FIRST HAWAIIAN, INC.

Previous wording

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including the following: the geographic concentration of our business, current and future market and economic conditions generally or in Hawaii, Guam and Saipan in particular, including inflationary pressures and interest rate environment; our dependence on the real estate markets in which we operate; concentrated exposures to certain asset classes and individual obligors; the effect of changes in interest rates on our business, including our net interest income, net interest margin, the fair value of our investment securities, and our mortgage loan originations, mortgage servicing rights and mortgage loans held for sale; the future value of the investment securities that we own; the possibility of a deterioration in credit quality in our portfolio; the possibility we might underestimate the credit losses inherent in our loan and lease portfolio; our ability to attract and retain customer deposits; our inability to receive dividends from our bank, pay dividends to our common stockholders and satisfy obligations as they become due; our access to sources of liquidity and capital to address our liquidity needs; our ability to attract and retain skilled employees or changes in our management personnel; our ability to maintain our Bank's reputation; the failure to properly use and protect our customer and employee information and data; the possibility of employee misconduct or mistakes; the actual or perceived soundness of other financial institutions; the effectiveness of our risk management and internal disclosure controls and procedures; our ability to keep pace with technological changes; any failure or interruption of our information and communications systems; our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business; our ability to identify and address cybersecurity risks; the occurrence of fraudulent activity or effect of a material breach of, or disruption to, the security of any of our or our vendors’ systems; our ability to successfully develop and commercialize new or enhanced products and services; changes in the demand for our products and services; risks associated with the sale of loans and with our use of appraisals in valuing and monitoring loans; the possibility that actual results may differ from estimates and forecasts; fluctuations in the fair value of our assets and liabilities and off-balance sheet exposures; effects of the failure of any component of our business infrastructure provided by a third party; the potential for environmental liability; the risk of being subject to litigation and the outcome thereof; changes in the demand for our products and services; the impact of, and changes in, applicable laws, regulations and accounting standards and policies; possible changes in, or effects o…

Excerpt shortened here; the source contains the full paragraph.

Current wording

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including the following: the geographic concentration of our business, current and future market and economic conditions generally or in Hawaii, Guam and Saipan in particular, including inflationary pressures and interest rate environment; our dependence on the real estate markets in which we operate; concentrated exposures to certain asset classes and individual obligors; the effect of changes in interest rates on our business, including our net interest income, net interest margin, the fair value of our investment securities, and our mortgage loan originations, mortgage servicing rights and mortgage loans held for sale; the future value of the investment securities that we own; the possibility of a deterioration in credit quality in our portfolio; the possibility we might underestimate the credit losses inherent in our loan and lease portfolio; our ability to attract and retain customer deposits; our inability to receive dividends from our bank, pay dividends to our common stockholders and satisfy obligations as they become due; our access to sources of liquidity and capital to address our liquidity needs; our ability to attract and retain skilled employees or changes in our management personnel; our ability to maintain our Bank's reputation; the failure to properly use and protect our customer and employee information and data; the possibility of employee misconduct or mistakes; the actual or perceived soundness of other financial institutions; the effectiveness of our risk management and internal disclosure controls and procedures; our ability to keep pace with technological changes; any failure or interruption of our information and communications systems; our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business; our ability to identify and address cybersecurity risks; the occurrence of fraudulent activity or effect of a material breach of, or disruption to, the security of any of our or our vendors’ systems; our ability to successfully develop and commercialize new or enhanced products and services; changes in the demand for our products and services; risks associated with the sale of loans and with our use of appraisals in valuing and monitoring loans; the possibility that actual results may differ from estimates and forecasts; fluctuations in the fair value of our assets and liabilities and off-balance sheet exposures; effects of the failure of any component of our business infrastructure provided by a third party; the potential for environmental liability; the risk of being subject to litigation and the outcome thereof; the impact of, and changes in, applicable laws, regulations and accounting standards and policies; possible changes in, or effects of changes of, trade, monetary and fiscal policies of,…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The foregoing factors should not be considered an exhaustive list and should be read together with the risk factors and other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Current wording

The foregoing factors should not be considered an exhaustive list and should be read together with the risk factors and other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Previous wording

Hawaii’s economy as a whole experienced mixed economic conditions during the quarter ended June 30, 2025. Although the economy remains resilient, the State continues to endure high consumer prices and housing affordability challenges. According to the State of Hawaii Department of Business, Economic Development and Tourism, the statewide seasonally adjusted unemployment rate decreased to 2.8% at June 30, 2025, compared to 2.9% at June 30, 2024. Nationally, the seasonally adjusted unemployment rate was 4.1% at June 30, 2025, compared to 4.1% at June 30, 2024.

Current wording

Hawaii’s economy as a whole continued to experience mixed economic conditions during the quarter ended September 30, 2025. Although the economy remains resilient, the State continues to endure high consumer prices and housing affordability challenges, which are expected to continue with the gradual pass-through of tariffs. According to the State of Hawaii Department of Business, Economic Development and Tourism, the statewide seasonally adjusted unemployment rate was 2.7% at August 31, 2025, compared to the national seasonally adjusted unemployment rate of 4.3%.

Previous wording

Domestic visitor arrivals for the state remain stable, with the average daily domestic passenger counts for the first six months of 2025 relatively similar to the average daily domestic passenger counts during the first six months of 2024, according to the Hawaii Tourism Authority. More generally, Hawaii’s economy depends significantly on conditions of the U.S. economy and key international economies, particularly Japan. International visitor arrivals from Japan in the first six months of 2025 is similar to the level of arrivals from Japan in the first six months of 2024, but remains below pre-pandemic arrival levels due to the weak yen.

Current wording

Domestic visitor arrivals for the state remain stable, with the average daily domestic passenger counts for the first nine months of 2025 being relatively similar to the average daily domestic passenger counts during the first nine months of 2024, according to the Hawaii Tourism Authority. More generally, Hawaii’s economy depends significantly on conditions of the U.S. economy and key international economies, particularly Japan. International visitor arrivals have not yet recovered to pre-pandemic arrival levels. As such, the Hawaii economy remains more reliant on the U.S. mainland market than pre-pandemic periods.

Previous wording

The local Oahu housing market has remained relatively stable, but continues to experience some softening as compared to previous years primarily due to high interest rates. According to the Honolulu Board of Realtors, the volume of single-family home sales decreased by 2.1%, while condominium sales decreased by 6.0%, in each case when comparing the first six months of 2025 with the same period in 2024. The median price of a single-family home sold on Oahu in the first six months of 2025 was $1,150,000, an increase of 6.0% from the same period in 2024. The median price of a condominium sold on Oahu in the first six months of 2025 was $507,000, a decrease of 0.5% from the same period in 2024. As of June 30, 2025, months of inventory of single-family homes and condominiums on Oahu were approximately 3.7 and 7.0 months, respectively.

Current wording

The local Oahu housing market continues to experience some softening as compared to previous years primarily due to increased interest rates. According to the Honolulu Board of Realtors, the volume of single-family home sales increased by 0.8%, while condominium sales decreased by 3.0%, in each case when comparing the first nine months of 2025 with the same period in 2024. The median price of a single-family home sold on Oahu in the first nine months of 2025 was $1,145,000, an increase of 4.1% from the same period in 2024. The median price of a condominium sold on Oahu in the first nine months of 2025 was $505,000, a decrease of 1.0% from the same period in 2024. As of September 30, 2025, months of inventory of single-family homes and condominiums on Oahu were approximately 3.4 and 6.4 months, respectively.

Previous wording

Our financial performance is highly dependent upon the business environment in the markets in which we operate and therefore may be impacted by a variety of factors such as a decline in economic conditions, natural disasters, financial market volatility, supply chain disruptions, trade policies and tariffs, monetary and fiscal policy measures, heightened geopolitical tensions, fluctuations in foreign currency exchange rates and interest rates, the political and regulatory environment, and changes to the U.S. Federal budget and tax laws.

Current wording

Our financial performance is highly dependent upon the business environment in the markets in which we operate and therefore may be impacted by a variety of factors such as a decline in economic conditions, natural disasters, financial market volatility, supply chain disruptions, trade policies and tariffs, monetary and fiscal policy measures, heightened geopolitical tensions, fluctuations in foreign currency exchange rates and interest rates, the political and regulatory environment, and changes to the U.S. Federal budget and tax laws. For instance, the enactment of the One Big Beautiful Bill Act (“OBBBA”) introduced a sweeping package of tax reform provisions and spending cuts in social programs that will affect both businesses and individuals, including our borrowers and the broader Hawaii economy. The full impact of this legislation is unknown at this time. Economic conditions in our markets depend on, among other things, several factors that are meaningfully influenced by U.S. federal government spending, including spending by the U.S. military and government and other service-based industries. Since October 1, 2025, the U.S. federal government has been in a shutdown. An extended shutdown may lead to the government curtailing certain government spending and operations and could affect various consumers and sectors in Hawaii dependent on federal funding.

Previous wording

Net income was $73.2 million for the three months ended June 30, 2025, an increase of $11.3 million or 18% as compared to the same period in 2024. Basic and diluted earnings per share were both $0.58 for the three months ended June 30, 2025, an increase of $0.10 or 21% as compared to the same period in 2024. The increase in net income was primarily due to a $10.7 million increase in net interest income, a $4.0 million decrease in the provision for income taxes and a $2.2 million increase in noninterest income. This was partially offset by a $2.9 million increase in noninterest expense and a $2.7 million increase in the provision for credit losses (the “Provision”).

Current wording

Net income was $73.8 million for the three months ended September 30, 2025, an increase of $12.3 million or 20% as compared to the same period in 2024. Basic and diluted earnings per share were both $0.59 for the three months ended September 30, 2025, an increase of $0.11 or 23% as compared to the same period in 2024. The increase in net income was primarily due to a $12.6 million increase in net interest income, a $3.8 million increase in noninterest income, a $2.9 million decrease in the provision for credit losses (the “Provision”) and a $0.4 million decrease in noninterest expense. This was partially offset by a $7.4 million increase in the provision for income taxes.

Previous wording

Our return on average total assets was 1.23% for the three months ended June 30, 2025, an increase of 19 basis points from the same period in 2024, and our return on average total stockholders’ equity was 11.03% for the three months ended June 30, 2025, an increase of 112 basis points from the same period in 2024. Our return on average tangible assets was 1.28% for the three months ended June 30, 2025, an increase of 20 basis points from the same period in 2024, and our return on average tangible stockholders’ equity was 17.61% for the three months ended June 30, 2025, an increase of 119 basis points from the same period in 2024. Our efficiency ratio was 57.23% for the three months ended June 30, 2025 compared to 59.22% for the same period in 2024.

Current wording

Our return on average total assets was 1.22% for the three months ended September 30, 2025, an increase of 20 basis points from the same period in 2024, and our return on average total stockholders’ equity was 10.81% for the three months ended September 30, 2025, an increase of 136 basis points from the same period in 2024. Our return on average tangible assets was 1.27% for the three months ended September 30, 2025, an increase of 21 basis points from the same period in 2024, and our return on average tangible stockholders’ equity was 17.08% for the three months ended September 30, 2025, an increase of 173 basis points from the same period in 2024. Our efficiency ratio was 55.29% for the three months ended September 30, 2025 compared to 59.77% for the same period in 2024.

Previous wording

Our return on average total assets was 1.12% for the six months ended June 30, 2025, an increase of 15 basis points from the same period in 2024, and our return on average total stockholders’ equity was 10.07% for the six months ended June 30, 2025, an increase of 75 basis points for the same period in 2024. Our return on average tangible assets was 1.17% for the six months ended June 30, 2025, an increase of 16 basis points from the same period in 2024, and our return on average tangible stockholders’ equity was 16.12% for the six months ended June 30, 2025, an increase of 64 basis points from the same period in 2024. Our efficiency ratio was 57.71% for the six months ended June 30, 2025 compared to 60.69% for the same period in 2024.

Current wording

Our return on average total assets was 1.15% for the nine months ended September 30, 2025, an increase of 16 basis points from the same period in 2024, and our return on average total stockholders’ equity was 10.32% for the nine months ended September 30, 2025, an increase of 95 basis points for the same period in 2024. Our return on average tangible assets was 1.20% for the nine months ended September 30, 2025, an increase of 17 basis points from the same period in 2024, and our return on average tangible stockholders’ equity was 16.45% for the nine months ended September 30, 2025, an increase of 102 basis points from the same period in 2024. Our efficiency ratio was 56.88% for the nine months ended September 30, 2025 compared to 60.38% for the same period in 2024.

Previous wording

Our results for the six months ended June 30, 2025 were highlighted by the following:

Current wording

Our results for the nine months ended September 30, 2025 were highlighted by the following:

Previous wording

For the six months ended June 30, 2025, we continued to maintain high levels of liquidity and adequate reserves for credit losses. We also remained well-capitalized. Common Equity Tier 1 (“CET1”) was 13.03% as of June 30, 2025, an increase of 23 basis points from December 31, 2024. The increase in CET1 was primarily due to earnings for the six months ended June 30, 2025 and a decrease in risk-weighted assets, partially offset by the dividends declared and paid to the Company’s stockholders and common stock repurchased.

Current wording

For the nine months ended September 30, 2025, we continued to maintain high levels of liquidity and adequate reserves for credit losses. We also remained well-capitalized. Common Equity Tier 1 (“CET1”) was 13.24% as of September 30, 2025, an increase of 44 basis points from December 31, 2024. The increase in CET1 was primarily due to earnings for the nine months ended September 30, 2025 and a decrease in risk-weighted assets, partially offset by the dividends declared and paid to the Company’s stockholders and common stock repurchased.

Previous wording

Net interest income, on a fully taxable-equivalent basis, was $164.4 million for the three months ended June 30, 2025, an increase of $10.0 million or 6% compared to the same period in 2024. Our net interest margin was 3.11% for the three months ended June 30, 2025, an increase of 19 basis points from the same period in 2024. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding costs and higher average balances on our interest-bearing deposits in other banks, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio during the three months ended June 30, 2025, compared to the same period in 2024. Deposit funding costs were $70.3 million for the three months ended June 30, 2025, a decrease of $15.3 million or 18% compared to the same period in 2024, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 2.09% for the three months ended June 30, 2025, a decrease of 49 basis points compared to the same period in 2024, primarily due to rate decreases. For the three months ended June 30, 2025, the average balance on our interest-bearing deposits in other banks was $1.3 billion, an increase of $503.4 million or 65% compared to the same period in 2024. The yield on our loan and lease portfolio was 5.44% for the three months ended June 30, 2025, a decrease of 23 basis points as compared to the same period in 2024, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the Secured Overnight Financing Rate (“SOFR”).

Current wording

Net interest income, on a fully taxable-equivalent basis, was $170.4 million for the three months ended September 30, 2025, an increase of $12.6 million or 8% compared to the same period in 2024. Our net interest margin was 3.19% for the three months ended September 30, 2025, an increase of 24 basis points from the same period in 2024. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding costs and higher average balances on our interest-bearing deposits in other banks, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio during the three months ended September 30, 2025, compared to the same period in 2024. Deposit funding costs were $70.8 million for the three months ended September 30, 2025, a decrease of $16.7 million or 19% compared to the same period in 2024, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 2.08% for the three months ended September 30, 2025, a decrease of 50 basis points compared to the same period in 2024, primarily due to rate decreases. For the three months ended September 30, 2025, the average balance on our interest-bearing deposits in other banks was $1.5 billion, an increase of $450.6 million or 44% compared to the same period in 2024. The yield on our loan and lease portfolio was 5.51% for the three months ended September 30, 2025, a decrease of 23 basis points as compared to the same period in 2024, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the Secured Overnight Financing Rate (“SOFR”).

Previous wording

For the six months ended June 30, 2025 and 2024, average balances, related income and expenses, on a fully taxable-equivalent basis, and resulting yields and rates are presented in Table 5. An analysis of the change in net interest income, on a fully taxable-equivalent basis, is presented in Table 6.

Current wording

For the nine months ended September 30, 2025 and 2024, average balances, related income and expenses, on a fully taxable-equivalent basis, and resulting yields and rates are presented in Table 5. An analysis of the change in net interest income, on a fully taxable-equivalent basis, is presented in Table 6.

Previous wording

Net interest income, on a fully taxable-equivalent basis, was $326.1 million for the six months ended June 30, 2025, an increase of $15.8 million or 5% compared to the same period in 2024. Our net interest margin was 3.10% for the six months ended June 30, 2025, an increase of 19 basis points from the same period in 2024. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding and borrowing costs and higher average balances on our interest-bearing deposits in other banks, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio and lower average balances on our investment securities portfolio during the six months ended June 30, 2025 compared to the same period in 2024. Deposit funding costs were $142.0 million for the six months ended June 30, 2025, a decrease of $27.8 million or 16% compared to the same period in 2024, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 2.13% for the six months ended June 30, 2025, a decrease of 43 basis points compared to the same period in 2024, primarily due to rate decreases. Total borrowing costs were $5.2 million for the six months ended June 30, 2025, a decrease of $6.7 million or 56% compared to the same period in 2024. During the third quarter of 2024, $500.0 million of FHLB advances matured and a new $250.0 million short-term FHLB advance was taken. For the six months ended June 30, 2025, the average balance on our interest-bearing deposits in other banks was $1.2 billion, an increase of $408.4 million or 50% compared to the same period in 2024. The yield on our loan and lease portfolio was 5.44% for the six months ended June 30, 2025, a decrease of 21 basis points as compared to the same period in 2024, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the SOFR. For the six months ended June 30, 2025, the average balance of our investment securities portfolio was $5.6 billion, a decrease of $536.7 million or 9% compared to the same period in 2024, primarily due to payments and maturities.

Current wording

Net interest income, on a fully taxable-equivalent basis, was $496.5 million for the nine months ended September 30, 2025, an increase of $28.4 million or 6% compared to the same period in 2024. Our net interest margin was 3.13% for the nine months ended September 30, 2025, an increase of 20 basis points from the same period in 2024. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding costs, higher average balances on our interest-bearing deposits in other banks and lower borrowing costs, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio and lower average balances on our investment securities portfolio during the nine months ended September 30, 2025 compared to the same period in 2024. Deposit funding costs were $212.8 million for the nine months ended September 30, 2025, a decrease of $44.5 million or 17% compared to the same period in 2024, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 2.11% for the nine months ended September 30, 2025, a decrease of 46 basis points compared to the same period in 2024, primarily due to rate decreases. For the nine months ended September 30, 2025, the average balance on our interest-bearing deposits in other banks was $1.3 billion, an increase of $422.8 million or 48% compared to the same period in 2024. Total borrowing costs were $7.4 million for the nine months ended September 30, 2025, a decrease of $9.9 million or 57% compared to the same period in 2024. During the third quarter of 2024, $500.0 million of FHLB advances matured and a new $250.0 million short-term FHLB advance was taken. The yield on our loan and lease portfolio was 5.47% for the nine months ended September 30, 2025, a decrease of 21 basis points as compared to the same period in 2024, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the SOFR. For the nine months ended September 30, 2025, the average balance of our investment securities portfolio was $5.6 billion, a decrease of $491.0 million or 8% compared to the same period in 2024, primarily due to payments and maturities.

Previous wording

The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is affected by changes in the prime interest rate. The prime rate began in 2024 at 8.50% and decreased 100 basis points (50 basis points in September and 25 basis points in both November and December) to end the year at 7.50%, where it remained as at the end of the second quarter of 2025. As noted above, our loan portfolio is also impacted by changes in the SOFR. At June 30, 2025, the one-month and three-month CME Term SOFR interest rates were 4.32% and 4.29%, respectively. At June 30, 2024, the one-month and three-month CME Term SOFR interest rates were 5.34% and 5.32%, respectively. The target range for the federal funds rate, which is the cost of immediately available overnight funds, began in 2024 at 5.25% to 5.50% and decreased 100 basis points to end the year at 4.25% to 4.50%, where it remained as at the end of the second quarter of 2025. There continues to be uncertainty in the changing market and economic conditions, as a result of an increase in trade restrictions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to the overall macroeconomic environment.

Current wording

The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is affected by changes in the prime interest rate. The prime rate began in 2024 at 8.50% and decreased 100 basis points (50 basis points in September and 25 basis points in both November and December) to end the year at 7.50%. In September 2025, the prime rate decreased 25 basis points to 7.25%, where it remained as at the end of the third quarter of 2025. As noted above, our loan portfolio is also impacted by changes in the SOFR. At September 30, 2025, the one-month and three-month CME Term SOFR interest rates were 4.13% and 3.98%, respectively. At September 30, 2024, the one-month and three-month CME Term SOFR interest rates were 4.85% and 4.59%, respectively. The target range for the federal funds rate, which is the cost of immediately available overnight funds, began in 2024 at 5.25% to 5.50% and decreased 100 basis points to end the year at 4.25% to 4.50%. As of August 31, 2025, the federal funds rate was in the range of 4.25% to 4.50%. Effective September 18, 2025, the Federal Reserve decreased the federal funds rate to a range of 4.00% to 4.25%. There continues to be uncertainty in the changing market and economic conditions, as a result of an increase in trade restrictions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to the overall macroeconomic environment.

Previous wording

The Provision was $4.5 million for the three months ended June 30, 2025, compared to a Provision of $1.8 million for the same period in 2024. The Provision of $4.5 million for the three months ended June 30, 2025, was primarily due to increases in the provision for commercial and industrial loans, home equity lines and construction loans and the provision for unfunded home equity line and commercial and industrial commitments. This was partially offset by decreases in the provision for residential mortgage loans, consumer loans and commercial real estate loans and the provision for unfunded construction commitments. We recorded net charge-offs of loans and leases of $3.3 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively. This represented net charge-offs of 0.09% and 0.07% of average loans and leases, on an annualized basis, for the three months ended June 30, 2025 and 2024, respectively. The Provision was $15.0 million for the six months ended June 30, 2025, compared to a Provision of $8.1 million for the same period in 2024. The Provision of $15.0 million for the six months ended June 30, 2025, was primarily due to increases in the provision for consumer loans, commercial and industrial loans, home equity lines and construction loans and the provision for unfunded commercial and industrial, construction and commercial real estate commitments. This was partially offset by decreases in the provision for residential mortgage loans, commercial real estate loans and lease financing. We recorded net charge-offs of loans and leases of $7.1 million and $6.3 million for the six months ended June 30, 2025 and 2024, respectively. This represented net charge-offs of 0.10% and 0.09% of average loans and leases, on an annualized basis, for the six months ended June 30, 2025 and 2024, respectively. The ACL was $167.8 million as of June 30, 2025, an increase of $7.4 million or 5% from December 31, 2024 and represented 1.17% of total outstanding loans and leases as of June 30, 2025, compared to 1.11% of total outstanding loans and leases as of December 31, 2024. The reserve for unfunded commitments was $33.3 million as of June 30, 2025, compared to $32.8 million as of December 31, 2024. The Provision is recorded to maintain the ACL and the reserve for unfunded commitments at levels deemed adequate by management based on the factors noted in the “Risk Governance and Quantitative and Qualitative Disclosures About Market Risk — Credit Risk” section of this MD&A.

Current wording

The Provision was $4.5 million for the three months ended September 30, 2025, compared to a Provision of $7.4 million for the same period in 2024. The Provision of $4.5 million for the three months ended September 30, 2025, was primarily due to decreases in the provision for consumer loans, home equity lines and construction loans. This was partially offset by increases in the provision for residential mortgage loans and lease financing, and the provision for unfunded construction and home equity line commitments. We recorded net charge-offs of loans and leases of $4.2 million and $3.9 million for the three months ended September 30, 2025 and 2024, respectively. This represented net charge-offs of 0.12% and 0.11% of average loans and leases, on an annualized basis, for the three months ended September 30, 2025 and 2024, respectively. The Provision was $19.5 million for the nine months ended September 30, 2025, compared to a Provision of $15.5 million for the same period in 2024. The Provision of $19.5 million for the nine months ended September 30, 2025, was primarily due to increases in the provision for commercial and industrial loans, home equity lines and consumer loans, and the provision for unfunded construction, home equity line, commercial and industrial and commercial real estate commitments. This was partially offset by decreases in the provision for residential mortgage loans and commercial real estate loans. We recorded net charge-offs of loans and leases of $11.3 million and $10.2 million for the nine months ended September 30, 2025 and 2024, respectively. This represented net charge-offs of 0.11% and 0.10% of average loans and leases, on an annualized basis, for the nine months ended September 30, 2025 and 2024, respectively. The ACL was $165.3 million as of September 30, 2025, an increase of $4.9 million or 3% from December 31, 2024 and represented 1.17% of total outstanding loans and leases as of September 30, 2025, compared to 1.11% of total outstanding loans and leases as of December 31, 2024. The reserve for unfunded commitments was $36.2 million as of September 30, 2025, compared to $32.8 million as of December 31, 2024. The Provision is recorded to maintain the ACL and the reserve for unfunded commitments at levels deemed adequate by management based on the factors noted in the “Risk Governance and Quantitative and Qualitative Disclosures About Market Risk — Credit Risk” section of this MD&A.

Previous wording

Table 7 presents the major components of noninterest income for the three months ended June 30, 2025 and 2024 and Table 8 presents the major components of noninterest income for the six months ended June 30, 2025 and 2024:

Current wording

Table 7 presents the major components of noninterest income for the three months ended September 30, 2025 and 2024 and Table 8 presents the major components of noninterest income for the nine months ended September 30, 2025 and 2024:

Previous wording

n/m – Denotes a variance that is not a meaningful metric to inform the change in noninterest income for the six months ended June 30, 2025 to the same period in 2024.

Current wording

n/m – Denotes a variance that is not a meaningful metric to inform the change in noninterest income for the nine months ended September 30, 2025 to the same period in 2024.

Previous wording

Total noninterest income was $54.0 million for the three months ended June 30, 2025, an increase of $2.2 million or 4% as compared to the same period in 2024. Total noninterest income was $104.4 million for the six months ended June 30, 2025, an increase of $1.3 million or 1% as compared to the same period in 2024.

Current wording

Total noninterest income was $57.1 million for the three months ended September 30, 2025, an increase of $3.8 million or 7% as compared to the same period in 2024. Total noninterest income was $161.5 million for the nine months ended September 30, 2025, an increase of $5.1 million or 3% as compared to the same period in 2024.

Previous wording

Service charges on deposit accounts were $7.8 million for the three months ended June 30, 2025, a minimal change as compared to the same period in 2024. Service charges on deposit accounts were $15.4 million for the six months ended June 30, 2025, a minimal change as compared to the same period in 2024.

Current wording

Service charges on deposit accounts were $8.1 million for the three months ended September 30, 2025, an increase of $0.3 million or 4% as compared to the same period in 2024. Service charges on deposit accounts were $23.5 million for the nine months ended September 30, 2025, an increase of $0.3 million or 1% as compared to the same period in 2024.

Previous wording

Credit and debit card fees were $15.9 million for the three months ended June 30, 2025, an increase of $0.1 million as compared to the same period in 2024. Credit and debit card fees were $30.4 million for the six months ended June 30, 2025, a decrease of $1.6 million or 5% as compared to the same period in 2024. This decrease was primarily due to a $2.5 million decrease in interchange settlement fees and a $0.3 million increase in network association dues, partially offset by a $1.3 million increase in merchant service revenues.

Current wording

Credit and debit card fees were $15.9 million for the three months ended September 30, 2025, a decrease of $1.7 million or 10% as compared to the same period in 2024. This decrease was primarily due to a $0.7 million decrease in interchange settlement fees, a $0.6 million increase in network association dues and a $0.3 million decrease in merchant service revenues. Credit and debit card fees were $46.2 million for the nine months ended September 30, 2025, a decrease of $3.3 million or 7% as compared to the same period in 2024. This decrease was primarily due to a $3.2 million decrease in interchange settlement fees, a $0.9 million increase in network association dues and a $0.3 million decrease in ATM interchange and surcharge fees, partially offset by a $1.0 million increase in merchant service revenues.

Previous wording

Other service charges and fees were $13.4 million for the three months ended June 30, 2025, an increase of $2.3 million or 21% as compared to the same period in 2024. This increase was primarily due to a $1.9 million increase in fees from annuities and securities and a $0.2 million increase in fees from standby letters of credit arrangements. Other service charges and fees were $25.5 million for the six months ended June 30, 2025, an increase of $4.6 million or 22% as compared to the same period in 2024. This increase was primarily due to a $4.1 million increase in fees from annuities and securities and a $0.5 million increase in fees from standby letters of credit arrangements.

Current wording

Other service charges and fees were $13.8 million for the three months ended September 30, 2025, an increase of $2.0 million or 17% as compared to the same period in 2024. This increase was primarily due to a $1.7 million increase in fees from annuities and securities and a $0.3 million increase in fees from standby letters of credit arrangements. Other service charges and fees were $39.3 million for the nine months ended September 30, 2025, an increase of $6.6 million or 20% as compared to the same period in 2024. This increase was primarily due to a $5.7 million increase in fees from annuities and securities and a $0.8 million increase in fees from standby letters of credit arrangements.

Previous wording

Trust and investment services income was $9.2 million for the three months ended June 30, 2025, a decrease of $0.3 million or 3% as compared to the same period in 2024. Trust and investment services income was $18.5 million for the six months ended June 30, 2025, a decrease of $1.3 million or 6% as compared to the same period in 2024. This decrease was primarily due to a $1.9 million decrease in investment management fees, partially offset by a $0.3 million increase in business cash management fees.

Current wording

Trust and investment services income was $9.2 million for the three months ended September 30, 2025, an increase of $0.1 million or 1% as compared to the same period in 2024. Trust and investment services income was $27.7 million for the nine months ended September 30, 2025, a decrease of $1.1 million or 4% as compared to the same period in 2024. This decrease was primarily due to a $2.1 million decrease in investment management fees, partially offset by a $0.5 million increase in business cash management fees and a $0.4 million increase in pension plan fees.

Previous wording

BOLI income was $4.7 million for the three months ended June 30, 2025, an increase of $1.4 million or 41% as compared to the same period in 2024. This increase was primarily due to a $1.8 million increase in BOLI earnings, partially offset by a $0.4 million decrease in death benefit proceeds from life insurance policies. BOLI income was $9.1 million for the six months ended June 30, 2025, an increase of $1.4 million or 19% as compared to the same period in 2024. This increase was primarily due to a $1.5 million increase in BOLI earnings.

Current wording

BOLI income was $6.3 million for the three months ended September 30, 2025, an increase of $1.8 million or 40% as compared to the same period in 2024. This increase was primarily due to a $1.8 million increase in BOLI earnings. BOLI income was $15.4 million for the nine months ended September 30, 2025, an increase of $3.3 million or 27% as compared to the same period in 2024. This increase was primarily due to a $3.3 million increase in BOLI earnings.

Previous wording

Other noninterest income was $3.0 million for the three months ended June 30, 2025, a decrease of $1.3 million or 30% as compared to the same period in 2024. This decrease was primarily due to a $1.5 million decrease in insurance proceeds received and a $0.5 million decrease in customer-related interest rate swap fees, partially offset by a $0.5 million decrease in net losses recognized in income related to derivative contractsanda $0.4 million increase in volume-based incentives. Other noninterest income was $5.5 million for the six months ended June 30, 2025, a decrease of $1.9 million or 26% as compared to the same period in 2024. This decrease was primarily due to a $3.5 million decrease in insurance proceeds received, partially offset by a $0.6 million decrease in net losses recognized in income related to derivative contracts and a $0.6 million increase in volume-based incentives.

Current wording

Other noninterest income was $3.8 million for the three months ended September 30, 2025, an increase of $1.2 million or 45% as compared to the same period in 2024. This increase was primarily due to a $1.0 million increase in volume-based incentives, a $1.0 million decrease in net losses recognized in income related to derivative contracts and a $0.5 million increase in customer-related interest rate swap fees, partially offset by a $1.5 million tax refund received during the three months ended September 30, 2024. Other noninterest income was $9.3 million for the nine months ended September 30, 2025, a decrease of $0.7 million or 7% as compared to the same period in 2024. This decrease was primarily due to a $3.7 million decrease in insurance proceeds received, a $1.5 million tax refund received during the nine months ended September 30, 2024, partially offset by a $1.7 million decrease in net losses recognized in income related to derivative contracts, a $1.6 million increase in volume-based incentives, a $0.5 million increase in customer-related interest rate swap fees, a $0.2 million increase in debit card merchant discount fees and a $0.2 million increase in gains on the sale of leased equipment.

Previous wording

Table 9 presents the major components of noninterest expense for the three months ended June 30, 2025 and 2024 and Table 10 presents the major components of noninterest expense for the three months ended June 30, 2025 and 2024:

Current wording

Table 9 presents the major components of noninterest expense for the three months ended September 30, 2025 and 2024 and Table 10 presents the major components of noninterest expense for the nine months ended September 30, 2025 and 2024:

Previous wording

Total noninterest expense was $124.9 million for the three months ended June 30, 2025, an increase of $2.9 million or 2% as compared to the same period in 2024. Total noninterest expense was $248.5 million for the six months ended June 30, 2025, a decrease of $2.4 million or 1% as compared to the same period in 2024.

Current wording

Total noninterest expense was $125.7 million for the three months ended September 30, 2025, a decrease of $0.4 million as compared to the same period in 2024. Total noninterest expense was $374.2 million for the nine months ended September 30, 2025, a decrease of $2.8 million or 1% as compared to the same period in 2024.

Previous wording

Salaries and employee benefits expense was $59.5 million for the three months ended June 30, 2025, an increase of $1.8 million or 3% as compared to the same period in 2024. This increase was primarily due to a $1.6 million increase in incentive compensation, a $0.3 million increase in retirement plan expenses and a $0.3 million increase in base salaries and related payroll taxes, partially offset by a $0.6 million decrease in adjustments made to the deferred compensation plan as a result of market conditions. Salaries and employee benefits expense was $119.6 million for the six months ended June 30, 2025, an increase of $2.6 million or 2% as compared to the same period in 2024. This increase was primarily due to a $3.8 million increase in incentive compensation and a $0.7 million increase in retirement plan expenses, partially offset by a $0.5 million increase in payroll and benefit costs being deferred as loan origination costs, a $0.5 million decrease in state unemployment tax expense, a $0.4 million decrease in adjustments made to the deferred compensation plan as a result of market conditions and a $0.4 million decrease in base salaries and related payroll taxes.

Current wording

Salaries and employee benefits expense was $61.5 million for the three months ended September 30, 2025, an increase of $2.0 million or 3% as compared to the same period in 2024. This increase was primarily due to a $2.3 million increase in incentive compensation and a $1.0 million increase in base salaries and related payroll taxes, partially offset by a $1.1 million increase in payroll and benefit costs being deferred as loan origination costs and a $0.5 million decrease in retirement plan expenses. Salaries and employee benefits expense was $181.1 million for the nine months ended September 30, 2025, an increase of $4.6 million or 3% as compared to the same period in 2024. This increase was primarily due to a $6.0 million increase in incentive compensation, a $0.7 million increase in base salaries and related payroll taxes and a $0.4 million increase in group health plan costs, partially offset by a $1.6 million increase in payroll and benefit costs being deferred as loan origination costs, a $0.5 million decrease in state unemployment tax expense and a $0.3 million decrease in adjustments made to the deferred compensation plan as a result of market conditions.

Previous wording

Contracted services and professional fees were $16.0 million for the three months ended June 30, 2025, a decrease of $0.1 million as compared to the same period in 2024. Contracted services and professional fees were $30.8 million for the six months ended June 30, 2025, a decrease of $1.0 million or 3% as compared to the same period in 2024. This decrease was primarily due to a $0.8 million decrease in outside services, primarily attributable to technology-related projects, marketing and new customer services and a $0.2 million decrease in audit, legal and consultant fees.

Current wording

Contracted services and professional fees were $15.8 million for the three months ended September 30, 2025, an increase of $1.2 million or 8% as compared to the same period in 2024. This increase was primarily due to a $0.5 million increase in contracted data processing expenses, a $0.4 million increase in outside services, primarily attributable to technology-related projects, marketing and new customer services and a $0.2 million increase in audit, legal and consultant fees. Contracted services and professional fees were $46.6 million for the nine months ended September 30, 2025, an increase of $0.2 million as compared to the same period in 2024.

Previous wording

Occupancy expense was $7.9 million for the three months ended June 30, 2025, an increase of $0.6 million or 8% as compared to the same period in 2024. This increase was primarily due to a $0.4 million increase in building depreciation and a $0.3 million increase in building maintenance expense. Occupancy expense was $16.0 million for the six months ended June 30, 2025, an increase of $1.7 million or 12% as compared to the same period in 2024. This increase was primarily due to a $0.9 million increase in building depreciation, a $0.6 million increase in building maintenance expense and a $0.4 million decrease in net sublease rental income.

Current wording

Occupancy expense was $7.1 million for the three months ended September 30, 2025, an increase of $0.2 million or 2% as compared to the same period in 2024. Occupancy expense was $23.1 million for the nine months ended September 30, 2025, an increase of $1.9 million or 9% as compared to the same period in 2024. This increase was primarily due to a $1.1 million increase in building depreciation, a $0.6 million increase in building maintenance expense and a $0.4 million decrease in net sublease rental income.

Previous wording

Equipment expense was $14.0 million for the three months ended June 30, 2025, an increase of $0.8 million or 6% as compared to the same period in 2024. This increase was primarily due to a $0.6 million increase in technology-related amortization and licensing and maintenance fees and a $0.2 million increase in furniture and equipment depreciation. Equipment expense was $27.9 million for the six months ended June 30, 2025, an increase of $1.3 million or 5% as compared to the same period in 2024. This increase was primarily due to a $1.1 million increase in technology-related amortization and licensing and maintenance fees and a $0.3 million increase in furniture and equipment depreciation.

Current wording

Equipment expense was $13.8 million for the three months ended September 30, 2025, an increase of $0.8 million or 6% as compared to the same period in 2024. This increase was primarily due to a $0.5 million increase in technology-related amortization and licensing and maintenance fees and a $0.2 million increase in furniture and equipment depreciation. Equipment expense was $41.7 million for the nine months ended September 30, 2025, an increase of $2.1 million or 5% as compared to the same period in 2024. This increase was primarily due to a $1.5 million increase in technology-related amortization and licensing and maintenance fees and a $0.4 million increase in furniture and equipment depreciation.

Previous wording

Regulatory assessment and fees were $3.8 million for the three months ended June 30, 2025, a decrease of $0.1 million or 1% as compared to the same period in 2024. Regulatory assessment and fees were $7.6 million for the six months ended June 30, 2025, a decrease of $4.4 million or 36% as compared to the same period in 2024. This decrease was primarily due to a decrease in the FDIC insurance assessment. During 2023, the FDIC approved a final rule for a special assessment to replenish the deposit insurance fund following bank failures occurring earlier in the year. As a result, the Company previously recorded a related loss of $16.3 million in the fourth quarter of 2023. During the first quarter of 2024, the FDIC issued a notice that the original loss estimate related to the 2023 bank failures was subsequently increased and that this increase would result in an additional assessment expense to affected institutions. The Company estimated a related loss of $4.1 million, which was recorded in the first quarter of 2024. This estimate was later adjusted by $0.3 million in the third quarter of 2024 to bring the net loss related to the special assessment to $3.8 million for the nine months ended September 30, 2024.

Current wording

Regulatory assessment and fees were $3.3 million for the three months ended September 30, 2025, a decrease of $0.1 million or 3% as compared to the same period in 2024. Regulatory assessment and fees were $10.9 million for the nine months ended September 30, 2025, a decrease of $4.5 million or 29% as compared to the same period in 2024. This decrease was primarily due to a decrease in the FDIC insurance assessment. During 2023, the FDIC approved a final rule for a special assessment to replenish the deposit insurance fund following bank failures occurring earlier in the year. As a result, the Company previously recorded a related loss of $16.3 million in the fourth quarter of 2023. During the first quarter of 2024, the FDIC issued a notice that the original loss estimate related to the 2023 bank failures was subsequently increased and that this increase would result in an additional assessment expense to affected institutions. The Company estimated a related loss of $4.1 million, which was recorded in the first quarter of 2024. This estimate was later adjusted by $0.3 million in the third quarter of 2024 and $0.3 million in the third quarter of 2025 to bring the net loss related to the special assessment to $3.5 million as of September 30, 2025.

Previous wording

Advertising and marketing expense was $2.0 million for the three months ended June 30, 2025, an increase of 0.3 million or 15% as compared to the same period in 2024. Advertising and marketing expense was $4.2 million for the six months ended June 30, 2025, a decrease of $0.2 million or 4% as compared to the same period in 2024.

Current wording

Advertising and marketing expense was $2.0 million for the three months ended September 30, 2025, an increase of 0.2 million or 12% as compared to the same period in 2024. Advertising and marketing expense was $6.2 million for the nine months ended September 30, 2025, an increase of $0.1 million or 1% as compared to the same period in 2024.

Previous wording

Card rewards program expense was $8.4 million for the three months ended June 30, 2025, a decrease of $0.3 million or 4% as compared to the same period in 2024. Card rewards program expense was $16.3 million for the six months ended June 30, 2025, a decrease of $0.9 million or 5% as compared to the same period in 2024. This decrease was primarily due to a $0.6 million decrease in priority rewards card redemptions and a $0.6 million decrease in interchange fees paid to our credit card partners, partially offset by a $0.3 million increase in credit card cash reward redemptions.

Current wording

Card rewards program expense was $8.7 million for the three months ended September 30, 2025, a minimal change as compared to the same period in 2024. Card rewards program expense was $25.0 million for the nine months ended September 30, 2025, a decrease of $0.9 million or 3% as compared to the same period in 2024. This decrease was primarily due to a $0.6 million decrease in priority rewards card redemptions and a $0.4 million decrease in interchange fees paid to our credit card partners.

Previous wording

Other noninterest expense was $13.3 million for the three months ended June 30, 2025, a decrease of $0.1 million or 1% as compared to the same period in 2024. Other noninterest expense was $26.0 million for the six months ended June 30, 2025, a decrease of $1.6 million or 6% as compared to the same period in 2024. This decrease was primarily due to a $2.3 million decrease in operational losses and other charge-offs and a $0.5 million decrease in costs associated with a fund acquired by the Company, partially offset by a $0.4 million increase in brokers fees, a $0.4 million increase in software amortization expense and a $0.3 million increase in travel expenses.

Current wording

Other noninterest expense was $13.5 million for the three months ended September 30, 2025, a decrease of $4.6 million or 25% as compared to the same period in 2024. This decrease was primarily due to a $3.8 million decrease in expense due to adjustments to certain liabilities assumed as a result of the Reorganization Transactions and a $2.1 million decrease in operational losses and other charge-offs, partially offset by a $0.4 million increase in postage expenses, a $0.4 million increase in charitable contributions and donations, a $0.2 million increase in supplies expense and a $0.2 million increase in brokers fees. Other noninterest expense was $39.5 million for the nine months ended September 30, 2025, a decrease of $6.2 million or 14% as compared to the same period in 2024. This decrease was primarily due to a $4.4 million decrease in operational losses and other charge-offs, a $3.8 million decrease in expense due to adjustments to certain liabilities assumed as a result of the Reorganization Transactions and a $0.7 million decrease in costs associated with a fund acquired by the Company, partially offset by a $0.6 million increase in brokers fees, a $0.6 million increase in charitable contributions and donations, a $0.4 million increase in postage expenses, a $0.3 million increase in software amortization expense, a $0.2 million increase in travel expenses and a $0.2 million decrease in loss recoveries related to natural disasters.

Previous wording

The provision for income taxes was $14.9 million (an effective tax rate of 16.86%) for the three months ended June 30, 2025, compared with a provision for income taxes of $18.8 million (an effective tax rate of 23.30%) for the same period in 2024. The provision for income taxes was $32.6 million (an effective tax rate of 19.72%) for the six months ended June 30, 2025, compared with a provision for income taxes of $35.3 million (an effective tax rate of 23.30%) for the same period in 2024. The change in the effective tax rate was primarily due to the revaluation of the California deferred tax assets as of the beginning of the year due to the change in the California apportionment formula for banks.

Current wording

The provision for income taxes was $22.3 million (an effective tax rate of 23.20%) for the three months ended September 30, 2025, compared with a provision for income taxes of $15.0 million (an effective tax rate of 19.56%) for the same period in 2024. The provision for income taxes was $54.9 million (an effective tax rate of 21.00%) for the nine months ended September 30, 2025, compared with a provision for income taxes of $50.2 million (an effective tax rate of 22.04%) for the same period in 2024. The change in the effective tax rate was primarily due to the change in the California apportionment formula for banks, which increased the California effective tax rate and caused a revaluation of the California deferred tax assets.

Previous wording

Our business segments are Retail Banking, Commercial Banking and Treasury and Other. Table 11 summarizes net income from our business segments for the three and six months ended June 30, 2025 and 2024. Additional information about operating segment performance is presented in “Note 17. Reportable Operating Segments” contained in our unaudited interim consolidated financial statements.

Current wording

Our business segments are Retail Banking, Commercial Banking and Treasury and Other. Table 11 summarizes net income from our business segments for the three and nine months ended September 30, 2025 and 2024. Additional information about operating segment performance is presented in “Note 17. Reportable Operating Segments” contained in our unaudited interim consolidated financial statements.

Previous wording

Net income for the Retail Banking segment was $67.7 million for the three months ended June 30, 2025, an increase of $9.5 million or 16% as compared to the same period in 2024. The increase in net income for the Retail Banking segment was primarily due to a $5.5 million increase in net interest income, a $2.9 million decrease in the provision for income taxes and a $1.5 million increase in noninterest income. The increase in net interest income was primarily due to higher deposit spreads and average balances and higher loan spreads. The decrease in the provision for income taxes was partially due to the allocation of the revaluation of the California deferred tax assets. The increase in noninterest income was primarily due to an increase in other service charges and fees.

Current wording

Net income for the Retail Banking segment was $66.6 million for the three months ended September 30, 2025, an increase of $11.2 million or 20% as compared to the same period in 2024. The increase in net income for the Retail Banking segment was primarily due to a $9.1 million increase in net interest income, a $2.6 million decrease in the Provision, a $1.9 million increase in noninterest income and a $1.5 million decrease in noninterest expense, partially offset by a $3.8 million increase in the provision for income taxes. The increase in net interest income was primarily due to higher deposit spreads and higher loan spreads. The decrease in the Provision allocated to the Retail Banking segment was primarily due to decreases in the provision for consumer loans, home equity lines and construction loans. The increase in noninterest income was primarily due to an increase in other service charges and fees. The decrease in noninterest expense was primarily due to a decrease in operational losses and other charge-offs. The increase in the provision for income taxes was primarily due to the increase in pretax income.

Previous wording

Net income for the Retail Banking segment was $127.7 million for the six months ended June 30, 2025, an increase of $13.3 million or 12% as compared to the same period in 2024. The increase in net income for the Retail Banking segment was primarily due to a $7.4 million increase in net interest income, a $3.8 million decrease in noninterest expense, a $2.1 million increase in noninterest income and a $2.0 million decrease in the provision for income taxes, partially offset by a $1.9 million increase in the Provision. The increase in net interest income was primarily due to higher deposit spreads. The decrease in noninterest expense was primarily due to lower overall expenses that were allocated to the Retail Banking segment and a decrease in regulatory assessment and fees. The increase in noninterest income was primarily due to an increase in other service charges and fees, partially offset by a decrease in trust and investment services income. The decrease in the provision for income taxes was partially due to the allocation of the revaluation of the California deferred tax assets. The increase in the Provision allocated to the Retail Banking segment was primarily due to increases in the provision for consumer loans, commercial and industrial loans, home equity lines and construction loans.

Current wording

Net income for the Retail Banking segment was $189.4 million for the nine months ended September 30, 2025, an increase of $25.0 million or 15% as compared to the same period in 2024. The increase in net income for the Retail Banking segment was primarily due to a $17.1 million increase in net interest income, a $5.2 million decrease in noninterest expense, a $4.0 million increase in noninterest income and a $0.7 million decrease in the Provision, partially offset by a $2.0 million increase in the provision for income taxes. The increase in net interest income was primarily due to higher deposit spreads and higher loan spreads. The decrease in noninterest expense was primarily due to lower overall expenses that were allocated to the Retail Banking segment and decreases in operational losses and other charge-offs and regulatory assessment and fees, partially offset by an increase in brokers fees. The increase in noninterest income was primarily due to an increase in other service charges and fees, partially offset by a decrease in trust and investment services income. The decrease in the Provision allocated to the Retail Banking segment was primarily due to decreases in the provision for residential mortgage loans and commercial real estate loans. The increase in the provision for income taxes was primarily due to the increase in pretax income, partially offset by the allocation of the revaluation of the California deferred tax assets.

Previous wording

Net income for the Commercial Banking segment was $59.0 million for the six months ended June 30, 2025, an increase of $1.4 million or 2% as compared to the same period in 2024. The increase in net income for the Commercial Banking segment was primarily due to an $8.5 million decrease in noninterest expense and a $3.4 million decrease in the provision for income taxes, partially offset by an $8.4 million decrease in net interest income and a $2.3 million increase in the Provision. The decrease in noninterest expense was primarily due to higher overall credits that were allocated to the Commercial Banking segment and decreases in regulatory assessment and fees and card rewards program expenses. The decrease in the provision for income taxes was partially due to the allocation of the revaluation of the California deferred tax assets. The decrease in net interest income was primarily due to lower loan and lease spreads. The increase in the Provision allocated to the Commercial Banking segment was primarily due to increases in the provision for consumer loans, commercial and industrial loans, home equity lines and construction loans.

Current wording

Net income for the Commercial Banking segment was $34.6 million for the three months ended September 30, 2025, a decrease of $2.2 million or 6% as compared to the same period in 2024. The decrease in net income for the Commercial Banking segment was primarily due to a $6.6 million decrease in net interest income and a $0.6 million decrease in noninterest income, partially offset by a $2.9 million decrease in the Provision, a $1.0 million decrease in the provision for income taxes and a $1.0 million decrease in noninterest expense. The decrease in net interest income was primarily due to lower loan and lease spreads and lower deposit spreads, partially offset by higher average deposit balances. The decrease in noninterest income was primarily due to a decrease in credit and debit card fees, partially offset by an increase in customer-related interest rate swap fees. The decrease in the Provision allocated to the Commercial Banking segment was primarily due to decreases in the provision for consumer loans, home equity lines and construction loans. The decrease in the provision for income taxes was primarily due to the decrease in pretax income. The decrease in noninterest expense was primarily due to higher overall credits that were allocated to the Commercial Banking segment, partially offset by increases in supplies expense and contracted services and professional fees.