WESTERN ALLIANCE BANCORPORATION

Previous wording

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and involve certain risks, uncertainties, assumptions, and changes in circumstances that may cause the Company's actual results to differ significantly from historical results and those expressed in any forward-looking statement. Risks and uncertainties include those set forth in the Company's filings with the SEC and the following factors that could cause actual results to differ materially from those presented: 1) adverse financial market and economic conditions, including the effects of inflation and any recession in the United States, adverse developments in the financial services industry generally, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers, and any related impact on depositor behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the military conflicts in Ukraine and the Middle East; 2) changes in interest rates and increased rate competition; 3) the discontinuation of or substantial changes to interest rate benchmarks utilized in our lending, borrowing and hedging activities; 4) exposure of financial instruments to certain market risks that may increase the volatility of earnings and AOCI; 5) the inherent risk associated with accounting estimates, including the impact to the allowance, provision for credit losses, and capital levels; 6) exposure to natural and man-made disasters in markets where we operate and the impact of climate change and sustainability practices on us and our customers; 7) the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; 8) higher defaults on our loan portfolio than we expect; 9) increased foreclosures and ownership of real property; 10) changes in management's estimate of the adequacy of the allowance for credit losses; 11) dependency on real estate and events that negatively impact the real estate market; 12) concentrations in certain business lines or product types within our loan portfolio; 13) residual risk retained by us on reference pools covered by credit linked notes; 14) exposures related to the properties to which we acquire title; 15) ability to compete in a highly competitive market; 16) expansion strategies through acquisitions or implementation of new lines of business or new products and services that may not be successful and supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; 17) uncertainty associated with digital payment initiatives; 18) ability to recruit and retain qualified employees and implement adequate succession planning to mitigate the loss of key members of our senior management team; 19…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and are subject to certain risks, uncertainties, assumptions, and changes in circumstances that may cause the Company's actual results to differ significantly from historical results and those expressed in any forward-looking statement. Risks and uncertainties include those set forth in the Company's filings with the SEC and the following factors that could cause actual results to differ materially from historical or expected results: 1) adverse financial market and economic conditions, including the effects of inflation and any recession in the United States, adverse developments in the financial services industry generally, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers, and any related impact on depositor behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the geopolitical conflicts such as the conflicts in Ukraine and the Middle East; 2) changes in interest rates and increased rate competition; 3) the discontinuation of or substantial changes to interest rate benchmarks utilized in our lending, borrowing and hedging activities; 4) exposure of financial instruments to certain market risks that may increase the volatility of earnings and AOCI; 5) the inherent risk associated with accounting estimates, including the impact to the allowance, provision for credit losses, and capital levels; 6) exposure to natural and man-made disasters in markets where we operate and the impact of climate change and sustainability practices on us and our customers; 7) the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; 8) higher defaults on our loan portfolio than we expect; 9) increased foreclosures and ownership of real property; 10) changes in management's estimate of the adequacy of the allowance for credit losses; 11) dependency on real estate and events that negatively impact the real estate market; 12) concentrations in certain business lines or product types within our loan portfolio; 13) residual risk retained by us on reference pools covered by credit linked notes; 14) exposures related to the properties to which we acquire title; 15) ability to compete in a highly competitive market; 16) expansion strategies through acquisitions or implementation of new lines of business or new products and services that may not be successful and supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; 17) uncertainty associated with digital payment initiatives; 18) ability to recruit and retain qualified employees and implement adequate succession planning to mitigate the loss …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

For more information regarding risks that may cause the Company's actual results to differ materially from any forward-looking statements, see “Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, “Risk Factors” in Part II, Item 1A of this Form 10-Q, and related disclosures in other filings with the SEC. All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Current wording

For more information regarding risks that may cause the Company's actual results to differ materially from any forward-looking statements, see “Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, “Risk Factors” in Part II, Item 1A of this Form 10-Q, and related disclosures in other filings with the SEC. All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are based only on information currently available to us and speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Form 10-Q might not occur, and you should not put undue reliance on any forward-looking statements.

Previous wording

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 30% of total loans at June 30, 2025 and December 31, 2024. Approximately 15% and 16% of CRE loans, excluding construction and land loans, were owner occupied at June 30, 2025 and December 31, 2024, respectively, and less than 5% were non-owner occupied office loans at June 30, 2025 and December 31, 2024. Due to changing conditions in the CRE market, the Company has implemented enhanced measures to monitor and manage credit risk related to this portfolio segment, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. During the three and six months ended June 30, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $17.5 million and $32.0 million, respectively, which primarily related to office properties. As the Company is focused on moving nonperforming loans through its standard credit resolution process, the Company took possession of five CRE office properties during the three and six months ended June 30, 2025, which drove the net $166 million increase in other assets acquired through foreclosure from December 31, 2024. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

Current wording

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 29% and 30% of total loans at September 30, 2025 and December 31, 2024, respectively. Approximately 14% and 16% of CRE loans, excluding construction and land loans, were owner occupied at September 30, 2025 and December 31, 2024, respectively, and less than 5% were non-owner occupied office loans at September 30, 2025 and December 31, 2024. Due to changing conditions in the CRE market, the Company has implemented enhanced measures to monitor and manage credit risk related to this portfolio segment, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. During the three and nine months ended September 30, 2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $12.9 million and $44.9 million, respectively, which primarily related to office properties. As the Company is focused on moving nonperforming loans through its standard credit resolution process, the Company took possession of five CRE office properties during the nine months ended September 30, 2025 which drove the net increase in other assets acquired through foreclosure from December 31, 2024. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

Previous wording

WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware. WAL provides a full spectrum of customized loan, deposit and treasury management capabilities, including funds transfer and other digital payment offerings, through its wholly-owned banking subsidiary, WAB, together with its banking divisions: ABA, BON, FIB, Bridge, and TPB.

Current wording

WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware. WAL provides a full spectrum of customized loan, deposit and treasury management capabilities, including funds transfer and other digital payment offerings, through its wholly-owned banking subsidiary, WAB. Effective as of October 4, 2025, the Company completed its brand unity initiative, consolidating its legacy division bank brands, ABA, BON, FIB, Bridge, and TPB, under a single unified name, Western Alliance Bank.

Previous wording

Financial Results Highlights for the Second Quarter of 2025

Current wording

Financial Results Highlights for the Third Quarter of 2025

Previous wording

•Net income available to common stockholders of $227.2 million and diluted earnings per share of $2.07, compared to $190.4 million and $1.75 per share, respectively, for the second quarter 2024

Current wording

•Net income available to common stockholders of $250.2 million and diluted earnings per share of $2.28, compared to $196.6 million and $1.80 per share, respectively, for the third quarter 2024

Previous wording

•Net revenue of $845.9 million, compared to $771.8 million for the second quarter 2024, with non-interest expense of $514.7 million, compared to $486.8 million for the second quarter 2024

Current wording

•Net revenue of $938.2 million, compared to $823.1 million for the third quarter 2024, with non-interest expense of $544.4 million, compared to $537.4 million for the third quarter 2024

Previous wording

•Nonperforming loans to funded HFI loans decreased to 0.76%, compared to 0.89% at December 31, 2024

Current wording

•Nonperforming loans to funded HFI loans increased to 0.92%, compared to 0.89% at December 31, 2024

Previous wording

•Nonperforming assets (nonaccrual loans and repossessed assets) increased to 0.74%of total assets, compared to 0.65% at December 31, 2024

Current wording

•Nonperforming assets (nonaccrual loans and repossessed assets) increased to 0.72%of total assets, compared to 0.65% at December 31, 2024

Previous wording

•Annualized net loan charge-offs to average loans outstanding of 0.22%, compared to 0.18% for the second quarter 2024

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•Annualized net loan charge-offs to average loans outstanding of 0.22%, compared to 0.20% for the third quarter 2024

Previous wording

•Net interest margin of 3.53%, decreased from 3.63% in the second quarter 2024

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•Net interest margin of 3.53%, decreased from 3.61% in the third quarter 2024

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•Tangible common equity ratio of 7.2%, flat from December 31, 20241

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•Tangible common equity ratio of 7.1%, compared to 7.2% at December 31, 20241

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•Book value per common share of $61.77, an increase of 6.1% from $58.24 at December 31, 2024

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•Book value per common share of $64.45, an increase of 10.7% from $58.24 at December 31, 2024

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•Tangible book value per share, net of tax, of $55.87, an increase of$3.60, or 6.9%, from $52.27 at December 31, 20241

Current wording

•Tangible book value per share, net of tax, of $58.56, an increase of$6.29, or 12.0%, from $52.27 at December 31, 20241

Previous wording

•Efficiency ratio of 60.1% in the second quarter 2025, compared to 62.3% in the second quarter 20241

Current wording

•Efficiency ratio of 57.4% in the third quarter 2025, compared to 64.5% in the third quarter 20241

Previous wording

The impact to the Company from these items, and others of both a positive and negative nature, are discussed in more detail below as they pertain to the Company’s overall comparative performance for the three and six months ended June 30, 2025.

Current wording

The impact to the Company from these items, and others of both a positive and negative nature, are discussed in more detail below as they pertain to the Company’s overall comparative performance for the three and nine months ended September 30, 2025.

Previous wording

Total assets increased to $86.7 billion at June 30, 2025 from $80.9 billion at December 31, 2024. The increase in total assets of $5.8 billion, or 7.2%, was supported by an increase in deposits, which contributed to an increase in investment securities of $3.5 billion and funded HFI and HFS loan growth of $2.3 billion and $736 million, respectively, which was partially offset by a decrease in cash of $1.3 billion.

Current wording

Total assets increased to $91.0 billion at September 30, 2025, an increase of $10.0 billion, or 12.4%, from $80.9 billion at December 31, 2024. Higher deposit levels supported increases in investment securities and cash of $3.7 billion and $1.7 billion, respectively, and also funded HFI and HFS loan growth of $3.0 billion and $1.2 billion, respectively.

Previous wording

Loans HFI increased $2.3 billion, or 4.2%, to $55.9 billion as of June 30, 2025, compared to $53.7 billion as of December 31, 2024. By loan type, commercial and industrial, commercial real estate, and residential loans increased $1.8 billion, $311 million, and $139 million, respectively, from December 31, 2024. In addition, loans HFS increased $736 million from $2.3 billion as of December 31, 2024 primarily due to an increase in non-EBO and agency-conforming loans.

Current wording

Loans HFI increased $3.0 billion, or 5.5%, to $56.6 billion as of September 30, 2025, compared to $53.7 billion as of December 31, 2024. By loan type, commercial and industrial, commercial real estate, and residential loans increased $2.6 billion, $476 million, and $325 million, respectively, from December 31, 2024. In addition, loans HFS increased $1.2 billion from $2.3 billion as of December 31, 2024 primarily due to an increase in non-EBO loans.

Previous wording

Total deposits increased $4.8 billion, or 7.2%, to $71.1 billion as of June 30, 2025 from $66.3 billion as of December 31, 2024. By type, the increase in deposits from December 31, 2024 was driven by increases of $4.2 billion and $1.0 billion in non-interest bearing deposits and savings and money market accounts, respectively, partially offset by a decrease of $204 million in both interest bearing demand deposits and certificates of deposit.

Current wording

Total deposits increased $10.9 billion, or 16.4%, to $77.2 billion as of September 30, 2025 from $66.3 billion as of December 31, 2024. By type, the increase in deposits from December 31, 2024 was driven by increases of $7.8 billion, $3.4 billion, and $544 million in non-interest bearing deposits, savings and money market accounts, and interest bearing demand deposits, respectively, partially offset by a decrease of $839 million in certificates of deposit.

Previous wording

Banking regulations define PPNR as the sum of net interest income and non-interest income less expenses before adjusting for loss provisions. Management believes this is an important metric as it illustrates the underlying performance of the Company, it enables investors and others to assess the Company's ability to generate capital to cover credit losses through the credit cycle, and provides consistent reporting with a key metric used by bank regulatory agencies.

Current wording

Banking regulations define PPNR as the sum of net interest income and non-interest income less expenses before adjusting for loss provisions. Management believes this is an important metric as it illustrates the underlying performance of the Company, enables investors and others to assess the Company's ability to generate capital to cover credit losses through the credit cycle, and provides consistent reporting with a key metric used by bank regulatory agencies.

Previous wording

The following tables present financial measures related to tangible common equity. Tangible common equity represents total stockholders' equity reduced by goodwill and intangible assets and preferred stock. Management believes tangible common equity financial measures are useful in evaluating the Company's capital strength, financial condition, and ability to manage potential losses.

Current wording

The following tables present financial measures related to tangible common equity. Tangible common equity represents total equity reduced by goodwill and intangible assets and preferred stock. Management believes tangible common equity financial measures are useful in evaluating the Company's capital strength, financial condition, and ability to manage potential losses.

Previous wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $10.2 million and $9.9 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $9.7 million and $10.0 million for the three months ended September 30, 2025 and 2024, respectively.

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(2)Included in the yield computation are net loan fees of $25.5 million and $32.1 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

(2)Included in the yield computation are net loan fees of $28.1 million and $21.7 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $20.3 million and $19.5 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $30.1 million and $29.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

(2)Included in the yield computation are net loan fees of $49.3 million and $65.2 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(2)Included in the yield computation are net loan fees of $77.4 million and $86.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The Company's primary source of revenue is interest income. For the three months ended June 30, 2025, interest income totaled $1.2 billion, an increase of $6.9 million, or 0.6%, compared to $1.1 billion for the three months ended June 30, 2024. This increase was primarily the result of increases in interest income from loans HFS and investment securities of $31.0 million and $11.0 million, respectively, resulting from increases in the average balances of these assets of $2.0 billion and $1.1 billion, respectively. These increases were partially offset by a decrease in interest income from loans HFI of $13.4 million as lower loan yields outweighed the increase in the average balance of $4.1 billion.

Current wording

The Company's primary source of revenue is interest income. For the three months ended September 30, 2025, interest income totaled $1.2 billion, an increase of $25.5 million, or 2.1%, compared to the three months ended September 30, 2024. This increase was primarily the result of increases in interest income from investment securities and loans HFS of $34.6 million and $10.2 million, respectively, resulting from increases in the average balances of these assets of $3.4 billion and $721 million, respectively. These increases were partially offset by a decrease in interest income from loans HFI of $7.2 million as lower loan yields outweighed the increase in the average balance of $3.4 billion.

Previous wording

For the six months ended June 30, 2025, interest income was $2.3 billion, an increase of $47.5 million, or 2.2%, compared to $2.2 billion for the six months ended June 30, 2024. This increase was primarily the result of an increase in interest income from loans HFS of $58.4 million driven by a higher average balance of $1.9 billion and a $35.0 million increase in interest income from investment securities primarily due to an increase in the average investment balance of $1.7 billion. These increases were partially offset by a $31.7 million decrease in interest income from loans HFI driven by lower yields net of a $3.9 billion increase in the average balance.

Current wording

For the nine months ended September 30, 2025, interest income was $3.5 billion, an increase of $73.0 million, or 2.1%, compared to $3.4 billion for the nine months ended September 30, 2024. This increase was primarily the result of an increase of $69.6 million in interest income from investment securities primarily due to an increase in the average investment balance of $2.3 billion and interest income from loans HFS of $68.6 million driven by a higher average balance of $1.5 billion. These increases were partially offset by a $38.9 million decrease in interest income from loans HFI driven by lower yields net of a $3.8 billion increase in the average balance.

Previous wording

For the three months ended June 30, 2025, interest expense totaled $456.8 million, a decrease of $34.1 million, or 4.8%, compared to $490.9 million for the three months ended June 30, 2024. The decrease in interest expense related to decreases in interest expense on deposits of $32.5 million due to lower rates and short-term borrowings of $23.2 million due to lower rates and a lower average balance of $1.1 billion. These decreases were partially offset by increases of $3.2 billion and $2.1 billion in average interest bearing deposits and long-term debt, respectively.

Current wording

For the three months ended September 30, 2025, interest expense totaled $475.1 million, a decrease of $28.0 million, or 5.6%, compared to $503.1 million for the three months ended September 30, 2024. The decrease in interest expense related to decreases in interest expense on deposits of $23.9 million due to lower rates and short-term borrowings of $27.6 million due to lower rates and a lower average balance of $1.6 billion. These decreases were partially offset by increases of $4.9 billion and $2.3 billion in average interest bearing deposits and long-term debt, respectively.

Previous wording

For the six months ended June 30, 2025, interest expense was $901.8 million, a decrease of $45.2 million, or 4.8%, compared to $947.0 million for the six months ended June 30, 2024. Interest expense on short-term borrowings decreased $56.2 million due to a decrease in the average balance of $1.6 billion in conjunction with lower rates, while interest expense on deposits decreased $34.8 million for the same period driven by lower rates net of a $4.3 billion increase in average interest bearing deposits. These decreases were partially offset by a $47.4 million increase in interest expense on long-term debt resulting from an increase in average balances of $2.1 billion.

Current wording

$83.7 million due to a decrease in the average balance of $1.6 billion in conjunction with lower rates, while interest expense on deposits decreased $58.7 million for the same period driven by lower rates net of a $4.5 billion increase in average interest bearing deposits. These decreases were partially offset by a $74.0 million increase in interest expense on long-term debt resulting from an increase in average balances of $2.2 billion.

Previous wording

For the three months ended June 30, 2025, net interest income totaled $697.6 million, an increase of $41.0 million, or 6.2%, compared to $656.6 million for the three months ended June 30, 2024. The increase in net interest income was driven by an increase in average interest earning assets of $6.7 billion and lower rates on deposits, partially offset by lower yields on interest earning assets. The decrease in net interest margin of 10 basis points to 3.53% is largely the result of the impact of lower rates on interest earning asset yields, partially offset by an increase in average interest earning assets.

Current wording

For the three months ended September 30, 2025, net interest income totaled $750.4 million, an increase of $53.5 million, or 7.7%, compared to $696.9 million for the three months ended September 30, 2024. The increase in net interest income was driven by an increase in average interest earning assets of $7.5 billion and lower rates on deposits, partially offset by lower yields on interest earning assets. The decrease in net interest margin of 8 basis points to 3.53% is largely the result of the impact of a lower rate environment on interest earning asset yields, partially offset by lower rates on interest bearing liabilities.

Previous wording

For the six months ended June 30, 2025, net interest income was $1.3 billion, an increase of $92.7 million, or 7.4%, compared to the six months ended June 30, 2024. The increase in net interest income reflects a $7.9 billion increase in average interest-earning assets, partially offset by an increase of $4.9 billion in average interest bearing liabilities. The decrease in net interest margin of 11 basis points to 3.50% is the result of a lower rate environment.

Current wording

For the nine months ended September 30, 2025, net interest income was $2.1 billion, an increase of $146.2 million, or 7.5%, compared to $2.0 billion for the nine months ended September 30, 2024. The increase in net interest income reflects a $7.8 billion increase in average interest-earning assets, partially offset by an increase of $5.0 billion in average interest bearing liabilities. The decrease in net interest margin of 10 basis points to 3.51% is primarily the result of a lower rate environment.

Previous wording

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three and six months ended June 30, 2025, the Company recorded a provision for credit losses of $39.9 million and $71.1 million, respectively, compared to $37.1 million and $52.3 million for the three and six months ended June 30, 2024, respectively. The provision for credit losses for the three and six months ended June 30, 2025 is primarily reflective of net loan charge-offs of $29.6 million and $55.4 million, respectively, and loan growth.

Current wording

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three and nine months ended September 30, 2025, the Company recorded a provision for credit losses of $80.0 million and $151.1 million, respectively, compared to $33.6 million and $85.9 million for the respective periods in 2024. The provision for credit losses for the three and nine months ended September 30, 2025 is primarily reflective of net loan charge-offs of $31.1 million and $86.5 million, respectively, establishment of a $29.6 million reserve related to the Cantor Group V loan, and qualitative overlays.

Previous wording

Total non-interest income for the six months ended June 30, 2025 increased $30.6 million compared to the same period in 2024 driven primarily by increases in service charges and loan fees, income from bank owned life insurance, and gain on sales of investment securities as discussed in the above paragraph. These increases were partially offset by decreases in net loan servicing revenue and income from equity investments. The decrease in net loan servicing revenue of $24.4 million resulted from fair value losses on MSRs and lower servicing income. The decrease in income from equity investments of $23.2 million was primarily due to timing of income recognition on an equity investment that is expected to be recovered over time.

Current wording

Total non-interest income for the nine months ended September 30, 2025 increased by $92.2 million compared to the same period in 2024. This growth was primarily attributable to higher service charges and loan fees, net gain on mortgage loan origination and sale activities, other non-interest income, and income from bank owned life insurance. The increases in net gain on mortgage loan origination and sale activities, as well as other non-interest income are discussed in the preceding paragraph. The increase in service charges and loan fees of $45.2 million was driven by service charges on insured deposit products. Income from bank owned life insurance rose by$18.5 million, reflecting income from a new policy entered into during the third quarter of 2024. Partially offsetting these increases were declines in income from equity investments and net loan servicing revenue. The $21.2 million decrease in income from equity investments was primarily due to the timing of income recognition on an equity investment, while the $17.6 million reduction in net loan servicing revenue resulted from fair value losses on MSRs and lower servicing income.

Previous wording

Total non-interest expense for the three months ended June 30, 2025 increased $27.9 million compared to the same period in 2024 primarily driven by increases in salaries and employee benefits as well as data processing expenses, partially offset by a decrease in deposit costs. Salaries and employee benefits increased $26.9 million due to increases in average salary and headcount. Data processing expenses increased $9.3 million due to higher software fees and an increase in software depreciation. These increases were partially offset by a decrease in deposit costs of $26.3 million as a result of lower ECR rates.

Current wording

Total non-interest expense for the three months ended September 30, 2025 increased by $7.0 million compared to the same period in 2024, primarily due to higher salaries and employee benefits, other non-interest expense, and data processing costs. Salaries and employee benefits rose by $35.7 million, reflecting increases in average salary and headcount. Other non-interest expense grew by $9.6 million, largely driven by increased costs from operating OREO properties. Data processing costs were up $9.4 million attributable to higher software licensing fees and associated depreciation. These increases were partially offset by a reduction in deposit costs of $32.9 million resulting from lower ECR rates as well as a decrease in insurance expense of $10.9 million, due to lower FDIC assessment fees following a decline in brokered deposit levels.

Previous wording

Total non-interest expense for the six months ended June 30, 2025 increased $46.5 million compared to the same period in 2024 primarily driven by an increase in salaries and employee benefits and data processing expenses as noted in the above paragraph. These increases were partially offset by decreases in deposit costs and insurance expense. Lower ECR rates drove the decrease in deposit costs, while the decrease in insurance costs was due to a reduction to insured and brokered deposit levels in the current year and a net FDIC special assessment charge of $11.6 million recognized during the six months ended June 30, 2024.

Current wording

Total non-interest expense for the nine months ended September 30, 2025 increased by $53.5 million compared to the same period in 2024, mainly due to higher salaries and employee benefits, data processing costs, and other non-interest expense, as discussed in the preceding paragraph. These increases were partially offset by decreases in deposit costs and insurance expense. Lower ECR rates drove the $59.4 million decrease in deposit costs, while insurance costs decreased $28.3 million due to a reduction in brokered deposit levels and an adjustment to the FDIC special assessment loss estimate that resulted in a charge of $9.4 million recognized during the nine months ended September 30, 2024.

Previous wording

The Company's effective tax rate was 18.4% and 21.9% for the three months ended June 30, 2025 and 2024, respectively, and 18.8% and 22.7% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three and six month periods ended June 30, 2025 compared to the same periods in 2024 was primarily due to an increase in investment tax credit benefits and decreases in the state blended tax rate and nondeductible insurance premiums.

Current wording

The Company's effective tax rate was 17.0% and 20.7% for the three months ended September 30, 2025 and 2024, respectively, and 18.1% and 22.0% for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three and nine month periods ended September 30, 2025 compared to the same periods in 2024 was primarily due to an increase in investment tax credit benefits and a decrease in state taxes.

Previous wording

The Company's reportable segments are aggregated with a focus on products and services offered and consist of three reportable segments:

Current wording

The Company's operating segments are aggregated with a focus on products and services offered and consist of three reportable segments:

Previous wording

Total assets increased $5.8 billion, or 7.2%, to $86.7 billion at June 30, 2025, compared to $80.9 billion at December 31, 2024, supported by an increase in deposits, which drove HFI and HFS loan growth and contributed to an increase in investment securities of $3.5 billion. Loans HFI increased $2.3 billion, or 4.2%, to $55.9 billion as of June 30, 2025, compared to $53.7 billion as of December 31, 2024 driven by increases in commercial and industrial, commercial real estate, and residential loans of $1.8 billion, $311 million, and $139 million, respectively. Loans HFS increased $736 million from $2.3 billion as of December 31, 2024 due to an increase in non-EBO and agency-conforming loans.

Current wording

Total assets increased $10.0 billion, or 12.4%, to $91.0 billion at September 30, 2025, compared to $80.9 billion at December 31, 2024. Higher deposit levels supported increases in investment securities and cash of $3.7 billion and $1.7 billion, respectively, and also funded HFI and HFS loan growth. Loans HFI increased $3.0 billion, or 5.5%, to $56.6 billion as of September 30, 2025 compared to $53.7 billion as of December 31, 2024. By loan type, commercial and industrial, commercial real estate, and residential loans increased $2.6 billion, $476 million, and $325 million, respectively, from December 31, 2024. Loans HFS increased $1.2 billion from $2.3 billion as of December 31, 2024 primarily due to an increase in non-EBO loans.

Previous wording

Total liabilities increased $5.1 billion to $79.3 billion at June 30, 2025, compared to $74.2 billion at December 31, 2024 primarily due to an increase in total deposits of $4.8 billion, or 7.2%, to $71.1 billion. By type, the increase in deposits from December 31, 2024 was driven by increases of $4.2 billion in non-interest bearing deposits and $1.0 billion in savings and money market accounts, partially offset by decreases in both interest bearing demand deposits and certificates of deposit of $204 million. Other borrowings increased $479 million from December 31, 2024 primarily due to an increase in long-term FHLB advances.

Current wording

Total liabilities increased $9.1 billion to $83.3 billion at September 30, 2025, compared to $74.2 billion at December 31, 2024 as total deposits increased $10.9 billion, or 16.4%, to $77.2 billion. By type, the increase in deposits from December 31, 2024 was driven by increases of $7.8 billion in non-interest bearing deposits, $3.4 billion in savings and money market accounts, and $544 million in interest bearing demand deposits, partially offset by a decrease in certificates of deposit of $839 million. Other borrowings decreased $1.7 billion from December 31, 2024 as deposit growth facilitated a reduction in overnight borrowings.

Previous wording

Total equity of $7.4 billion at June 30, 2025 increased $700 million, or 10.4%, from December 31, 2024 primarily due to net income of $436.9 million, the issuance of preferred stock from the Company's REIT subsidiary, and unrealized fair value gains on AFS securities, recorded net of tax in OCI. Proceeds from the REIT preferred stock issuance totaled $293 million, net of issuance costs, and was recognized as a noncontrolling interest in subsidiary. These increases were partially offset by quarterly dividends to common and preferred stockholders as well as REIT preferred stockholders.

Current wording

Total equity of $7.7 billion at September 30, 2025 increased $983 million, or 14.7%, from December 31, 2024. This change was primarily attributable to net income of $697.4 million for the nine months ended September 30, 2025, the issuance of preferred stock from the Company's REIT subsidiary, and unrealized fair value gains on AFS securities, recorded net of tax in OCI. Proceeds from the REIT preferred stock issuance totaled $293 million, net of issuance costs, and was recognized as a noncontrolling interest in subsidiary. These increases were partially offset by quarterly dividends to common and preferred stockholders as well as REIT preferred stockholders.