HANCOCK WHITNEY CORP

Previous wording

The objective of this discussion and analysis is to provide material information relevant to the assessment of the financial condition and results of operations of Hancock Whitney Corporation and its subsidiaries during the six months ended June 30, 2025 and selected comparable prior periods, including an evaluation of the amounts and certainty of cash flows from operations and outside sources. This discussion and analysis is intended to highlight and supplement financial and operating data and information presented elsewhere in this report, including the consolidated financial statements and related notes. The discussion contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC include, but are not limited to, the following:

Current wording

The objective of this discussion and analysis is to provide material information relevant to the assessment of the financial condition and results of operations of Hancock Whitney Corporation and its subsidiaries during the nine months ended September 30, 2025 and selected comparable prior periods, including an evaluation of the amounts and certainty of cash flows from operations and outside sources. This discussion and analysis is intended to highlight and supplement financial and operating data and information presented elsewhere in this report, including the consolidated financial statements and related notes. The discussion contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC include, but are not limited to, the following:

Previous wording

uncertainties surrounding geopolitical events, trade policy, taxation policy, and monetary policy which continue to impact the outlook for future economic growth; impacts from current and/or future imposition of tariffs by the United States against other nations; consideration of responsive actions by these nations, including retaliatory tariffs, or the expansion of import fees and tariffs among a larger group of nations is bringing greater ambiguity to the outlook for future economic growth, including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, impacts from decreased international tourism, decreased demand for other banking products and services, and negative credit quality developments arising from the foregoing or other factors;

Current wording

uncertainties surrounding geopolitical events, trade policy, taxation policy, and monetary policy which continue to impact the outlook for future economic growth; impacts from current and/or future imposition of tariffs by the United States against other nations; consideration of responsive actions by these nations, including retaliatory tariffs, or the expansion of import fees and tariffs among a larger group of nations is bringing greater ambiguity to the outlook for future economic growth, including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, impacts from decreased international tourism, decreased demand for banking products and services, and negative credit quality developments arising from the foregoing or other factors;

Previous wording

the impact of current and future business combinations, including Sabal Trust Company, upon our performance and financial condition including our ability to successfully integrate the businesses;

Current wording

the impact of current (including Sabal Trust Company) and future business combinations on our performance and financial condition including our ability to successfully integrate the businesses;

Previous wording

the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technology changes in the financial services market;

Current wording

the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and rapid technology changes in the financial services market;

Previous wording

the effects of war or other conflicts, acts of terrorism, climate change, natural disasters such as hurricanes, freezes, flooding, man-made disasters, such as oil spills, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions, and/or increase costs, including, but not limited to, property and casualty and other insurance costs;

Current wording

the effects of geopolitical conflicts, war or other conflicts, acts of terrorism, climate change, natural disasters such as hurricanes, freezes, flooding, man-made disasters, such as oil spills, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions, and/or increase costs, including, but not limited to, property and casualty and other insurance costs;

Previous wording

We present certain additional non-GAAP financial measures to assist the reader with a better understanding of the Company’s performance period over period, and to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. The Company highlights certain items that are outside of our principal business and/or are not indicative of forward-looking trends in supplemental disclosure items below our GAAP financial data and presents certain "Adjusted" ratios that exclude these disclosed items. These adjusted ratios provide management and the reader with a measure that may be more indicative of forward-looking trends in our business, as well as demonstrates the effects of significant gains or losses and changes.

Current wording

We present certain additional non-GAAP financial measures to assist the reader with a better understanding of the Company’s performance period over period, and to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. The Company highlights certain items that are outside of our principal business and/or are not indicative of forward-looking trends in supplemental disclosure items below our GAAP financial data and presents certain "Adjusted" ratios that exclude these disclosed items. These adjusted ratios provide management and the reader with a measure that may be more indicative of forward-looking trends in our business, as well as demonstrate the effects of significant gains or losses and changes.

Previous wording

Within the financial services industry, economic uncertainty and prolonged elevated interest rates continue to present headwinds in terms of loan demand and deposit behavior. Despite these pressures, we experienced solid linked-quarter loan growth due to stronger demand, increased line utilization and lower payoffs. Funding costs continued to benefit from repricing of interest-bearing deposits as a result of earlier interest rate cuts and promotional rate reductions, contributing to net interest margin expansion during the period.

Current wording

Within the financial services industry, economic uncertainty and prolonged elevated interest rates continue to present headwinds in terms of loan demand and deposit behavior. Despite these pressures, we experienced another quarter of loan growth, though to a lesser degree than the prior quarter, and our net interest margin was unchanged.

Previous wording

Key assumptions within the June 2025 baseline forecast include the following: (1) The effective tariff rate will rise from nearly 3% to an average close to 15% through mid-2026 before slowly falling in subsequent years; (2) the Federal Reserve will issue rate cuts of 25 basis points each in September and December 2025, with further gradual reductions in 2026 until the benchmark rate reaches 3%; (3) the economy remains near full-employment with the current unemployment rate of 4.1%, but global trade war is expected to damage the U.S. economy and, as a result, the unemployment rate will rise to a peak of 4.8% in late 2026; (4) GDP will display modest annual below-trend growth in the coming years of 1.5% in 2025, 1.4% in 2026, and 1.8% in 2027; and, (5) the 10-year U.S. Treasury yield is forecasted to average 4.3% in 2025 and hover around its current level through the end of the decade because of elevated inflation and fiscal uncertainty.

Current wording

Key assumptions within the September 2025 baseline forecast include the following: (1) The effective tariff rate is expected to continue to increase in the fourth quarter of 2025 and the first quarter of 2026 to an average of around 15%, and is expected to remain for the entirety of the current administration; (2) the Federal Reserve will issue rate cuts of 25 basis points each in September and December 2025, with further gradual reductions in 2026 until the benchmark rate reaches 3%; (3) job growth continues to slow and, as a result, the current unemployment rate of 4.3% will trend slowly higher and peak at 4.8% in the fourth quarter of 2026; (4) GDP will display modest annual below-trend growth in the coming years of 1.8% in 2025, 1.5% in 2026, and 1.8% in 2027; and, (5) the 10-year U.S. Treasury yield is forecasted to average 4.3% in 2025 and hover around its current level through the end of the decade because of elevated inflation and fiscal uncertainty.

Previous wording

The S-2 scenario presents a downside alternative to the baseline. The S-2 scenario assumes the impacts of the current administration's tariff and immigration plans and actions on the economy are worse than expected, causing inflation to rise in the third quarter of 2025. The effective tariff rate is forecasted to increase to 22% and remain elevated through most of 2026. Further, elevated interest rates weaken credit-sensitive spending more than anticipated and there is longer and farther-reaching disturbance from geopolitical conflict. The scenario assumes the unemployment rate will rise considerably to a peak of 7.1% in the second quarter of 2026 and remain elevated before returning to full employment in mid-2029. As a result of these pressures, the U.S. falls into a mild recession beginning in the third quarter of 2025 that lasts for three quarters, with the stock market contracting 23% and a peak-to-trough decline in GDP of 1%. Despite the onset of the recession, rising inflation prompts the Federal Reserve to raise its benchmark rate in the third quarter of 2025 before resuming easement in the fourth quarter of 2025.

Current wording

The S-2 scenario presents a downside alternative to the baseline. The S-2 scenario assumes the impacts of the current administration's tariff and immigration plans and actions on the economy are worse than expected, causing inflation to rise in the fourth quarter of 2025. The effective tariff rate is forecasted to increase to 22% and remain elevated through the end of 2028. Further, elevated interest rates weaken credit-sensitive spending more than anticipated and there is longer and farther-reaching disturbance from geopolitical conflict. The scenario assumes the unemployment rate will rise considerably to a peak of 7.2% in the third quarter of 2026 and remain elevated before returning to full employment in late 2028. As a result of these pressures, the U.S. falls into a mild recession beginning in the fourth quarter of 2025 that lasts for three quarters, with the stock market contracting 23% and a peak-to-trough decline in GDP of 1%. Despite the onset of the recession, rising inflation prompts the Federal Reserve to raise its benchmark interest rate in the fourth quarter of 2025 before resuming easement in the first quarter of 2026.

Previous wording

Management has deemed certain assumptions underlying the downside S-2 scenario to be as likely to occur in the near term as those underlying the baseline scenario, and, as such, the baseline scenario and the S-2 scenario were each given probability weightings of 50% in the calculation of our allowance for credit losses calculation at June 30, 2025. The weighting of scenarios has changed from the March 31, 2025 calculation of allowance for credit losses, where the baseline scenario was weighted at 40% and the downside S-2 scenario was weighted at 60%. The change in weighting does not represent a significant shift in our outlook, but rather is a function of a shift in the assumptions underlying the forecasts.

Current wording

Management has deemed certain assumptions underlying the downside S-2 scenario to be as likely to occur in the near term as those underlying the baseline scenario, and, as such, the baseline scenario and the S-2 scenario were each given probability weightings of 50% in the calculation of our allowance for credit losses calculation at September 30, 2025. The weightings are consistent with those applied in the calculation of allowance for credit losses at June 30, 2025.

Previous wording

The credit loss outlook for our portfolio as a whole has not changed materially since March 31, 2025. We continue to closely monitor our portfolio for customers that are sensitive to prolonged inflation, the elevated interest rate environment, tariffs and/or other economic circumstances that may impact credit quality.

Current wording

The credit loss outlook for our portfolio as a whole has not changed materially since June 30, 2025. We continue to closely monitor our portfolio for customers that are sensitive to prolonged inflation, the elevated interest rate environment, tariffs, labor market conditions and/or other economic circumstances that may impact credit quality.

Previous wording

Recent and expected changes in fiscal and other policies with the current administration create significant uncertainty as to the impact on the U.S and global economies. The effects of continued elevated inflation, and the Federal Reserve’s actions to counter these effects, as well as to respond to other economic concerns, could reduce economic growth in the near term. The full extent of the impact of these and other influential factors are uncertain and may have an adverse effect on the U.S. economy, including the possibility of an economic recession or slower growth in the near or midterm.

Current wording

Recent and expected changes in fiscal and other policies with the current administration, including the ongoing government shutdown, create significant uncertainty as to the impact on the U.S and global economies. The effects of continued elevated inflation, and the Federal Reserve’s actions to counter these effects and respond to other economic concerns, could reduce economic growth in the near term. The full extent of the impact of these and other influential factors are uncertain and may have an adverse effect on the U.S. economy, including the possibility of an economic recession or slower growth in the near or midterm.

Previous wording

We reported net income for the second quarter of 2025 of $113.5 million, or $1.32 per diluted common share, compared to $119.5 million, or $1.38 per diluted common share, in the first quarter of 2025 and $114.6 million, or $1.31 per diluted common share, in the second quarter of 2024. The second quarter of 2025 includes $5.9 million, or $0.05 per diluted share, of supplemental disclosure items related to the costs associated with the acquisition of Sabal. There were no supplemental disclosure items in the first quarter of 2025 or the second quarter of 2024.

Current wording

We reported net income for the third quarter of 2025 of $127.5 million, or $1.49 per diluted common share, compared to $113.5 million, or $1.32 per diluted common share, in the second quarter of 2025 and $115.6 million, or $1.33 per diluted common share, in the third quarter of 2024. The second quarter of 2025 includes $5.9 million, or $0.05 per diluted share, of supplemental disclosure items related to the costs associated with the acquisition of Sabal Trust Company. There were no supplemental disclosure items in the third quarters of 2025 or 2024.

Previous wording

Second quarter 2025 results compared to first quarter 2025:

Current wording

Third quarter 2025 results compared to second quarter 2025:

Previous wording

Adjusted pre-provision net revenue, a non-GAAP measure, totaled $167.9 million, up $5.5 million, or 3%

Current wording

Adjusted pre-provision net revenue, a non-GAAP measure, totaled $175.6 million, up $7.6 million, or 5%

Previous wording

Period-end loans totaled $23.5 billion, up $363.6 million, or 2%

Current wording

Period-end loans totaled $23.6 billion, up $134.8 million, or 1%

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Period-end deposits totaled $29.0 billion, down $148.1 million, or 1%

Current wording

Period-end deposits totaled $28.7 billion, down $386.9 million, or 1%

Previous wording

Allowance for credit losses coverage to total loans remains solid at 1.45%, down 4 basis points (bps)

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Allowance for credit losses coverage to total loans remains solid at 1.45%, unchanged from June 30, 2025

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Net interest margin of 3.49%, up 6 bps from 3.43%

Current wording

Net interest margin of 3.49%, unchanged from prior quarter

Previous wording

Tangible common equity ratio of 9.84%, down 17 bps; common equity tier 1 ratio of 13.97%, down 51 bps; and total risk-based capital ratio of 15.82%, down 55 bps; reflects deployment of capital through growth and shareholder returns

Current wording

Tangible common equity ratio of 10.01%, up 17 bps; common equity tier 1 ratio of 14.09%, up 12 bps; and total risk-based capital ratio of 15.92%, up 10 bps

Previous wording

Efficiency ratio, a non-GAAP measure, improved to 54.91%, compared to 55.22%

Current wording

Efficiency ratio, a non-GAAP measure, improved to 54.10%, compared to 54.91%

Previous wording

Net interest income (te) for the second quarter of 2025 totaled $279.5 million, up $6.7 million, or 2%, compared to the first quarter of 2025, and $552.2 million for the first six months of 2025, up $9.9 million, or 2%, compared to the same period in 2024.

Current wording

Net interest income (te) for the third quarter of 2025 totaled $282.3 million, up $2.9 million, or 1%, compared to the second quarter of 2025, and $834.5 million for nine months ended September 30, 2025, up $17.8 million, or 2%, compared to the same period in 2024.

Previous wording

The $6.7 million increase in net interest income (te) from the first quarter of 2025 was driven by an increase in interest income (te) of $6.9 million that was partially offset by an increase in interest expense of $0.2 million. The increase in interest income (te) was driven primarily by an additional accrual day, a favorable change in the earning asset mix, and higher yields on the loan and securities portfolios. Included in interest income on securities was $1.5 million and $0.7 million in the second and first quarters of 2025, respectively, associated with certain fair value hedges that became effective during the year, favorably impacting the securities yield by 7 bps in the second quarter of 2025 and 4 bps in the first quarter of 2025. The increase in interest expense was largely driven by an increase in average short-term borrowings and the impact of an additional accrual day, partially offset by a decrease in both the cost and average balance of interest-bearing deposits and a favorable change in the mix therein.

Current wording

The $2.9 million increase in net interest income (te) from the second quarter of 2025 was driven by an increase in interest income (te) of $6.5 million that was partially offset by an increase in interest expense of $3.6 million. The increase in interest income (te) was driven primarily by an additional accrual day, growth in average earning assets and a favorable change in the mix therein, and higher yields on the securities portfolio. The increase in interest expense was largely driven by an increase in average short-term borrowings and the impact of an additional accrual day, partially offset by a decrease in the cost of interest-bearing deposits and a favorable change in the mix therein.

Previous wording

The net interest margin for the second quarter of 2025 was 3.49%, up 6 bps from 3.43% in the first quarter of 2025. The increase in the net interest margin was largely driven by a decrease in rates on deposits (+4 bps), higher loan yields (+2 bps) and securities yields (+2 bps), partially offset by an unfavorable change in funding mix as the volume of higher-cost short-term borrowings increased (-2 bps).

Current wording

The net interest margin for the third quarter of 2025 was 3.49%, unchanged from the second quarter of 2025, as higher securities yields (+2 bps) and a favorable change in earning asset mix with higher average loans (+2 bps) were offset by an unfavorable change in funding mix as the volume of higher-cost short-term borrowings increased (-4 bps).

Previous wording

The $9.9 million increase in net interest income (te) for the six months ended June 30, 2025 from the same period in 2024 was largely interest rate driven, as the decline in prevailing rates on interest-bearing liabilities outpaced lower yields on interest earning assets. The increase is also reflective of favorable changes in average balance and mix within interest-bearing liabilities, partially offset by a decline in average loans and the net impact of one less accrual day. Interest income (te) decreased $51.7 million, driven largely by a decrease in both loan yields and average balances, partially offset by increases in securities yields and average balances. Interest expense decreased $61.6 million, driven largely by a decline in both average interest-bearing deposit balances and the interest rates paid on those deposits, as well as a decrease in the average short-term borrowings. The decrease in average interest-bearing deposits includes the impact of the elimination of higher-cost brokered time deposits outstanding, with average balances down $398.9 million from the comparative period.

Current wording

The $17.8 million increase in net interest income (te) for the nine months ended September 30, 2025 from the same period in 2024 was largely interest rate driven, as the decline in prevailing rates on interest-bearing liabilities and an increase in securities yields outpaced lower yields on loans. The increase is also reflective of favorable changes in average balance and mix within interest-bearing liabilities, partially offset by a decline in average loans and the net impact of one less accrual day. Interest income (te) decreased $72.3 million, driven largely by a decrease in both loan yields and average balances, partially offset by increases in securities yields and average balances. Interest income (te) from securities for the nine months ended September 30, 2025 also includes $3.7 million associated with certain fair value hedges that became effective during the year. Interest expense decreased $90.0 million, driven largely by a decline in both the average balance of interest-bearing deposits and the interest rates paid on those deposits. The decrease in average interest-bearing deposits includes the impact of the elimination of brokered time deposits and a decline in retail time deposits, a portion of which shifted to lower-cost transaction and savings deposits.

Previous wording

The net interest margin for the six months ended June 30, 2025 was 3.46%, up 12 bps from 3.34% for the same period in 2024. The increase in the net interest margin also reflects the decrease in the cost of funds outpacing the decline in the yield on earning assets. The rate on interest-bearing liabilities was down 55 bps from 2024, primarily driven by the lower interest rate environment, promotional rate reductions, and a more favorable mix of retail deposits. The yield on average earning assets was down 23 bps, largely the result of a 35 bp decline in the loan yield, reflective of market interest rate movement, that was partially offset by a 24 bp increase in securities yields, as cash flows from maturing securities were reinvested into instruments with higher yields, coupled with the favorable impact from the fair value hedges described above.

Current wording

The net interest margin for the nine months ended September 30, 2025 was 3.47%, up 11 bps from 3.36% for the same period in 2024. The increase in the net interest margin also reflects the decrease in the cost of funds outpacing the decline in the yield on earning assets. The rate on interest-bearing liabilities was down 55 bps from 2024, primarily driven by the lower interest rate environment, promotional rate reductions, the elimination of brokered time deposits and a more favorable mix of retail deposits. The yield on average earning assets was down 25 bps, largely the result of a 36 bp decline in the loan yield, reflective of market interest rate movement, that was partially offset by a 24 bp increase in securities yields, as cash flows from maturing securities were reinvested into instruments with higher yields, coupled with a 6 bp favorable impact from fair value hedge effectiveness described above.

Previous wording

Included in interest income is net purchase accounting accretion of $0.8 million for the three months ended June 30, 2024. There was no net purchase accounting accretion in 2025.

Current wording

Included in interest income is net purchase accounting accretion of $0.5 million for the three months ended September 30, 2024. There was no net purchase accounting accretion in 2025.

Previous wording

Included in interest income is net purchase accounting accretion of $1.1 million six months ended June 30, 2024. There was no net purchase accounting accretion in 2025.

Current wording

Included in interest income is net purchase accounting accretion of $1.6 million nine months ended September 30, 2024. There was no net purchase accounting accretion in 2025.

Previous wording

During the second quarter of 2025, we recorded a provision for credit losses of $14.9 million, compared to $10.5 million in the first quarter of 2025. The provision for credit loss in the second quarter of 2025 included net charge-offs of $17.8 million and a reserve release of $2.9 million, compared to net charge-offs of $10.3 million and a reserve build of $0.2 million in the first quarter of 2025. The increase in provision expense is largely attributable to the higher charge-offs in the current quarter, including a $14.6 million commercial charge-off related to a single borrower that is working through resolution, with relatively stable to improving performance in other credit metrics.

Current wording

During the third quarter of 2025, we recorded a provision for credit losses of $12.7 million, compared to $14.9 million in the second quarter of 2025. The provision for credit loss in the third quarter of 2025 included net charge-offs of $11.4 million and a reserve build of $1.3 million, compared to net charge-offs of $17.8 million and a reserve release of $2.9 million in the second quarter of 2025.

Previous wording

Annualized net charge-offs as a percentage of average loans in the second quarter of 2025 were 0.31%, up from 0.18%, in the first quarter of 2025. Net charge-offs in the second quarter of 2025 included $14.7 million in the commercial portfolio, $2.9 million in the consumer portfolio and $0.2 million in the residential mortgage portfolio. Net charge-offs in the first quarter of 2025 included $7.1 million in the commercial portfolio and $3.4 million in the consumer portfolio, partially offset by net recoveries of $0.2 million in the residential mortgage portfolio.

Current wording

Annualized net charge-offs as a percentage of average loans in the third quarter of 2025 were 0.19%, down from 0.31%, in the second quarter of 2025. Net charge-offs in the third quarter of 2025 included $7.5 million in the commercial portfolio, $3.8 million in the consumer portfolio and $0.2 million in the residential mortgage portfolio. Net charge-offs in the second quarter of 2025 included $14.7 million in the commercial portfolio, $2.9 million in the consumer portfolio, and $0.2 million in the residential mortgage portfolio.

Previous wording

We recorded a provision for credit losses of $25.4 million for the six months ended June 30, 2025, compared to $21.7 million for the same period in 2024. The provision for credit losses for the six months ended June 30, 2025 included net charge-offs of $28.0 million and a reserve release of $2.6 million, compared to net charge-offs of $16.3 million and a reserve build of $5.4 million in the same period in 2024. Net charge-offs for the six months ended June 30, 2025 were 0.24% of average loans, comprised of net charge-offs of

Current wording

We recorded a provision for credit losses of $38.0 million for the nine months ended September 30, 2025, compared to $40.3 million for the same period in 2024. The provision for credit losses for the nine months ended September 30, 2025 included net charge-offs of $39.4 million and a reserve release of $1.4 million, compared to net charge-offs of $34.3 million and a reserve build of $6.0 million in the same period in 2024. Net charge-offs for the nine months ended September 30, 2025 were 0.23% of average loans, comprised of net charge-offs of $29.2 million in the commercial portfolio, $10.1 million in the consumer portfolio and $0.1 million in the residential mortgage portfolio. Net charge-offs for the nine months ended September 30, 2024 were 0.19% of average loans, comprised of net charge-offs of $23.8 million in the commercial portfolio and $10.7 million in the consumer portfolio, partially offset by net recoveries of $0.2 million in the residential mortgage portfolio.

Previous wording

Noninterest income totaled $98.5 million for the second quarter of 2025, up $3.7 million, or 4%, from the first quarter of 2025. The increase in noninterest income from the first quarter of 2025 was largely driven by trust fees as a result of the Sabal acquisition, as well as growth in most revenue lines that were partially offset by declines in other miscellaneous income, net gains on sales of assets, investment and annuity fees and insurance commissions, and credit related fees. For the six months ended June 30, 2025, noninterest income totaled $193.3 million, up $16.3 million, or 9%, from the same period in 2024. The increase from the six months ended June 30, 2024 is also attributable to growth in most lines that was partially offset by declines in other miscellaneous income, net gains on sales of assets, and credit related fees. A more detailed discussion of these and other noninterest income variances follows.

Current wording

Noninterest income totaled $106.0 million for the third quarter of 2025, up $7.5 million, or 8%, from the second quarter of 2025. The increase in noninterest income from the second quarter of 2025 was largely driven by investment and annuity fees and insurance commissions, a full quarter's impact from the Sabal Trust Company (Sabal) acquisition, service charges on deposit accounts, and net gains on sales of assets. For the nine months ended September 30, 2025, noninterest income totaled $299.3 million, up $26.4 million, or 10%, from the same period in 2024. The increase from the same period in 2024 was largely driven by trust fees, reflecting the May 2025 acquisition of Sabal, income from derivatives, service charges on deposits, investment and annuity fees and insurance commissions, income from bank-owned life insurance, and income from secondary mortgage market operations, partially offset by declines in other miscellaneous, and net gains on sales of assets. A more detailed discussion of these and other noninterest income variances follows.

Previous wording

Service charges on deposit accounts include consumer, business, and corporate deposit account servicing fees, as well as nonsufficient funds fees on non-consumer accounts, overdraft and overdraft protection fees, and other customer transaction-related fees. Service charges on deposits totaled $24.3 million for the second quarter of 2025, relatively flat compared to the first quarter of 2025. The linked-quarter results reflect an increase in consumer overdraft fees, largely offset by a decline in analysis fees on business accounts. For the six months ended June 30, 2025, service charges on deposits totaled $48.4 million, up $3.9 million, or 9%, from the same period in 2024. The year-over-year increase was largely attributable to consumer overdraft fees, and analysis fees and overdraft fees on business accounts.

Current wording

Service charges on deposit accounts include consumer, business, and corporate deposit account servicing fees, as well as nonsufficient funds fees on non-consumer accounts, overdraft and overdraft protection fees, and other customer transaction-related fees. Service charges on deposits totaled $25.2 million for the third quarter of 2025, up $1.0 million, or 4%, from the second quarter of 2025. The linked-quarter increase was driven primarily by consumer overdraft fees. For the nine months ended September 30, 2025, service charges on deposits totaled $73.6 million, up $5.9 million, or 9%, from the same period in 2024. The year-over-year increase was largely attributable to consumer overdraft fees, and analysis fees and overdraft fees on business accounts.

Previous wording

Trust fee income represents revenue generated from a full range of trust services, including asset management and custody services provided to individuals, businesses and institutions. Trust fees totaled $22.8 million for the second quarter of 2025, up $4.7 million, or 26%, from the first quarter of 2025. The linked-quarter increase reflects $3.6 million in personal trust fees as a result of the May 2, 2025 Sabal acquisition, $0.6 million in seasonal tax preparation fees, and market value-driven growth in personal and corporate trust fees in our legacy business. Trust fees for the six months ended June 30, 2025 totaled $40.8 million, up $5.2 million, or 15%, from the same period in 2024. The year-over-year increase also reflects $3.6 million in personal trust fees as a result of the Sabal acquisition and growth in our legacy personal and corporate trust fees, partially offset by a decline in employee benefits trust revenue.

Current wording

Trust fee income represents revenue generated from a full range of trust services, including asset management and custody services provided to individuals, businesses and institutions. Trust fees totaled $24.2 million for the third quarter of 2025, up $1.5 million, or 6%, from the second quarter of 2025. The linked-quarter increase reflects a full quarter's impact from the May 2025 acquisition of Sabal. Trust fees for the nine months ended September 30, 2025 totaled $65.0 million, up $11.4 million, or 21%, from the same period in 2024. The year-over-year increase reflects $9.0 million in personal trust fees as a result of the Sabal acquisition and growth in our legacy personal and corporate trust fees, partially offset by a decline in employee benefits trust revenue.

Previous wording

Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled $22.0 million for the second quarter of 2025, up $1.3 million, or 6%, from the first quarter of 2025. The linked-quarter increase was driven by increases in credit card, including purchasing card, and debit card processing fees. For the six months ended June 30, 2025, bank card and ATM fees totaled $42.7 million, up $0.3 million, or 1%, from the same period in 2024, as increases in purchasing card and debit card processing fees were partially offset by declines in business credit card processing fees and ATM fees.

Current wording

Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled $21.8 million for the third quarter of 2025, down $0.2 million, or 1%, from the second quarter of 2025, driven primarily by merchant service fees. For the nine months ended September 30, 2025, bank card and ATM fees totaled $64.5 million, up $0.4 million, or 1%, from the same period in 2024, as increases in purchasing card and debit card processing fees were partially offset by declines in business credit card processing fees and ATM fees.

Previous wording

Investment and annuity fees and insurance commissions, which include both fees earned from sales of annuity and insurance products, as well as managed account fees, totaled $10.6 million, down $0.8 million, or 7%, from the first quarter of 2025. The linked-quarter decrease was largely driven declines in fixed income trading and corporate underwriting fees, partially offset by increases in annuity sales volume and insurance commissions. For the six months ended June 30, 2025, investment and annuity fees and insurance commissions totaled $22.0 million, up $0.4 million, or 2%, from the same period in 2024. The year-over-year increase was driven by an increase in investment management fees, which was partially offset by a decline in annuity sales volume.

Current wording

Investment and annuity fees and insurance commissions, which include both fees earned from sales of annuity and insurance products, as well as managed account fees, totaled $14.5 million, up $3.9 million, or 37%, from the second quarter of 2025, largely attributable to strong annuity sales and an increase in fixed income trading transactions driven by favorable market conditions. The linked-quarter increase is also reflective of an increase in investment management and corporate underwriting fees. For the nine months ended September 30, 2025, investment and annuity fees and insurance commissions totaled $36.5 million, up $4.0 million, or 12%, from the same period in 2024, largely attributable to increases in investment management fees and fixed income trading fees. The year-over-year increase also reflects increases in annuity fees and corporate underwriting fees.

Previous wording

Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. We offer a full range of mortgage products to our customers and typically sell longer-term fixed-rate loans while retaining the majority of adjustable-rate loans, as well as loans generated through programs to support customer relationships. Secondary mortgage market operations income will vary based on mortgage application volume, pull through rates, the percentage of loans ultimately sold in the secondary market and the timing of such sales. Income from secondary mortgage market operations was $4.1 million in the second quarter of 2025, up $0.7 million, or 20%, from the first quarter of 2025. The linked-quarter increase was primarily attributable to an increase in mortgage loan production. For the six months ended June 30, 2025, income from secondary mortgage market operations totaled $7.6 million, up $1.2 million, or 18%, from the same period in 2024. The year-over-year increase was attributable to an increase in mortgage loan production, partially offset by a lower percentage of loans sold in the secondary market, as opposed to being retained in our portfolio.

Current wording

Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. We offer a full range of mortgage products to our customers and typically sell longer-term fixed-rate loans while retaining the majority of adjustable-rate loans, as well as loans generated through programs to support customer relationships. Secondary mortgage market operations income will vary based on mortgage application volume, pull through rates, the percentage of loans ultimately sold in the secondary market and the timing of such sales. Income from secondary mortgage market operations was $3.5 million in the third quarter of 2025, down $0.7 million, or 16%, from the second quarter of 2025. The linked-quarter decrease was primarily attributable to a decrease in mortgage loan production. For the nine months ended September 30, 2025, income from secondary mortgage market operations totaled $11.1 million, up $1.3 million, or 13%, from the same period in 2024. The year-over-year increase was primarily attributable to an increase in mortgage loan production, coupled with a higher percentage of loans sold in the secondary market as opposed to being held in our loan portfolio.

Previous wording

Income from bank-owned life insurance (BOLI) is typically generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from BOLI was $5.3 million for the second quarter of 2025, up $0.4 million, or 9%, from the first quarter of 2025. The linked-quarter increase was attributable to a $0.2 million increase in mortality gains and a $0.2 million increase in income associated with changes in cash surrender value. For the six months ended June 30, 2025, income from BOLI totaled $10.2 million, up $2.2 million, or 28%, from the same period in 2024. The year-over-year increase is attributable to a $1.6 million increase in income associated with changes in cash surrender value and a $0.6 million increase in mortality gains.

Current wording

Income from bank-owned life insurance (BOLI) is typically generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from BOLI was $5.8 million for the third quarter of 2025, up $0.4 million, or 8%, from the second quarter of 2025. The linked-quarter increase was attributable to a $0.3 million increase in mortality gains and a $0.1 million increase in income associated with changes in cash surrender value. For the nine months ended September 30, 2025, income from BOLI totaled $15.9 million, up $3.6 million, or 29%, from the same period in 2024. The year-over-year increase is attributable to a $2.3 million increase in income associated with changes in cash surrender value and a $1.3 million increase in mortality gains.

Previous wording

Credit related fees include fees assessed on letters of credit and unused portions of loan commitments. Credit related fees were $2.7 million for the second quarter of 2025, down $0.1 million, or 4%, from the first quarter of 2025. For the six months ended June 30, 2025, credit related fees totaled $5.6 million, down $0.7 million, or 11%, from the same period in 2024. The linked-quarter and year-over-year decreases were largely driven by unused commitment fees, which are generally a function of credit line utilization.

Current wording

Credit related fees include fees assessed on letters of credit and unused portions of loan commitments. Credit related fees were $2.9 million for the third quarter of 2025, up $0.2 million, or 7%, from the second quarter of 2025. For the nine months ended September 30, 2025, credit related fees totaled $8.5 million, down $0.7 million, or 8%, from the same period in 2024. The linked-quarter and year-over-year variances were largely driven by unused commitment fees, which are generally a function of credit line utilization.

Previous wording

Income or loss from customer and other derivatives is largely from our customer interest rate derivative program. Income from customer and other derivatives totaled $2.0 million for the second quarter of 2025, compared to a loss of $0.3 million in the first quarter of 2025. The linked-quarter increase was primarily driven by the customer interest rate derivative program, which can vary period to period based on the market conditions. For the six months ended June 30, 2025, income from customer and other derivatives totaled $1.7 million compared to a loss of $3.9 million for the same period in 2024. The year-over-year increase was due in part to the 2024 results including a $1.5 million loss related to assumption changes for certain valuation inputs on customer derivatives and $1.7 million of higher losses resulting from assumption changes to the Visa Class B derivative liability. The remaining year-over-year increase is attributable to the customer interest rate derivative program, driven by market conditions. Derivative income can be volatile and is dependent upon the composition of the portfolio, volume and mix of sales and termination activity, and market value adjustments due to market interest rate movement.

Current wording

Income or loss from customer and other derivatives is largely from our customer interest rate derivative program. Income from customer and other derivatives totaled $1.9 million for the third quarter of 2025, relatively flat when compared to the second quarter of 2025. For the nine months ended September 30, 2025, income from customer and other derivatives totaled $3.6 million compared to a loss of $2.9 million for the same period in 2024. The year-over-year increase was due in part to the 2024 results including a $1.5 million loss related to assumption changes for certain valuation inputs on customer derivatives and $1.2 million of higher losses resulting from assumption changes to the Visa Class B derivative liability. The remaining year-over-year increase is attributable to the customer interest rate derivative program, driven by market conditions. Derivative income can be volatile and is dependent upon the composition of the portfolio, volume and mix of sales and termination activity, and market value adjustments due to market interest rate movement.