CVB FINANCIAL CORP

Previous wording

For the second quarter of 2025, we reported net earnings of $50.6 million, compared with $51.1 million for the first quarter of 2025 and $50.0 million for the second quarter of 2024. Diluted earnings per share were $0.37 for the second quarter, compared to $0.36 for the prior quarter and $0.36 for the same period last year. Net income of $50.6 million for the second quarter of 2025 produced an annualized return on average equity (“ROAE”) of 9.06%, an annualized return on average tangible common equity (“ROATCE”) of 14.08%, and an annualized return on average assets (“ROAA”) of 1.34%. Our net interest margin, tax equivalent (“NIM”), was 3.31% for the second quarter of 2025, while our efficiency ratio was 45.55%. Year-to-date net earnings for 2025 were $101.7 million, a $3.0 million increase compared to the same period in 2024.

Current wording

For the third quarter of 2025, we reported net earnings of $52.6 million, compared with $50.6 million for the second quarter of 2025 and $51.2 million for the third quarter of 2024. Diluted earnings per share were $0.38 for the third quarter, compared to $0.37 for the prior quarter and $0.37 for the same period last year. Net income for the third quarter of 2025 produced an annualized return on average equity (“ROAE”) of 9.19%, an annualized return on average tangible common equity (“ROATCE”) of 14.11%, and an annualized return on average assets (“ROAA”) of 1.35%. Our net interest margin, tax equivalent (“NIM”), was 3.33% for the third quarter of 2025, while our efficiency ratio was 45.56%. Year-to-date net earnings for 2025 were $154.3 million, a $4.4 million increase compared to the same period in 2024.

Previous wording

Net interest income was $111.6 million for the second quarter of 2025. This represented a $1.2 million, or 1.05%, increase from the first quarter of 2025, and an $0.8 million, or 0.68%, increase from the second quarter of 2024. The quarter-over-quarter increase in net interest income was due to a $1.2 million increase in interest income, primarily due to one more day of interest during the second quarter. The increase in net interest income compared to the second quarter of 2024 was the net result of a $15.6 million decline in interest expense, that exceeded a $14.9 million decline in interest income. As a result of the Company's deleveraging strategy in the second half of 2024, net interest income increased compared to the second quarter of 2024 as a 26 basis point increase in net interest margin offset a $1.1 billion decrease in earnings assets. Year-to-date net interest income for 2025 was $222.1 million, a $1.3 million decrease compared to the same period in 2024.

Current wording

Net interest income was $115.6 million for the third quarter of 2025, that represented a $4.0 million, or 3.56%, increase from the second quarter of 2025, and a $2.0 million, or 1.72%, increase from the third quarter of 2024. The quarter-over-quarter increase in net interest income was due to a $5.9 million increase in interest income resulting from a $315.0 million increase in average earning assets and a four basis point increase in the yield on average earning assets. The increase in interest income was partially offset by a $1.9 million increase in interest expense that was due to a $217 million increase in interest bearing deposits and customer repurchases and a two basis point increase in cost of funds. The increase in net interest income compared to the third quarter of 2024 was the net result of a $17.6 million decline in interest expense, that exceeded a $15.6 million decline in interest income. As a result of the Company's deleveraging strategy in the second half of 2024, average earning assets in the third quarter of 2025 were $1.1 billion lower than the third quarter of 2024, while the net interest margin increased by 28 basis points between the two periods. Year-to-date net interest income for 2025 was $337.6 million, a $700,000 increase compared to the same period in 2024.

Previous wording

Noninterest expense for the second quarter of 2025 was $57.6 million, compared to $59.1 million for the first quarter of 2025 and $56.5 million for the second quarter of 2024. The $1.5 million quarter-over-quarter decrease was primarily due to a $500,000 provision for unfunded loan commitments in the first quarter of 2025 and a $1.5 million decrease in salaries and benefits. The $1.1 million increase in expense compared to the second quarter of 2024, was due primarily to the impact of a $500,000 expense reduction in the second quarter of 2024 related to a decrease in reserves for unfunded loan commitments, in addition to a $603,000 increase in regulatory assessment expenses. Noninterest expense for the first six months of 2025 was $116.7 million, a $433,000, or .37% increase over the same period in 2024.

Current wording

Noninterest expense for the third quarter of 2025 was $58.6 million, compared to $57.6 million for the second quarter of 2025 and $58.8 million for the third quarter of 2024. The $1.0 million quarter-over-quarter increase was primarily due to an $877,000 increase in salaries and benefits and a $500,000 provision for unfunded loan commitments in the third quarter of 2025. Noninterest expense for the first nine months of 2025 was $175.3 million, a $173,000, or 0.10% increase over the same period in 2024.

Previous wording

At June 30, 2025, total assets of $15.41 billion increased by $260.5 million, or 1.72%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets of $13.74 billion at June 30, 2025 increased by $217.1 million, or 1.60%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $492.8 million increase in interest-earning balances due from the Federal Reserve and a $10.5 million increase in interest-earning balances due from other institutions, offset by a $177.9 million decrease in total loans, and a $108.2 million decrease in investment securities.

Current wording

At September 30, 2025, total assets were $15.67 billion, an increase $512.6 million, or 3.38%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets were $14.0 billion at September 30, 2025, an increase of $483.9 million, or 3.58%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $581.2 million increase in interest-earning balances due from the Federal Reserve, offset by a $65.5 million decrease in total loans, and a $44.5 million decrease in investment securities.

Previous wording

Total investment securities were $4.81 billion at June 30, 2025, a decrease of $108.2 million, or 2.20%, from $4.92 billion at December 31, 2024. At June 30, 2025, investment securities held-to-maturity (“HTM”) totaled $2.33 billion, a $52.4 million, or 2.20%, decline from $2.38 billion at December 31, 2024. At June 30, 2025, investment securities available-for-sale (“AFS”) totaled $2.49 billion, inclusive of a pre-tax net unrealized loss of $363.7 million. AFS securities decreased by $55.8 million, or 2.20%, from $2.54 billion at December 31, 2024. The pre-tax unrealized loss decreased by $84 million from December 31, 2024. Our tax equivalent yield on investments was 2.62% for the quarter ended June 30, 2025, compared to 2.63% for the first quarter of 2025 and 2.71% for the second quarter of 2024.

Current wording

Total investment securities were $4.88 billion at September 30, 2025, a decrease of $44.5 million, or 0.90%, from $4.92 billion at December 31, 2024. At September 30, 2025, investment securities held-to-maturity (“HTM”) totaled $2.30 billion, a $81.8 million, or 3.44%, decline from $2.38 billion at December 31, 2024. At September 30, 2025, investment securities available-for-sale (“AFS”) totaled $2.58 billion, inclusive of a pre-tax net unrealized loss of $333.8 million. AFS securities increased by $37.3 million, or 1.47%, from $2.54 billion at December 31, 2024. The pre-tax unrealized loss decreased by $113.9 million from December 31, 2024. Our tax equivalent yield on investments was 2.66% for the quarter ended September 30, 2025, compared to 2.62% for the second quarter of 2025 and 2.67% for the third quarter of 2024.

Previous wording

Total loans and leases, at amortized cost, of $8.36 billion at June 30, 2025, decreased by $177.9 million, or 2.08%, from December 31, 2024. The decrease in total loans included decreases of $186.0 million in dairy and livestock loans and $12.8 million in commercial and industrial loans, offset by increases of $19.3 million in SFR mortgage loans and $10.0 million in commercial real estate loans. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 81% at December 31, 2024 to 62% at June 30, 2025. Our yield on loans was 5.22% for the quarter ended June 30, 2025, compared to 5.22% for the quarter ended March 31, 2025 and 5.26% for the second quarter of 2024.

Current wording

Total loans and leases, at amortized cost, of $8.47 billion at September 30, 2025, decreased by $65.5 million, or 0.77%, from December 31, 2024. The decrease in total loans included decreases of $138.5 million in dairy and livestock loans, offset partially by increases of $27.9 million in commercial real estate loans, $16.9 million in SFR mortgage loans, $14.0 million in commercial and industrial loans and $13.9 million in construction loans. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 81% at December 31, 2024 to 64% at September 30, 2025. Our yield on loans was 5.25% for the quarter ended September 30, 2025, compared to 5.22% for the quarter ended June 30, 2025 and 5.31% for the third quarter of 2024.

Previous wording

The allowance for credit losses totaled $78.0 million at June 30, 2025, compared to $80.1 million at December 31, 2024. There was no provision for credit losses in the second quarter of 2025 compared to a $2.0 million recapture of credit losses in the first quarter of 2025. The decline in the allowance from December 31, 2024 was due to improved credit ratings for dairy and livestock loans.

Current wording

The allowance for credit losses totaled $79.3 million at September 30, 2025, compared to $80.1 million at December 31, 2024. There was a $1.0 million provision for credit losses in the third quarter of 2025 and a $1.0 million recapture of credit losses for the nine months ending September 30, 2025

Previous wording

Noninterest-bearing deposits were $7.25 billion at June 30, 2025, an increase of $210.0 million, or 2.98%, when compared to $7.04 billion at December 31, 2024. At June 30, 2025, noninterest-bearing deposits were 60.47% of total deposits, compared to 58.90% at December 31, 2024.

Current wording

Noninterest-bearing deposits were $7.24 billion at September 30, 2025, an increase of $207.9 million, or 2.95%, when compared to $7.04 billion at December 31, 2024. At September 30, 2025, noninterest-bearing deposits were 59.76% of total deposits, compared to 58.90% at December 31, 2024.

Previous wording

Interest-bearing deposits were $4.74 billion at June 30, 2025, a decrease of $173.6 million, or 3.53%, when compared to $4.91 billion at December 31, 2024. Customer repurchase agreements totaled $404.2 million at June 30, 2025, compared to $261.9 million at December 31, 2024. Our average cost of total deposits including customer repurchase agreements was 0.87% for the quarters ended June 30, 2025, March 31, 2025, and June 30, 2024.

Current wording

Interest-bearing deposits were $4.88 billion at September 30, 2025, a decrease of $32.0 million, or 0.65%, when compared to $4.91 billion at December 31, 2024. Customer repurchase agreements totaled $451.3 million at September 30, 2025, compared to $261.9 million at December 31, 2024. Our average cost of total deposits including customer repurchase agreements was 0.90% for the quarter ended September 30, 2025, compared to 0.87% for the quarter ended June 30, 2025, and 1.01% for the quarter ended September 30, 2024.

Previous wording

The Company’s total equity was $2.24 billion at June 30, 2025. This represented an overall increase of $54.0 million from total equity of $2.19 billion at December 31, 2024. Increases to equity included $101.7 million in net earnings and a $43.9 million increase in other comprehensive income that were partially offset by $55.6 million in cash dividends. During the first half of 2025, we repurchased, under our stock repurchase plan, 2,063,564 shares at an average price of $18.15, totaling $37.5 million. Our tangible book value per share at June 30, 2025 was $10.64.

Current wording

The Company’s total equity was $2.28 billion at September 30, 2025. This represented an overall increase of $95.8 million from total equity of $2.19 billion at December 31, 2024. Increases to equity included $154.3 million in net earnings and a $64.3 million increase in other comprehensive income that were partially offset by $83.1 million in cash dividends. During the first nine months of 2025, we repurchased, under our stock repurchase plan, 2,360,070 shares at an average price of $18.43, totaling $43.5 million. Our tangible book value per share at September 30, 2025 was $10.98, which compares to $10.10 at December 31, 2024.

Previous wording

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory requirements. As of June 30, 2025, the Company’s Tier 1 leverage capital ratio was 11.84%, common equity Tier 1 ratio was 16.52%, Tier 1 risk-based capital ratio was 16.52%, and total risk-based capital ratio was 17.33%. Refer to our Analysis of Financial Condition – Capital Resources.

Current wording

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory requirements. As of September 30, 2025, the Company’s Tier 1 leverage capital ratio was 11.8%, common equity Tier 1 ratio was 16.3%, Tier 1 risk-based capital ratio was 16.3%, and total risk-based capital ratio was 17.1%. Refer to our Analysis of Financial Condition – Capital Resources.

Previous wording

The principal component of our earnings is net interest income, which is the difference between the interest and fees earned on loans and investments (interest-earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities). Net interest margin is net interest income as a percentage of average interest-earning assets for the period. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest spread is the yield on average interest-earning assets minus the cost of average interest-bearing liabilities. Net interest margin and net interest spread are included on a tax equivalent (TE) basis by adjusting interest income utilizing the federal statutory tax rates of 21% in effect for the three and six months ended June 30, 2025 and 2024. Our net interest income, interest spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation, monetary supply, and the strength of the international, national and state economies, in general, and more specifically, the local economies in which we conduct business. Our ability to manage net interest income during changing interest rate environments will have a significant impact on our overall performance. We manage net interest income through affecting changes in the mix of interest-earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to interest-earning assets, and in the growth and maturity of earning assets. See Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset/Liability and Market Risk Management – Interest Rate Sensitivity Management included herein.

Current wording

The principal component of our earnings is net interest income, which is the difference between the interest and fees earned on loans and investments (interest-earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities). Net interest margin is net interest income as a percentage of average interest-earning assets for the period. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest spread is the yield on average interest-earning assets minus the cost of average interest-bearing liabilities. Net interest margin and net interest spread are included on a tax equivalent ("TE") basis by adjusting interest income utilizing the federal statutory corporate tax rates of 21% in effect for the three and nine months ended September 30, 2025 and 2024. Our net interest income, interest spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation, monetary supply, and the strength of the international, national and state economies, in general, and more specifically, the local economies in which we conduct business. We manage interest rate risk within policy limits approved by the Board of Directors, which guides and limits the interest rate risk over short-term and long-term horizons. Sources of interest rate risk include differences in maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, and embedded options in assets or liabilities. The mix of interest-earning assets as well as the mix of noninterest bearing deposits and interest-bearing liabilities impacts our ability to manage net interest income during changing interest rate conditions. We also utilize certain derivative instruments to partially hedge interest rate risk. See Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset/Liability and Market Risk Management – Interest Rate Sensitivity Management included herein.

Previous wording

Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the three months ended June 30, 2025 and June 30, 2024. The non TE rates for total investment securities were 2.57% and 2.71% for the three months ended June 30, 2025 and June 30, 2024, respectively.

Current wording

Includes tax equivalent (TE) adjustments utilizing federal statutory corporate rates of 21% in effect for the three months ended September 30, 2025 and September 30, 2024. The non TE rates for total investment securities were 2.62% and 2.63% for the three months ended September 30, 2025 and September 30, 2024, respectively.

Previous wording

Includes loan fees of $615,000 and $721,000 for the three months ended June 30, 2025 and June 30, 2024, respectively. Prepayment penalty fees of $680,000 and $440,000 are included in interest income for the three months ended June 30, 2025 and June 30, 2024, respectively.

Current wording

Includes loan fees of $781,000 and $748,000 for the three months ended September 30, 2025 and September 30, 2024, respectively. Prepayment penalty fees of $643,000 and $830,000 are included in interest income for the three months ended September 30, 2025 and September 30, 2024, respectively.

Previous wording

Includes tax equivalent (TE) adjustments utilizing federal statutory rates of 21% in effect for the six months ended June 30, 2025 and June 30, 2024. The non TE rates for total investment securities were 2.58% and 2.63% for the six months ended June 30, 2025 and June 30, 2024, respectively.

Current wording

Includes tax equivalent (TE) adjustments utilizing federal statutory corporate rates of 21% in effect for the nine months ended September 30, 2025 and September 30, 2024. The non TE rates for total investment securities were 2.59% and 2.63% for the nine months ended September 30, 2025 and September 30, 2024, respectively.

Previous wording

Includes loan fees of $1.3 million and $1.4 million for the six months ended June 30, 2025 and June 30, 2024, respectively. Prepayment penalty fees of $1.6 million and $1.1 million are included in interest income for the six months ended June 30, 2025 and June 30, 2024, respectively.

Current wording

Includes loan fees of $2.1 million and $2.2 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. Prepayment penalty fees of $2.3 million and $1.9 million are included in interest income for the nine months ended September 30, 2025 and September 30, 2024, respectively.

Previous wording

Net interest income, before provision for credit losses, of $111.6 million for the second quarter of 2025 increased by $759,000, or 0.7%, from the second quarter of 2024. The increase in net interest income compared to the second quarter of 2024 was due primarily to a decrease in interest expense from borrowings offset partially by lower interest income in the second quarter of 2025.

Current wording

Net interest income, before provision for credit losses, of $115.6 million for the third quarter of 2025 increased by $2.0 million, or 1.72%, from the third quarter of 2024. The increase in net interest income in the third quarter of 2025 compared to the third quarter of 2024 was the net result of a $17.6 million decrease in interest expense that exceeded a $15.6 million decline in interest income. The decrease in interest expense was primarily due to a $14.9 million decrease in interest expense from a $1.2 billion decrease in average borrowings.

Previous wording

Total interest income of $144.2 million declined by $14.9 million, or 9.34%, when compared to the second quarter of 2024. This decrease was primarily due to a $1.12 billion decline in average interest-earning assets and a nine basis point decrease of the yield on earning assets. Average loan balances declined by $376.7 million from the second quarter of 2024. Compared to the second quarter of 2024, the average balance of investment securities decreased by $359.5 million, while the average amount of funds held at the Federal Reserve decreased by $371.9 million.

Current wording

Total interest income of $150.1 million declined by $15.6 million, or 9.44%, when compared to the third quarter of 2024. This decrease was primarily due to a $1.06 billion decline in average interest-earning assets and an 11 basis point decrease of the yield on earning assets. Average loan balances declined by $232.9 million from the third quarter of 2024. Compared to the third quarter of 2024, the average balance of investment securities decreased by $244.1 million, while the average amount of funds held at the Federal Reserve decreased by $581.3 million.

Previous wording

Total interest income and fees on loans for the second quarter of 2025 was $108.8 million, a decrease of $5.4 million, or 4.69%, from the second quarter of 2024. This decrease in income was primarily due to a decline in loan yields from 5.26% for the second quarter of 2024, to 5.22% for the second quarter of 2025. Loan yields decreased as declining short term interest rates such as the Prime rate impacted variable indexed loans, as well as lower utilization of higher yielding lines of credit.

Current wording

Total interest income and fees on loans for the third quarter of 2025 was $110.8 million, a decrease of $4.1 million, or 3.57%, from the third quarter of 2024. This decrease in income was due to both the decline in average loan balances and a decline in loan yields from 5.31% for the third quarter of 2024, to 5.25% for the third quarter of 2025. Loan yields decreased as declining short term interest rates, such as the Prime rate, lowered the yield on variable indexed loans.

Previous wording

Interest income from investment securities was $31.2 million, a decrease of $3.5 million, or 10.05%, from the second quarter of 2024. The decrease was driven primarily by a $2.8 million decrease in the positive carry on pay-fixed swaps that are available for sale investment fair value hedges. The spread between daily SOFR and fixed rate paid on these swaps decreased from 1.65% in the second quarter of 2024 to .72% in the second quarter of 2025. Excluding the impact of the fair value hedges, investment security yields increased by 12 basis points, partially offsetting the $360 million decrease in average investment balances.

Current wording

Interest income from investment securities was $31.7 million, a decrease of $1.8 million, or 5.33%, from the third quarter of 2024. The decrease was driven primarily by a $3.0 million decrease in the positive carry on pay-fixed swaps that are available-for-sale investment fair value hedges. The spread between daily SOFR and fixed rate paid on these swaps decreased from 1.71% in the third quarter of 2024 to .74% in the third quarter of 2025. Excluding the impact of the fair value hedges, investment security yields increased by 22 basis points, partially offsetting the impact on interest income from the $244.1 million decrease in average investment balances.

Previous wording

Interest expense was $32.6 million for the second quarter of 2025, a decrease of $15.6 million, compared to the second quarter of 2024. Total cost of funds of 1.03% for the second quarter of 2025 decreased from 1.38% for the year ago quarter. This 35 basis point decrease in cost of funds was primarily the result of a $1.3 billion decrease in borrowings, as well as the 18 basis point decrease in average borrowing costs, when compared to the second quarter of 2024. The redemption of $1.3 billion of Federal Reserve Bank Term Funding Program borrowings in the third quarter of 2024 resulted in the year over year decline in the level of borrowings. A 12 basis point decrease in the cost of total interest-bearing deposits was primarily due to a $160.6 million decrease in average time deposits and a 59 basis point decrease in the cost of time deposits. The cost of customer repurchase agreements increased from .47% in the second quarter of 2024 to 1.66% in the second quarter of 2025. Average noninterest-bearing deposits were 59.7% of total deposits for the second quarter of 2025, compared to 60.2% for the second quarter of 2024.

Current wording

Interest expense was $34.5 million for the third quarter of 2025, a decrease of $17.6 million, compared to the third quarter of 2024. Total cost of funds of 1.05% for the third quarter of 2025 decreased from 1.47% for the year ago quarter. This 42 basis point decrease in cost of funds was primarily the result of a $1.2 billion decrease in average borrowings, as well as the 16 basis point decrease in average borrowing costs, when compared to the third quarter of 2024. The redemption of $1.3 billion of Federal Reserve Bank Term Funding Program borrowings in the third quarter of 2024 resulted in the year over year decline in the level of borrowings. A 29 basis point decrease in the cost of total interest-bearing deposits was primarily due to a 19 basis point decrease in the cost of non-maturing interest bearing deposits. Additionally, time deposits declined by $159.8 million and the cost of time deposits decreased by 68 basis points. The cost of customer repurchase agreements increased from 1.73% in the third quarter of 2024 to 2.00% in the third quarter of 2025. Average noninterest-bearing deposits were 59.3% of total average deposits for the third quarter of 2025, compared to 59.1% for the third quarter of 2024.

Previous wording

Net interest income, before provision for credit losses, was $222.0 million for the six months ended June 30, 2025, a decrease of $1.3 million, or 0.56%, compared to $223.3 million for the same period in 2024. The decrease in net interest income for the six months ended June 30, 2025 compared to the same period in 2024 was due to a decrease in the balance and yield on average interest-earning assets, partially offset by a decrease in the balance and cost in interest-bearing liabilities. The average balance on interest-bearing liabilities decreased by $1.1 billion, or 7.51%, to $5.71 billion for the six months ended June 30, 2025, from $6.81 billion for the same period in the prior year. Our net interest margin (TE) was 3.31% for the first six months of 2025, compared to 3.07% for the same period of 2024.

Current wording

Net interest income, before provision for credit losses, was $337.6 million for the nine months ended September 30, 2025, an increase of $0.7 million, or 0.21%, compared to $336.9 million for the same period in 2024. The increase in net interest income for the nine months ended September 30, 2025 compared to the same period in 2024 was due to the net impact of a 26 basis point increase in the net interest margin that offset a $1.1 billion decrease in average earning assets. The average balance on interest-bearing liabilities decreased by $1.1 billion, or 16.25%, to $5.76 billion for the nine months ended September 30, 2025, from $6.88 billion for the same period in the prior year. Our net interest margin (TE) was 3.32% for the first nine months of 2025, compared to 3.06% for the same period of 2024.

Previous wording

Total interest income was $287.2 million for the six months ended June 30, 2025, which was $29.6 million, or 9.33%, lower than the same period of 2024. The decline was due to the decrease in the average balance on interest-earning assets which decreased by $1.1 billion, or 7.51%, to $13.56 billion for the six months ended June 30, 2025 from $14.66 billion for the same period in 2024, and an eight basis point decrease in the yield on earning assets, to 4.28% for the first six months of 2025, compared to 4.36% for 2024. The year-over-year decrease in average earning assets resulted from a decline of $404.4 million in average investment securities, a $367.2 million decrease in our average loan balances, and a $321.4 million decrease in the average amount of funds held at the Federal Reserve. The eight basis point decrease in the average earning asset yield compared to the first six months of 2024 resulted from a six basis point decrease in loan yields, from 5.28% for the first six months of 2024 to 5.22% for the same period of 2025, and a five basis point decrease in the non tax-equivalent yield on investment securities. Loan yields declined from 5.28% for the second quarter of 2024 to 5.22% for the second quarter of 2025, as the Federal Reserve decreased the fed funds rate by 100 basis points during the second half of 2024. Including the impact of fair value hedges, the yield on investment securities decreased from 2.67% for the first six months of 2024 to 2.62% for the six months ended June 30, 2025. The decrease in yield includes the positive carry on the fair value hedges, which resulted in $2.3 million of interest income for the six months ended June 30, 2025, compared to $7.8 million in the first six months of 2024.

Current wording

Total interest income was $437.3 million for the nine months ended September 30, 2025, which was $45.2 million, or 9.37%, lower than the same period of 2024. The decline was due to the decrease in the average balance in interest-earning assets which decreased by $1.1 billion, or 7.38%, to $13.66 billion for the nine months ended September 30, 2025 from $14.75 billion for the same period in 2024, and a nine basis point decrease in the yield on earning assets, to 4.29% for the first nine months of 2025, compared to 4.38% for the same period in 2024. The year-over-year decrease in average earning assets resulted from a decline of $350.7 million in average investment securities, a $322.2 million decrease in our average loan balances, and a $408.3 million decrease in the average amount of funds held at the Federal Reserve. The decrease in the average earning asset yield compared to the first nine months of 2024 resulted from a six basis point decrease in loan yields, from 5.29% for the first nine months of 2024 to 5.23% for the same period of 2025, and a four basis point decrease in the tax-equivalent yield on investment securities. Including the impact of fair value hedges, the yield on investment securities decreased from 2.68% for the first nine months of 2024 to 2.64% for the nine months ended September 30, 2025. The decrease in yield includes the positive carry on the fair value hedges, which resulted in $3.6 million of interest income for the nine months ended September 30, 2025, compared to $12.1 million in the first nine months of 2024.

Previous wording

Interest expense of $65.2 million for the six months ended June 30, 2025, decreased by $28.3 million from the same period of 2024. Total cost of funds for the first six months of 2025 was 1.03%, compared with 1.34% for the same period of 2024. Average noninterest-bearing deposits for the six months ending June 30, 2025 decreased by $138.9 million, compared to the first six months of 2024. Average noninterest-bearing deposits represented 59.37% of our total average deposits for the six months ended June 30, 2025, compared to 60.96% for the same period of 2024. The average rate paid on interest-bearing liabilities decreased by 46 basis points, to 2.30% for the first six months of 2025, from 2.76% for the same period of 2024. The average rate paid on interest-bearing deposits for the first six months of 2025 increased by three basis points from the same period in 2024. The average balance of time deposits decreased by $22.2 million to $567.8 million in the first six months of 2025 compared to $589.9 million in the same period in 2024, while the cost of time deposits decreased to 2.79%, from 3.04% in the same period in 2024. The average balance on non-maturity interest-bearing deposits increased from the prior year period by $241.4 million, with the cost of these deposits increasing by eight basis points. Average borrowings for the first six months of 2025 were $510.6 million at a cost of 4.61%, compared with a cost of 4.76% on $1.92 billion of average borrowings for the same period of 2024. The decrease in rates on deposits and borrowings was due to declining market rates and the redemption of Bank Term Funding Program borrowings.

Current wording

Interest expense of $99.7 million for the nine months ended September 30, 2025, was $45.9 million lower than the same period of 2024. Total cost of funds for the first nine months of 2025 was 1.04%, compared with 1.39% for the same period of 2024. Average noninterest-bearing deposits for the nine months ending September 30, 2025 decreased by $92.6 million, compared to the first nine months of 2024. Average noninterest-bearing deposits represented 59.34% of our total average deposits for the nine months ended September 30, 2025, compared to 60.32% for the same period of 2024. The average rate paid on interest-bearing liabilities decreased by 52 basis points, to 2.31% for the first nine months of 2025, from 2.83% for the same period of 2024. The average rate paid on interest-bearing deposits for the first nine months of 2025 decreased by eight basis points from the same period in 2024. The average balance of time deposits decreased by $68.3 million to $572.6 million in the first nine months of 2025 compared to $640.9 million in the same period in 2024, while the cost of time deposits decreased to 2.78%, from 3.19% in the same period in 2024. The average balance on non-maturity interest-bearing deposits increased from the prior year period by $201.3 million, with the cost of these deposits decreasing by one basis point. Average borrowings for the first nine months of 2025 were $507.0 million at a cost of 4.61%, compared with $1.86 billion at cost of 4.76% of average borrowings for the same period of 2024. The decrease in rates on deposits and borrowings was due to declining market rates and the redemption of Bank Term Funding Program borrowings.

Previous wording

There was no provision for credit losses in the second quarter of 2025, compared to no provision in the second quarter of 2024. Net charge-offs for the second quarter of 2025 were $249,000, compared to $31,000 in the second quarter of 2024. Projected loss rates were 0.93% at June 30, 2025, compared to 0.95% at June 30, 2024.

Current wording

There was a $1.0 million provision for credit losses in the third quarter of 2025, compared to no provision in the third quarter of 2024. Net recoveries for the third quarter of 2025 were $333,000, compared to net recoveries of $156,000 in the third quarter of 2024. Projected loss rates were 0.94% at September 30, 2025, compared to 0.97% at September 30, 2024.

Previous wording

There was a $2 million recapture of credit losses for the six months ended June 30, 2025, compared to no provision or recapture for credit losses for the same period of 2024. We experienced credit charge-offs of $469,000 and total recoveries of $350,000, resulting in net charge-offs of $119,000 for 2025 year-to-date. For the six months ended June 30, 2024, we experienced credit charge-offs of $4.3 million and total recoveries of $262,000, resulting in net charge-offs of $4.1 million. Refer to the discussion of “Allowance for Credit Losses” in Item 2 –Management’s Discussion and Analysis of Financial Condition and Results of Operations contained herein for discussion concerning observed changes in the credit quality of various components of our loan portfolio as well as changes and refinements to our methodology.

Current wording

There was a $1.0 million recapture of credit losses for the nine months ended September 30, 2025, compared to no provision or recapture for credit losses for the same period of 2024. For the nine months ended September 30, 2025, we experienced credit charge-offs of $536,000 and total recoveries of $750,000, resulting in net recoveries of $214,000. For the nine months ended September 30, 2024, we experienced credit charge-offs of $4.3 million and total recoveries of $444,000, resulting in net charge-offs of $3.9 million. Refer to the discussion of “Allowance for Credit Losses” in Item 2 –Management’s Discussion and Analysis of Financial Condition and Results of Operations contained herein for discussion concerning observed changes in the credit quality of various components of our loan portfolio as well as changes and refinements to our methodology.

Previous wording

No assurance can be given that economic conditions which affect the Company’s service areas or other circumstances will or will not be reflected in future changes in the level of our allowance for credit losses and the resulting provision or recapture of provision for credit losses. The process to estimate the allowance for credit losses requires considerable judgment and our economic forecasts may continue to vary due to the uncertainty of the future impact from the recent rise in interest rates, geopolitical events in Europe, and global inflation will have on future interest rates, unemployment, the overall economy and resulting impact on our customers. See “Allowance for Credit Losses” under Analysis of Financial Condition herein.

Current wording

No assurance can be given that economic conditions which affect the Company’s service areas or other circumstances will or will not be reflected in future changes in the level of our allowance for credit losses and the resulting provision or recapture of provision for credit losses. The process to estimate the allowance for credit losses requires considerable judgment and our economic forecasts may continue to vary due to the uncertainty of the future impact from geopolitical events, trade barriers, including tariff policies, and global inflation will have on future interest rates, unemployment, the overall economy and resulting impact on our customers. See “Allowance for Credit Losses” under Analysis of Financial Condition herein.

Previous wording

Trust and Investment Services represents our CitizensTrust group. The CitizensTrust group is made up of wealth management and investment services. They provide a variety of services, which include asset management, financial planning, estate planning, retirement planning, private and corporate trustee services, and probate services. Investment Services provides self-directed brokerage, 401(k) plans, mutual funds, insurance and other non-insured investment products. At June 30, 2025, CitizensTrust had approximately $5 billion in assets under management and administration, including $3.54 billion in assets under management. CitizensTrust generated fees of $3.7 million for the second quarter of 2025, compared to $3.4 million for the same period of 2024.

Current wording

Trust and Investment Services represents our CitizensTrust group. The CitizensTrust group is made up of wealth management and investment services. They provide a variety of services, which include asset management, financial planning, estate planning, retirement planning, private and corporate trustee services, and probate services. Investment Services provides self-directed brokerage, 401(k) plans, mutual funds, insurance and other non-insured investment products. At September 30, 2025, CitizensTrust had approximately $5.2 billion in assets under management and administration, including $3.7 billion in assets under management. CitizensTrust generated fees of $3.9 million for the third quarter of 2025, compared to $3.6 million for the same period of 2024.

Previous wording

Our ability to control noninterest expenses in relation to asset growth can be measured in terms of total noninterest expenses as a percentage of average assets. Noninterest expense as a percentage of average assets was 1.52% for the second quarter of 2025, compared to 1.40% for the second quarter of 2024.

Current wording

Our ability to control noninterest expenses in relation to asset growth can be measured in terms of total noninterest expenses as a percentage of average assets. Noninterest expense as a percentage of average assets was 1.50% for the third quarter of 2025, compared to 1.42% for the third quarter of 2024.

Previous wording

Our ability to control noninterest expenses in relation to the level of total revenue (net interest income before provision for credit losses plus noninterest income) can be measured by the efficiency ratio and indicates the percentage of net revenue that is used to cover expenses. The efficiency ratio was 45.55% for the second quarter of 2025, compared to 45.10% for the second quarter of 2024.

Current wording

Our ability to control noninterest expenses in relation to the level of total revenue (net interest income before provision for credit losses plus noninterest income) can be measured by the efficiency ratio and indicates the percentage of net revenue that is used to cover expenses. The efficiency ratio was 45.56% for the third quarter of 2025, compared to 46.53% for the third quarter of 2024.

Previous wording

Noninterest expense of $116.7 million for the first six months of 2025 was $433,000 higher than the prior year period. Year-over-year expense increases included $1.2 billion, or a 15.5% increase in data processing costs from continued investments in technology and automation, which coincides with a $351,000 decrease in salary and benefit expense. Regulatory assessment expense declined by $1.8 million as there was additional accruals in the first half of 2024 for the FDIC special assessment fee from initial estimates of losses from bank failures in 2023. This was offset by the impact of the change in unfunded commitment reserve. The first six months of 2025 included $500,000 in provision for unfunded loan commitments, compared to $500,000 recapture of for the same period of 2024, resulting in a $1 million increase in expense. Legal expenses also decreased by $896,000 in the first half of 2025, primarily due to legal expenses incurred in the first half of 2024 related to the lawsuit the Company pursued related to allegations of trade secrets misappropriation that was settled subsequent to the end of the second quarter of 2025. As a percentage of average assets, noninterest expense was 1.55% for the six months ended June 30, 2025, compared to 1.44% for the same period of 2024. For the six months ended June 30, 2025, the efficiency ratio was 46.12%, compared to 46.17% for the same period of 2024.

Current wording

Noninterest expense of $175.3 million for the first nine months of 2025 was $173,000 higher than the prior year period. Year-over-year expense increases included $1.6 million, or a 14.1% increase in computer software expense related to data processing costs from continued investments in technology and automation, which coincides with a $1.1 million decrease in salary and benefit expense. Regulatory assessment expense declined by $1.9 million as there was additional accruals in the first half of 2024 for the FDIC special assessment fee from initial estimates of losses from bank failures in 2023. This was offset by the impact of the change in unfunded commitment reserve. The first nine months of 2025 included $1.0 million in provision for unfunded loan commitments, compared to $1.3 million in recapture of provision for in the same period of 2024, resulting in a $2.3 million increase in expense. Legal expenses decreased by $1.3 million in the first nine months of 2025, primarily due to legal expenses incurred in the first nine months of 2024 related to the lawsuit the Company pursued related to allegations of trade secrets misappropriation that was settled in the third quarter of 2025. As a percentage of average assets, noninterest expense was 1.53% for the nine months ended September 30, 2025, compared to 1.43% for the same period of 2024. For the nine months ended September 30, 2025, the efficiency ratio was 45.93%, compared to 46.29% for the same period of 2024.

Previous wording

The Company’s effective tax rate for the three and six months ended June 30, 2025 was 26.50%, compared to 27.25% for the three and six months ended June 30, 2024, respectively. Our estimated annual effective tax rate also varies depending upon the level of tax-advantaged income from municipal securities and BOLI, as well as available tax credits. The decrease in the effective tax rate was primarily driven by increased investments in solar tax credits.

Current wording

The Company’s effective tax rate for the three and nine months ended September 30, 2025 was 23.80% and 25.60% compared to 24.25% and 26.25%, for the three and nine months ended September 30, 2024, respectively. Our estimated annual effective tax rate also varies depending upon the level of tax-advantaged income from municipal securities and bank owned life insurance ("BOLI"), as well as available tax credits. The decrease in the effective tax rate was primarily driven by increased investments in solar tax credits.

Previous wording

Total assets of $15.41 billion at June 30, 2025 increased by $260.5 million, or 1.72%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets of $13.74 billion at June 30, 2025 increased by $217.1 million, or 1.60%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $492.8 million increase in interest-earning balances due from the Federal Reserve, offset by a $177.9 million decrease in total loans, and a $108.2 million decrease in investment securities.

Current wording

Total assets of $15.67 billion at September 30, 2025 increased by $512.6 million, or 3.38%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets of $14.01 billion at September 30, 2025 increased by $483.9 million, or 3.58%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $581.2 million increase in interest-earning balances due from the Federal Reserve, offset by a $65.5 million decrease in total loans, and a $44.5 million decrease in investment securities.

Previous wording

Total liabilities were $13.17 billion at June 30, 2025, an increase of $206.5 million, or 1.59%, from total liabilities of $12.97 billion at December 31, 2024. Total deposits increased by $36.4 million, or 0.30%, with noninterest-bearing deposits increasing by $210.0 million, or 2.98%. Interest-bearing deposits declined by $173.6 million, or 3.53%. Borrowings remained the same balance as of December 31, 2024. At June 30, 2025, total borrowings consisted of $500 million of FHLB advances, at an average cost of approximately 4.6%.

Current wording

Total liabilities were $13.38 billion at September 30, 2025, an increase of $416.8 million, or 3.21%, from total liabilities of $12.97 billion at December 31, 2024. Total deposits increased by $175.9 million, or 1.47%, with noninterest-bearing deposits increasing by $207.9 million, or 2.95%. Interest-bearing deposits declined by $32.0 million, or 0.65%. Borrowings remained the same balance as of December 31, 2024. At September 30, 2025, total borrowings consisted of $500 million of FHLB advances, at an average cost of approximately 4.6%.

Previous wording

Total equity increased $54.0 million to $2.24 billion at June 30, 2025, compared to total equity of $2.19 billion at December 31, 2024. Increases to equity included $101.7 million in net earnings and a $43.9 million increase in other comprehensive income that were partially offset by $55.6 million in cash dividends. In the first half of 2025, we repurchased, under our stock repurchase plan, 2,063,564 shares of common stock, at an average repurchase price of $18.15, totaling $37.5 million. We engaged in no stock repurchases during the first half of 2024.

Current wording

Total equity increased $95.8 million to $2.28 billion at September 30, 2025, compared to total equity of $2.19 billion at December 31, 2024. Increases to equity included $154.3 million in net earnings and a $64.3 million increase in other comprehensive income that were partially offset by $83.1 million in cash dividends. In the first nine months of 2025, we repurchased, under our stock repurchase plan, 2,360,070 shares of common stock, at an average repurchase price of $18.43, totaling $43.5 million. We engaged in no stock repurchases during the first nine months of 2024.

Previous wording

The Company maintains a portfolio of investment securities to provide interest income and to serve as a source of liquidity for its ongoing operations. We continued to shrink our investment portfolio. At June 30, 2025, total investment securities were $4.81 billion. This represented a decrease of $108.2 million, or 2.20%, from $4.92 billion at December 31, 2024. The overall decrease in investment securities was primarily due to a $55.8 million decline in our AFS securities. At June 30, 2025, our AFS investment securities totaled $2.49 billion, inclusive of a pre-tax net unrealized loss of $363.7 million. The $84 million increase in fair value of our AFS securities was partially offset by a $17 million decrease in the fair value of our derivatives that hedge the change in value of our AFS portfolio. The after-tax unrealized loss reported in AOCI on our AFS investment securities at June 30, 2025 was $258 million. The changes in the net unrealized holding loss resulted primarily from fluctuations in market interest rates. At June 30, 2025, investment securities HTM totaled $2.33 billion. For the six months ended June 30, 2025 and 2024, repayments/maturities of investment securities totaled $220 million and $258.4 million, respectively. The Company purchased $29.3 million and $33 million of short-term treasury notes for pledging purposes in the second quarter of 2025 and 2024, respectively. We also originated $6.2 million of Commercial Property Assessed Clean Energy ("C-PACE") bonds in the first half of 2025, which are included in our HTM securities portfolio. There were no investment securities sold during the second quarter of 2025 and 2024.

Current wording

The Company maintains a portfolio of investment securities to provide interest income and to serve as a source of liquidity for its ongoing operations. At September 30, 2025, total investment securities were $4.88 billion. This represented a decrease of $44.5 million, or 0.90%, from $4.92 billion at December 31, 2024. The overall decrease in investment securities was primarily due to a $81.8 million decline in our HTM securities. At September 30, 2025, our AFS investment securities totaled $2.58 billion, inclusive of a pre-tax net unrealized loss of $333.8 million. The $113.9 million increase in fair value of our AFS securities since December 31, 2024 was partially offset by a $18.4 million decrease in the fair value of our derivatives that hedge the change in value of our AFS portfolio. The after-tax unrealized loss reported in AOCI on our AFS investment securities at September 30, 2025 was $236.8 million. The changes in the net unrealized holding loss resulted primarily from fluctuations in market interest rates. At September 30, 2025, investment securities HTM totaled $2.30 billion. For the nine months ended September 30, 2025 and 2024, repayments/maturities of investment securities totaled $339.4 million and $366.4 million, purchases totaled $250.2 million and $44.9 million, and sales totaled $65.5 million and $245.3 million, respectively. Total Commercial Property Assessed Clean Energy ("C-PACE") bonds which are included in our HTM securities portfolio at September 30, 2025 were $17.7 million, of which $6.2 million was originated in the first nine months of 2025.

Previous wording

As of June 30, 2025, approximately $24.0 million in U.S. government agency bonds are callable. The Agency CMO/REMIC securities are backed by agency-pooled collateral. Municipal bonds, which represented approximately 9% of the total investment portfolio, are predominately AA or higher rated securities.

Current wording

As of September 30, 2025, $21.8 million in U.S. government agency bonds are callable. The Agency CMO/REMIC securities are backed by agency-pooled collateral. Municipal bonds, which represented approximately 9% of the total investment portfolio, are predominately AA or higher rated securities.

Previous wording

Total loans and leases, at amortized cost, of $8.36 billion at June 30, 2025 decreased by $177.9 million, or 2.08%, from December 31, 2024. The decrease in total loans included decreases of $186.1 million in dairy & livestock and agribusiness loans and $12.8 million in commercial and industrial loans. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 81% at the end of 2024 to 62% at June 30, 2025. Excluding the decline in dairy & livestock loans, total gross loans would have increased by $8 million, as commercial real estate loans grew by $10 million and SFR mortgage loans grew by $19.3 million.

Current wording

Total loans and leases, at amortized cost, of $8.47 billion at September 30, 2025 decreased by $65.5 million, or 0.77%, from December 31, 2024. The decrease in total loans included decreases of $138.5 million in dairy & livestock loans, offset partially by increases of $14.0 million in commercial and industrial loans, $27.9 million in commercial real estate loans, $13.9 million in construction loans, $11.6 million in agribusiness loans, and $16.9 million in single family residential loans. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 81% at the end of 2024 to 64% at September 30, 2025. Excluding the decline in dairy & livestock loans, total gross loans would have increased by $73.0 million.

Previous wording

As of June 30, 2025, $417.1 million, or 6.40% of the total commercial real estate loans included loans secured by farmland, compared to $449.8 million, or 6.91%, at December 31, 2024. The loans secured by farmland included $104.6 million for loans secured by dairy & livestock land and $312.6 million for loans secured by agricultural land at June 30, 2025, compared to $109.1 million for loans secured by dairy & livestock land and $340.7 million for loans secured by agricultural land at December 31, 2024. As of June 30, 2025, dairy & livestock and agribusiness loans of $233.8 million were comprised of $199.4 million of dairy & livestock loans and $34.4 million of agribusiness loans, compared to $419.9 million comprised of $385.3 million of dairy & livestock loans and $34.6 million of agribusiness loans December 31, 2024.

Current wording

As of September 30, 2025, $411.4 million, or 6.30% of the total commercial real estate loans included loans secured by farmland, compared to $449.8 million, or 6.91%, at December 31, 2024. The loans secured by farmland included $102.0 million for loans secured by dairy & livestock land and $309.4 million for loans secured by agricultural land at September 30, 2025, compared to $109.1 million for loans secured by dairy & livestock land and $340.7 million for loans secured by agricultural land at December 31, 2024. As of September 30, 2025, dairy & livestock and agribusiness loans of $293.0 million were comprised of $246.7 million of dairy & livestock loans and $46.2 million of agribusiness loans, compared to $419.9 million comprised of $385.3 million of dairy & livestock loans and $34.6 million of agribusiness loans December 31, 2024.

Previous wording

As of June 30, 2025, the Company had $210.5 million of total SBA 504 loans. SBA 504 loans include term loans to finance capital expenditures and for the purchase of commercial real estate. Initially the Bank provides two separate loans to the borrower representing a first and second lien on the collateral. The loan with the first lien is typically at a 50% advance to the acquisition costs and the second lien loan provides the financing for 40% of the acquisition costs with the borrower’s down payment of 10% of the acquisition costs. The Bank retains the first lien loan for its term and sells the second lien loan to the SBA subordinated debenture program. A majority of the Bank’s 504 loans are granted for the purpose of commercial real estate acquisition. As of June 30, 2025, the Company had $61.3 million of total SBA 7(a) loans that include a guarantee of payment from the SBA (typically 75% of the loan amount, but up to 90% in certain cases) in the event of default. The SBA 7(a) loans include revolving lines of credit (SBA Express) and term loans of up to ten (10) years to finance long-term working capital requirements, capital expenditures, and/or for the purchase or refinance of commercial real estate.

Current wording

As of September 30, 2025, the Company had $211.2 million of total SBA 504 loans. SBA 504 loans include term loans to finance capital expenditures and for the purchase of commercial real estate. Initially the Bank provides two separate loans to the borrower representing a first and second lien on the collateral. The loan with the first lien is typically at a 50% advance to the acquisition costs and the second lien loan provides the financing for 40% of the acquisition costs with the borrower’s down payment of 10% of the acquisition costs. The Bank retains the first lien loan for its term and sells the second lien loan to the SBA subordinated debenture program. A majority of the Bank’s 504 loans are granted for the purpose of commercial real estate acquisition. As of September 30, 2025, the Company had $55.0 million of total SBA 7(a) loans that include a guarantee of payment from the SBA (typically 75% of the loan amount, but up to 90% in certain cases) in the event of default. The SBA 7(a) loans include revolving lines of credit (SBA Express) and term loans of up to ten (10) years to finance long-term working capital requirements, capital expenditures, and/or for the purchase or refinance of commercial real estate.