WINTRUST FINANCIAL CORP

Previous wording

The following discussion and analysis of the financial condition of Wintrust Financial Corporation and its subsidiaries (collectively, “Wintrust” or the “Company”) as of June 30, 2025 compared with December 31, 2024 and June 30, 2024, and the results of operations for the three and six month periods ended June 30, 2025 and June 30, 2024, should be read in conjunction with the unaudited consolidated financial statements and notes contained in this report and the risk factors discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) and in Part II, Item 1A, of this Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties and, as such, future results could differ significantly from management’s current expectations. See the last section of this discussion for further information on forward-looking statements.

Current wording

The following discussion and analysis of the financial condition of Wintrust Financial Corporation and its subsidiaries (collectively, “Wintrust” or the “Company”) as of September 30, 2025 compared with December 31, 2024 and September 30, 2024, and the results of operations for the three and nine month periods ended September 30, 2025 and September 30, 2024, should be read in conjunction with the unaudited consolidated financial statements and notes contained in this report and the risk factors discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) and in Part II, Item 1A, of this Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties and, as such, future results could differ significantly from management’s current expectations. See the last section of this discussion for further information on forward-looking statements.

Previous wording

The Company recorded net income of $195.5 million for the second quarter of 2025 compared to $152.4 million in the second quarter of 2024. The results for the second quarter of 2025 demonstrate increased net interest income due to growth in earning assets as well as the Company’s ability to navigate disruptions in the current economic environment during the period due to the Company’s strong deposit franchise and balanced business model. Partially offsetting the increase in net interest income was an increase in non-interest expense. The increase in non-interest expense was a result of additional expenses to support organic growth as well as the impact from the Macatawa acquisition. Comprehensive income includes 1) net income as presented on the Company’s Consolidated Statements of Income and 2) other comprehensive income or loss from unrealized gains and losses on the Company’s available-for-sale investment securities portfolios and derivative contracts designated as cash flow hedges as well as foreign currency translation adjustments. Comprehensive income totaled $239.3 million for the second quarter of 2025 compared to $125.3 million for the second quarter of 2024.

Current wording

The Company recorded net income of $216.3 million for the third quarter of 2025 compared to $170.0 million in the third quarter of 2024. The results for the third quarter of 2025 demonstrate increased net interest income due to growth in earning assets as well as the Company’s ability to navigate disruptions in the current economic environment during the period due to the Company’s strong deposit franchise and balanced business model. Partially offsetting the increase in net interest income was an increase in non-interest expense. The increase in non-interest expense was a result of additional expenses to support growth. Comprehensive income includes 1) net income as presented on the Company’s Consolidated Statements of Income and 2) other comprehensive income or loss from unrealized gains and losses on the Company’s available-for-sale investment securities portfolios and derivative contracts designated as cash flow hedges as well as foreign currency translation adjustments. Comprehensive income totaled $267.7 million for the third quarter of 2025 compared to $390.0 million for the third quarter of 2024.

Previous wording

The Company increased its loan portfolio from $44.7 billion at June 30, 2024 and $48.1 billion at December 31, 2024 to $51.0 billion at June 30, 2025. The increase in the current period compared to the prior periods was a result of growth in several portfolios, including the commercial, commercial real estate, residential real estate loans held for investment portfolios, and insurance premium finance receivable portfolios. For more information regarding changes in the Company’s loan portfolio, see Financial Condition – Interest Earning Assets and Note (6) “Loans” of the Consolidated Financial Statements in Item 1 of this report.

Current wording

The Company increased its loan portfolio from $47.1 billion at September 30, 2024 and $48.1 billion at December 31, 2024 to $52.1 billion at September 30, 2025. The increase in the current period compared to the prior periods was a result of growth in several portfolios, including the commercial, commercial real estate, residential real estate loans held for investment portfolios, and insurance premium finance receivable portfolios. For more information regarding changes in the Company’s loan portfolio, see Financial Condition – Interest Earning Assets and Note (6) “Loans” of the Consolidated Financial Statements in Item 1 of this report.

Previous wording

The Company recorded net interest income of $546.7 million in the second quarter of 2025 compared to $470.6 million in the second quarter of 2024. This increase in net interest income recorded in the second quarter of 2025 compared to the second quarter of 2024 resulted primarily from growth in earning assets, specifically a $5.7 billion increase in average loans. Net interest margin was 3.52% (3.54% on a fully taxable-equivalent basis, non-GAAP) in the second quarter of 2025 compared to 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) in the second quarter of 2024. The increase in net interest margin is primarily due to a reduction in funding cost, primarily related to the rate paid on interest-bearing liabilities, most notably interest-bearing deposits, junior subordinated debentures and other borrowings. This was partially offset by a decline in loan and other earning assets yields along with a decline in the net free funds contribution (see “Net Interest Income” for further detail).

Current wording

The Company recorded net interest income of $567.0 million in the third quarter of 2025 compared to $502.6 million in the third quarter of 2024. This increase in net interest income recorded in the third quarter of 2025 compared to the third quarter of 2024 resulted primarily from growth in earning assets, specifically a $5.5 billion increase in average loans. Net interest margin was 3.48% (3.50% on a fully taxable-equivalent basis, non-GAAP) in the third quarter of 2025 compared to 3.49% (3.51% on a fully taxable-equivalent basis, non-GAAP) in the third quarter of 2024. The net interest margin remained essentially the same as declines in yields of most asset classes were substantially offset by reductions in funding costs (see “Net Interest Income” for further detail).

Previous wording

Non-interest income totaled $124.1 million in the second quarter of 2025 compared to $121.1 million in the second quarter of 2024. The increase is primarily due to an increase on gains recognized on investment securities of $4.9 million and an increase of service charges on deposit accounts of $4.0 million in the second quarter of 2025 compared to the second quarter of 2024 . This was partially offset by a decrease in mortgage banking revenue of $6.0 million (see “Non-Interest Income” for further detail).

Current wording

Non-interest income totaled $130.8 million in the third quarter of 2025 compared to $113.1 million in the third quarter of 2024. The increase is primarily due to an increase in mortgage banking revenue of $8.5 million, an increase of service charges on deposit accounts of $3.4 million, and an increase in income from fees from covered call options of $4.6 million in the third quarter of 2025 compared to the third quarter of 2024. This was partially offset by a decrease in foreign currency remeasurement losses of $1.1 million compared to the third quarter of 2024 (see “Non-Interest Income” for further detail).

Previous wording

Non-interest expense totaled $381.5 million in the second quarter of 2025, an increase of $41.1 million, or 12%, compared to the second quarter of 2024. This increase compared to the second quarter of 2024 was primarily attributable to increased salaries and employee benefits of $21.0 million, increased software and equipment expenses of $7.3 million and increased amortization of other acquisition-related intangible assets of $4.5 million. (see “Non-Interest Expense” for further detail).

Current wording

Non-interest expense totaled $380.0 million in the third quarter of 2025, an increase of $19.3 million, or 5%, compared to the third quarter of 2024. This increase compared to the third quarter of 2024 was primarily attributable to increased salaries and employee benefits of $8.4 million and increased software and equipment expenses of $3.5 million (see “Non-Interest Expense” for further detail).

Previous wording

Management considers the maintenance of adequate liquidity to be important to the management of risk. Accordingly, during the second quarter of 2025, the Company continued its practice of maintaining appropriate funding capacity to provide the Company with adequate liquidity for its ongoing operations. In this regard, the Company benefited from its strong deposit base, a liquid investment portfolio and its access to funding from a variety of external funding sources, including the Company’s issuance of an additional series of preferred stock during the second quarter of 2025. See “Shareholders’ Equity”, “Deposits” and “Other Funding Sources” for additional information regarding liquidity sources.

Current wording

Management considers the maintenance of adequate liquidity to be important to the management of risk. Accordingly, during the third quarter of 2025, the Company continued its practice of maintaining appropriate funding capacity to provide the Company with adequate liquidity for its ongoing operations. In this regard, the Company benefited from its strong deposit base, a liquid investment portfolio and its access to funding from a variety of external funding sources, including the Company’s issuance of an additional series of preferred stock during the second quarter of 2025. See “Shareholders’ Equity”, “Deposits” and “Other Funding Sources” for additional information regarding liquidity sources.

Previous wording

The Company’s key operating measures and growth rates for the three and six months ended June 30, 2025, as compared to the same period last year, are shown below:

Current wording

The Company’s key operating measures and growth rates for the three and nine months ended September 30, 2025, as compared to the same period last year, are shown below:

Previous wording

The allowance for credit losses represents management’s estimate of expected credit losses over the life of a financial asset carried at amortized cost. Determining the amount of the allowance for credit losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the fair value of the underlying collateral and amount and timing of expected future cash flows on individually assessed financial assets, estimated credit losses on pools of loans with similar risk characteristics, and consideration of reasonable and supportable forecasts of macroeconomic conditions, all of which are susceptible to significant change. At June 30, 2025, the loan and held-to-maturity debt securities portfolios represent 79% of the total assets on the Company’s consolidated balance sheet. The Company also maintains an allowance for lending-related commitments, specifically unfunded loan commitments and letters of credit, which relates to certain amounts the Company is committed to lend (not unconditionally cancelable) but for which funds have not yet been disbursed.

Current wording

The allowance for credit losses represents management’s estimate of expected credit losses over the life of a financial asset carried at amortized cost. Determining the amount of the allowance for credit losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the fair value of the underlying collateral and amount and timing of expected future cash flows on individually assessed financial assets, estimated credit losses on pools of loans with similar risk characteristics, and consideration of reasonable and supportable forecasts of macroeconomic conditions, all of which are susceptible to significant change. At September 30, 2025, the loan and held-to-maturity debt securities portfolios represent 80% of the total assets on the Company’s consolidated balance sheet. The Company also maintains an allowance for lending-related commitments, specifically unfunded loan commitments and letters of credit, which relates to certain amounts the Company is committed to lend (not unconditionally cancelable) but for which funds have not yet been disbursed.

Previous wording

Key macroeconomic variable data points that are significant inputs into our credit loss models for the commercial and commercial real estate portfolios are the Baa corporate credit spread as well as the Dow Jones Total Stock Market Index specifically for the commercial portfolio and the Commercial Real Estate Price Index (“CREPI”) specifically related to the commercial real estate portfolio. The Dow Jones Total Stock Market Index is not a new macroeconomic variable used in the commercial loss model. This variable has always been a part of the expected credit loss model for commercial, however we have included the impact analysis due to the significant volatility experienced in this variable during the beginning of 2025. Holding all other inputs constant, the table below shows the impact of changes in these key macroeconomic variable data points on the estimate of allowance for credit losses.

Current wording

Key macroeconomic variable data points that are significant inputs into our credit loss models for the commercial and commercial real estate portfolios are the Baa corporate credit spread as well as the Dow Jones Total Stock Market Index specifically for the commercial portfolio and the Commercial Real Estate Price Index (“CREPI”) specifically related to the commercial real estate portfolio. Holding all other inputs constant, the table below shows the impact of changes in these key macroeconomic variable data points on the estimate of allowance for credit losses.

Previous wording

Net income for the quarter ended June 30, 2025 totaled $195.5 million, an increase of $43.1 million, or 28%, compared to the quarter ended June 30, 2024. On a per share basis, net income for the second quarter of 2025 totaled $2.78 per diluted common share compared to $2.32 for the second quarter of 2024.

Current wording

Net income for the quarter ended September 30, 2025 totaled $216.3 million, an increase of $46.3 million, or 27%, compared to the quarter ended September 30, 2024. On a per share basis, net income for the third quarter of 2025 totaled $2.78 per diluted common share compared to $2.47 for the third quarter of 2024.

Previous wording

The increase in net income for the second quarter of 2025 as compared to the same period in the prior year is primarily attributable to increased net interest income and a lower provision for credit losses, partially offset by increased non-interest expense primarily due to increases in employees related to the growth of the Company, increased software and equipment expenses and amortization of intangible assets and other acquisition-related expenses that were not applicable in the same period in the prior year. See “Net Interest Income,” “Non-interest Income,” “Non-interest Expense” and “Credit Quality” for further detail.

Current wording

The increase in net income for the third quarter of 2025 as compared to the same period in the prior year is primarily attributable to increased net interest income and an increase in non-interest income, partially offset by increased non-interest expense primarily due to increased salary and employee benefits expenses, increased software and equipment expenses and amortization of intangible assets and other acquisition-related expenses that were not applicable in the same period in the prior year. See “Net Interest Income,” “Non-interest Income,” “Non-interest Expense” and “Credit Quality” for further detail.

Previous wording

The following table presents a summary of the Company’s average balances, net interest income and related net interest margins, including a calculation on a fully taxable-equivalent basis, for the second quarter of 2025 as compared to the first quarter of 2025 (sequential quarters) and second quarter of 2024 (linked quarters):

Current wording

The following table presents a summary of the Company’s average balances, net interest income and related net interest margins, including a calculation on a fully taxable-equivalent basis, for the third quarter of 2025 as compared to the second quarter of 2025 (sequential quarters) and third quarter of 2024 (linked quarters):

Previous wording

(3)Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024 were $2.9 million, $2.9 million and $2.9 million, respectively.

Current wording

(3)Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024 were $2.8 million, $2.9 million and $3.1 million, respectively.

Previous wording

For the second quarter of 2025, net interest income totaled $546.7 million, an increase of $20.2 million as compared to the first quarter of 2025, and an increase of $76.1 million as compared to the second quarter of 2024. Net interest margin was 3.52% (3.54% on a FTE basis, non-GAAP) during the second quarter of 2025 compared to 3.54% (3.56% on a FTE basis, non-GAAP) during the first quarter of 2025, and 3.50% (3.52% on a FTE basis, non-GAAP) during the second quarter of 2024.

Current wording

For the third quarter of 2025, net interest income totaled $567.0 million, an increase of $20.3 million as compared to the second quarter of 2025, and an increase of $64.4 million as compared to the third quarter of 2024. Net interest margin was 3.48% (3.50% on a FTE basis, non-GAAP) during the third quarter of 2025 compared to 3.52% (3.54% on a FTE basis, non-GAAP) during the second quarter of 2025, and 3.49% (3.51% on a FTE basis, non-GAAP) during the third quarter of 2024.

Previous wording

The following table presents a summary of the Company’s net interest income and related net interest margin, including a calculation on a fully taxable-equivalent basis, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024:

Current wording

The following table presents a summary of the Company’s net interest income and related net interest margin, including a calculation on a fully taxable-equivalent basis, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:

Previous wording

(3)Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on a marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the six months ended June 30, 2025 and June 30, 2024 were $5.8 million and $5.7 million, respectively.

Current wording

(3)Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on a marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the nine months ended September 30, 2025 and September 30, 2024 were $8.6 million and $8.8 million, respectively.

Previous wording

The following table presents an analysis of the changes in the Company’s net interest income on a FTE basis (non-GAAP) comparing the three month ended June 30, 2025 to each of the three month periods ended March 31, 2025 and June 30, 2024 and six month periods ended June 30, 2025 and 2024. The reconciliations set forth the changes in the net interest income on a FTE basis (non-GAAP) as a result of changes in volumes, changes in rates and differing number of days in each period:

Current wording

The following table presents an analysis of the changes in the Company’s net interest income on a FTE basis (non-GAAP) comparing the three month ended September 30, 2025 to each of the three month periods ended June 30, 2025 and September 30, 2024 and nine month periods ended September 30, 2025 and 2024. The reconciliations set forth the changes in the net interest income on a FTE basis (non-GAAP) as a result of changes in volumes, changes in rates and differing number of days in each period:

Previous wording

Mortgage banking revenue decreased for the three months ended June 30, 2025 as compared to the same period in 2024 due to lower production of loans originated for sale and net revenue related to MSR activity and valuation adjustments. On a year-to-date basis, mortgage banking revenue decreased for the six months ended June 30, 2025 as compared to the same period in 2024 as a result of lower production margins and net revenue related to lower MSR activity and valuation adjustments. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. A main factor in the mortgage banking revenue recognized by the Company is the volume of mortgage loans originated or purchased for sale and the related production margins. Mortgage loans originated for sale totaled $681.5 million in the second quarter of 2025 as compared to $722.2 million in the second quarter of 2024. On a year-to-date basis, mortgage loans originated for sale totaled $1.1 billion for the six months ended June 30, 2025 as compared to $1.2 billion for six months ended June 30, 2024. The slight decrease in linked quarter originations was driven by a slight uptick in rates offset by slightly higher inventory levels. The percentage of origination volume from refinancing activities was 26% and 25% for the three and six months ended June 30, 2025, as compared to 17% and 20%, for the same periods in 2024, respectively.

Current wording

Mortgage banking revenue increased for the three months ended September 30, 2025 as compared to the same period in 2024 due to higher production revenue and improved valuation adjustments in the MSRs. On a year-to-date basis, mortgage banking revenue decreased for the nine months ended September 30, 2025 as compared to the same period in 2024 as a result of lower production volume and net revenue related to lower MSR activity and valuation adjustments. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. A main factor in the mortgage banking revenue recognized by the Company is the volume of mortgage loans originated or purchased for sale and the related production margins. Mortgage loans originated for sale totaled $643.4 million in the third quarter of 2025 as compared to $766.8 million in the third quarter of 2024. On a year-to-date basis, mortgage loans originated for sale totaled $1.8 billion for the nine months ended September 30, 2025 as compared to $2.0 billion for nine months ended September 30, 2024. The slight decrease in linked quarter originations was driven by a slight uptick in rates offset by slightly higher inventory levels. The percentage of origination volume from refinancing activities was 23% and 24% for the three and nine months ended September 30, 2025, as compared to 28% and 22%, for the same periods in 2024, respectively.

Previous wording

The Company records MSRs at fair value on a recurring basis. For the three months ended June 30, 2025, the fair value of the MSRs portfolio decreased as a result of an unfavorable fair value adjustment of $4.0 million and a reduction in value of $5.6 million due to payoffs, paydowns and repurchases of the existing portfolio, partially offset as retained servicing rights led to capitalization of$6.3 million. For the six months ended June 30, 2025, the fair value of the MSRs portfolio decreaseddue to an unfavorable fair value adjustment of$11.5 millionas well asa reduction in value of $10.3 million due to payoffs and paydowns of the existing portfolio partially offset by retained servicing rights led to capitalization of$11.0 million. See Note (9) “Mortgage Servicing Rights (“MSRs”)” to the Consolidated Financial Statements in Item 1 of this report for a summary of the changes in the carrying value of MSRs.

Current wording

The Company records MSRs at fair value on a recurring basis. For the three months ended September 30, 2025, the fair value of the MSRs portfolio decreased as a result of an unfavorable fair value adjustment of $2.3 million as well as a reduction in value of $5.6 million due to payoffs, paydowns and repurchases of the existing portfolio partially offset by retained servicing rights led to capitalization of$5.8 million. For the nine months ended September 30, 2025, the fair value of the MSRs portfolio decreaseddue to an unfavorable fair value adjustment of$13.8 millionas well asa reduction in value of $15.9 million due to payoffs and paydowns and repurchases of the existing portfolio partially offset by retained servicing rights led to capitalization of$16.8 million. See Note (9) “Mortgage Servicing Rights (“MSRs”)” to the Consolidated Financial Statements in Item 1 of this report for a summary of the changes in the carrying value of MSRs.

Previous wording

Mortgage banking revenue is also impacted by changes in the fair value of derivative contracts held to economically hedge a portion of the fair value adjustments related to the Company’s MSRs portfolio. The change in fair value of the derivative contracts held as an economic hedge was a favorable $2.5 million and $7.4 million for the three and six months ended June 30, 2025 compared to an unfavorable $772,000 and $3.3 million for the three and six months ended June 30, 2024.

Current wording

Mortgage banking revenue is also impacted by changes in the fair value of derivative contracts held to economically hedge a portion of the fair value adjustments related to the Company’s MSRs portfolio. The change in fair value of the derivative contracts held as an economic hedge was a favorable $265,000 and $7.7 million for the three and nine months ended September 30, 2025 compared to a favorable $6.9 million and $3.5 million for the three and nine months ended September 30, 2024.

Previous wording

Service charges on deposits increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024 primarily as a result of increased commercial account analysis service fees, and the Macatawa acquisition. Service charges on deposit accounts include fees charged to deposit customers for various services, including account analysis services, and are based on factors such as the size and type of customer, type of product and number of transactions. The fees are based on a standard schedule of fees and, depending on the nature of the service performed, the service is performed at a point in time or over a period of a month.

Current wording

Service charges on deposits increased for the three and nine months ended September 30, 2025 as compared to the same periods in 2024 primarily as a result of increased commercial account analysis service fees. Service charges on deposit accounts include fees charged to deposit customers for various services, including account analysis services, and are based on factors such as the size and type of customer, type of product and number of transactions. The fees are based on a standard schedule of fees and, depending on the nature of the service performed, the service is performed at a point in time or over a period of a month.

Previous wording

The Company recognized net gains on investment securities for the three and six months ended June 30, 2025 of $650,000 and $3.8 million, respectively. The Company recognized net losses on investment securities for the three and six months ended June 30, 2024 of $4.3 million and $3.0 million, respectively. The net gains for the three and six months ended June 30, 2025 were primarily due to unrealized gains on the Company’s equity investment securities with a readily determinable fair value recorded in the first and second quarter of 2025. See Note (5) “Investment Securities” to the Consolidated Financial Statements in Item 1 of this report for more information on net gains and losses on investment securities.

Current wording

The Company recognized net gains on investment securities for the three and nine months ended September 30, 2025 of $3.0 million and $6.8 million, respectively. The Company recognized net gains on investment securities for the three and nine months ended September 30, 2024 of $3.2 million and $233,000, respectively. The net gains for the three and nine months ended September 30, 2025 were primarily due to unrealized gains on the Company’s equity investment securities with a readily determinable fair value recorded in the first and second quarter of 2025. See Note (5) “Investment Securities” to the Consolidated Financial Statements in Item 1 of this report for more information on net gains and losses on investment securities.

Previous wording

Fees from covered call options for the three and six months ended June 30, 2025 increased $3.6 million and $2.2 million, respectively, when compared to the same periods in the prior year. The increased income was primarily because the Company sold more options than in the comparative periods. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has effectively entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to increase the total return associated with holding certain investment securities and do not qualify as hedges pursuant to accounting guidance. There were no outstanding call option contracts at June 30, 2025 and 2024.

Current wording

Fees from covered call options for the three and nine months ended September 30, 2025 increased $4.6 million and $6.8 million, respectively, when compared to the same periods in the prior year. The increased income was primarily because the Company sold more options than in the comparative periods. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has effectively entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to increase the total return associated with holding certain investment securities and do not qualify as hedges pursuant to accounting guidance. There were no outstanding call option contracts at September 30, 2025 and 2024.

Previous wording

Miscellaneous non-interest income includes loan servicing fees, income from other investments, and other fees. This category of income decreased $7.2 million and $29.6 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. For the three months ended June 30, 2025, miscellaneous income decreased compared to the same period in 2024 primarily due to a $4.6 million gain recognized in the second quarter of 2024 on the sale of premium finance receivables. For the six months ended June 30, 2025, miscellaneous income decreased compared to the same period in 2024 primarily due to a $20.0 million gain recognized in the first quarter of 2024 related to the sale of the Company’s Retirement Benefits Advisors (“RBA”) division within its wealth management business.

Current wording

Miscellaneous non-interest income includes loan servicing fees, income from other investments, and other fees. This category of income increased $329,000 and decreased $29.2 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. For the nine months ended September 30, 2025, miscellaneous income decreased compared to the same period in 2024 primarily due to a $20.0 million gain recognized in the first quarter of 2024 related to the sale of the Company’s Retirement Benefits Advisors (“RBA”) division within its wealth management business as well as a $4.6 million gain recognized in the second quarter of 2024 on the sale of premium finance receivables.

Previous wording

Salaries and employee benefits expense increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024. The increase was primarily due to annual merit increases and increases in employees related to the growth of the Company, including the Macatawa acquisition.

Current wording

Salaries and employee benefits expense increased for the three and nine months ended September 30, 2025 as compared to the same periods in 2024. The increase was primarily due to annual merit increases.

Previous wording

Software and equipment expense increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024 as a result of higher software license fees as well as higher computer and software depreciation expense as the Company invests in enhancements to the digital customer experience, upgrades to infrastructure and enhancements to information security capabilities. Software and equipment expense includes furniture, equipment and computer software, depreciation, and repairs and maintenance costs.

Current wording

Software and equipment expense increased for the three and nine months ended September 30, 2025 as compared to the same periods in 2024 as a result of higher software license fees as well as higher computer and software depreciation expense as the Company invests in enhancements to the digital customer experience, upgrades to infrastructure and enhancements to information security capabilities. Software and equipment expense includes furniture, equipment and computer software, depreciation, and repairs and maintenance costs.

Previous wording

Amortization of other acquisition-related intangible assets increased for the three and six months ended June 30, 2025 compared to the same periods in 2024 as a result of amortization of the core deposit intangible asset associated with the Macatawa acquisition.

Current wording

Amortization of other acquisition-related intangible assets increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024 as a result of amortization of the core deposit intangible asset associated with the Macatawa acquisition.

Previous wording

FDIC insurance expense decreased for the six months ended June 30, 2025 compared to the same period in 2024. On a year-to-date basis, the decrease is primarily due to $5.2 million recognized in March 31, 2024 related to the FDIC’s special assessment on uninsured deposits in response to certain bank failures that occurred in 2023.

Current wording

FDIC insurance expense increased for the three months and decreased for the nine months ended September 30, 2025 compared to the same period in 2024. For the three months ended September 30, 2025, the increase is primarily due to balance sheet growth as compared to the three months ended September 30, 2024. On a year-to-date basis, the decrease is primarily due to $5.2 million recognized in March 31, 2024 related to the FDIC’s special assessment on uninsured deposits in response to certain bank failures that occurred in 2023.

Previous wording

Miscellaneous non-interest expense includes ATM expenses, correspondent bank charges, directors’ fees, telephone, postage, corporate insurance, dues and subscriptions, problem loan expenses and other miscellaneous operational losses and costs. During the three and six months ended June 30, 2025, the company incurred $2.9 million and $5.6 million in acquisition-related expenses related to the Macatawa acquisition.

Current wording

Miscellaneous non-interest expense includes ATM expenses, correspondent bank charges, directors’ fees, telephone, postage, corporate insurance, dues and subscriptions, problem loan expenses and other miscellaneous operational losses and costs. During the three and nine months ended September 30, 2025, the company incurred $471,000 and $6.1 million in acquisition-related expenses related to the Macatawa acquisition.

Previous wording

The Company recorded income tax expense of $71.6 million in the second quarter of 2025 compared to $59.0 million in the second quarter 2024. The effective tax rates were 26.79% in the second quarter 2025 compared to 27.90% in the second quarter of 2024. During the first six months of 2025, the Company recorded income tax expenseof $135.6 million compared to $121.6 million for the first six months of 2024. The effective tax rates were 26.07%for the first six months of 2025 and 26.36% for the first six months of 2024.

Current wording

The Company recorded income tax expense of $79.8 million in the third quarter of 2025 compared to $62.7 million in the third quarter of 2024. The effective tax rates were 27.0% in the third quarter of 2025 compared to 26.9% in the third quarter of 2024. During the first nine months of 2025, the Company recorded income tax expense of $215.4 million compared to $184.3 million for the first nine months of 2024. The effective tax rates were 26.4% for the first nine months of 2025 and 26.6% for the first nine months of 2024.

Previous wording

The community banking segment’s net interest income for the quarter ended June 30, 2025 totaled $436.7 million as compared to $358.8 million for the same period in 2024, an increase of $77.8 million, or 22%. On a year-to-date basis, net interest income for the segment increased by $133.2 million from $722.5 million for the six months ended June 30, 2024 to $855.7 million for the six months ended June 30, 2025. The increase in the three and six month periods was primarily attributable to growth in average earning assets coupled with a relatively stable net interest margin. The community banking segment’s non-interest income totaled$75.5 million in the second quarter of 2025, anincrease of$3.9 million, or 5%, when compared to the second quarter of 2024 total of$71.6 million. On a year-to-date basis, non-interest income totaled$149.0 million for thesix months ended June 30, 2025, anincrease of$2.7 million, or 2%, compared to$146.3 million for thesix months ended June 30, 2024. Theincrease in thethree and six month periods, was primarily the result of anincrease on gains recognized on investment securities and increased service charges on deposit accounts, partially offset by decreased mortgage banking revenue due to the decreases in MSRs related to the change in fair value model assumptions. The community banking segment recorded provision for credit losses of$20.5 million and $42.9 million, respectively, for thethree and six months ended June 30, 2025, compared to$36.3 million and $56.7 million, respectively, for the same periods in 2024. Thedecrease in provision for credit losses for thethree and six month periods wasprimarily the result of improvement in the forecast for key macroeconomic variables, most notably Baa corporate credit spread and Commercial Real Estate Price Index. Non-interest expenses increased by $35.8 million and $68.7 million, respectively, for the three and six months, ended June 30, 2025 compared to the same periods in 2024, primarily because of higher salary, commissions, and incentive compensation along with other segment expenses. The community banking segment’s net income for the quarter ended June 30, 2025 totaled$139.1 million, an increase of $47.9 million as compared to net income in thesecond quarter of 2024 of$91.2 million. On a year-to-date basis, the net income of the community banking segment for the six months ended June 30, 2025 totaled $273.4 million as compared to $211.3 million for the six months ended June 30, 2024.

Current wording

The community banking segment’s net interest income for the quarter ended September 30, 2025 totaled $452.5 million as compared to $396.9 million for the same period in 2024, an increase of $55.7 million, or 14%. On a year-to-date basis, net interest income for the segment increased by $188.8 million from $1.1 billion for the nine months ended September 30, 2024 to $1.3 billion for the nine months ended September 30, 2025. The increase in the three and nine month periods was primarily attributable to growth in average earning assets coupled with a relatively stable net interest margin. The community banking segment’s non-interest income totaled $82.5 million in the third quarter of 2025, an increase of $16.2 million, or 24%, when compared to the third quarter of 2024 total of $66.3 million. On a year-to-date basis, non-interest income totaled $231.5 million for the nine months ended September 30, 2025, an increase of $18.9 million, or 9%, compared to $212.6 million for the nine months ended September 30, 2024. The increase in the three and nine month periods was primarily the result of an increase in gains recognized on investment securities and increased service charges on deposit accounts. The community banking segment recorded provision for credit losses of $20.1 million and $63.0 million, respectively, for the three and nine months ended September 30, 2025, compared to $20.5 million and $77.2 million, respectively, for the same periods in 2024. The decrease in provision for credit losses for the three and nine month periods was primarily the result of improvements in the forecast for the key macroeconomic variable Baa corporate credit spread coupled with lower net charge-offs . Non-interest expenses increased by $17.5 million and $86.1 million, respectively, for the three and nine months ended September 30, 2025 compared to the same periods in 2024, due to higher salaries, commissions, and incentive compensation along with other segment expenses. The community banking segment’s net income for the quarter ended September 30, 2025 totaled $154.6 million, an increase of $39.4 million as compared to net income in the third quarter of 2024 of $115.2 million. On a year-to-date basis, the net income of the community banking segment for the nine months ended September 30, 2025 totaled $428.0 million as compared to $326.5 million for the nine months ended September 30, 2024.

Previous wording

The specialty finance segment’s net interest income totaled $92.3 million for the quarter ended June 30, 2025, compared to $95.2 million for the same period in 2024, a decrease of $2.9 million, or 3%. The decrease for the three month period was primarily due to a decline in yields on the premium finance receivable loan portfolio. On a year-to-date basis, net interest income for the segment increased $6.1 million, or 3%, compared to the same period in 2024.The increase for the six month period was primarily due to loan growth. The specialty finance segment’s provision for credit losses totaled $1.8 million and $3.3 million, respectively, for thethree and six months ended June 30, 2025 compared to $3.7 million and $5.0 million, respectively, for the same periods in 2024. Thedecrease in provision for credit losses for thethree and six month periods was primarily the result of improvement in credit quality within premium finance receivables and to a lesser extent improvement in the forecast for the key macroeconomic variable Baa corporate credit spread, impacting lease financing. The specialty finance segment’s non-interest income increased to $33.5 million from $32.3 million for the three months ended June 30, 2025 and 2024, respectively, and stood at $64.6 million and $59.6 million for the six months ended June 30, 2025 and 2024, respectively. Non-interest expenses increased by $5.4 million and $8.1 million, respectively, for the three and six months, ended June 30, 2025 compared to the same periods in 2024, primarily because of higher employee benefits, commissions, and incentive compensation as well as other segment expenses. Our property and casualty insurance premium finance operations, life insurance finance operations, lease financing operations and accounts receivable finance operations accounted for 47%, 30%, 21% and 2%, respectively, of the net revenues of our specialty finance business for the six month period ended June 30, 2025. The net income of the specialty finance segment for the quarter ended June 30, 2025 totaled $48.8 million as compared to $53.1 million for the quarter ended June 30, 2024. On a year-to-date basis, the net income of the specialty finance segment for the six months ended June 30, 2025 totaled $99.1 million as compared to $95.6 million for the six months ended June 30, 2024.

Current wording

The specialty finance segment’s net interest income totaled $97.4 million for the quarter ended September 30, 2025, compared to $88.4 million for the same period in 2024, an increase of $9.0 million, or 10%. The increase for the three and nine month periods was primarily due to higher average balances in premium finance and leasing, and lower funding costs, offset by lower yields on premium finance. On a year-to-date basis, net interest income for the segment increased $15.1 million, or 6%, compared to the same period in 2024. The specialty finance segment’s provision for credit losses totaled $1.7 million and $5.0 million, respectively, for the three and nine months ended September 30, 2025 compared to $1.9 million and $6.9 million, respectively, for the same periods in 2024. The decrease in provision for credit losses for the three and nine month periods was primarily the result of improvement in credit quality within premium finance receivables and improvement in the forecast for the key macroeconomic variable Baa corporate credit spread, impacting lease financing. The specialty finance segment’s non-interest income increased to $32.2 million from $29.6 million for the three months ended September 30, 2025 and 2024, respectively, and stood at $96.8 million and $89.2 million for the nine months ended September 30, 2025 and 2024, respectively. Non-interest expenses increased by $4.8 million and $12.8 million, respectively, for the three and nine months ended September 30, 2025 compared to the same periods in 2024, primarily because of higher employee benefits, commissions, and incentive compensation as well as other segment expenses. Our property and casualty insurance premium finance operations, life insurance finance operations, lease financing operations and accounts receivable finance operations accounted for 47%, 29%, 22% and 2%, respectively, of the net revenues of our specialty finance business for the nine month period ended September 30, 2025. The net income of the specialty finance segment for the quarter ended September 30, 2025 totaled $52.6 million as compared to $46.8 million for the quarter ended September 30, 2024. On a year-to-date basis, the net income of the specialty finance segment for the nine months ended September 30, 2025 totaled $151.7 million as compared to $142.4 million for the nine months ended September 30, 2024.

Previous wording

The wealth management segment reported net interest income of $4.8 million for the second quarter of 2025 compared to $7.9 million in the same quarter of 2024, a decrease of $3.1 million. On a year-to-date basis, net interest income totaled $10.2 million for the first six months of 2025, as compared to $15.7 million for the first six months of 2024. Net interest income for this segment is primarily comprised of an allocation of the net interest income earned by the community banking segment on non-interest-bearing and interest-bearing wealth management customer account balances on deposit at the banks. Wealth management customer account balances on deposit at the banks averaged $1.1 billion and $1.5 billion in the first six months of 2025 and 2024, respectively. This segment recorded non-interest income of $39.5 million for the second quarter of 2025 compared to $35.6 million for the second quarter of 2024. The increase in the three month period was primarily due to higher wealth management revenue driven by an increase in asset valuations. On a year-to-date basis, this segment recorded non-interest income of $73.3 million for the first six months of 2025 as compared to $94.1 million for the first six months of 2024. The decrease in the six month period was primarily due a $20.0 million gain recognized in the first quarter of 2024 related to the sale of the Company’s RBA division within its wealth management business. Non-interest expenses increased by $1.8 million for the second quarter of 2025 compared to the same period in 2024, primarily because of higher salary, commissions and incentive compensation as well as other segment expenses. On a year-to-date basis, non-interest expense increased by $690,000 for the six month period ended June 30, 2025 compared to the same period in 2024, primarily due to other segment expenses. Distribution of wealth management services through each bank continues to be a focus of the Company. The Company is committed to growing the wealth management segment in order to better service its customers and create a more diversified revenue stream. The wealth management segment’s net income totaled $7.6 million for the second quarter of 2025 compared to $8.1 million for the second quarter of 2024. On a year-to-date basis, the wealth management segment’s net income totaled $12.1 million and $32.8 million for the six month period ended June 30, 2025, and 2024, respectively.

Current wording

The wealth management segment reported net interest income of $5.6 million for the third quarter of 2025 compared to $6.9 million in the same quarter of 2024, a decrease of $1.3 million. On a year-to-date basis, net interest income totaled $15.8 million for the first nine months of 2025, as compared to $22.6 million for the first nine months of 2024. Net interest income for this segment is primarily comprised of an allocation of the net interest income earned by the community banking segment on non-interest-bearing and interest-bearing wealth management customer account balances on deposit at the banks. Wealth management customer account balances on deposit at the banks averaged $1.1 billion and $1.5 billion in the first nine months of 2025 and 2024, respectively. This segment recorded non-interest income of $39.7 million for the third quarter of 2025 compared to $37.4 million for the third quarter of 2024. The increase in the three month period was primarily due to higher wealth management revenue driven by an increase in asset valuations. On a year-to-date basis, this segment recorded non-interest income of $113.0 million for the first nine months of 2025 as compared to $131.5 million for the first nine months of 2024. The decrease in the nine month period was primarily due a $20.0 million gain recognized in the first quarter of 2024 related to the sale of the Company’s RBA division within its wealth management business. On a quarter-to-date and year-to-date basis, non-interest expense remained relatively stable for the three and nine month periods ended September 30, 2025 compared to the same periods in 2024. Distribution of wealth management services through each bank continues to be a focus of the Company. The Company is committed to growing the wealth management segment in order to better service its customers and create a more diversified revenue stream. The wealth management segment’s net income totaled $9.1 million for the third quarter of 2025 compared to $8.0 million for the third quarter of 2024. On a year-to-date basis, the wealth management segment’s net income totaled $21.2 million and $40.8 million for the nine month period ended September 30, 2025, and 2024, respectively.

Previous wording

Total assets were $69.0 billion at June 30, 2025, representing an increase of $9.2 billion, or 15%, when compared to June 30, 2024 and an increase of approximately $3.1 billion, or 19% on an annualized basis, when compared to March 31, 2025. Total funding, which includes deposits, all notes and advances, including secured borrowings and the junior subordinated debentures, was $60.1 billion at June 30, 2025, $57.8 billion at March 31, 2025, and $52.4 billion at June 30, 2024. See Notes (5), (6), (10), (11) and (12) of the Consolidated Financial Statements presented under Item 1 of this report for additional period-end detail on the Company’s interest-earning assets and funding liabilities.

Current wording

Total assets were $69.6 billion at September 30, 2025, representing an increase of $5.8 billion, or 9%, when compared to September 30, 2024 and an increase of approximately $646.3 million, or 4% on an annualized basis, when compared to June 30, 2025. Total funding, which includes deposits, all notes and advances, including secured borrowings and the junior subordinated debentures, was $61.0 billion at September 30, 2025, $60.1 billion at June 30, 2025, and $55.8 billion at September 30, 2024. See Notes (5), (6), (10), (11) and (12) of the Consolidated Financial Statements presented under Item 1 of this report for additional period-end detail on the Company’s interest-earning assets and funding liabilities.

Previous wording

Mortgage loans held-for-sale. Mortgage loans held-for-sale represents such loans awaiting subsequent sale in the secondary market with such sales eliminating the interest-rate risk associated with these loans, as they are predominantly long-term fixed rate loans, and provide a source of non-interest revenue. The increase in the average balance for the second quarter of 2025 as compared to the sequential period is primarily due to higher mortgage origination production, but decreased compared to the prior year period due to lower mortgage origination production.

Current wording

Mortgage loans held-for-sale. Mortgage loans held-for-sale represents such loans awaiting subsequent sale in the secondary market with such sales eliminating the interest-rate risk associated with these loans, as they are predominantly long-term fixed rate loans, and provide a source of non-interest revenue. The decrease in the average balance for the third quarter of 2025 as compared to the sequential period and prior year periods is primarily due to lower mortgage originations for sale.

Previous wording

Loans, net of unearned income. Growth realized in the combined commercial and commercial real estate loan categories for the second quarter of 2025 as compared to the sequential and prior year periods is primarily attributable to increased business development efforts. The aggregate balances of these loan categories comprised 59% in the second quarter of 2025 and first quarter of 2025 and 58% of the average loan portfolio in the second quarter of 2024.

Current wording

Loans, net of unearned income. Growth realized in the combined commercial and commercial real estate loan categories for the third quarter of 2025 as compared to the sequential and prior year periods is primarily attributable to increased business development efforts. The aggregate balances of these loan categories comprised 58% in the third quarter of 2025, 59% in the second quarter of 2025 and 59% of the average loan portfolio in the third quarter of 2024.

Previous wording

Residential real estate loans averaged $3.7 billion in the second quarter of 2025, and increased $807.1 million, or 28%, from the average balance of $2.9 billion in the same period of 2024. Additionally, compared to the quarter ended March 31, 2025, the average balance increased $158.7 million, or 18% on an annualized basis. Growth is due to the Company continuing to originate non-agency mortgages that are held-for-investment.

Current wording

Residential real estate loans averaged $4.0 billion in the third quarter of 2025, and increased $803.8 million, or 25%, from the average balance of $3.2 billion in the same period of 2024. Additionally, compared to the quarter ended June 30, 2025, the average balance increased $274.0 million, or 29% on an annualized basis. Growth is due to the Company continuing to originate non-agency mortgages that are held-for-investment.

Previous wording

The increase in the premium finance receivables during the second quarter of 2025 compared to the second quarter of 2024 was the result of effective marketing and customer servicing. Approximately $6.1 billion of premium finance receivables were originated in the second quarter of 2025 compared to $5.5 billion during the same period of 2024. Premium finance receivables consist of a property and casualty portfolio and a life portfolio comprising approximately 48% and 52%, respectively, of the average total balance of premium finance receivables for the second quarter of 2025, and 47% and 53%, respectively, for the second quarter of 2024.

Current wording

The increase in the premium finance receivables during the third quarter of 2025 compared to the third quarter of 2024 was the result of effective marketing and customer servicing. Approximately $5.5 billion of premium finance receivables were originated in the third quarter of 2025 compared to $4.8 billion during the same period of 2024. Premium finance receivables consist of a property and casualty portfolio and a life portfolio comprising approximately 50% and 50%, respectively, of the average total balance of premium finance receivables for the third quarter of 2025, and 47% and 53%, respectively, for the third quarter of 2024.

Previous wording

We make commercial loans for many purposes, including working capital lines, which are generally renewable annually and supported by business assets, personal guarantees and additional collateral. Such loans may vary in size based on customer need. As a result of growth and the macroeconomic uncertainty qualitative overlay in the Company’s commercial loan portfolio, our allowance for credit losses in our commercial loan portfolio increased to $194.6 million as of June 30, 2025 compared to $182.0 million as of June 30, 2024.

Current wording

We make commercial loans for many purposes, including working capital lines, which are generally renewable annually and supported by business assets, personal guarantees and additional collateral. Such loans may vary in size based on customer need. As a result of growth and the macroeconomic uncertainty qualitative overlay in the Company’s commercial loan portfolio, our allowance for credit losses in our commercial loan portfolio increased to $189.5 million as of September 30, 2025 compared to $171.6 million as of September 30, 2024.