance for medical, life and disability. Personnel expense totaled $114.3 million for the first quarter of 2025, up $0.6 million, or 1%, from the fourth quarter of 2024 and down $6.8 million, or 6%, from the same period in 2024. The linked quarter increase was largely driven by seasonal increases in payroll tax and benefits, partially offset by a decrease in bonus expense, and a decrease in compensation expense as a result of two fewer payroll days in the current period. The year over year decrease reflects a favorable impact from salary deferrals associated with lending activities, a decrease in headcount, and one fewer payroll day, partially offset by annual merit increases and annual increases in most benefit categories.
Previous wording
Occupancy and equipment expenses are primarily composed of lease expenses, depreciation, maintenance and repairs, rent, taxes, and other equipment expenses. Occupancy and equipment expenses totaled $18.1 million for the third quarter of 2024, up $0.7 million, or 4%, from the prior quarter, with increased cost associated with general repairs, maintenance and utilities, partially offset by decreases in leased facility expense. For the nine months ended September 30, 2024, occupancy and equipment expenses totaled $53.2 million, up $0.3 million, or 1%, from the same period in 2023.
Current wording
Occupancy and equipment expenses are primarily composed of lease expenses, depreciation, maintenance and repairs, rent, taxes, and other equipment expenses. Occupancy and equipment expenses totaled $17.7 million for the first quarter of 2025, down $0.2 million, or 1%, from the fourth quarter of 2024 and virtually flat compared to the same period in 2024. The linked-quarter decrease was attributable to lower costs associated with general repairs and maintenance, partially offset by increases in property taxes, utilities, and leased facility expense.
Previous wording
Data processing expense includes expenses related to third party technology processing and servicing costs, technology project costs and fees associated with bank card and ATM transactions, and credit card reward expenses, and may vary with transaction volume and timing of technology enhancement initiatives. Data processing expense was $31.1 million for the third quarter of 2024, down $0.2 million, or 1%, from the second quarter of 2024. For the nine months ended September 30, 2024, data processing expense totaled $91.2 million up $3.7 million, or 4%, from the same period in 2023, driven in part by certain activity-based processing fees, expenses associated with ongoing technology enhancements, increases in card rewards expense, and ATM servicing arrangement costs, as the current period reflects a full nine months of expense associated with an arrangement entered into in 2023.
Current wording
Data processing expense includes expenses related to third party technology processing and servicing costs, technology project costs and fees associated with bank card and ATM transactions, and credit card reward expenses. Data processing expense was $31.3 million for the first quarter of 2025, up $0.6 million, or 2%, from the fourth quarter of 2024 and up $2.5 million, or 9%, from the same period in 2024. The linked-quarter increase was driven in part by certain activity-based processing fees, expenses associated with ongoing technology enhancements, and increases in card expense, partially offset by a decrease in software maintenance costs. The increase from the same period in 2024 was largely related to activity-based processing fees, partially offset by a decrease in software maintenance costs. Data processing expense can vary from period to period, depending on business needs and technology enhancement initiatives.
Previous wording
Professional services expense includes accounting and audit, legal, consulting and certain outsourced service expense. Professional services expense for the third quarter of 2024 totaled $11.0 million, up $1.5 million, or 16%, from the second quarter of 2024, with increases in most categories. For the nine months ended September 30, 2024, professional services expense totaled $29.5 million, up $1.9 million, or 7%, from the same period in 2023, primarily driven by expenses incurred for certain outsourcing initiatives, partially offset by a decrease in consulting fees. Professional service expense may vary from period to period, generally related to consulting and legal needs.
Current wording
Professional services expense includes accounting and audit, legal, consulting and certain outsourced service expense. Professional services expense for the first quarter of 2025 totaled $12.2 million, down $0.2 million, or 2%, from the fourth quarter of 2024 and up $3.2 million, or 35%, from the same period in 2024. The linked-quarter decrease was largely driven by a decline in consulting, legal and other similar services, partially offset by an increase in expense from certain outsourced initiatives. The increase compared to the same period in 2024 was largely related to outsourcing initiatives.
Showing the first 40 of 89 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Our securities portfolio consists mainly of residential and commercial mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies. We invest only in high quality investment grade securities with a targeted portfolio effective duration generally between two and five and a half years. At March 31, 2025, the average expected maturity of the portfolio was 5.46 years with an effective duration of 4.04 years and a nominal weighted-average yield of 2.70%.
Current report — wording carried from elsewhere
December 31, 2024. At March 31, 2025, we have calculated our average deposit account size by dividing period-end deposits by the population of accounts with balances to be approximately $37,600, which includes $199,400 in our commercial and small business lines (excluding public funds), $122,000 in our wealth management business line, and $18,500 in our consumer business line.
Current report — wording carried from elsewhere
The following table sets forth average balances and weighted-average rates paid on deposits for the first quarter of 2025 and the fourth and the first quarter of 2024.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Taxable equivalent (te) amounts were calculated using a federal income tax rate of 21%.
Previous report — wording carried elsewhere
Average securities do not include unrealized holding gains/losses on available for sale securities.
Previous report — wording carried elsewhere
Included in interest income is net purchase accounting accretion of $1.6 million and $2.1 million for the nine months ended September 30, 2024 and 2023, respectively.