UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-36872
HANCOCK WHITNEY CORPORATION
(Exact name of registrant as specified in its charter)
Mississippi
64-0693170
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Hancock Whitney Plaza, 2510 14th Street,
Gulfport, Mississippi
39501
(Address of principal executive offices)
(Zip Code)
(228) 868-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common stock, par value $3.33 per share
HWC
Nasdaq
6.25% Subordinated Notes
HWCPZ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
80,223,058 common shares were outstanding at July 31, 2026.
Table of Contents
Hancock Whitney Corporation
Index
Part I. Financial Information
Page
Number
ITEM 1.
Financial Statements
5
Consolidated Balance Sheets (unaudited) – June 30, 2026 and December 31, 2025
Consolidated Statements of Income (unaudited) – Three and Six Months Ended June 30, 2026 and 2025
6
Consolidated Statements of Comprehensive Income (unaudited) – Three and Six Months Ended June 30, 2026 and 2025
7
Consolidated Statements of Changes in Stockholders’ Equity (unaudited) – Three and Six Months Ended June 30, 2026 and 2025
8
Consolidated Statements of Cash Flows (unaudited) – Six Months Ended June 30, 2026 and 2025
9
Notes to Consolidated Financial Statements (unaudited) – June 30, 2026
10
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
40
ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
64
ITEM 4.
Controls and Procedures
66
Part II. Other Information
Legal Proceedings
67
ITEM 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Default Upon Senior Securities
Mine Safety Disclosures
ITEM 5.
Other Information
ITEM 6.
Exhibits
68
Signatures
69
2
Glossary of Defined Terms
Entities:
Hancock Whitney Corporation – a financial holding company registered with the Securities and Exchange Commission
Hancock Whitney Bank – a wholly-owned subsidiary of Hancock Whitney Corporation through which Hancock Whitney Corporation conducts its banking operations
Company – Hancock Whitney Corporation and its consolidated subsidiaries
Parent – Hancock Whitney Corporation, exclusive of its subsidiaries
Bank – Hancock Whitney Bank
Other Terms:
ACL – allowance for credit losses
AFS – available for sale securities
AI – Artificial Intelligence
ALCO – Asset Liability Management Committee
ALLL – allowance for loan and lease losses
AML – Anti-money laundering
AOCI – accumulated other comprehensive income or loss
ASC – Accounting Standards Codification
ASU – Accounting Standards Update
ATM – automated teller machine
Basel III – Basel Committee's 2010 Regulatory Capital Framework (Third Accord)
Beta – amount by which deposit or loan costs change in response to movement in short-term interest rates
BOLI – bank-owned life insurance
bp(s) – basis point(s)
C&I – commercial and industrial loans
CD – certificate of deposit
CDE – Community Development Entity
CECL – Current Expected Credit Losses
CEO – Chief Executive Officer
CFPB – Consumer Financial Protection Bureau
CFO – Chief Financial Officer
CISO – Chief Information Security Officer
CMO – collateralized mortgage obligation
Core client deposits – total deposits excluding public funds and brokered deposits
Core deposits – total deposits excluding certificates of deposits of $250,000 or more and brokered deposits
CRE – commercial real estate
CET1 – Common equity tier 1 capital as defined by Basel III capital rules
DIF – Deposit Insurance Fund
EVE – Economic Value of Equity
Excess Liquidity – deposits held at the Federal Reserve above normal levels
FASB – Financial Accounting Standards Board
FDIC – Federal Deposit Insurance Corporation
FDICIA – Federal Deposit Insurance Corporation Improvement Act of 1991
Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes
monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed
by the President subject to Senate confirmation, and serve 14-year terms.
Federal Reserve System – The 12 Federal Reserve Banks, with each one serving member banks in its own district. This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the
credit structure. They implement the policies of the Federal Reserve Board and also conduct economic research.
FFIEC – Federal Financial Institutions Examination Council
FHA – Federal Housing Administration
FHLB – Federal Home Loan Bank
GAAP – Generally Accepted Accounting Principles in the United States of America
3
HTM – held to maturity securities
ICS – Insured cash sweep
IRR – Interest rate risk
IRS – Internal Revenue Service
IT – Information Technology
LIHTC – Low Income Housing Tax Credit
LTIP – long-term incentive plan
MBS – mortgage-backed securities
MD&A – Management’s discussion and analysis of financial condition and results of operations
MDBCF – Mississippi Department of Banking and Consumer Finance
MEFD – reportable modified loans to borrowers experiencing financial difficulty
NAICS – North American Industry Classification System
NII – net interest income
n/m – not meaningful
NSF – Non-sufficient funds
OBBBA – “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” more commonly referred to as the “One Big Beautiful Bill Act,” enacted on July 4, 2025
OCI – other comprehensive income or loss
OD – Overdraft
OFB – OFB Bancshares, Inc., on a consolidated basis with its subsidiary One Florida Bank; an entity acquired on August 1, 2026
ORE – other real estate defined as foreclosed and surplus real estate
PCD – purchased credit deteriorated loans, as defined by ASC 326
Pension Plan – the Hancock Whitney Corporation Pension Plan and Trust Agreement
PPNR – Pre-provision net revenue
QSCB – Qualified School Construction Bonds
QZAB – Qualified Zone Academy Bonds
Repos – securities sold under agreements to repurchase
RSA – Restricted share awards
RSU – Restricted stock units
Sabal – Sabal Trust Company, an entity acquired on May 2, 2025
SBA – Small Business Administration
SBIC – Small Business Investment Company
SEC – U.S. Securities and Exchange Commission
Securities Act – Securities Act of 1933, as amended
Short-term Investments – the sum of Interest-bearing bank deposits and Federal funds sold
SOFR – Secured Overnight Financing Rate
Supplemental disclosure items – certain highlighted items that are outside of our principal business and/or are not indicative of forward-looking trends
TBA – To Be Announced security contracts
te – taxable equivalent adjustment, or the term used to indicate that a financial measure is presented on a fully taxable equivalent basis
TSR – total shareholder return
U.S. Treasury – The United States Department of the Treasury
401(k) Plan – the Hancock Whitney Corporation 401(k) Savings Plan and Trust Agreement
4
Item 1. Financial Statements
Hancock Whitney Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
June 30,
December 31,
(in thousands, except per share data)
2026
2025
ASSETS
Cash and due from banks
$
572,039
562,995
Interest-bearing bank deposits
514,887
132,037
Federal funds sold
195
229
Securities available for sale, at fair value (amortized cost of $6,340,945 and $6,341,322)
6,006,220
5,961,917
Securities held to maturity (fair value of $1,755,583 and $2,011,026)
1,885,139
2,132,882
Loans held for sale (includes $42,867 and $33,158 measured at fair value)
52,850
33,158
Loans
24,580,173
23,958,440
Less: allowance for loan losses
(312,608
)
(307,731
Loans, net
24,267,565
23,650,709
Property and equipment, net of accumulated depreciation of $376,395 and $370,818
254,807
261,181
Right of use assets, net of accumulated amortization of $80,695 and $73,527
102,433
102,056
Prepaid expenses
66,138
58,847
Other real estate and foreclosed assets, net
12,858
14,788
Accrued interest receivable
141,675
138,509
Goodwill
925,404
Other intangible assets, net
62,300
67,071
Life insurance contracts
811,843
798,509
Funded pension assets, net
301,301
292,437
Deferred tax asset, net
41,665
55,798
Other assets
326,653
284,235
Total assets
36,345,972
35,472,762
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing
10,336,866
10,374,991
Interest-bearing
19,292,894
18,904,783
Total deposits
29,629,760
29,279,774
Short-term borrowings
1,570,970
1,017,292
Long-term debt
193,823
199,407
Accrued interest payable
14,544
14,485
Lease liabilities
122,476
121,505
Other liabilities
370,265
380,182
Total liabilities
31,901,838
31,012,645
Stockholders' equity:
Common stock
309,513
Capital surplus
1,352,528
1,491,219
Retained earnings
3,127,514
3,035,636
Accumulated other comprehensive loss, net
(345,421
(376,251
Total stockholders' equity
4,444,134
4,460,117
Total liabilities and stockholders' equity
Preferred shares authorized (par value of $20.00 per share)
50,000
Preferred shares issued and outstanding
—
Common shares authorized (par value of $3.33 per share)
350,000
Common shares issued
92,947
Common shares outstanding
80,471
82,259
See notes to unaudited consolidated financial statements.
Consolidated Statements of Income
Three Months Ended
Six Months Ended
Interest income:
Loans, including fees
338,931
338,413
670,286
669,901
Loans held for sale
745
399
1,111
740
Securities-taxable
65,169
54,046
127,294
105,945
Securities-tax exempt
3,286
4,007
6,996
8,225
Short-term investments
4,756
5,716
8,582
13,091
Total interest income
412,887
402,581
814,269
797,902
Interest expense:
102,565
117,766
207,011
238,273
14,504
4,865
23,393
6,710
2,806
2,991
5,688
6,055
Total interest expense
119,875
125,622
236,092
251,038
Net interest income
293,012
276,959
578,177
546,864
Provision for credit losses
13,775
14,925
26,947
25,387
Net interest income after provision for credit losses
279,237
262,034
551,230
521,477
Noninterest income:
Service charges on deposit accounts
25,897
24,256
51,799
48,375
Trust fees
26,049
22,753
50,623
40,775
Bank card and ATM fees
23,181
22,004
45,307
42,718
Investment and annuity fees and insurance commissions
14,617
10,603
27,189
22,018
Secondary mortgage market operations
4,065
4,147
7,594
7,615
Securities transactions, net
(98,595
Other income
14,541
14,761
31,915
31,814
Total noninterest income
108,350
98,524
115,832
193,315
Noninterest expense:
Compensation expense
105,579
95,875
204,367
184,827
Employee benefits
24,612
20,637
52,972
46,032
Personnel expense
130,191
116,512
257,339
230,859
Net occupancy expense
13,857
13,825
26,986
27,405
Equipment expense
4,410
4,541
8,567
8,632
Data processing expense
31,701
33,448
64,497
64,698
Professional services expense
14,538
16,371
28,138
28,606
Amortization of intangible assets
2,222
2,524
4,770
4,637
Deposit insurance and regulatory fees
5,019
4,822
10,007
9,848
Other real estate and foreclosed assets expense, net
214
1,181
655
2,961
Other expense
23,284
22,755
45,225
43,392
Total noninterest expense
225,436
215,979
446,184
421,038
Income before income taxes
162,151
144,579
220,878
293,754
Income taxes expense
35,190
31,048
46,495
60,719
Net income
126,961
113,531
174,383
233,035
Earnings per common share-basic
1.56
1.32
2.14
2.70
Earnings per common share-diluted
1.55
2.12
2.69
Dividends paid per share
0.50
0.45
1.00
0.90
Weighted average shares outstanding-basic
80,934
85,577
81,302
85,833
Weighted average shares outstanding-diluted
81,485
85,943
81,868
86,203
Consolidated Statements of Comprehensive Income
($ in thousands)
Other comprehensive income (loss) before income taxes:
Net change in unrealized loss on securities available for sale, cash flow hedges and equity method investment
(32,649
48,271
(71,123
157,783
Reclassification of net loss realized and included in earnings
5,917
9,668
110,509
19,083
Valuation adjustments to employee benefit plans
(496
Amortization of unrealized net loss on securities transferred to held to maturity
400
387
813
792
Other comprehensive income (loss) before income taxes
(26,332
58,326
39,703
177,658
Income tax expense (benefit)
(6,038
13,181
8,873
41,393
Other comprehensive income (loss) net of income taxes
(20,294
45,145
30,830
136,265
Comprehensive income
106,667
158,676
205,213
369,300
Consolidated Statements of Changes in Stockholders’ Equity
Three Months Ended June 30, 2026 and 2025
Accumulated
Common Stock
Other
(in thousands, except parenthetical share data)
SharesIssued
Amount
CapitalSurplus
RetainedEarnings
ComprehensiveLoss
Total
Balance, March 31, 2026
1,393,663
3,041,543
(325,127
4,419,592
Other comprehensive income
Dividends declared ($0.50 per common share)
(40,990
Common stock activity, long-term incentive plans
6,860
Issuance of stock from dividend reinvestment and stock purchase plans
1,172
Repurchase of common stock (712,966 shares)
(49,167
Balance, June 30, 2026
Balance, March 31, 2025
1,699,474
2,784,657
(514,972
4,278,672
Dividends declared ($0.45 per common share)
(39,154
5,809
5,813
1,129
Repurchase of common stock (750,000 shares)
(39,717
Balance, June 30, 2025
1,666,695
2,859,038
(469,827
4,365,419
Six Months Ended June 30, 2026 and 2025
Comprehensive Loss
Balance, December 31, 2025
Dividends declared ($1.00 per common share)
(82,505
3,470
2,383
Repurchase of common stock (2,112,966 Shares)
(144,544
Balance, December 31, 2024
1,719,609
2,704,606
(606,092
4,127,636
Dividends declared ($0.90 per common share)
(78,614
5,338
11
5,349
2,212
Repurchase of common stock (1,100,000 Shares)
(60,464
Consolidated Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
12,620
15,021
Gain on other real estate and foreclosed assets
(654
(388
Deferred income tax expense
5,261
17,199
Increase cash surrender value of life insurance contracts
(15,808
(9,396
Loss on disposal of assets
169
99
Loss on securities transactions, net
98,595
Net increase in loans held for sale
(19,461
(8,673
Net amortization of securities premium/discount
6,171
6,775
Stock-based compensation expense
12,656
11,964
Net change in derivative collateral liability
8,689
(22,017
Net decrease in interest payable and other liabilities
(20,541
(19,528
Net increase in other assets
(23,821
(26,395
Other, net
(4,322
2,265
Net cash provided by operating activities
265,654
229,985
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale
1,414,258
Proceeds from maturities of securities available for sale
261,738
198,383
Purchases of securities available for sale
(1,781,832
(514,808
Proceeds from maturities of securities held to maturity
245,081
199,570
Proceeds from termination of fair value hedges
1,657
Net (increase) decrease in short-term investments
(382,816
335,106
Net purchases of Federal Home Loan Bank stock
(41,234
(12,318
Proceeds from sales of loans and leases
101,847
49,756
Net increase in loans
(752,229
(244,216
Purchases of property and equipment
(6,786
(7,758
Net cash paid in business acquisition
(112,071
Proceeds from sales of other real estate and foreclosed assets
6,920
3,238
3,563
(4,118
Net cash used in investing activities
(929,833
(109,236
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits
349,986
(446,239
Net increase in short-term borrowings
553,678
405,912
Dividends paid
(82,567
(78,237
Payroll tax remitted on net share settlement of equity awards
(9,186
(6,628
Proceeds from dividend reinvestment and stock purchase plans
Repurchase of common stock
(141,071
(60,177
Net cash provided by (used in) financing activities
673,223
(183,157
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
9,044
(62,408
CASH AND DUE FROM BANKS, BEGINNING
574,910
CASH AND DUE FROM BANKS, ENDING
512,502
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Assets acquired in settlement of loans
5,774
5,691
HANCOCK WHITNEY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The consolidated financial statements include the accounts of Hancock Whitney Corporation and all other entities in which it has a controlling interest (the “Company”). The financial statements include all adjustments that are, in the opinion of management, necessary to fairly state the Company’s financial condition, results of operations, changes in stockholders’ equity and cash flows for the interim periods presented. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q (this “Report” or “report”). Some financial information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Financial information reported in these financial statements is not necessarily indicative of the Company’s financial condition, results of operations, or cash flows for any other interim or annual period.
Certain prior period amounts have been reclassified to conform to the current period presentation. These changes in presentation did not have a material impact on the Company's financial condition or operating results.
Use of Estimates
The accounting principles the Company follows and the methods for applying these principles conform to GAAP and general practices followed by the banking industry. These accounting principles require management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Accounting Policies
There were no material changes or developments during the reporting period with respect to methodologies that the Company uses when applying what management believes are critical accounting policies and developing critical accounting estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.
Refer to Note 16 – Recent Accounting Pronouncements for a discussion of the prospective adoption of ASU 2025-08, “Financial Instruments – Credit Losses (Topic 326): Purchased Loans,” as of January 1, 2026 and a description of changes to our acquired loan accounting policy.
2. Securities
The following tables set forth the amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities classified as available for sale and held to maturity at June 30, 2026 and December 31, 2025. Amortized cost of securities does not include accrued interest which is reflected in the accrued interest line item on the consolidated balance sheets totaling $31.9 million at June 30, 2026 and $31.7 million at December 31, 2025, respectively.
June 30, 2026
December 31, 2025
Gross
Securities Available for Sale
Amortized
Unrealized
Fair
Cost
Gains
Losses
Value
U.S. Treasury and government agency securities
288,981
2,223
1,697
289,507
266,825
3,705
1,198
269,332
Municipal obligations
164,084
19
246
163,857
191,754
82
508
191,328
Residential mortgage-backed securities
2,502,473
4,661
244,273
2,262,861
2,620,980
11,643
256,994
2,375,629
Commercial mortgage-backed securities
3,342,418
3,574
97,293
3,248,699
3,217,663
10,530
144,868
3,083,325
Collateralized mortgage obligations
22,989
1,193
21,796
27,100
1,154
25,946
Corporate debt securities
20,000
511
19,500
17,000
37
680
16,357
6,340,945
10,488
345,213
6,341,322
25,997
405,402
Securities Held to Maturity
362,407
52
30,320
332,139
373,605
248
30,143
343,710
341,033
450
11,706
329,777
511,516
708
11,455
500,769
461,784
37,876
423,908
497,338
34,239
463,099
704,287
49,624
654,663
731,329
46,455
684,874
15,628
532
15,096
19,094
520
18,574
502
130,058
1,755,583
956
122,812
2,011,026
The following tables present the amortized cost and fair value of debt securities available for sale and held to maturity at June 30, 2026 by contractual maturity. Actual maturities will differ from contractual maturities because of rights to call or repay obligations with or without penalties and scheduled and unscheduled principal payments on mortgage-backed securities and collateral mortgage obligations.
Debt Securities Available for Sale
Due in one year or less
36,421
36,425
Due after one year through five years
1,471,156
1,438,607
Due after five years through ten years
2,336,915
2,237,926
Due after ten years
2,496,453
2,293,262
Debt Securities Held to Maturity
101,001
100,705
660,247
634,985
358,843
337,242
765,048
682,651
The Company held no securities classified as trading at June 30, 2026 and December 31, 2025.
In January 2026, the Company completed a restructuring of its available for sale investment securities portfolio, whereby lower-yielding securities with an amortized cost of $1.5 billion were sold and the proceeds were reinvested in higher-yielding securities. Certain securities that were sold were previously hedged in derivative instruments designated as fair value hedges of interest rate risk that were subsequently terminated. At the time of termination, the value of the swap was recorded as basis adjustment to the amortized cost of the underlying security. The basis adjustment is amortized as yield adjustment while the security is held, and affects the net gain or loss realized by the remaining unamortized basis adjustment when sold. The unamortized basis adjustment recognized in connection with this portfolio restructure reduced the net loss by approximately $50.4 million, resulting in a net realized loss of $98.6 million. Refer to Note 6 – Derivatives for a discussion of fair value hedges of interest rate risk.
The following table presents the proceeds from, gross gains on, and gross losses on sales of securities during the six months ended June 30, 2026 and 2025. Net gains or losses are reflected in the "Securities transactions, net" line item on the Consolidated Statements of Income.
Three Months EndedJune 30,
Six Months EndedJune 30,
Proceeds
Gross gains
Gross losses
98,602
Net loss
Securities with carrying values totaling approximately $3.3 billion and $3.9 billion were pledged as collateral at June 30, 2026 and December 31, 2025, respectively, primarily to secure public deposits or securities sold under agreements to repurchase.
Credit Quality
The Company’s policy is to invest only in securities of investment grade quality. These investments are largely limited to U.S. agency securities and municipal securities. Management has concluded, based on the long history of no credit losses, that the expectation of nonpayment of the held to maturity securities carried at amortized cost is zero for securities that are backed by the full faith and credit of and/or guaranteed by the U.S. government. As such, no allowance for credit losses has been recorded for these securities. The municipal portfolio is analyzed separately for allowance for credit loss in accordance with the applicable guidance for each portfolio as noted below.
The Company evaluates credit impairment for individual securities available for sale whose fair value is below amortized cost with a more than inconsequential risk of default and where the Company has assessed whether the decline in fair value is significant enough to suggest a credit event has occurred. The Company did not identified any securities with a material credit loss event and, therefore, no allowance for credit loss was recorded in any period presented.
The fair value and gross unrealized losses for securities classified as available for sale with unrealized losses for the periods indicated follow.
Available for Sale
Losses < 12 months
Losses 12 months or >
FairValue
GrossUnrealizedLosses
98,049
605
6,689
1,092
104,738
37,833
150
49,139
96
86,972
404,847
5,219
1,237,483
239,054
1,642,330
2,003,582
31,471
824,963
65,822
2,828,545
2,974
26
13,515
485
16,489
2,547,285
37,471
2,153,585
307,742
4,700,870
Losses < 12 Months
Losses 12 Months or >
17,468
14,677
1,189
32,145
124,852
54,250
598
1,442,746
256,396
1,496,996
374,740
1,787
2,158,865
143,081
2,533,605
1,998
11,322
678
13,320
448,456
2,396
3,778,408
403,006
4,226,864
At each reporting period, the Company evaluated its held to maturity municipal obligation portfolio for credit loss using probability of default and loss given default models. The models were run using a long-term average probability of default migration and with a probability weighting of Moody’s economic forecasts. The resulting credit losses, if any, were negligible and no allowance for credit loss was recorded.
12
The fair value and gross unrealized losses for securities classified as held to maturity with unrealized losses for the periods indicated follow.
Held to Maturity
13,212
115
306,716
30,205
319,928
38,841
145
114,018
11,561
152,859
423,909
654,662
52,053
260
1,514,401
129,798
1,566,454
316,814
98,559
97
325,241
11,358
423,800
1,808,602
122,715
1,907,161
As of June 30, 2026 and December 31, 2025, the Company had 588 and 604 securities, respectively, with market values below their cost basis. There were no material unrealized losses related to the marketability of the securities or the issuer’s ability to meet contractual obligations. In all cases, the indicated impairment on these debt securities would be recovered no later than the security’s maturity date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. The unrealized losses were deemed to be non-credit related at June 30, 2026 and December 31, 2025. At June 30, 2026, the Company had adequate liquidity and, therefore, neither planned nor expected to be required to liquidate these securities before recovery of the amortized cost basis.
13
3. Loans and Allowance for Credit Losses
The Company generally makes loans in its market areas of southern and central Mississippi; southern and central Alabama; northwest, central and southern Louisiana; the northern, central and panhandle regions of Florida; certain areas of east and northeast Texas; and the metropolitan areas of Nashville, Tennessee, Atlanta, Georgia and Charlotte, North Carolina. In addition, and to a lesser degree, the Bank makes loans both regionally and nationally, generally through its specialty lines of business, including the equipment finance, commercial real estate and healthcare segments, often with sponsors in our market areas.
The following table presents loans at their amortized cost basis by portfolio class at June 30, 2026 and December 31, 2025. The amortized cost basis is net of unearned income and excludes accrued interest totaling $108.0 million and $105.1 million at June 30, 2026 and December 31, 2025, respectively. Accrued interest is reflected in the accrued interest line item in the Consolidated Balance Sheets.
Commercial non-real estate
9,961,458
9,809,011
Commercial real estate - owner occupied
3,353,501
3,270,080
Total commercial and industrial
13,314,959
13,079,091
Commercial real estate - income producing
4,602,813
4,283,168
Construction and land development
1,405,454
1,239,086
Residential mortgages
3,909,076
4,016,917
Consumer
1,347,871
1,340,178
Total loans
The following briefly describes the composition of each loan category and portfolio class.
Commercial and industrial
Commercial and industrial loans are made available to businesses for working capital (including financing of inventory and receivables), for business expansion, facilitating the acquisition of a business, and for the purchase of equipment and machinery, including equipment leasing. These loans are primarily made based on the identified cash flows of the borrower and, when secured, have the added strength of the underlying collateral.
Commercial non-real estate loans may be secured by the assets being financed or other tangible or intangible business assets such as accounts receivable, inventory, ownership, enterprise value or commodity interests, and may incorporate a personal or corporate guarantee; however, some short-term loans may be made on an unsecured basis, including a small portfolio of corporate credit cards, generally issued as a part of overall customer relationships.
Commercial real estate – owner occupied loans consist of commercial mortgages on properties where repayment is generally dependent on the cash flow from the ongoing operations and activities of the borrower. Like commercial non-real estate, these loans are primarily made based on the identified cash flows of the borrower, but they also have the added strength of the value of underlying real estate collateral.
Commercial real estate – income producing
Commercial real estate – income producing loans consist of loans secured by commercial mortgages on properties where the loan is made to real estate developers or investors and repayment is dependent on the sale, refinance, or income generated from the operation of the property. Properties financed include multifamily, retail, healthcare related facilities, industrial, office, hotel/motel and restaurants, and other commercial properties.
14
Construction and land development loans are made to facilitate the acquisition, development, improvement and construction of both commercial and residential-purpose properties. Such loans are made to builders and investors where repayment is expected to be made from the sale, refinance or operation of the property or to businesses to be used in their business operations. This portfolio also includes residential construction loans and loans secured by raw land not yet under development.
Residential mortgages consist of closed-end loans secured by first liens on 1-4 family residential properties. The portfolio includes both fixed and adjustable rate loans, although most longer-term, fixed rate loans originated are sold in the secondary mortgage market.
Consumer loans include second lien mortgage home loans, home equity lines of credit and nonresidential consumer purpose loans. Nonresidential consumer loans are made to finance the purchase of personal property, including automobiles, recreational vehicles and boats, and for other personal purposes (secured and unsecured), and also include deposit account secured loans. Consumer loans also include a small portfolio of credit card receivables issued on the basis of applications received through referrals from the Bank’s branches, online and other marketing efforts.
Allowance for Credit Losses
The calculation of the allowance for credit losses is performed using two primary approaches: a collective approach using a loss rate analysis for pools of loans that have similar risk characteristics, and a specific reserve analysis for credits individually evaluated. The allowance for credit losses for collectively evaluated portfolios is developed using multiple Moody’s macroeconomic forecasts applied in internally developed credit models for a two-year reasonable and supportable period. For additional information on our allowance for credit loss methodology, refer to Note 1 – Summary of Significant Accounting Policies and Recent Accounting Pronouncements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The following tables present activity in the allowance for credit losses by portfolio class for the six months ended June 30, 2026 and 2025, as well as the allowance for credit loss by primary calculation method at the end of each period.
Six Months Ended June 30, 2026
Commercial
Real Estate-
Construction
Non-Real
Owner
and
Income
and Land
Residential
Estate
Occupied
Industrial
Producing
Development
Mortgages
Allowance for credit losses
Allowance for loan losses:
Beginning balance
121,439
40,695
162,134
60,475
17,450
42,834
24,838
307,731
Charge-offs
(16,860
(8
(16,868
(248
(531
(7,927
(25,574
Recoveries
2,684
332
3,016
203
1,768
4,995
Net provision for loan losses
18,083
2,508
20,591
(1,772
2,218
(247
4,666
25,456
Ending balance - allowance for loan losses
125,346
43,527
168,873
58,709
19,422
42,259
23,345
312,608
Reserve for unfunded lending commitments:
12,639
371
13,010
1,005
17,949
1,961
33,928
Provision for losses on unfunded commitments
1,176
(54
1,122
(357
848
(3
(119
1,491
Ending balance - reserve for unfunded lending commitments
13,815
317
14,132
648
18,797
1,842
35,419
Total allowance for credit losses
139,161
43,844
183,005
59,357
38,219
25,187
348,027
Allowance for credit losses:
Individually evaluated
6,380
174
6,554
Collectively evaluated
132,781
43,670
176,451
341,473
The allowance for credit losses at June 30, 2026 reflects a modest net increase in the funded and unfunded reserves, largely driven by the growth in the commercial loan portfolios and reflecting relatively stable credit metrics when compared to year-end. In arriving at the allowance for credit losses at June 30, 2026, the Company weighted Moody’s June 2026 baseline economic forecast at 50% and the downside mild recessionary S-2 scenario at 50%. The June 2026 baseline scenario, which Moody’s defines as the most likely outcome of where the economy is headed based on current conditions, reflects the potential impacts of current geopolitical conflicts and continued elevated inflation, and projects moderate GDP growth and gradually rising unemployment in the near term. The S-2 scenario assumes heightened geopolitical and trade disruptions, higher and sustained tariffs, elevated oil prices, and increased global uncertainty, triggering a mild recession beginning in the third quarter of 2026, and lasting for three quarters.
15
Six Months Ended June 30, 2025
121,090
36,264
157,354
71,975
21,158
42,445
25,950
318,882
(24,484
(2,741
(27,225
(34
(33
(429
(7,900
(35,621
5,042
363
5,405
123
453
1,607
7,588
20,953
3,827
24,780
(6,606
(3,563
1,148
6,581
22,340
122,601
37,713
160,314
65,335
17,685
43,617
26,238
313,189
6,441
309
6,750
642
14,639
2,018
24,053
1,963
33
1,996
(152
1,483
(277
3,047
8,404
342
8,746
490
16,122
1
1,741
131,005
38,055
169,060
65,825
33,807
43,618
27,979
340,289
9,626
41
9,667
753
198
10,618
121,379
38,014
159,393
42,865
27,781
329,671
The allowance for credit losses at June 30, 2025 was down modestly on a net basis compared to December 31, 2024, largely driven by the declines in the commercial real estate - income producing and the construction and land development portfolios, that was partially offset by increases in certain other portfolios due to the expected impact of continued stress of market conditions on our borrowers. In arriving at the allowance for credit losses at June 30, 2025, the Company weighted the baseline economic forecast at 50% and the downside mild recessionary S-2 scenario at 50%.
Nonaccrual Loans and Certain Reportable Modified Loan Disclosures
The following table shows the composition of nonaccrual loans and those without an allowance for loan losses, by portfolio class at June 30, 2026 and December 31, 2025.
Total Nonaccrual
Nonaccrual Without Allowance for Loan Loss
40,205
14,293
34,525
3,294
6,952
2,314
6,723
1,470
47,157
16,607
41,248
4,764
2,301
1,635
4,760
5,114
1,165
3,173
2,178
51,508
4,516
46,986
2,511
11,550
998
10,703
316
113,681
23,756
106,870
14,883
As a part of our loss mitigation efforts, we may provide modifications to borrowers experiencing financial difficulty to improve long-term collectability of the loans and to avoid the need for repossession or foreclosure of collateral. Nonaccrual loans include reportable nonaccruing modified loans to borrowers experiencing financial difficulty (“MEFDs”) totaling $11.4 million and $5.8 million at June 30, 2026 and December 31, 2025, respectively. Total reportable MEFDs, both accruing and nonaccruing, were $154.3 million and $162.8 million at June 30, 2026 and December 31, 2025, respectively. Unfunded commitments to borrowers whose terms have been modified as a reportable MEFD were $3.1 million and $7.2 million at June 30, 2026 and December 31, 2025, respectively.
16
The tables below provide detail by portfolio class for reportable MEFDs entered into during the three and six months ended June 30, 2026 and 2025. Modified facilities are reported using the balance at the end of each period reported and are reflected only once in each table based on the type of modification or combination of modification.
Three Months Ended June 30, 2026
Term Extension
Significant Payment Delay
Term Extensions and Significant Payment Delay
Balance
Percentage of Portfolio
7,839
0.08
%
10,627
0.11
31,547
0.94
39,386
0.30
1,604
0.04
0.01
Total reportable modified loans
41,059
0.17
Other(1)
8,580
0.09
26,843
0.27
6,519
0.07
40,127
0.20
0.05
5,536
0.14
262
45,762
0.19
0.03
0.00
Three Months Ended June 30, 2025
34,384
0.35
9,021
70
1,106
35,490
0.15
17
43,015
0.44
9,217
352
43,367
0.34
14,207
414
57,574
0.25
9,631
For the three months ended June 30, 2026, reportable modifications to borrowers experiencing financial difficulty consisted of weighted average term extensions totaling approximately one year for commercial loans, two years for residential mortgage loans and four years for consumer loans. Reportable modifications to borrowers experiencing financial difficulty during the six months ended June 30, 2026 consisted of weighted average term extensions totaling approximately 13 months for commercial loans, two years for residential mortgage loans and five years for consumer loans. The weighted average term of other than insignificant payment delays for the three months ended June 30, 2026 was two months for commercial loans. The weighted average term of other than insignificant payment delays for the six months ended June 30, 2026 was 11 months for commercial loans. In addition, the weighted-average interest rate reduction for residential loans during the six months ended June 30, 2026 was 164 basis points. Term extensions and payment delays are considered other than insignificant when they exceed six months when considering other modifications made in the prior twelve months.
Reportable modifications to borrowers experiencing financial difficulty during the three months ended June 30, 2025 consisted of weighted average term extensions totaling approximately two months for commercial loans and 17 months for residential mortgage loans. Reportable modifications to borrowers experiencing financial difficulty during the six months ended June 30, 2025 consisted of weighted average term extensions totaling approximately three months for commercial loans and 13 months for residential mortgage loans. The weighted average term of other than insignificant payment delays for the three months ended June 30, 2025 was four months for commercial loans. The weighted average term of other than insignificant payment delays for the six months ended June 30, 2025 was four months for commercial loans and one month for residential mortgage loans.
The tables that follow present the aging analysis of reportable modifications to borrowers experiencing financial difficulty by portfolio class at June 30, 2026 and December 31, 2025.
(in thousands)
30-59DaysPast Due
60-89DaysPast Due
90 Days or morePast Due
TotalPast Due
Current
Total Reportable Modified Loans
5,000
9,852
14,852
85,748
100,600
223
31,770
5,223
15,075
117,295
132,370
10,668
146
588
2,227
2,815
8,009
10,824
277
10,440
2,373
18,036
136,249
154,285
18
27,670
734
28,404
74,911
103,315
28,939
103,850
132,254
14,914
147
1,285
416
1,701
13,458
15,159
148
227
375
28,086
882
30,253
132,596
162,849
There were loans to four commercial borrowers totaling $32.8 million and two residential borrowers totaling $2.2 million with reportable term extensions and/or significant payment delays that had post modification payment defaults during the three months ended June 30, 2026. For the six month period ended June 30, 2026, there were loans to eight commercial borrowers totaling $72.9 million and three residential borrowers totaling $2.3 million with reportable term extensions and/or significant payment delays that had post modification payment defaults. There were loans to six commercial borrowers totaling $18.9 million with reportable term extensions and/or significant payment delays that had post modification payment defaults during the three months ended June 30, 2025. For the six month period ended June 30, 2025, there were loans to eight commercial borrowers totaling $20.8 million with reportable term extensions, significant payment delays and/or interest rate reductions that had post modification payment defaults. A payment default occurs if the loan is either 90 days or more delinquent or has been charged off as of the end of the period presented.
Aging Analysis
The tables below present the aging analysis of past due loans by portfolio class at June 30, 2026 and December 31, 2025.
TotalLoans
RecordedInvestment> 90 Days andStill Accruing
22,170
20,938
36,190
79,298
9,882,160
11,846
10,088
4,110
9,184
23,382
3,330,119
3,289
32,258
25,048
45,374
102,680
13,212,279
15,135
5,210
3,360
12,439
21,009
4,581,804
10,585
91
141
1,015
1,247
1,404,207
60
12,771
15,533
40,094
68,398
3,840,678
83
7,518
2,591
9,473
19,582
1,328,289
1,890
57,848
46,673
108,395
212,916
24,367,257
27,753
19,008
43,316
39,954
102,278
9,706,733
20,358
15,013
308
7,609
22,930
3,247,150
1,586
34,021
43,624
47,563
125,208
12,953,883
21,944
990
7,177
10,973
4,272,195
2,928
1,754
564
3,488
5,806
1,233,280
565
42,302
17,984
34,656
94,942
3,921,975
116
9,284
4,675
9,839
23,798
1,316,380
3,245
88,351
69,653
102,723
260,727
23,697,713
28,798
Credit Quality Indicators
The following tables present the credit quality indicators by segment and portfolio class of loans at June 30, 2026 and December 31, 2025.
CommercialNon-Real Estate
CommercialReal Estate -Owner-Occupied
TotalCommercialand Industrial
CommercialReal Estate -Income Producing
Construction and Land Development
TotalCommercial
Grade:
Pass
9,391,177
3,194,503
12,585,680
4,427,579
1,360,749
18,374,008
Pass-Watch
225,042
66,723
291,765
154,052
11,416
457,233
Special Mention
66,283
18,494
84,777
3,916
88,693
Substandard
278,956
73,781
352,737
17,266
33,289
403,292
Doubtful
19,323,226
9,180,624
3,064,325
12,244,949
4,035,415
1,170,834
17,451,198
266,120
123,373
389,493
189,994
35,305
614,792
88,729
23,195
111,924
8,251
28,208
148,383
273,538
59,187
332,725
49,508
4,739
386,972
18,601,345
ResidentialMortgage
Residential Mortgage
Performing
3,857,568
1,336,321
5,193,889
3,969,931
1,329,475
5,299,406
Nonperforming
63,058
57,689
5,256,947
5,357,095
The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. Below are the definitions of the Company’s internally assigned grades:
Commercial:
20
Residential and Consumer:
Vintage Analysis
The following tables present credit quality disclosures of amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing at June 30, 2026 and December 31, 2025. The Company defines vintage as the later of origination, renewal or modification date. The gross charge-offs presented in the tables that follow are for the six months ended June 30, 2026 and the year ended December 31, 2025.
Term Loans
Revolving Loans
Amortized Cost Basis by Origination Year
Revolving
Converted to
2024
2023
2022
Prior
Commercial Non-Real Estate:
1,111,184
1,754,164
940,564
638,351
603,594
1,177,088
3,063,650
102,582
1,378
17,434
21,798
46,322
38,688
22,787
73,867
2,768
243
3,760
12,427
6,269
276
25,284
17,438
586
8,507
11,953
68,735
81,913
22,581
59,179
11,584
1,127,309
1,783,865
986,742
759,677
724,471
1,247,740
3,214,134
117,520
Gross Charge-offs
1,004
362
2,925
6,392
466
2,262
1,479
1,970
16,860
Commercial Real Estate - Owner Occupied:
323,827
611,937
368,299
343,016
427,741
1,060,712
57,516
1,455
2,976
2,731
6,740
2,729
34,010
17,119
418
1,422
2,332
1,536
378
6,915
5,735
176
4,352
797
6,162
15,788
14,895
240
359,772
621,352
377,372
352,285
484,454
1,098,461
58,174
1,631
Commercial Real Estate - Income Producing:
626,738
1,062,870
510,159
543,816
627,524
991,109
62,268
3,095
15,659
3,591
91,041
38,653
369
295
218
2,953
696
3,787
3,711
7,704
500
868
631,549
1,079,675
513,750
547,821
722,276
1,040,419
63,137
4,186
Construction and Land Development:
142,437
557,980
281,100
141,658
41,881
82,912
109,668
3,113
288
2,956
370
1,368
232
186
6,016
185
446
98
30,472
344
265
142,910
561,382
281,568
144,505
72,585
83,442
115,684
3,378
30
Residential Mortgage:
132,762
302,967
121,275
369,811
998,935
1,928,977
2,841
970
1,979
11,659
11,751
25,149
303,937
123,254
381,470
1,010,686
1,954,126
282
189
531
Consumer Loans:
38,634
24,878
19,055
16,505
12,474
65,978
1,139,640
19,157
255
1,283
1,213
6,946
636
1,177
24,918
19,310
17,788
13,687
72,924
1,140,276
20,334
187
443
397
331
5,227
857
7,927
21
2021
2,030,587
1,164,266
711,218
812,902
525,095
891,032
2,955,174
90,350
24,737
27,477
39,683
33,385
12,896
18,064
94,461
15,417
2,405
6,975
6,239
27,719
10,564
4,305
28,330
2,192
13,738
6,450
81,228
87,745
11,275
6,798
51,619
14,685
2,071,467
1,205,168
838,368
961,751
559,830
920,199
3,129,584
122,644
4,798
2,718
15,397
2,888
74
3,722
15,436
45,564
616,536
401,399
312,006
461,247
459,700
711,509
51,600
50,328
26,766
6,397
2,746
43,060
14,187
27,591
2,506
120
2,371
2,202
1,008
12,024
5,054
293
48
2,082
822
6,685
20,353
1,472
27,723
50
647,755
410,820
322,445
536,684
480,413
767,116
54,351
50,496
86
2,741
1,799
4,626
1,110,044
416,052
519,955
724,326
549,335
649,996
64,217
1,490
22,429
15,606
4,219
101,959
4,277
40,381
1,123
7,962
289
192
7,669
10,441
10,871
20,185
1,140,627
431,658
532,132
836,726
564,483
710,562
65,490
34
349,811
358,827
185,672
54,798
75,084
14,954
131,153
535
29,323
814
1,500
3,299
128
241
28,036
112
72
1,665
2,560
135
122
379,266
359,826
188,837
75,459
15,317
1,297
1,314
360,686
131,928
390,276
1,039,884
824,012
1,220,288
2,857
2,300
10,582
10,244
6,335
17,154
361,057
134,228
400,858
1,050,128
830,347
1,237,442
36
335
49
922
50,512
24,693
22,963
18,103
8,928
47,131
1,123,471
33,674
51
44
349
842
627
4,367
408
4,015
50,563
23,312
18,945
9,555
51,498
1,123,879
37,689
85
952
1,104
1,277
528
695
9,228
2,137
16,006
Residential Mortgage Loans in Process of Foreclosure
Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. Included in loans at June 30, 2026 and December 31, 2025 were $18.0 million and $12.0 million, respectively, of loans secured by single family residential real estate that were in process of foreclosure. In addition to the single family residential real estate loans in process of foreclosure, the Company also held foreclosed single family residential properties in other real estate owned totaling $4.4 million and $5.1 million at June 30, 2026 and December 31, 2025, respectively.
Loans Held for Sale
Loans held for sale totaled $52.9 million and $33.2 million at June 30, 2026 and December 31, 2025, respectively. Loans held for sale is composed primarily of residential mortgage loans originated for sale in the secondary market and, at certain times, other loans originated for sale, generally through syndications. At June 30, 2026, residential mortgage loans carried at the fair value option totaled $42.9 million with an unpaid principal balance of $41.8 million. At December 31, 2025, residential mortgage loans carried at the fair value option totaled $33.2 million with an unpaid principal balance of $32.3 million. All other loans held for sale are carried at the lower of cost or market.
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4. Investments in Low Income Housing Tax Credit Entities
The Company invests in certain affordable housing project limited partnerships that are qualified low-income housing tax credit developments. These investments are considered variable interest entities for which the Company is not the primary beneficiary and, therefore, are not consolidated. These partnerships generate low-income tax credits that are earned over a 10-year period, beginning with the year the rental activity begins. The Company has elected to use the practical expedient method of amortization, which approximates the proportional amortization method, whereby the investment cost is amortized in proportion to the allocated tax credits over the 10 year tax credit period. Additionally, the Company recognizes deferred taxes on the basis difference of the tax equity investment to reflect the financial impact of other tax benefits (e.g., tax operating losses) not included in the practical expedient amortization. The tax credits, when realized, are reflected in the consolidated statements of income as a reduction of income tax expense. The Company’s investments in affordable housing limited partnerships totaled $37.5 million at both June 30, 2026 and December 31, 2025, with a balance net of accumulated amortization included in the other assets line item on our Consolidated Balance Sheets totaling $20.0 million and $21.8 million, respectively, for those same periods. The net impact of the low-income housing tax credit program was not material to our Consolidated Statements of Income or Cash Flows for the three or six months ended June 30, 2026 and 2025.
5. Short-term Borrowings
Short-term borrowings include Federal Home Loan Bank (FHLB) advances totaling $950 million as of June 30, 2026 and $400 million as of December 31, 2025. At June 30, 2026, FHLB advances outstanding consisted of seven fixed-rate notes with a weighted average interest rate of 3.89% and maturity dates ranging from September 23, 2026 through April 29, 2027. At December 31, 2025, FHLB advances outstanding consisted of one fixed-rate note bearing interest at 3.62% entered into on December 31, 2025, that matured on January 2, 2026. As short-term advances mature, they are generally paid off and replaced with new short-term FHLB advances, if warranted, depending on funding needs.
Also included in short-term borrowings are securities sold under agreements to repurchase that mature daily and are secured by U.S. agency securities totaling $620.6 million and $546.9 million at June 30, 2026 and December 31, 2025, respectively. The Company borrows funds on a secured basis by selling securities under agreements to repurchase, mainly in connection with treasury management services offered to its deposit customers. As the Company maintains effective control over assets sold under agreements to repurchase, the securities continue to be carried on the consolidated statements of financial condition. Because the Company acts as borrower transferring assets to the counterparty, and the agreements mature daily, the Company’s risk is limited.
The remaining balances in short-term borrowings of $0.3 million at June 30, 2026 and $70.4 million at December 31, 2025, are federal funds purchased, which are unsecured borrowings from other banks, generally on an overnight basis.
6. Derivatives
Risk Management Objective of Using Derivatives
The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments. The Bank also enters into interest rate derivative agreements as a service to certain qualifying customers. The Bank manages a matched book with respect to these customer derivatives in order to minimize its net interest rate risk exposure resulting from such agreements. In addition, the Bank also enters into risk participation agreements under which it may either sell or buy credit risk associated with a customer’s performance under certain interest rate derivative contracts related to loans in which participation interests have been sold to or purchased from other banks.
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Fair Values of Derivative Instruments on the Balance Sheet
The table below presents the notional or contractual amounts and fair values of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets at June 30, 2026 and December 31, 2025.
Notional or
Type of
Contractual
Derivative (1)
Hedge
Assets
Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps - variable rate loans
Cash Flow
1,825,000
270
21,541
1,775,000
4,026
16,335
Interest rate swaps - securities
Fair Value
359,000
26,849
397,500
23,569
Total derivatives designated as hedging instruments
2,184,000
27,119
2,172,500
27,595
Derivatives not designated as hedging instruments:
Interest rate swaps
N/A
5,438,388
67,176
67,245
5,308,711
73,725
73,829
Risk participation agreements
436,574
25
373,117
Interest rate-lock commitments on residential mortgage loans
37,497
684
23,192
497
Forward commitments to sell residential mortgage loans
9,124
9,081
108
To Be Announced (TBA) securities
41,250
30,000
62
Foreign exchange forward contracts
64,416
1,691
1,672
82,157
3,779
3,745
Visa Class B derivative contract
41,435
986
41,588
1,284
Total derivatives not designated as hedging instruments
6,068,684
69,629
70,140
5,867,846
78,017
79,038
Total derivatives
8,252,684
96,748
91,681
8,040,346
105,612
95,373
Less: netting adjustment (2)
(47,611
(42,486
(6
Total derivative assets/liabilities
49,137
63,126
95,367
Cash Flow Hedges of Interest Rate Risk
The Company is party to various interest rate swap agreements designated and qualifying as cash flow hedges of the Company’s forecasted variable cash flows for pools of variable rate loans. For each agreement, the Company receives interest at a fixed rate and pays interest at a variable rate. The Company has terminated certain interest rate swaps designated as cash flow hedges prior to maturity. The net cash received/paid for these transactions was recorded as accumulated other comprehensive income (loss) and is being amortized into earnings through the original maturity dates of the respective contracts. The Company expects to reclassify into earnings approximately $18.7 million in pre-tax losses due to the net receipt/payment of interest and amortization on all cash flow hedges within the next twelve months. See Note 7 – Stockholders’ Equity for the impact of cash flow hedges on the consolidated statements of income related to realized gains (losses) reclassified from accumulated other comprehensive income (loss) to net income.
The notional amounts of the active interest rate swap agreements at June 30, 2026 expire as follows: $250 million in 2026; $825 million in 2027; $50 million in 2028; $275 million in 2029 and $425 million in 2030.
Fair Value Hedges of Interest Rate Risk
Interest rate swaps on securities available for sale
The Company is party to forward-starting fixed payer swaps that convert the latter portion of the term of certain available for sale securities to a floating rate. These derivative instruments are designated as fair value hedges of interest rate risk. This strategy provides the Company with a fixed rate coupon during the front-end unhedged tenor of the bonds and results in a floating rate security during the back-end hedged tenor. At June 30, 2026, these single layer instruments have hedge start dates between February 2025 and July 2026, and maturity dates from March 2030 through March 2031. The change in the fair value of the hedged item attributable to interest rate risk and the net hedge income from effective hedges is presented in interest income along with the change in the fair value of the hedging instrument.
The notional amount of fair value hedges that are effective totaled $265.0 million and $203.5 million at June 30, 2026 and 2025, respectively. Once effective, fair value hedges synthetically convert the notional portion of the hedged asset to a variable rate over the
24
life of the hedge that is indexed to the federal funds effective rate, with the resulting net earnings recorded in interest income on the "Securities-taxable" line item on the Consolidated Statements of Income.
The hedged available for sale securities are part of closed portfolios of pre-payable commercial mortgage backed securities. In accordance with ASC 815, prepayment risk may be excluded when measuring the change in fair value of such hedged items attributable to interest rate risk under the portfolio layer method. At June 30, 2026, the amortized cost basis of the closed portfolio of pre-payable commercial mortgage backed securities totaled $387.8 million, excluding any basis adjustment. The amount representing the hedged items was $332.0 million, and the basis adjustment associated with those hedged items was a loss of $27.0 million.
The Company terminated one swap agreement designated as a fair value hedge during the six months ended June 30, 2026 and received cash of approximately $1.7 million and also sold the underlying security. There were no fair value swap agreements terminated during the six months ended June 30, 2025.
Derivatives Not Designated as Hedges
Customer interest rate derivative program
The Bank enters into interest rate derivative agreements, primarily rate swaps, with commercial banking customers to facilitate their risk management strategies. The Bank enters into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.
The Bank also enters into risk participation agreements under which it may either assume or sell credit risk associated with a borrower’s performance under certain interest rate derivative contracts. In those instances where the Bank has assumed credit risk, it is not a direct counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because it is a party to the related loan agreement with the borrower. In those instances in which the Bank has sold credit risk, it is the sole counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because other banks participate in the related loan agreement. The Bank manages its credit risk under risk participation agreements by monitoring the creditworthiness of the borrower, based on the Bank’s normal credit review process.
Mortgage banking derivatives
The Bank also enters into certain derivative agreements as part of its mortgage banking activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell loans to investors on either a best efforts or a mandatory delivery basis. The Company uses these forward sales commitments, which may include To Be Announced (“TBA”) security contracts, on the open market to protect the value of its rate locks and mortgage loans held for sale from changes in interest rates and pricing between the origination of the rate lock and the final sale of these loans. These instruments meet the definition of derivative financial instruments and are reflected in other assets and other liabilities in the Consolidated Balance Sheets, with changes to the fair value recorded in noninterest income within the secondary mortgage market operations line item in the Consolidated Statements of Income.
The loans sold on a mandatory basis commit the Company to deliver a specific principal amount of mortgage loans to an investor at a specified price, by a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, we may be obligated to pay a pair-off fee, based on then-current market prices, to the investor/counterparty to compensate the investor for the shortfall. Mandatory delivery forward commitments include TBA security contracts on the open market to provide protection against changes in interest rates on the locked mortgage pipeline. The Company expects that mandatory delivery contracts, including TBA security contracts, will experience changes in fair value opposite to the changes in the fair value of derivative loan commitments. Certain assumptions, including pull through rates and rate lock periods, are used in managing the existing and future hedges. The accuracy of underlying assumptions could impact the ultimate effectiveness of any hedging strategies.
Forward commitments under best effort contracts commit the Company to deliver a specific individual mortgage loan to an investor if the loan to the underlying borrower closes. Generally, best efforts cash contracts have no pair-off risk regardless of market movement. The price the investor will pay the seller for an individual loan is specified prior to the loan being funded, generally the same day the Company enters into the interest rate lock commitment with the potential borrower. The Company expects that these best efforts forward loan sale commitments will experience a net neutral shift in fair value with related derivative loan commitments.
At the closing of the loan, the rate lock commitment derivative expires and the Company generally records a loan held for sale at fair value under the election of fair value option.
Customer foreign exchange forward contract derivatives
The Company enters into foreign exchange forward derivative agreements, primarily forward foreign currency contracts, with commercial banking customers to facilitate their risk management strategies. The Bank manages its risk exposure from such transactions by entering into offsetting agreements with unrelated financial institutions. The Bank has not elected to designate these foreign exchange forward contract derivatives as hedges; as such, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.
The Company is a member of Visa USA. In 2018, the Company sold the majority of its Visa Class B holdings, at which time it entered into a derivative agreement with the purchaser whereby the Company will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. The conversion ratio changes when Visa deposits funds to a litigation escrow established by Visa to pay settlements for certain litigation, for which Visa is indemnified by Visa USA members. The Company is also required to make periodic financing payments to the purchaser until all of Visa’s covered litigation matters are resolved. Thus, the derivative contract extends until the end of Visa’s covered litigation matters, the timing of which is uncertain.
During the second quarter of 2024, Visa allowed Class B holders to convert some but not all of their Class B shares to Class A shares. As a result of this conversion event, the Bank and its counterparty agreed to modify the transaction agreement to reflect the partial exchange and include certain provisions related to conversion rate changes. The conversion plan approved by Visa requires a minimum of 12 months before another exchange event and thus extends the expected time for a full resolution of the matter.
The contract includes a contingent accelerated termination clause based on the credit ratings of the Company. The fair value of the liability associated with this contract was $1.0 million at June 30, 2026 and $1.3 million at December 31, 2025. Refer to Note 15 – Fair Value of Financial Instruments for discussion of the valuation inputs and process for this derivative liability.
Effect of Derivative Instruments on the Statements of Income
The effects of derivative instruments on the Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025 are presented in the table below. Amounts in parentheses indicate a reduction of net income.
Income Statement Line Item
Derivative Instruments:
of Recognized Gain (Loss)
Cash flow hedges:
Variable rate loans
Interest income - loans
(5,664
(8,735
(11,644
(17,195
Fair value hedges:
Securities
Interest income - securities - taxable (1)
1,386
4,690
3,060
8,600
Securities - sold
Noninterest income - securities transaction, net
50,381
Derivatives not designated as hedging:
Residential mortgage banking
Noninterest income - secondary mortgage market operations
516
556
860
Customer and all other instruments
Noninterest income - other noninterest income
395
1,969
1,355
1,698
Total gain (loss)
(3,367
(1,520
43,800
(6,037
Credit Risk-Related Contingent Features
Certain of the Bank’s derivative instruments contain provisions allowing the financial institution counterparty to terminate the contracts in certain circumstances, such as the downgrade of the Bank’s credit ratings below specified levels, a default by the Bank on its indebtedness, or the failure of the Bank to maintain specified minimum regulatory capital ratios or its regulatory status as a
well-capitalized institution. These derivative agreements also contain provisions regarding the posting of collateral by each party. At June 30, 2026, the Company was not in violation of any such provisions. The aggregate fair value of derivative instruments with credit risk-related contingent features that were in a net liability position was $14.3 million and $13.2 million at June 30, 2026 and December 31, 2025, respectively, for which the Company had posted collateral of $13.4 million and $13.0 million, respectively.
Offsetting Assets and Liabilities
The Bank’s derivative instruments with certain counterparties contain legally enforceable netting provisions that allow for net settlement of multiple transactions to a single amount, which may be positive, negative, or zero. Agreements with certain bilateral counterparties require both parties to maintain collateral in the event that the fair values of derivative instruments exceed established exposure thresholds. For centrally cleared derivatives, the Company is subject to initial margin posting and daily variation margin exchange with the central clearinghouses. Offsetting information in regards to all derivative assets and liabilities, including accrued interest, subject to these master netting agreements at June 30, 2026 and December 31, 2025 is presented in the following tables.
As of June 30, 2026
Gross Amounts Offset in the
Net Amounts Presented in the
Gross Amounts Not Offset in theStatement of Financial Condition
AmountsRecognized
Statement of Financial Condition
FinancialInstruments
CashCollateral
NetAmount
Derivative Assets
93,859
(48,456
45,403
27,078
30,990
49,315
Derivative Liabilities
As of December 31, 2025
89,930
(43,810
46,120
36,259
32,890
42,751
(5
The Company has excess posted collateral compared to total exposure due to initial margin requirements for day-to-day rate volatility.
7. Stockholders’ Equity
Common Shares Outstanding
Common shares outstanding excludes treasury shares totaling 12.5 million and 10.7 million at June 30, 2026 and December 31, 2025, respectively, with a first-in-first-out cost basis of $639.2 million and $502.9 million at June 30, 2026 and December 31, 2025, respectively. Shares outstanding also excludes unvested restricted share awards totaling 5,682 at June 30, 2026 and 8,520 at December 31, 2025.
Stock Buyback Programs
On December 10, 2025, the Company’s Board of Directors approved a stock buyback program, effective January 1, 2026, whereby the Company is authorized to repurchase up to 5% of the shares of the Company's common stock outstanding as of December 31, 2025, or approximately 4.1 million shares, through the program’s expiration date of December 31, 2026. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or otherwise, in one or more transactions, from time to time, depending on market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. The Company is not obligated to purchase any shares under this program, and the Board of Directors has the ability to terminate or amend the program at any time prior to the expiration date. During the six months ended June 30, 2026, the Company repurchased 2.1 million shares of its outstanding common stock at an average cost of $67.82 per share, inclusive of commissions, under this program. The Company has accrued $1.3 million of estimated excise tax associated with share repurchases during the six months ended June 30, 2026.
Prior to its completion in December 2025, the Company had in place a stock repurchase program authorized by the Board of Directors on December 9, 2024, whereby the Company was authorized to repurchase up to 5% of the Company's common stock outstanding at December 31, 2024, or approximately 4.3 million shares, with the same terms described above through the program's expiration date of December 31, 2026. During the six months ended June 30, 2025, the Company repurchased 1.1 million shares of its outstanding common stock at an average cost of $54.58 per share, inclusive of commissions.
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Accumulated Other Comprehensive Income (Loss)
A rollforward of the components of Accumulated Other Comprehensive Income (Loss) is presented in the table that follows:
Available forSale Securities
HTM SecuritiesTransferredfrom AFS
EmployeeBenefit Plans
CashFlow Hedges
Equity Method Investment
(293,835
(6,858
(61,448
(14,795
685
Net change in unrealized gain (loss)
(53,914
(17,595
386
11,644
Amortization of unrealized net loss on securities transferred to HTM
Income tax (expense) benefit
(10,082
(184
1,342
(8,873
(259,236
(6,229
(61,623
(19,404
1,071
(473,679
(8,071
(77,235
(47,136
29
146,860
11,096
(173
1,888
17,195
Income tax expense
(34,140
(196
(594
(6,463
(41,393
(360,959
(7,475
(75,941
(25,308
(144
Accumulated Other Comprehensive Income or Loss (“AOCI”) is reported as a component of stockholders’ equity. AOCI can include, among other items, unrealized holding gains and losses on securities available for sale (“AFS”), including the Company’s share of unrealized gains and losses reported by a partnership accounted for under the equity method, gains and losses associated with pension or other post-retirement benefits that are not recognized immediately as a component of net periodic benefit cost, and gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges. Net unrealized gains and losses on AFS securities reclassified as securities held to maturity (“HTM”) also continue to be reported as a component of AOCI and will be amortized over the estimated remaining life of the securities as an adjustment to interest income. Subject to certain thresholds, unrealized losses on employee benefit plans will be reclassified into income as pension and post-retirement costs are recognized over the remaining service period of plan participants. Accumulated gains or losses on cash flow hedges of variable rate loans described in Note 6 - Derivatives will be reclassified into income over the life of the hedge. Accumulated other comprehensive loss resulting from terminated interest rate swaps are being amortized over the remaining maturities of the designated instruments. Gains and losses within AOCI are net of deferred income taxes, where applicable.
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The following table shows the line items in the consolidated statements of income affected by amounts reclassified from AOCI.
Amount reclassified from AOCI (a)
Income Statement
Line Item
Loss on sale of AFS securities
Tax effect
22,222
Income taxes
Net of tax
(76,373
(813
(792
Interest income
184
196
(629
(596
Amortization of defined benefit pension and post-retirement items
(270
(1,888
Other noninterest expense (b)
61
594
(209
(1,294
Reclassification of unrealized loss on cash flow hedges
(8,634
(14,159
1,947
3,235
(6,687
(10,924
Amortization of loss on terminated cash flow hedges
(3,010
(3,036
679
694
(2,331
(2,342
Total reclassifications, net of tax
(86,229
(15,156
8. Other Noninterest Income
Components of other noninterest income are as follows:
Income from bank-owned life insurance
6,316
5,313
11,583
10,186
Credit related fees
2,788
2,713
5,563
5,553
Gain (loss) from customer and other derivatives
Net gains on sales of premises, equipment and other assets
1,638
1,036
3,684
2,893
Other miscellaneous
3,404
3,730
9,730
11,484
Total other noninterest income
9. Other Noninterest Expense
Components of other noninterest expense are as follows:
Corporate value and franchise taxes and other non-income taxes
4,545
4,733
8,961
9,036
Entertainment and contributions
3,477
3,347
7,695
6,734
Advertising
4,325
2,988
8,511
6,003
Telecommunications and postage
2,667
2,570
5,309
5,011
Travel expense
2,231
1,891
3,866
3,123
Tax credit investment amortization
890
1,068
1,793
2,136
Printing and supplies
1,145
1,269
2,130
2,171
Net other retirement expense
(5,647
(3,907
(10,958
(7,791
9,651
8,796
17,918
16,969
Total other noninterest expense
10. Earnings Per Common Share
The Company calculates earnings per common share using the two-class method. The two-class method allocates net income to each class of common stock and participating security according to common dividends declared and participation rights in undistributed earnings. Participating securities consist of nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents.
A summary of the information used in the computation of earnings per common share follows.
($ in thousands, except per share data)
Numerator:
Net income to common shareholders
Net income allocated to participating securities - basic and diluted
330
486
489
1,007
Net income allocated to common shareholders - basic and diluted
126,631
113,045
173,894
232,028
Denominator:
Weighted-average common shares - basic
Dilutive potential common shares
551
366
566
Weighted-average common shares - diluted
Earnings per common share:
Basic
Diluted
Potential common shares consist of nonvested performance-based awards, nonvested restricted stock units, and restricted share awards deferred under the Company’s nonqualified deferred compensation plan. These potential common shares do not enter into the calculation of diluted earnings per share if the impact would be antidilutive, i.e., increase earnings per share or reduce a loss per share. The weighted average of potentially dilutive common shares that were anti-dilutive totaled 1,749 and 3,152 for the three and six months ended June 30, 2026, respectively, and 142,030 and 3,008 for the three and six months ended June 30, 2025, respectively, and were excluded from the calculation of diluted earnings per share for the respective periods.
11. Segment Reporting
U.S. GAAP requires that information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue-producing components for which discrete financial information is produced internally and which are subject to evaluation by our chief operating decision maker in deciding how to allocate resources to segments. The Company has identified the Capital Committee as the chief operating decision maker. Consistent with the Company’s strategy that is focused on providing a consistent package of banking products and services across all markets, the Company has identified its overall banking operations as its only reportable segment. There have been no changes in the basis of segmentation or basis of measurement of segment profit or loss since our last annual filing as of December 31, 2025.
Because the overall banking operations comprise substantially all of the Company’s consolidated operations, no separate financial segment disclosures are presented. The significant segment expenses included in net income are presented in the financial statement captions shown on the face of the Consolidated Statements of Income and in Note 9 – Other Noninterest Expense, and align materially with those reported to the Capital Committee. There are no other segment items that are required to reconcile expenses included in net income to significant expenses reviewed by the Capital Committee.
12. Retirement Plans
The Company offers a qualified defined benefit pension plan, the Hancock Whitney Corporation Pension Plan and Trust Agreement (“Pension Plan”), that covers certain eligible associates and is closed to new entrants. The Company makes contributions to the Pension Plan in amounts sufficient to meet funding requirements set forth in federal employee benefit and tax laws, plus such additional amounts as the Company may determine to be appropriate. The Company made no contributions to the Pension Plan during the three and six months ended June 30, 2026 and 2025, and does not anticipate being required to make a contribution during 2026. The Company also sponsors a nonqualified defined benefit plan covering certain associates, under which accrued benefits were frozen and no future benefits are accrued under this plan.
The Company sponsors defined benefit post-retirement plans for certain associates that provide health care and life insurance benefits. These plans are closed to new entrants.
The following table shows the components of net periodic benefit cost included in expense for the periods indicated.
Three Months Ended June 30,
Pension Benefits
Other Post-Retirement Benefits
Service cost
1,432
1,551
Interest cost
6,017
6,273
153
154
Expected return on plan assets
(12,070
(11,266
Amortization of net (gain) or loss and prior service costs
438
1,118
(185
Net periodic benefit cost
(4,183
(2,324
(23
(22
Six Months Ended June 30,
Service cost (benefit)
2,957
3,151
12,610
12,548
307
(24,145
(22,534
640
2,258
(370
(7,938
(4,577
(45
(44
Service cost is reflected in the “Benefit expense” line item of the Consolidated Statements of Income. Components other than service cost in the in the table above are reflected in “Net other retirement expense” in Note 9 – Other Noninterest Expense, and reported in the “Other expense” line item of the Consolidated Statements of Income.
Additional information related to the Company’s retirement plans, including a defined contribution 401(k) plan, is provided in Note 18 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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13. Share-Based Payment Arrangements
The Company maintains incentive compensation plans that incorporate share-based payment arrangements for associates and directors. These plans have been approved by the Company's shareholders. Descriptions of these plans were included in Note 19 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The Company’s restricted and performance-based share awards to certain employees and directors are subject to service requirements. A summary of the status of the Company’s nonvested restricted stock units and restricted and performance-based share awards at June 30, 2026 are presented in the following table.
Weighted Average
Number of
Grant Date
Shares
Nonvested at January 1, 2026
1,400,195
50.51
Granted
551,982
67.57
Vested
(439,411
50.33
Forfeited
(73,261
52.42
Nonvested at June 30, 2026
1,439,505
57.00
At June 30, 2026, there was $67.9 million of total unrecognized compensation expense related to nonvested restricted and performance share awards and units expected to vest in the future. This compensation is expected to be recognized in expense over a weighted average period of 3.2 years. The total fair value of shares that vested during the six months ended June 30, 2026 was $20.7 million.
During the six months ended June 30, 2026, the Company granted 425,386 restricted stock units (RSUs) to certain eligible employees. The holders of unvested RSUs have no rights as a shareholder of the Company, including voting or dividend rights. The Company has elected to award dividend equivalents on each RSU not deferred under the Company's nonqualified deferred compensation plan. Such dividend equivalents are forfeited should the employee terminate employment prior to the vesting of the RSU.
During the six months ended June 30, 2026, the Company granted to key members of executive management 25,278 performance share awards subject to a total shareholder return (“TSR”) performance metric with a grant date fair value of $70.83 per share. The fair value of the performance share units subject to TSR at the grant date was determined using a Monte Carlo simulation method. The number of performance share units subject to TSR that ultimately vest at the end of the three-year performance period, if any, will be based on the relative rank of the Company’s three-year TSR among the TSRs of a peer group of 49 regional banks. The Company also granted 24,535 performance share awards subject to a return on average assets (ROAA) performance metric and 24,535 performance share awards subject to a return on average tangible common equity (ROATCE) performance metric with a grant date fair value of $60.08 per share for both performance share awards. The number of performance shares subject to ROAA and ROATCE that ultimately vest, if any, will be based on the rank of the Company’s three-year ROAA and ROATCE relative to the KBW Regional Bank index. The maximum number of performance share units that could vest is 200% of the target award. Compensation expense for these performance shares is recognized on a straight-line basis over the three-year service period.
14. Commitments and Contingencies
In the normal course of business, the Bank enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of its customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Bank to varying degrees of credit risk and interest rate risk in much the same way as funded loans. Under regulatory capital guidelines, the Company and Bank must include unfunded commitments meeting certain criteria in risk-weighted capital calculations.
Commitments to extend credit include revolving commercial credit lines, nonrevolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements of the Company.
A substantial majority of the letters of credit are standby agreements that obligate the Bank to fulfill a customer’s financial commitments to a third party if the customer is unable to perform. The Bank issues standby letters of credit primarily to provide credit
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enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.
The contractual amounts of these instruments reflect the Company’s exposure to credit risk. The Company undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support. The Company had a reserve for unfunded lending commitments of $35.4 million and $33.9 million at June 30, 2026 and December 31, 2025, respectively.
The following table presents a summary of the Company’s off-balance sheet financial instruments as of June 30, 2026 and December 31, 2025:
Commitments to extend credit
9,802,066
9,650,197
Letters of credit
401,189
409,010
The Company is party to various legal proceedings arising in the ordinary course of business. Management does not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Company.
Federal Deposit Insurance Corporation (FDIC) Special Assessment
In November 2023, the FDIC approved a final rule to implement a special deposit insurance assessment to recover losses to the Deposit Insurance Fund (DIF) arising from the full protection of uninsured depositors under the systemic risk exception following the receiverships of Silicon Valley Bank and Signature Bank in the spring of 2023. To-date, the Company has expensed $27.6 million related to this special assessment based on loss estimate information provided by the FDIC.
The loss estimates resulting from the failures of these institutions may be subject to further change pending the projected and actual outcome of loss share agreements, joint ventures, and outstanding litigation. The exact amount of losses incurred will not be determined until the FDIC terminates the receiverships of these banks; therefore, the Company's exact exposure for FDIC special assessment remains unknown.
15. Fair Value Measurements
The FASB defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The FASB’s guidance also establishes a fair value hierarchy that prioritizes the inputs to these valuation techniques used to measure fair value, giving preference to quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs such as a reporting entity’s own data (level 3). Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active, observable inputs other than quoted prices, such as interest rates and yield curves, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Fair Value of Assets and Liabilities Measured on a Recurring Basis
The following tables present the fair value hierarchy levels for the Company’s financial assets and liabilities that are measured at fair value on a recurring basis on the consolidated balance sheets at June 30, 2026 and December 31, 2025:
Level 1
Level 2
Level 3
Available for sale debt securities:
Total available for sale securities
Mortgage loans held for sale
42,867
Derivative assets (1)
Total recurring fair value measurements - assets
6,098,224
Derivative liabilities (1)
90,695
Total recurring fair value measurements - liabilities
(1) For further disaggregation of derivative assets and liabilities, see Note 6 - Derivatives.
6,058,201
94,083
Securities classified as level 2 include obligations of U.S. Government agencies and U.S. Government-sponsored agencies, including U.S. Treasury securities, residential and commercial mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies, and state and municipal bonds. The level 2 fair value measurements for investment securities are obtained quarterly from a third-party pricing service that uses industry-standard pricing models. Substantially all of the model inputs are observable in the marketplace or can be supported by observable data.
The Company invests only in securities of investment grade quality with a targeted duration, for the overall portfolio, generally between two and five and a half years. Company policies generally limit U.S. investments to agency securities and municipal securities determined to be investment grade according to an internally generated score which generally includes a rating of not less than “Baa” or its equivalent by a nationally recognized statistical rating agency.
Loans held for sale consist of residential mortgage loans carried under the fair value option. The fair value for these instruments is classified as level 2 based on market prices obtained from potential buyers.
For the Company’s derivative financial instruments designated as hedges and those under the customer interest rate program, the fair value is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, Overnight Index swap rate curves and SOFR swap curves (where applicable); all observable in the marketplace. To comply with the accounting guidance, credit valuation adjustments are incorporated in the fair values to appropriately reflect nonperformance risk for both the Company and the counterparties. Although the Company has determined that the majority of the inputs used to value these derivative instruments fall within level 2 of the fair value hierarchy, the credit value adjustments utilize level 3 inputs, such as estimates of current credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified its derivative valuations for these instruments in level 2 of the fair value hierarchy. The Company’s policy is to measure counterparty credit risk quarterly for derivative instruments, which are all subject to master netting arrangements, consistent with how market participants would price the net risk exposure at the measurement date.
The Company also has certain derivative instruments associated with the Bank’s mortgage-banking activities. These derivative instruments include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a best efforts delivery basis and To Be Announced securities for mandatory delivery contracts. The fair value of these derivative instruments is measured using observable market prices for similar instruments and is classified as a level 2 measurement.
The Company’s level 3 liability consists of a derivative contract with the purchaser of 192,163 shares of Visa Class B common stock. Pursuant to the agreement, the Company retains the risks associated with the ultimate conversion of the Visa Class B common shares into shares of Visa Class A common stock, such that the counterparty will be compensated for any dilutive adjustments to the conversion ratio and the Company will be compensated for any anti-dilutive adjustments to the ratio. The agreement also requires periodic payments by the Company to the counterparty calculated by reference to the market price of Visa Class A common shares at the time of sale and a fixed rate of interest that stepped up once after the eighth scheduled quarterly payment. The fair value of the liability is determined using a discounted cash flow methodology. The significant unobservable inputs used in the fair value measurement are the Company’s own assumptions about estimated changes in the conversion rate of the Visa Class B common shares into Visa Class A common shares, the date on which such conversion is expected to occur and the estimated growth rate of the Visa Class A common share price. Refer to Note 6 – Derivatives for information about the derivative contract with the counterparty.
The Company believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.
Changes in Level 3 Fair Value Measurements and Quantitative Information about Level 3 Fair Value Measurements
The nominal changes in the fair value of level 3 financial instruments is due to the net impact of cash settlements and losses included in earnings. The level 3 fair value measurement was based on discounted cash flows, with a Visa Class B common share conversion ratio range of 1.55x to 1.54x and an estimated time to resolution of 15 to 27 months. The range of sensitivities that management utilized in its fair value calculations is deemed acceptable in the industry with respect to the identified financial instrument
The Company’s policy is to recognize transfers between valuation hierarchy levels as of the end of a reporting period.
Fair Value of Assets Measured on a Nonrecurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis. Collateral-dependent loans individually evaluated for credit loss are measured at the fair value of the underlying collateral based on independent third-party appraisals that take into consideration market-based information such as recent sales activity for similar assets in the property’s market.
Other real estate owned and foreclosed assets, including both foreclosed property and surplus banking property, are level 3 assets that are adjusted to fair value, less estimated selling costs, upon transfer from loans or property and equipment. Subsequently, other real estate owned and foreclosed assets are carried at the lower of carrying value or fair value less estimated selling costs. Fair values are determined by sales agreement or third-party appraisals as discounted for estimated selling costs, information from comparable sales, and marketability of the assets.
The fair value information presented below is not as of the period end, rather it was as of the date the fair value adjustment was recorded during the twelve months for each of the dates presented below, and excludes nonrecurring fair value measurements of assets no longer on the balance sheet.
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The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.
Collateral-dependent loans
29,562
Other real estate owned and foreclosed assets, net
Total nonrecurring fair value measurements
42,420
33,762
48,550
Accounting guidance from the FASB requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below.
Cash, Short-Term Investments and Federal Funds Sold – For these short-term instruments, the carrying amount is a reasonable estimate of fair value.
Securities – The fair value measurement for securities available for sale is discussed earlier in this note. The same measurement techniques were applied to the valuation of securities held to maturity.
Loans, Net – The fair value measurement for certain collateral dependent loans that are individually evaluated for credit loss was described earlier in this note. For the remaining portfolio, fair values were generally determined by discounting scheduled cash flows using discount rates determined with reference to current market rates at which loans with similar terms would be made to borrowers of similar credit quality.
Loans Held For Sale – These loans are either carried under the fair value option or at the lower of cost or market. Given the short duration of these instruments, the carrying amount is considered a reasonable estimate of fair value.
Deposits – The accounting guidance requires that the fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, and interest-bearing checking and savings accounts, be assigned fair values equal to amounts payable upon demand (carrying amounts). The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.
Federal Funds Purchased and Securities Sold under Agreements to Repurchase – For these short-term liabilities, the carrying amount is a reasonable estimate of fair value.
Short-Term FHLB Borrowings – At June 30, 2026, short-term FHLB borrowings consisted of seven short-term fixed-rate borrowings for which the fair value was estimated by discounting contractual cash flows using current market rates at which borrowing with similar terms could be obtained. At December 31, 2025, FHLB borrowings consisted of one short-term fixed rate borrowing (two calendar days outstanding); as such, the carrying amount of the instrument was a reasonable fair value.
Long-Term Debt – The fair value is estimated by discounting the future contractual cash flows using current market rates at which debt with similar terms could be obtained.
Derivative Financial Instruments – The fair value measurement for derivative financial instruments is described earlier in this note.
The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amounts.
Total Fair
Carrying
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold
1,086,926
1,087,121
Available for sale securities
Held to maturity securities
24,118,056
9,983
Derivative financial instruments
Financial liabilities:
29,617,567
Federal funds purchased
325
Securities sold under agreements to repurchase
620,645
Short-term FHLB borrowings
950,664
950,000
154,915
Total FairValue
CarryingAmount
695,032
695,261
23,588,681
29,274,190
70,400
546,892
400,000
162,257
16. Recent Accounting Pronouncements
Accounting Standards Adopted during the Six Months Ended June 30, 2026
In November 2025, the FASB issued ASU 2025-08, “Financial Instruments – Credit Losses (Topic 326): Purchased Loans,” to expand the population of acquired assets subject to the gross-up approach in Topic 326. Under the amendments in this update, loans (excluding credit cards) acquired without credit deterioration that are deemed “seasoned” are considered purchased seasoned loans and accounted for using the gross-up approach at acquisition. Non-purchased credit deteriorated loans (excluding credit cards) are seasoned if they are acquired in a business combination or were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. Under the gross-up approach, the fair value discount is bifurcated between the credit and noncredit components, and the credit portion of the fair value discount is added to the initial amortized cost basis with a corresponding increase in the allowance for credit losses at the date of acquisition. Any noncredit premium or discount resulting from acquiring these seasoned loans is allocated to each individual asset and accreted or amortized to interest income using the effective yield method. Prior to this amendment, all non-purchased credit deteriorated loans acquired were recorded at the estimated fair value of the loan at acquisition, with the estimated allowance for credit loss recorded as a provision for credit losses through earnings in the period in which the acquisition occurred. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company elected to early adopt this standard on January 1, 2026. As of June 30, 2026, the Company had not acquired any financial assets to which the amendments would apply, and therefore, the early adoption of this standard did not have an impact on the Company’s consolidated results of operations or financial condition for the periods presented in this filing. Subsequent to quarter-end, on August 1, 2026, the Company completed its acquisition of OFB Bancshares, Inc. The accounting for loans acquired in that transaction will reflect the provisions of ASU 2025-08, as applicable. The Company is currently evaluating the fair values of the acquired assets and liabilities and, accordingly, has not yet determined the impact the adoption of the standard will have on the accounting for this transaction.
Accounting Standards Issued But Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40),” to improve the disclosures about a public business entity’s expenses in commonly presented expense captions. The amendments in this update require disclosure of specified information about certain costs and expenses in the notes to financial statements. Disclosure requirements also include a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, among other items. An entity is not precluded from providing additional voluntary disclosures that may provide investors with additional decision-useful information. This update, as amended, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently assessing the provisions of this guidance. As the update contains only amendments to disclosure requirements, adoption will have no impact on the Company’s consolidated results of operations or financial condition.
In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” to modernize the accounting for software costs that are accounted for under Subtopic 350-40. The amendments in this update remove all references to prescriptive and sequential software development stages in Subtopic 350-40 and instead require an entity to begin capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function. The amendment also provides factors to consider when evaluating probable-to-complete recognition thresholds and specifies that the disclosures in Subtopic 360-10, “Property, Plant and Equipment,” are required for all capitalized internal-use software. Further, the amendment supersedes website development costs guidance and incorporates the recognition requirements in this subtopic. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Entities may apply a prospective transition approach, a modified transition approach or a retrospective approach. The Company is currently assessing the provisions of this guidance but does not expect adoption to have a material impact on the Company’s consolidated results of operations or financial condition.
In November 2025, the FASB issued ASU 2025-09, “Derivative and Hedging (Topic 815): Hedge Accounting Improvements,” to clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. The update addresses five issues: (1) the ability to group individual forecasted transactions in a cash flow hedge, modifying the term “shared risk exposure” to “similar risk exposure;” (2) the ability to apply cash flow hedge
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accounting to “choose your rate” debt instruments; (3) the application of cash flow hedge accounting to forecasted purchases and sales of nonfinancial assets; (4) the use of net written options has hedging instruments; and (5) the mechanics of assessing hedge effectiveness for foreign-currency-denominated dual hedge strategies. This update is effective for public business entities in the interim and annual reporting periods beginning after December 15, 2026, with early adoptions permitted. Entities should apply the amendments on a prospective basis for all hedging relationships. An entity may elect to adopt the amendments for hedging relationships that exist as of the date of adoption. Upon adoption, entities are permitted to modify certain critical terms of certain existing hedging relationships without dedesignating the hedge. The Company is currently assessing the provisions of this guidance but does not expect adoption to have a material impact on the Company’s consolidated results of operations or financial condition.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow Scope Improvements," to improve interim reporting guidance in Topic 270 by improving the navigability of the required interim disclosures, clarifying when that guidance is applicable, and providing additional guidance on what disclosures should be provided in interim reporting periods. This update reorganizes and clarifies interim reporting guidance without expanding disclosure requirements. Key provisions include clarification of entities in the scope of ASC 270, updates to the form and content requirements for condensed interim financial statements, and a new disclosure principle requiring disclosure of material events since year-end. This update is effective for public entities for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments in this update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently assessing the provisions of this guidance. As the update contains only clarification of disclosure requirements, adoption will have no impact on the Company's consolidated results of operations or financial condition.
17. Subsequent Event
On August 1, 2026, subsequent to the June 30, 2026 balance sheet date and prior to the issuance of these consolidated financial statements, the Company completed its previously announced acquisition of OFB Bancshares, Inc., the parent company of One Florida Bank, pursuant to the Agreement and Plan of Merger, dated May 15, 2026, (the "Merger Agreement"). The total purchase consideration was approximately $377.6 million for all outstanding OFB Bancshares, Inc. common stock and stock options. Pursuant to the terms of the Merger Agreement, holders of OFB Bancshares, Inc. common stock received aggregate cash consideration of approximately $355.1 million. In addition, each holder of outstanding OFB Bancshares, Inc. stock options received cash equal to the per-share value of the merger consideration over the per-share exercise price resulting in aggregate cash consideration of approximately $22.5 million that was paid by OFB Bancshares, Inc. on behalf of the Company. Outstanding OFB Bancshares, Inc. stock options with a per-share exercise price equal to or greater than the per-share value of the merger consideration were cancelled for no consideration.
One Florida Bank operated five financial centers in the greater Orlando, Florida market and one financial center in the Florida Panhandle. The acquisition expands the Company's presence in Florida and establishes a significant position in the high-growth Orlando metropolitan market.
The acquisition will be accounted for as a business combination under ASC 805, Business Combinations. As the acquisition was completed subsequent to June 30, 2026, the results of operations of OFB Bancshares, Inc. are not included in the Company's consolidated financial statements as of or for the three and six months ended June 30, 2026.
The Company is in the process of determining the fair values of assets acquired and liabilities assumed; as such, the initial accounting for the acquisition is incomplete as of the date these consolidated financial statements were issued, and the disclosures required by ASC 805, including the preliminary allocation of the purchase price and other disclosure information, have not yet been finalized. The Company will provide the required acquisition-related disclosures in subsequent filings as the preliminary purchase accounting and related valuation analysis are completed, which is expected to occur during the third quarter of 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
The objective of this discussion and analysis is to provide material information relevant to the assessment of the financial condition and results of operations of Hancock Whitney Corporation and its subsidiaries during the three and six months ended June 30, 2026 and selected comparable prior periods, including an evaluation of the amounts and certainty of cash flows from operations and outside sources. This discussion and analysis is intended to highlight and supplement financial and operating data and information presented elsewhere in this report, including the consolidated financial statements and related notes. The discussion contains forward-looking statements within the meaning and protections of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC include, but are not limited to, the following:
Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.
Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Additional factors that could cause actual results to differ materially can be found in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, or in other periodic reports that we file with the SEC.
You are cautioned not to place undue reliance on these forward-looking statements. We do not intend, and undertake no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.
OVERVIEW
Non-GAAP Financial Measures
Management’s Discussion and Analysis of Financial Condition and Results of Operations includes non-GAAP measures used to describe our performance. These non-GAAP financial measures have inherent limitations as analytical tools and should not be considered on a standalone basis or as a substitute for analyses of financial condition and results as reported under GAAP. Non-GAAP financial measures are not standardized and therefore, it may not be possible to compare these measures with other companies that present measures having the same or similar names. These disclosures should not be considered an alternative to GAAP.
A reconciliation of those measures to GAAP measures are provided in the Consolidated Financial Results table later in this item. The following is a summary of these non-GAAP measures and an explanation as to why they are deemed useful.
Consistent with the provisions of subpart 229.1400 of the Securities and Exchange Commission’s Regulation S-K, “Disclosures by Bank and Savings and Loan Registrants,” we present net interest income, net interest margin and efficiency ratios on a fully taxable equivalent ("te") basis. The te basis adjusts for the tax-favored status of net interest income from certain loans and investments using a statutory federal tax rate of 21% to increase tax-exempt interest income to a taxable equivalent basis. We believe this measure to be the preferred industry measurement of net interest income, and that it enhances comparability of net interest income arising from taxable and tax-exempt sources.
We present certain additional non-GAAP financial measures to assist the reader with a better understanding of the Company’s performance period over period, and to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. The Company highlights certain items that are outside of our principal business and/or are not indicative of forward-looking trends in supplemental disclosure items below our GAAP financial data and presents certain "Adjusted" ratios that exclude these disclosed items. These adjusted ratios provide management and the reader with a measure that may be more indicative of forward-looking trends in our business, as well as demonstrate the effects of significant gains or losses and changes.
We define Adjusted Pre-Provision Net Revenue as net income excluding provision expense and income tax expense, plus the taxable equivalent adjustment (as defined above), less supplemental disclosure items (as defined above). Management believes that adjusted pre-provision net revenue is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle. We define Adjusted Revenue as net interest income (te) and noninterest income less supplemental disclosure items. We define Adjusted Noninterest Expense as noninterest expense less supplemental disclosure items. We define our Efficiency Ratio as noninterest expense to total net interest income (te) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosure items, if applicable. Management believes adjusted revenue, adjusted noninterest expense and the efficiency ratio are useful measures as they provide a greater understanding of ongoing operations and enhance comparability with prior periods.
Acquisition of OFB Bancshares, Inc.
Subsequent to the end of the second quarter of 2026, on August 1, 2026, we acquired OFB Bancshares, Inc., parent company of One Florida Bank, in an all-cash transaction. One Florida Bank operated five financial centers in the greater Orlando, Florida area and one in the Florida Panhandle. At June 30, 2026, OFB Bancshares, Inc., on a consolidated basis, had total assets of $2.1 billion, total loans of $1.7 billion, and total deposits of $1.8 billion. The acquisition enhances our existing financial center footprint by establishing a meaningful presence in the high growth Orlando market and is expected to be immediately accretive to earnings per share, exclusive of one-time transaction costs. Full integration and system conversion activities are expected to be finalized in the fourth quarter of 2026.
Securities Portfolio Restructuring
In January 2026, we executed a restructuring of our available for sale securities portfolio whereby we sold securities with an amortized cost of $1.5 billion and average yield of 2.49% and reinvested the $1.4 billion of proceeds with the purchase of securities with an average yield of 4.35%. We anticipate a 50 month payback period to cover the $98.5 million pre-tax loss associated with the sale, or approximately $0.95 per diluted share after tax. The restructure is expected to contribute approximately $23.8 million to net interest income, or $0.23 per diluted share, resulting in increases of 32 basis points (bps) to the securities portfolio yield and 7 bps to net interest margin on an annual basis.
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Current Economic Environment
The U.S. – Iran conflict continues to contribute to heightened volatility and supply concerns in global energy markets. Rising energy prices were a significant contributor to inflation, with the consumer price index reaching 4.2% on an annualized basis in May 2026 before declining to 3.5% in June as energy prices retreated. Despite ongoing geopolitical and policy uncertainty, global equity markets rebounded sharply during the second quarter of 2026, and the U.S. economy proved more resilient through the energy shock than many had anticipated. The labor market saw an unexpected rebound in job creation in the latter part of the first quarter and into the second, and the unemployment rate dropped to 4.2% in June 2026. While energy prices likely hampered consumer spending, activity remained strong. Positive labor market and consumer spending indicators, coupled with continued business investments in artificial intelligence technology, drove real gross domestic product (GDP) growth of 1.5% on an annualized basis in the second quarter of 2026. In terms of monetary policy, the sharp rise in already persistent inflation has come to the forefront of the agenda. During the second quarter of 2026, the Federal Reserve announced no change in monetary policy and appears to have taken a hawkish position, emphasizing its commitment to price stability. As such, market expectations shifted in recent months from anticipation of multiple rate cuts in 2026 toward the notion that monetary policy could remain restrictive for a longer period.
In the second quarter of 2026, conditions in the financial services industry remained generally favorable despite persistent economic pressures and uncertainty with respect to fiscal and monetary policy. Within our markets, we experienced robust loan production, and deposit cost pressures continued to moderate, contributing favorably to our net interest margin and profitability.
Economic Outlook
We utilize economic forecasts produced by Moody’s Analytics (Moody’s) that provide various scenarios to assist in the development of our economic outlook. This outlook discussion utilizes the June 2026 Moody’s forecast, the most current available at June 30, 2026. The forecasts are anchored on a baseline forecast scenario, which Moody’s defines as the “most likely outcome” of where the economy is headed based on current conditions. Several upside and downside scenarios are produced that are derived from the baseline scenario and incorporate varying degrees of favorable and unfavorable adjustments to economic indicators and circumstances as compared to the baseline.
The baseline scenario maintains a mostly optimistic tenor with respect to economic outcomes, though the outlook has softened as energy prices remain elevated. Key variables underlying the June 2026 baseline forecast include the following: (1) the conflict with Iran will be resolved in the near-term; (2) the effective tariff rate of about 8% is expected to remain for the duration of the current administration before eventually falling back to about 2% late in the decade or early in the next; (3) above target inflation caused by the Iran conflict, oil price shock, tariffs and migration policy headwinds will preclude Federal Reserve interest rate cuts for the remainder of 2026 and 2027; (4) the combination of a slowdown in labor force growth and monthly job growth will remain a headwind to the labor market, prompting the unemployment rate to resume a gradual climb, peaking at 4.6% in the second quarter of 2027; (5) GDP is forecasted at 2.1% in 2026 and then slow to 1.9% in 2027 and 2.0% in 2028 before rebounding to 2.5% in 2029; (6) the 10-year U.S. Treasury yield is forecasted to average 4.4% in the second quarter of 2026 and remain near that level through the end of the decade due to elevated inflation and fiscal uncertainty.
The S-2 scenario presents a downside alternative to the baseline. The S-2 scenario assumes the negotiations between the U.S. and Iran take longer than expected and that the damage to energy infrastructure is worse than expected and takes longer to repair. As a result, oil prices decline at a slower rate than assumed in the baseline. The effective tariff rate increases to about 11% and remains elevated through the end of 2028. The impacts on the economy from tariffs, deportations and elevated oil prices are worse than expected, causing inflation to rise. Further, there is longer and farther-reaching disturbance from other geopolitical conflict. The scenario assumes the unemployment rate will rise considerably to a peak of 7.3% in the second quarter of 2027 and remain elevated before returning to full employment in late 2028. The combination of higher oil prices, rising inflation, tariffs, still elevated interest rates and reduced credit availability causes the U.S. economy to fall into a mild recession beginning in the third quarter of 2026 that lasts for three quarters, with a peak-to-trough decline in GDP of 1% and the stock market contracting 22%. The recession and rising inflation prompts the Federal Reserve to lower its benchmark interest rate only slightly below what is forecasted in the baseline scenario before making more significant cuts as inflation subsides.
Management has deemed certain assumptions underlying the baseline scenario and the downside S-2 scenario to have an equal likelihood to occur in the near term, and, as such, the baseline and S-2 scenarios were each given probability weightings of 50% in the calculation of our allowance for credit losses at June 30, 2026. The weighting of scenarios has changed from the March 31, 2026 calculation of allowance for credit losses, where the baseline scenario was weighted at 40% and the downside S-2 scenario was weighted at 60%. The change in weighting does not represent a significant shift in our outlook, but rather is a function of a shift in the assumptions underlying the baseline forecast to reflect the downside risks of the U.S. – Iran conflict.
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The credit loss outlook for our portfolio as a whole has not changed materially since March 31, 2026. We continue to closely monitor our portfolio for customers that are sensitive to prolonged inflation, the elevated interest rate environment, tariffs, labor market conditions and/or other economic circumstances that may impact credit quality.
Rapidly evolving changes in geopolitical, fiscal and other policies have created heightened uncertainty as to the impact on the U.S. and global economies. The duration and scope of the conflict in the Middle East is expected to play a pivotal role in economic conditions. The impact of continued inflation, a softening labor market and the Federal Reserve's actions to counter those effects, as well as to respond to other economic concerns, could reduce economic growth in the near term. The full extent of the impact of the conflict in the Middle East and other influential factors are uncertain and may have an adverse effect on the U.S. economy, including the possibility of an economic recession or slower growth in the near or midterm.
Highlights of the Second Quarter 2026
We reported net income for the second quarter of 2026 of $127.0 million, or $1.55 per diluted common share, compared to $47.4 million, or $0.57 per diluted common share, in the first quarter of 2026 and $113.5 million, or $1.32 per diluted common share, in the second quarter of 2025. The first quarter of 2026 included a supplemental disclosure item attributable to a net loss on the restructuring of the available for sale securities portfolio totaling $98.6 million pre-tax, or $0.95 per diluted share after tax, and the second quarter of 2025 included supplemental disclosure items $5.9 million pre-tax, or $0.05 per diluted share, attributable to costs associated with the acquisition of Sabal Trust Company.
Second quarter 2026 results compared to first quarter 2026:
Our results for the second quarter of 2026 reflect continued strong performance, profitability and enhanced shareholder value. We experienced solid loan and deposit growth during the quarter, reflecting continued progress on our organic growth plan. We continued to invest in our growth strategy with the hiring of a net 15 new bankers in the second quarter, bringing the year to date total to 42. We also returned capital to shareholders with the repurchase of 712,966 shares of our common stock, bringing year-to-date repurchases to 2.1 million shares. Noninterest income grew, expenses remained on target and our efficiency ratio improved. Credit metrics remained stable and we maintained a robust allowance for credit losses coverage of 1.42%. Looking ahead, our acquisition of One Florida Bank, completed on August 1, 2026, will enhance our ability to bring our relationship-based approach to banking to customers across an expanded footprint in the Central Florida area. We remain encouraged by the momentum across our franchise. While the operating environment continues to present challenges, we believe our solid balance sheet, strong customer relationships and disciplined execution position us well to deliver on our objectives for the remainder of this year and over the longer term.
Consolidated Financial Results
The following table contains the consolidated financial results for the periods indicated.
March 31,
September 30,
Income Statement Data:
401,382
407,698
409,020
Interest income (te) (a)
415,100
403,783
410,203
411,591
405,077
818,883
803,204
Interest expense
116,217
125,528
129,282
Net interest income (te)
295,225
287,566
284,675
282,309
279,455
582,791
552,166
13,172
13,145
12,651
Noninterest income
7,482
107,131
106,001
Noninterest expense
220,748
217,850
212,753
58,727
158,306
160,335
11,305
32,734
32,869
47,422
125,572
127,466
Supplemental disclosure items-included above, pre-tax:
Included in noninterest income
Loss on securities portfolio restructure
Included in noninterest expense:
Sabal Trust Company acquisition expense
5,911
Balance Sheet Data:
Period end balance sheet data
23,991,840
23,596,565
23,461,750
Earning assets
33,039,464
32,306,650
32,218,663
32,532,320
31,965,130
35,542,126
35,766,407
35,212,652
Noninterest-bearing deposits
10,344,878
10,305,303
10,638,785
29,082,134
28,659,750
29,046,612
Stockholders' equity
4,474,479
Average balance sheet data
24,339,904
23,965,993
23,715,763
23,425,895
23,249,241
24,153,981
23,159,406
33,205,847
32,698,837
32,598,315
32,213,632
32,081,140
32,953,742
32,052,670
35,881,537
35,420,096
35,227,286
34,751,209
34,527,276
35,652,091
34,441,870
10,104,015
10,033,006
10,165,806
10,121,707
10,317,446
10,068,707
10,240,760
28,780,937
28,834,747
28,816,539
28,492,076
28,649,900
28,807,693
28,700,875
4,420,837
4,461,827
4,417,711
4,368,746
4,284,279
4,441,218
4,233,827
Common Share Data:
Earnings per share - basic
0.58
1.51
1.50
Earnings per share - diluted
0.57
1.49
Cash dividends per common share
Book value per share (period-end)
55.23
54.46
54.22
52.82
51.15
Tangible book value per share (period-end)
42.95
42.26
42.16
41.07
39.46
Weighted average number of shares - diluted
82,261
83,791
85,453
Period-end number of shares
81,152
84,711
85,351
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Performance and other data:
Return on average assets
1.42
0.54
1.41
1.46
0.99
1.36
Return on average common equity
11.52
4.31
11.28
11.58
10.63
7.92
11.10
Return on average tangible common equity
14.84
5.54
14.55
15.00
13.71
10.19
14.21
Tangible common equity ratio (b)
9.78
9.93
10.06
10.01
9.84
Common equity Tier 1 (CET1) ratio
13.19
13.29
13.65
14.09
13.97
Net interest margin (te)
3.56
3.55
3.48
3.49
3.46
Noninterest income as a percentage of total revenue (te)
26.85
2.54
27.34
27.30
26.07
16.58
25.93
Efficiency ratio (c)
55.31
55.43
54.93
54.10
54.91
55.37
55.06
Allowance for loan losses as a percentage of period-end loans
1.27
1.30
1.28
1.33
Allowance for credit losses as a percentage of period-end loans
1.43
1.45
Annualized net charge-offs to average loans
0.16
0.22
0.31
0.24
Nonaccrual loans as a percentage of loans
0.46
0.47
0.48
0.40
FTE headcount
3,674
3,658
3,627
3,603
3,580
Reconciliation of pre-provision net revenue (te) and adjusted pre-provision net revenue(te) (non-GAAP measures) (d)
Net income (GAAP)
Pre-provision net revenue
175,926
71,899
171,451
172,986
159,504
247,825
319,141
Taxable equivalent adjustment
2,213
2,401
2,505
2,571
2,496
4,614
5,302
Pre-provision net revenue (te)
178,139
74,300
173,956
175,557
162,000
252,439
324,443
Adjustments from supplemental disclosure items
Adjusted pre-provision net revenue (te)
172,895
167,911
351,034
330,354
Reconciliation of revenue (te), adjusted revenue (te) and efficiency ratio (non-GAAP measures) (d)
285,165
282,170
279,738
Total GAAP revenue
401,362
292,647
389,301
385,739
375,483
694,009
740,179
Total revenue (te)
403,575
295,048
391,806
388,310
377,979
698,623
745,481
Adjusted total revenue (te)
393,643
797,218
GAAP noninterest expense
Amortization of intangibles
(2,222
(2,548
(2,622
(2,694
(2,524
(4,770
(4,637
(5,911
Adjusted noninterest expense for efficiency
223,214
218,200
215,228
210,059
207,544
441,414
410,490
RESULTS OF OPERATIONS
Net Interest Income
Net interest income (te) for the second quarter of 2026 totaled $295.2 million, up $7.7 million, or 3%, from the first quarter of 2026, and $582.8 million for the first six months of 2026, up $30.6 million, or 6%, from the same period in 2025.
The $7.7 million increase in net interest income (te) from the first quarter of 2026 is comprised of an increase in interest income (te) of $11.3 million partially offset by an increase in interest expense of $3.6 million. The increase in interest income (te) was driven primarily by loan growth, an additional accrual day and an increase in interest income from securities as a result of the full-quarter impact of the portfolio restructuring completed in late January 2026. The increase in interest expense was primarily attributable to an increase in average short-term borrowings to support growth in the loan portfolio and an additional accrual day, partially offset by a decrease in the cost of deposits, reflecting a continued shift in the mix of average interest-bearing deposits from time deposits to transaction and savings deposits. The net interest margin for the second quarter of 2026 was 3.56%, up 1 bp from the first quarter of
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2026, driven primarily by higher securities yields as a result of the bond portfolio restructuring, up 12 bps, and a lower cost of interest on deposits, down 5 bps, partially offset by lower loan yields, down 2 bps, and an increase in borrowing costs, up 26 bps.
The $30.6 million increase in net interest income (te) for the six months ended June 30, 2026 from the same period in 2025 is comprised of a $15.7 million increase in interest income (te) and a $14.9 million decrease in interest expense. The increase in interest income (te) was primarily attributable to an increase in interest income from securities, as the impact of loan growth was largely offset by a decline in loan yields. The decrease in interest expense was driven by a decline in interest expense on deposits that was largely a product of the interest rate environment, which also fostered a favorable shift in the mix of average interest-bearing deposits from time deposits to transaction and savings deposits, partially offset by an increase in average short-term borrowings. The net interest margin for the six months ended June 30, 2026 was 3.55%, up 9 bps from the same period in 2025, largely attributable to the impact of higher securities yields of 47 bps, a lower cost of interest-bearing deposits of 37 bps, partially offset by a decline in loan yields of 24 bps and an increase in borrowing costs of 40 bps.
The following tables detail the components of our net interest income (te) and net interest margin.
March 31, 2026
June 30, 2025
($ in millions)
Volume
Interest
Rate
Average earning assets
Commercial & real estate loans (te) (a)
19,085.1
276.8
5.82
18,651.4
268.8
5.84
17,832.7
271.1
6.10
Residential mortgage loans
3,921.8
39.2
4.00
3,982.5
40.1
4.03
4,082.0
41.6
4.07
Consumer loans
1,333.0
25.1
7.54
1,332.1
24.9
7.57
1,334.5
27.8
8.34
Loan fees & late charges
(0.8
(1.0
(0.6
Total loans (te) (b)
24,339.9
340.3
5.60
23,966.0
332.8
5.62
23,249.2
339.9
5.86
48.0
0.7
6.22
27.7
0.4
5.36
24.4
6.55
US Treasury and government agency securities
647.3
5.3
3.29
643.7
5.2
3.23
628.9
5.0
3.16
Mortgage-backed securities and collateralized mortgage obligations
7,065.2
59.2
3.35
6,945.1
56.2
3.24
6,864.2
48.4
2.82
Municipals (te)
554.3
4.6
3.33
659.9
3.13
761.2
5.6
2.95
Other securities
18.8
0.2
4.40
17.0
4.11
17.5
0.1
3.69
Total securities (te) (c)
8,285.6
69.3
8,265.7
66.8
8,271.8
59.1
2.86
Total short-term investments
532.3
4.8
3.58
439.4
3.8
3.53
535.7
5.7
4.28
Total earning assets (te)
33,205.8
415.1
5.01
32,698.8
403.8
4.99
32,081.1
405.1
5.06
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits
12,389.5
57.8
1.87
12,032.7
54.4
1.83
11,341.9
59.7
2.11
Time deposits
3,436.5
26.5
3.09
3,647.9
30.0
3.34
4,044.4
35.9
3.57
Public funds
2,850.9
18.3
2.57
3,121.1
20.0
2.60
2,946.2
22.1
3.01
Total interest-bearing deposits
18,676.9
102.6
2.20
18,801.7
104.4
2.25
18,332.5
117.7
2.58
Repurchase agreements
703.5
2.2
1.26
707.2
2.1
1.23
606.7
1.39
Other short-term borrowings
1,278.6
12.3
3.86
721.0
6.8
3.80
247.0
2.8
4.49
193.8
5.79
198.0
2.9
211.1
3.0
5.67
Total borrowings
2,175.9
17.3
3.19
1,626.2
11.8
2.93
1,064.8
7.9
2.96
Total interest-bearing liabilities
20,852.8
119.9
2.31
20,427.9
116.2
19,397.3
125.6
Net interest-free funding sources
12,353.0
12,270.9
12,683.8
Total cost of funds
1.44
1.57
Net interest spread (te)
295.2
287.6
2.68
279.5
2.46
Net interest margin
47
18,869.5
545.6
5.83
17,785.7
538.1
3,952.0
79.3
4.01
4,031.1
80.3
3.98
1,332.5
50.0
7.55
1,342.6
55.4
8.31
(1.8
24,154.0
673.1
5.61
23,159.4
673.0
5.85
37.9
1.1
5.90
22.5
6.62
645.5
10.5
3.26
608.9
9.4
3.08
7,005.5
115.4
3.30
6,848.1
95.1
2.78
606.8
9.8
3.22
781.9
11.6
17.9
4.26
17.8
0.3
3.66
8,275.7
136.1
8,256.7
116.4
486.1
8.6
614.1
13.1
4.30
32,953.7
818.9
5.00
32,052.7
803.2
5.04
12,212.1
112.2
1.85
11,272.5
117.0
2.09
3,541.6
56.5
4,158.0
75.9
3.68
2,985.3
38.3
2.59
3,029.6
45.3
3.02
18,739.0
207.0
2.23
18,460.1
238.2
705.3
4.4
1.24
619.1
3.9
1,001.3
19.0
3.84
126.2
4.50
195.9
5.81
210.9
6.1
5.74
1,902.5
29.1
956.2
12.8
20,641.5
236.1
19,416.3
251.0
2.61
12,312.2
12,636.4
1.58
582.8
552.2
2.43
Provision for Credit Losses
During the second quarter of 2026, we recorded a provision for credit losses of $13.8 million, compared to $13.2 million in the first quarter of 2026. The provision for credit losses in the second quarter of 2026 included net charge-offs of $9.4 million and a reserve build of $4.4 million, compared to net charge-offs of $11.1 million and a reserve build of $2.1 million in the first quarter of 2026. The provisions for credit losses in both periods reflect mostly stable credit quality and modest builds attributable to loan growth.
Annualized net charge-offs as a percentage of average loans in the second quarter of 2026 were 0.16%, down from 0.19%, in the first quarter of 2026. Net charge-offs in the second quarter of 2026 included $6.6 million in the commercial portfolio, $2.7 million in the consumer portfolio and $0.1 million in the residential mortgage portfolio. Net charge-offs in the first quarter of 2026 included $7.4 million in the commercial portfolio, $3.5 million in the consumer portfolio and $0.2 million in the residential mortgage portfolio.
For the six months ended June 30, 2026, we recorded a provision for credit losses of $26.9 million compared to $25.4 million for the same period in 2025. The provision for credit losses for the six months ended June 30, 2026 included net charge-offs of $20.6 million and a reserve build of $6.3 million, compared to net charge-offs of $28.0 million and a reserve release of $2.6 million in the same period in 2025. Net charge-offs for the six months ended June 30, 2026 were 0.17% of average loans, comprised of net charge-offs of $14.1 million in the commercial portfolio, $6.2 million in the consumer portfolio and $0.3 million in the residential mortgage portfolio. Net charge-offs for the six months ended June 30, 2025 were 0.24% of average loans, comprised of net charge-offs of $21.8 million in the commercial portfolio and $6.3 million in the consumer portfolio, partially offset by net recoveries of less than $0.1 million in the residential mortgage portfolio.
The discussion labeled "Allowance for Credit Losses and Asset Quality" that appears later in this Item provides additional information on these changes and on general credit quality.
Noninterest Income
Noninterest income totaled $108.4 million for the second quarter of 2026, up $100.9 million from the first quarter of 2026. Included in noninterest income in the first quarter of 2026 was a $98.6 million loss identified as a supplemental disclosure item attributable to the restructuring of the available for sales securities portfolio. Excluding the supplemental disclosure item, noninterest income was up $2.3 million, or 2%, from the first quarter of 2026, driven primarily by increases in investment and annuity fees, trust fees, bank card and ATM fees and income from secondary mortgage market operations, partially offset by a decline in other miscellaneous income. For the six months ended June 30, 2026, noninterest income totaled $115.8 million, down $77.5 million from the same period in 2025. Excluding the supplemental disclosure item described above, noninterest income was up $21.1 million, or 11%, from the same period in 2025, with increases across most lines. A detailed discussion of noninterest income variances follows.
The components of noninterest income are presented in the following table for the indicated periods.
25,902
24,574
22,126
12,572
3,529
5,267
2,775
Income (loss) from customer and other derivatives
960
2,046
6,326
Supplemental Disclosure Items in Noninterest Income
Securities transactions, net:
Total supplemental disclosure item in noninterest income
Service charges on deposit accounts include consumer, business, and corporate deposit account servicing fees, as well as nonsufficient funds fees on non-consumer accounts, overdraft and overdraft protection fees, and other customer transaction-related fees. Service charges on deposits totaled $25.9 million for the second quarter of 2026, virtually flat compared to the first quarter of 2026. For the six months ended June 30, 2026, service charges on deposits totaled $51.8 million, up $3.4 million, or 7%, from the same period in 2025, primarily attributable to consumer overdraft fees and analysis fees on commercial accounts.
Trust fee income represents revenue generated from a full range of trust services, including asset management and custody services provided to individuals, businesses and institutions. Trust fees totaled $26.0 million for the second quarter of 2026, up $1.5 million, or 6%, from the first quarter of 2026, driven in part by seasonal tax preparation fees. For the six months ended June 30, 2026, trust fees totaled $50.6 million, up $9.8 million, or 24%, from the same period in 2025. The year-over-year increase is mostly attributable to personal trust, resulting from both a full period contribution from the Sabal acquisition and organic and market value-driven growth in our legacy business.
Bank card and ATM fees include interchange and other income from credit and debit card transactions, fees earned from processing card transactions for merchants, and fees earned from ATM transactions. Bank card and ATM fees totaled $23.2 million for the second quarter of 2026, up $1.1 million, or 5%, from the first quarter of 2026, reflecting higher activity across all fee lines. Bank card and ATM fees for the six months ended June 30, 2026 totaled $45.3 million, up $2.6 million, or 6%, from the same period in 2025. The year-over-year increase is mostly attributable to interchange fees, due in part to card-focused marketing campaigns, and ATM fees, reflecting a marketing adjustment on certain fees.
Investment and annuity fees and insurance commissions includes both fees earned from sales of annuity and insurance products, as well as managed account fees. Investment and annuity fees and insurance commissions totaled $14.6 million for the second quarter of 2026, up $2.0 million, or 16%, from the first quarter of 2026. The linked quarter increase was largely driven by annuity sales, corporate underwriting fees and investment management fees. For the six months ended June 30, 2026, investment and annuity fees and insurance commissions totaled $27.2 million, up $5.2 million, or 23%, from the same period in 2025. The year-over-year increase was largely driven by fixed income trading and investment management fees, partially offset by a decline in annuity sales. Investment and annuity fee income can vary from period to period depending on market conditions, impacting demand for products and services and related fees.
Income from secondary mortgage market operations is comprised of income produced from the origination and sales of residential mortgage loans in the secondary market. We offer a full range of mortgage products to our customers and typically sell longer-term fixed-rate loans while retaining the majority of adjustable-rate loans, as well as loans generated through programs to support customer relationships. Secondary mortgage market operations income will vary based on mortgage application volume, pull through rates, the percentage of loans ultimately sold in the secondary market and the timing of such sales. Income from secondary mortgage market operations was $4.1 million in the second quarter of 2026, up $0.5 million, or 15%, from the first quarter of 2026. The linked quarter increase was primarily attributable to an increase in mortgage production. For the six months ended June 30, 2026, income from secondary mortgage market operations totaled $7.6 million, virtually flat compared to the same period in 2025, as the impact of an increase in mortgage production was offset by a decline in the percentage of loans sold in the secondary market.
There was no net gain or loss on securities transactions during the second quarter of 2026, compared to a net loss on securities transactions of $98.6 million in the first quarter of 2026 that resulted from the sale of $1.5 billion of available for sale securities. The sale reflects a strategic decision to restructure the portfolio to enhance future net interest income through deployment of the proceeds into higher-yielding instruments.
Income from bank-owned life insurance (BOLI) is typically generated through insurance benefit proceeds as well as the growth of the cash surrender value of insurance contracts held. Income from BOLI was $6.3 million for the second quarter of 2026, up $1.0 million, or 20%, from the first quarter of 2026. The linked quarter increase was driven primarily by an increase in mortality gains and also reflects an increase in income from changes in cash surrender value. For the six months ended June 30, 2026, income from BOLI totaled $11.6 million, up $1.4 million, or 14%, from the same period in 2025, driven by an increase in income from changes in cash surrender value that was partially offset by a decline in mortality gains.
Credit related fees include fees assessed on letters of credit and unused portions of loan commitments. For the three and six months ended June 30, 2026, credit related fees totaled $2.8 million and $5.6 million, respectively. The linked quarter and year-over-year variances were virtually flat in relation to the respective comparative periods.
Income or loss from customer and other derivatives is largely from our customer interest rate derivative program. Income from customer and other derivatives totaled $0.4 million for the second quarter of 2026, down $0.6 million from the first quarter of 2026. The linked quarter decrease was largely attributable to the customer derivative program and is a product of volume and interest rate movement, partially offset by lower losses associated with assumption changes to the Visa Class B derivative liability. For the six months ended June 30, 2026, income from customer and other derivatives totaled $1.4 million, down $0.3 million from the same period in 2025. The year-over-year decrease was also driven by the customer derivative program. Derivative income can be volatile and is dependent upon the composition of the portfolio, volume and mix of sales and termination activity, and market value adjustments due to market interest rate movement.
Net gains on sales of premises, equipment and other assets consist primarily of net revenue earned from sales of excess-bank owned facilities and equipment no longer in use, gains on sales of Small Business Administration (SBA) and other non-residential mortgage loans, and leases and other assets associated with the equipment finance line of business. Net gains on sales of premises, equipment and other assets for the second quarter of 2026 totaled $1.6 million, down $0.4 million, or 20%, from the first quarter of 2026. For the six months ended June 30, 2026, net gains on sales of premises, equipment and other assets totaled $3.7 million, up $0.8 million, or 27%, from the same period in 2025. The level of net gains or losses on sales of these assets in a given reporting period will vary based on a variety of circumstances.
Other miscellaneous income is comprised of various items, including income from investments in small business investment companies (SBIC), dividends on Federal Home Loan Bank (FHLB) stock, and fees from loan syndication and other specialty lines of business. Other miscellaneous income totaled $3.4 million, down $2.9 million from the first quarter of 2026. The linked quarter decrease reflects declines in income from SBICs, syndication income and dividends on FHLB stock. For the six months ended June 30, 2026, other miscellaneous income totaled $9.7 million, down $1.8 million from the same period in 2025. The year over year decrease was driven primarily by a decline in income from SBICs that was partially offset by an increase in dividends on FHLB stock. SBIC income and syndication fees will vary from period to period, depending on activity.
Noninterest Expense
Noninterest expense for the second quarter of 2026 was $225.4 million, up $4.7 million, or 2%, from the first quarter of 2026, driven by personnel, other miscellaneous, professional services and occupancy and equipment expenses, partially offset by a decrease in data processing expense. For the six months ended June 30, 2026, noninterest expense totaled $446.2 million, up $25.1 million, or 6%, from the same period in 2025. Included in noninterest expense for six months ended June 30, 2025 were supplemental disclosure items totaling $5.9 million attributable to costs associated with the Sabal acquisition. Excluding the supplemental disclosure items, noninterest expense was up $31.1 million, or 7%, from the same period in 2025, largely driven by increases in personnel, business development, data processing and professional services expenses. A more detailed discussion of noninterest expense variances follows.
The components of noninterest expense are presented in the following table for the indicated periods.
98,788
28,360
127,148
13,129
4,157
32,796
13,600
2,548
4,988
Other real estate and foreclosed asset expense, net
441
4,416
4,218
2,642
903
985
(5,311
8,267
Supplemental Disclosure Items in Noninterest Expense
Sabal Trust Company acquisition expense:
1,976
1,550
210
Total supplemental disclosure items in noninterest expense
Personnel expense consists of salaries, incentive compensation, long-term incentives, payroll taxes, and other employee benefits such as 401(k), pension, and insurance for medical, life and disability. Personnel expense totaled $130.2 million for the second quarter of 2026, up $3.0 million, or 2%, from the first quarter of 2026. The linked quarter increase was driven primarily by increases in salary expense as a result of annual merit increases and increased headcount, commissions and incentives associated with production, share-based compensation and certain employee benefits. These increases were partially offset by seasonal declines in payroll tax and certain other employee benefits, and a favorable benefit from salary deferrals associated with lending activity. For the six months ended June 30, 2026, personnel expense totaled $257.3 million, up $26.5 million, or 11%, from the same period in 2025. The six months ended June 30, 2025 included $1.4 million of Sabal acquisition costs highlighted as supplemental disclosure items. Excluding the Sabal acquisition costs, personnel expense for the six months ended June 30, 2026 was up $27.9 million, or 12%, from the same period in 2025. The year-over-year increase reflects increases in most components of this category, and reflects both expected annual increases in salary, incentives, bonus and associated benefit costs, and incremental expense associated with increased headcount that includes both Sabal associates and additional hires of revenue-producing and facility management associates.
Occupancy and equipment expenses are primarily composed of lease expenses, depreciation, maintenance and repairs, rent, property taxes, and other equipment expenses. Occupancy and equipment expenses totaled $18.3 million for the second quarter of 2026, up $1.0 million, or 6%, from the first quarter of 2026, primarily attributable to increases in building repair and maintenance and leased facility expense. For the six months ended June 30, 2026, occupancy and equipment expenses totaled $35.6 million, down $0.5 million, or 1%, compared to the same period in 2025. The year-over-year decrease was driven by decreases in facility repair and maintenance and outsourced facility management that were partially offset by an increase in leased facility expense.
Data processing expense includes expenses related to third party technology processing and servicing costs, technology project costs and fees associated with bank card and ATM transactions, and credit card reward expenses. Data processing expense was $31.7 million for the second quarter of 2026, down $1.1 million, or 3%, from the first quarter of 2026. The linked quarter decrease was driven primarily by declines in maintenance on bank owned software and certain third-party technology processing expenses, partially offset by an increase in activity-based card processing and rewards and rebate expenses. For the six months ended June 30, 2026, data processing expense totaled $64.5 million, down $0.2 million, or less than 1%, from the same period in 2025. The six months ended June 30, 2025 included $2.0 million of Sabal acquisition costs highlighted as supplemental disclosure items. Excluding the Sabal acquisition costs, data processing expense for the six months ended June 30, 2026 was up $1.8 million, or 3%, from the same period in 2025. The year over year increase was largely attributable to increases in certain third-party technology processing and activity-based card processing and rewards and rebates expenses, partially offset by a decrease in amortization and maintenance on bank owned software. Data processing expense can vary from period to period, depending on business needs and technology enhancement initiatives.
Professional services expense includes accounting and audit, legal, consulting and certain outsourced service expense. Professional services expense for the second quarter of 2026 totaled $14.5 million, up $0.9 million, or 7%, from the first quarter of 2026. The linked quarter increase was mostly attributable to legal fees, consulting fees, expenses associated with problem loan collections and outsourced service expenses. For the six months ended June 30, 2026, professional services expense totaled $28.1 million, down $0.5 million, or 2%, from the same period in 2025. The six months ended June 30, 2025 included $1.5 million of Sabal acquisition costs highlighted as supplemental disclosure items. Excluding the Sabal acquisition costs, professional services expense for the six months ended June 30, 2026 was up $1.1 million, or 4%, from the same period in 2025. The year-over-year increase was largely attributable to costs associated with consulting and other professional services associated with stand-alone engagements, including process improvement projects. Professional services expense may vary from period to period, generally related to the timing of external service needs.
Deposit insurance and regulatory fees for the second quarter of 2026 totaled $5.0 million, virtually flat compared to the first quarter of 2026. For the six months ended June 30, 2026, deposit insurance and regulatory fees totaled $10.0 million, up $0.2 million, or 2%, from the same period in 2025.
Other real estate and foreclosed assets expense totaled $0.2 million in the second quarter of 2026, down $0.2 million from the first quarter of 2026. For the six months ended June 30, 2026, other real estate and foreclosed assets expense totaled $0.7 million, down $2.3 million from the same period in 2025. Gains or losses on the sale of other real estate and foreclosed assets may occur periodically and are dependent on the number and type of assets for sale and current market conditions.
Corporate value, franchise and other non-income tax expense for the second quarter of 2026 totaled $4.5 million, up $0.1 million, or 3%, from the first quarter of 2026. The linked quarter increase was largely attributable to bank share tax. For the six months ended June 30, 2026, corporate value, franchise and other non-income tax expense totaled $9.0 million down $0.1 million, or 1%, from the same period in 2025. The year-over-year decline was driven by a decrease in bank share tax that was mostly offset by an increase in
franchise tax. The calculation of bank share tax is based on multiple variables, including average quarterly assets, earnings and stockholders’ equity to determine the taxable assessment value and can vary from period to period.
Business development-related expenses (including advertising, travel, entertainment and contributions) totaled $10.0 million for the second quarter of 2026, virtually flat compared to the first quarter of 2026, as increases in advertising and promotion and travel expenses were offset by decreases in contributions, sponsorships and promotional campaign expenses. For the six months ended June 30, 2026, business development-related expenses totaled $20.1 million, up $4.2 million, or 27%, from the same period in 2025. The year-over-year increase was attributable to most components of this category but driven primarily by advertising and promotion expenses.
All other expenses, excluding amortization of intangibles, is comprised of a variety of other operational expenses and losses, tax credit investment amortization, and net other retirement expense. All other expenses totaled $8.7 million for the second quarter of 2026, up $1.2 million, or 16%, from the first quarter of 2026. The linked quarter increase was driven largely by other operational losses. For the six months ended June 30, 2026, all other expenses totaled $16.2 million, down $2.3 million, or 12%, from the same period in 2025. The six months ended June 30, 2025 included $1.0 million of Sabal acquisition costs highlighted as supplemental disclosure items. Excluding the Sabal acquisition costs, all other expenses for the six months ended June 30, 2026 was down $1.3 million, or 8%, from the same period in 2025, driven primarily by net other retirement expense as a result of changes in actuarial assumptions for our pension plan, partially offset by an increase in other operational losses.
Income Taxes
The effective income tax rate for the second quarter of 2026 was 21.7%, compared to 19.3% in the first quarter of 2026. The linked-quarter increase in the effective tax rate was due primarily to a $1.4 million income tax benefit in the first quarter of 2026 related to various discrete items, such as share-based compensation. The effective tax rate for the six months ended June 30, 2026 was 21.1%, compared to 20.7% for the same period in 2025.
Many factors impact the effective income tax rate including, but not limited to, the level of pre-tax income and relative impact of net tax benefits related to tax credit investments, tax-exempt interest income, bank-owned life insurance, and nondeductible expenses. Additionally, discrete tax items recognized in any given period affect the comparability of the effective income tax rate between periods. Such items include share-based compensation, valuation allowance changes, uncertain tax position changes and tax law changes.
Our effective tax rate has historically varied from the federal statutory rate primarily because of tax-exempt income and tax credits. Interest income on bonds issued by or loans to state and municipal governments and authorities, and earnings from the bank-owned life insurance program are the major components of tax-exempt income. The main source of tax credits has been investments in tax-advantaged securities and tax credit projects. These investments are made primarily in the markets we serve and are directed at tax credits issued under the Federal and State New Market Tax Credit (“NMTC”) programs, Low-Income Housing Tax Credit (“LIHTC”) programs, as well as pre-2018 Qualified Zone Academy Bonds (“QZAB”) and Qualified School Construction Bonds (“QSCB”). These investments generate tax credits, which reduce current and future taxes and are recognized when earned as a benefit in the provision for income taxes.
We have invested in NMTC projects through investments in our own Community Development Entities (“CDE”), as well as other unrelated CDEs. Federal tax credits from NMTC investments are recognized over a seven-year period, while recognition of the benefits from state tax credits varies from three to five years. We have also invested in affordable housing projects that generate federal LIHTC tax credits that are recognized over a ten-year period, beginning in the year the rental activity begins. The amortization of the LIHTC investment cost is recognized as a component of income tax expense in proportion to the tax credits recognized over the ten-year credit period.
Based on tax credit investments that have been made to date in 2026, we expect to realize benefits from federal and state tax credits over the next three years totaling $8.0 million, $5.5 million, and $4.4 million in 2027, 2028, and 2029, respectively. We may continue making investments in tax credit projects; however, our ability to access new credits will depend upon, among other factors, federal and state tax policies and the level of competition for such credits.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Liquidity management ensures that funds are available to meet the cash flow requirements of our depositors and borrowers, while also meeting the operating, capital and strategic cash flow needs of the Company, the Bank and other subsidiaries. As part of the overall asset and liability management process, liquidity management strategies and measurements have been developed to manage and monitor liquidity risk. The following table summarizes available liquidity at June 30, 2026:
Total Available
Amount Used
Net Availability
Available Sources of Funding:
Internal Sources:
Free securities
4,566,934
External Sources:
Federal Home Loan Bank (a)
6,826,443
1,993,422
4,833,021
Federal Reserve Bank
3,407,180
Brokered deposits
4,444,464
1,209,000
Total Available Sources of Funding
20,454,021
18,460,599
Cash and other interest-bearing bank deposits
Total Liquidity
19,547,720
(a) Amount used includes letters of credit.
Liquidity levels of financial institutions continue to be in heightened focus since the failure of several major regional U.S. banks that experienced large-scale deposit runs in early 2023. At June 30, 2026, our available on and off-balance sheet liquidity of $19.5 billion is well in excess of our estimated uninsured, noncollateralized deposits of approximately $12.4 billion.
The asset portion of the balance sheet provides liquidity primarily through loan principal repayments, maturities and repayments of investment securities and occasional sales of various assets. Short-term investments such as federal funds sold, securities purchased under agreements to resell and interest-bearing deposits with the Federal Reserve Bank or with other commercial banks are additional sources of liquidity to meet cash flow requirements. Free securities represent unpledged securities that can be sold or used as collateral for borrowings, and include unpledged securities assigned to short-term dealer repurchase agreements or to the Federal Reserve Bank discount window. Total pledged securities were $3.3 billion at June 30, 2026, down $619 million from December 31, 2025. The decrease in pledged securities compared to December 31, 2025 is largely attributable to pledges that were released in response to a decrease in public funds deposits. Both securities and FHLB letters of credit are pledged as collateral related to public funds and repurchase agreements. Management has established an internal target for the ratio of free securities to total securities of 20% or greater. As shown in the table below, our ratio of free securities to total securities was 58.76% at June 30, 2026, compared to 56.35% at March 31, 2026, and 51.97% at December 31, 2025.
Liquidity Metrics
Free securities / total securities
58.76
56.35
51.97
60.83
59.44
Core deposits / total deposits
95.50
95.17
94.99
94.81
94.68
Wholesale funds / core deposits
6.24
4.37
7.74
4.57
Liquid assets / total liabilities
17.72
16.85
15.63
19.88
17.67
Quarter-to-date average loans / quarter-to-date average deposits
84.57
83.11
82.30
82.22
81.15
The liability portion of the balance sheet provides liquidity mainly through the ability to use cash sourced from customer deposit accounts. At June 30, 2026, deposits totaled $29.6 billion, up $547.6 million, or 2%, from March 31, 2026 and $350.0 million, or 1%, from December 31, 2025, due primarily to growth in transaction and savings deposits that was partially offset by retail time deposit maturities and typical seasonal movement in public funds deposits. There were no brokered time deposits at June 30, 2026, March 31, 2026 or December 31, 2025. The use of brokered deposits as a funding source is subject to certain policies regarding the amount, term and interest rate.
Core deposits consist of total deposits excluding certificates of deposit of $250,000 or more and brokered deposits. Core deposits totaled $28.3 billion at June 30, 2026, up $621.0 million from March 31, 2026 and $484.3 million from December 31, 2025. Changes
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in the level of core deposits will vary based on the level of total deposits and the mix therein. The ratio of core deposits to total deposits was 95.50% at June 30, 2026, compared to 95.17% at March 31, 2026 and 94.99% at December 31, 2025.
Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings from customers provide additional sources of liquidity to meet short-term funding requirements. Besides funding from customer sources, the Bank has a line of credit with the FHLB that is secured by blanket pledges of certain mortgage loans. At June 30, 2026, the bank had $950 million in borrowings and approximately $4.8 billion available under this line. At June 30, 2026, the unused borrowing capacity at the Federal Reserve’s discount window was approximately $3.4 billion. There were no outstanding borrowings with the Federal Reserve at any date during any period covered by this report.
Wholesale funds, which are comprised of short-term borrowings, long-term debt and brokered deposits were 6.24% of core deposits at June 30, 2026, compared to 5.62% at March 31, 2026 and 4.37% at December 31, 2025. At June 30, 2026, wholesale funds totaled $1.8 billion, an increase of $210.6 million from March 31 2026 and $548.1 million from December 31, 2025, largely driven by an increase in FHLB borrowings. The amount of wholesale funds outstanding will vary based on retail deposit levels and current funding needs. The Company has established an internal target for wholesale funds to be less than 25% of core deposits.
Other key measures used to monitor liquidity include the liquid asset ratio and the loan-to-deposit ratio. The liquid asset ratio (liquid assets, consisting of cash, short-term investments and free securities, divided by total liabilities) measures our ability to meet short-term obligations. Our liquid asset ratio was 17.72% at June 30, 2026, compared to 16.85% at March 31, 2026 and 15.63% at December 31, 2025. Management has established a minimum liquid asset ratio of 7.5% and an internal target of 12% or greater. The loan to deposit ratio (average loans outstanding for the reporting period divided by average deposits outstanding) measures the amount of funds the Bank lends for each dollar of deposits on hand. Our average loan-to-deposit ratio for the second quarter of 2026 was 84.57%, compared to 83.11% for the first quarter of 2026, and 82.30% for the fourth quarter of 2025. Management has an established target range for the loan-to-deposit ratio of 87% to 89%, but will operate outside that range under certain circumstances.
Cash generated from operations is another important source of funds to meet liquidity needs. The Consolidated Statements of Cash Flows included in Part I, Item 1 of this document present operating cash flows and summarize all significant sources and uses of funds during the six months ended June 30, 2026 and 2025.
Dividends received from the Bank have been the primary source of funds available to the Parent for the payment of dividends to our stockholders, repurchasing our common stock in the open market, servicing its debt and for acquisitions with cash consideration. The liquidity management process takes into account the various regulatory provisions that can limit the amount of dividends the Bank can distribute to the Parent. The Parent targets cash and other liquid assets to provide liquidity in an amount sufficient to fund approximately six quarters of ongoing cash or liquid asset needs, consisting primarily of common stockholder dividends, debt service requirements, and any expected early extinguishment of debt. The Parent may operate below the target level on a temporary basis if a return to the target can be achieved within a reasonable amount of time. The Parent had cash and liquid assets of $244.2 million at June 30, 2026.
Capital Resources
Stockholders’ equity totaled $4.4 billion at June 30, 2026, down $16.0 million, or less than 1%, from December 31, 2025. The decrease from December 31, 2025 is primarily attributable to common stock repurchases of $144.5 million, dividends of $82.5 million, partially offset by net income of $174.4 million, other comprehensive income of $30.8 million and long-term incentive plan and dividend reinvestment activity of $5.9 million.
The tangible common equity (TCE) ratio was 9.78% at June 30, 2026, down 28 bps from 10.06% at December 31, 2025, driven by common stock repurchases (-42 bps), tangible asset growth (-25 bps) and dividends (-24 bps), partially offset by tangible net earnings (+52 bps) and other comprehensive income (+9 bps) and stock-based compensation and other (+2 bps).
The regulatory capital ratios of the Company and the Bank at June 30, 2026 remained well in excess of current regulatory minimum requirements, including capital conservation buffers, by at least $1.0 billion. The Company and the Bank have been categorized as “well-capitalized” in the most recent notices received from our regulators. Refer to the Supervision and Regulation section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion of our capital requirements.
The following table shows the regulatory capital ratios for the Company and the Bank for the indicated periods.
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Well-
Capitalized
Total capital (to risk weighted assets)
10.00
14.98
15.10
15.45
15.92
15.82
Hancock Whitney Bank
14.05
14.25
14.43
14.88
14.79
Tier 1 common equity capital (to risk weighted assets)
6.50
12.86
13.05
13.24
13.67
13.57
Tier 1 capital (to risk weighted assets)
8.00
Tier 1 leverage capital
10.87
10.89
11.17
11.46
11.35
10.59
10.69
10.84
11.11
11.02
On April 30, 2026, our board of directors declared a regular quarterly common stock cash dividend of $0.50 per share. The quarterly common stock cash dividend was paid on June 15, 2026 to shareholders of record on June 5, 2026. The Company has paid uninterrupted dividends to its shareholders since 1967.
In December 2025, our Board of Directors authorized a stock repurchase program, effective January 1, 2026, to repurchase up to 5% of the shares of common stock outstanding as of December 31, 2025, or 4.1 million shares. The authorization is set to expire on December 31, 2026. The shares may be repurchased in the open market, by block purchase, through accelerated share repurchase plans, in privately negotiated transactions or otherwise, in one or more transactions, from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. The Company is not obligated to purchase any shares under this program and the repurchase authorization may be terminated or amended by the Board of Directors at any time prior to the expiration date. During the second quarter of 2026, the Company repurchased 712,966 shares under this program at an average price of $68.31 per share, inclusive of commissions. To date, 2,112,966 shares have been repurchased under this program. The Company has accrued an estimated excise tax liability on net share repurchases under this plan of $1.3 million at June 30, 2026.
On March 19, 2026, the federal bank regulatory agencies requested comment on three proposals to modernize the regulatory capital framework for banks of all sizes. The proposals are intended to streamline capital requirements and better align regulatory capital with risk while maintaining the safety and soundness of the banking system. While the agencies anticipate that the amount of overall capital in the banking system will modestly decrease as a result of these proposals, they expect capital levels will still be substantially higher than they were before the 2008 financial crisis. In aggregate, the proposals would modestly reduce capital requirements for large banks and moderately reduce requirements for smaller banks, reflecting their more traditional lending activities.
Comments on all three proposals were due by June 18, 2026, and there is not yet a proposed timeline for issuance of a final rule or an implementation date. The Company is in process of evaluating the proposed rules and, based on a preliminary estimate, expects the rules as proposed would have a favorable impact on our capital levels.
BALANCE SHEET ANALYSIS
Short-Term Investments
Short-term investments are held so that funds are available to meet the cash flow needs of both borrowers and depositors. Short-term investments, including interest-bearing bank deposits and federal funds sold, totaled $515.1 million at June 30, 2026, up $291.4 million from March 31, 2026 and $382.8 million from December 31, 2025. Average short-term investments of $532.4 million for the second quarter of 2026 were up $92.9 million from the first quarter of 2026. Typically, the balance of short-term investments will change on a daily basis depending upon movement in customer loan and deposit accounts.
The purpose of the securities portfolio is to increase profitability, mitigate interest rate risk, provide liquidity and comply with regulatory pledging requirements. Our securities portfolio includes securities categorized as available for sale and held to maturity. Available for sale securities are carried at fair value and may be sold prior to maturity. Unrealized gains or losses on available for sale securities, net of deferred taxes, are recorded as accumulated other comprehensive income or loss in stockholders' equity.
Investment in securities totaled $7.9 billion at June 30, 2026, down $136.7 million, or 2%, from March 31, 2026 and $203.4 million, or 3%, from December 31, 2025. The linked quarter decrease is primarily attributable to net paydowns and maturities, a portion of which was used to fund growth in the loan portfolio. The decrease from December 31, 2025 is also due to net paydowns and
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maturities as well as the impact of the portfolio restructure described below. At June 30, 2026, securities available for sale totaled $6.0 billion and securities held to maturity totaled $1.9 billion.
In January 2026, we executed a restructuring of the available for sale securities portfolio to enhance net interest income whereby we sold securities with an amortized cost of $1.5 billion and an average yield of 2.49% and reinvested the $1.4 billion of proceeds with the purchase of securities with an average yield of 4.35%.
Our securities portfolio consists mainly of residential and commercial mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies. We invest only in high quality investment grade securities with a targeted portfolio effective duration generally between two and five and a half years. At June 30, 2026, the average expected maturity of the portfolio was 5.44 years with an effective duration of 4.08 years and a nominal weighted-average yield of 3.26%. Under an immediate, parallel rate shock using increases of 100 bps and 200 bps, the effective durations would be 4.12 years and 4.09 years, respectively. At December 31, 2025, the average expected maturity of the portfolio was 5.18 years with an effective duration of 3.89 years and a nominal weighted-average yield of 2.87%. The changes in expected maturity, effective duration, and nominal weighted-average yield from December 31, 2025 were largely the result of the portfolio restructuring and reinvestment in the portfolio during the period. At June 30, 2026, approximately $387.8 million of our available for sale securities are hedged with $359.0 million in fair value hedges in order to provide protection and flexibility to reposition and/or reprice the portfolio, effectively reducing the duration (market price risk) on the hedged securities. Once effective, fair value hedges synthetically convert the notional amount of the hedged asset over the life of the hedge to a variable rate instrument that is indexed to the federal funds effective rate. At June 30, 2026, fair value hedges with notional amounts totaling $265.0 million are effective, with the remaining $94.0 million of notional amount effective beginning July 1, 2026.
At the end of each reporting period, we evaluate the securities portfolio for credit loss. Based on our assessments, expected credit loss was not material for any period presented, and therefore no allowance for credit loss was recorded.
Total loans at June 30, 2026, were $24.6 billion, up $588.3 million, or 2%, from March 31, 2026 and $621.7 million, or 3%, from December 31, 2025. Linked-quarter, loan growth was largely driven by commercial non-real estate, healthcare and commercial real estate lending across multiple products. A more detailed discussion of loan portfolio activity follows.
The following table shows the composition of our loan portfolio at each date indicated.
Total loans:
9,710,891
9,680,597
9,760,733
3,299,867
3,279,258
3,136,182
13,010,758
12,959,855
12,896,915
4,382,665
4,076,643
3,940,309
1,320,224
1,197,305
1,219,514
3,950,154
4,027,600
4,057,307
1,328,039
1,335,162
1,347,705
Our commercial customer base is diversified over a range of industries. We lend mainly to middle-market and smaller commercial entities, although we do participate in larger shared-credit loan facilities generally with businesses/sponsors operating in our market areas that are well known to the relationship officers. Shared national credits outstanding at June 30, 2026 totaled approximately $2.4 billion, or 9.6% of total loans, up $323.1 million from December 31, 2025. At June 30, 2026, our largest industry concentrations in shared national credits included approximately $373 million in real estate rental and leasing, $336 million in finance and insurance, $259 million in manufacturing, $253 million in information, $226 million in healthcare and social assistance, and $207 million in professional, scientific and technical services, with the remainder of the balance in other diverse industries.
Commercial and industrial (“C&I”) loans include both non-real estate and owner occupied real estate secured loans. C&I loans totaled $13.3 billion at June 30, 2026, up $304.2 million, or 2%, from March 31, 2026 and up $235.9 million, or 2%, from December 31, 2025, reflecting increased demand and upward momentum in loan production from our new bankers.
Our C&I loan portfolio is well diversified by product, client, and geography throughout our footprint. Nevertheless, we may be exposed to certain concentrations of credit risk which exist in relation to different borrowers or groups of borrowers, specific types of
57
collateral, industries, loan products, or regions. The following table provides detail of the more significant industry concentrations for our commercial and industrial loan portfolio, which is based on NAICS codes for all industries, with the exception of energy, which is based on the borrower’s source of revenue (i.e. a manufacturer whose income is derived from energy-related business is reported as energy).
Pct of
( $ in thousands )
Commercial & industrial loans:
Retail trade
1,325,319
1,359,013
1,419,299
1,400,293
1,327,530
Manufacturing
1,311,163
1,283,699
1,226,962
1,216,813
1,178,187
Real estate and rental and leasing
1,305,943
1,182,742
1,234,527
1,233,906
1,249,885
1,191,837
1,146,822
1,122,921
1,100,770
993,338
Health care and social assistance
1,180,868
1,202,190
1,306,170
1,306,684
1,376,655
Professional, scientific, and technical services
1,083,280
907,315
852,169
818,290
796,817
Wholesale trade
1,000,097
1,036,202
1,081,854
1,117,737
1,103,615
Transportation and warehousing
936,355
905,738
945,011
976,880
986,952
Accommodation, food services and entertainment
874,770
862,294
818,599
807,897
755,365
Finance and insurance
626,326
619,065
646,171
593,798
676,691
Information
537,924
485,724
465,971
461,178
453,154
Other services (except public administration)
437,213
412,119
415,429
395,869
396,440
Admin, support, waste mgmt, remediation services
355,343
331,121
338,693
325,086
336,566
Public administration
310,671
332,887
348,545
358,704
366,942
Educational services
218,496
220,118
236,273
235,165
242,677
Energy
177,811
175,582
169,700
169,536
177,551
441,543
548,127
450,797
441,249
478,550
Total commercial & industrial loans
100
Commercial real estate - income producing loans totaled approximately $4.6 billion at June 30, 2026, up $220.1 million, or 5%, from March 31, 2026 and $319.6 million, or 7%, from December 31, 2025. Construction and land development loans totaled approximately $1.4 billion at June 30, 2026, up $85.2 million, or 6%, from March 31, 2026 and $166.4 million, or 13%, from December 31, 2025. The growth from both comparative periods reflect increased demand and early success in our organic growth plan. The following table details the end-of-period aggregated commercial real estate - income producing and construction loan balances by property type. Loans reflected in 1-4 family residential construction include both loans to construction builders as well as single family borrowers.
Commercial real estate - income producing and construction loans:
Multifamily
1,704,377
1,554,277
1,438,509
1,397,370
1,401,521
Healthcare related properties
977,983
884,819
812,712
650,448
641,735
Retail
910,845
908,660
907,611
836,666
821,420
793,295
727,290
739,009
772,552
710,424
Office
494,136
504,838
506,581
516,659
503,525
Hotel, motel and restaurants
438,532
426,474
430,007
402,728
437,650
1-4 family residential construction
210,540
225,402
213,733
239,568
228,104
Other land loans
186,744
191,134
181,170
174,048
169,303
291,815
279,995
292,922
283,909
246,141
Total commercial real estate - income producing and construction loans
6,008,267
5,702,889
5,522,254
5,273,948
5,159,823
The residential mortgage loan portfolio totaled $3.9 billion at June 30, 2026, down $41.1 million, or 1%, compared to March 31, 2026 and $107.8 million, or 3%, compared to December 31, 2025. The composition of the residential mortgage loan portfolio will depend on the volume of loans originated and the percentage ultimately sold in the secondary market.
The consumer loan portfolio totaled $1.3 billion at June 30, 2026, up $19.8 million, or 1%, from March 31, 2026 and $7.7 million, or 1%, from December 31, 2025.
Average loans for the second quarter of 2026 of $24.3 billion were up $373.9 million, or 2%, compared to the first quarter of 2026.
Allowance for Credit Losses and Asset Quality
Our allowance for credit losses was $348.0 million at June 30, 2026, an increase of $4.4 million from March 31, 2026, and is comprised of a $1.3 million increase in the allowance for loan losses and a $3.0 million increase in the reserve for unfunded lending commitments. The increase in the allowance for credit losses from March 31, 2026 is attributable to a $13.8 million provision for
58
credit losses, partially offset by $9.4 million of net charge-offs. Our overall credit loss outlook is not significantly different from that at March 31, 2026. Uncertainty remains related to geopolitical conflict and economic conditions, which continues to influence our reserve levels. The increase in the allowance for credit losses at June 30, 2026 compared to March 31, 2026 includes a $9.0 million build in our collectively evaluated reserves, commensurate with portfolio growth, partially offset by a decrease in individually evaluated reserves on problem loans of $4.6 million. The level of reserves on individually evaluated credits can vary from period to period based on instrument-specific circumstances.
Our June 30, 2026 allowance for credit losses increased $6.3 million compared to December 31, 2025, and is comprised of a $4.8 million increase in the allowance for loan losses and a $1.5 million increase in the reserve for unfunded lending commitments. The increase in the allowance for credit losses from December 31, 2025 is attributable to a $26.9 million provision for credit losses, partially offset by $20.6 million of net charge-offs. The net increase in the allowance for credit losses compared to December 31, 2025 was largely due to portfolio growth and was concentrated in the commercial portfolio, partially offset by declines in residential mortgage and consumer portfolios.
We utilized the June 2026 Moody's economic scenarios in our allowance for credit losses calculation at June 30, 2026. After considering the variables underlying each of the Moody's economic scenarios, management probability-weighted both the baseline scenario and the downside S-2 mild recessionary scenario at 50% in the computation of the allowance for credit losses at June 30, 2026, compared to probability-weighting the baseline scenario at 40% and the downside S-2 mild recessionary scenario at 60% in the computation of the allowance for credit losses at March 31, 2026. The change in the probability weightings from those used at March 31, 2026 does not indicate a significant shift in our overall credit loss outlook, but rather, is a response to a shift in the assumptions underlying the baseline forecast to reflect the downside risks of the conflict in Iran, which were not reflected in the March 2026 Moody's forecast scenarios. Each of the scenarios considered have varying degrees of severity and duration of impacts to forecasted market conditions, economic indicators, monetary and other governmental policies and geopolitical conditions, among other variables. Refer to the Economic Outlook section of this discussion and analysis for further information on the Moody’s scenarios and our weighting assumptions.
Our allowance for credit losses coverage to total loans was 1.42% at June 30, 2026, compared to 1.43% at both March 31, 2026 and December 31, 2025. The allowance for credit losses on the commercial portfolio totaled $280.6 million, or 1.45% of that portfolio, at June 30, 2026, compared to $276.6 million, or 1.48%, at March 31, 2026. The allowance for credit losses on the residential mortgage portfolio totaled $42.3 million, or 1.08% of that portfolio, at June 30, 2026, compared to $41.6 million, or 1.05%, at March 31, 2026. The allowance for credit losses on the consumer portfolio totaled $25.2 million, or 1.87% of that portfolio, at June 30, 2026, compared to $25.6 million, or 1.92%, at March 31, 2026.
Criticized commercial loans totaled $492.0 million at June 30, 2026, down $30.2 million, or 6%, from $522.2 million at March 31, 2026, and $43.4 million, or 8%, from $535.4 million at December 31, 2025. Criticized loans are defined as those having potential weaknesses that deserve management’s close attention (risk-rated as special mention, substandard and doubtful), including both accruing and nonaccruing loans. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often reviews portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach. Criticized commercial loans comprised 2.55% of that portfolio at June 30, 2026, down from 2.79% at March 31, 2026 and from 2.88% at December 31, 2025. We remain focused on identifying specific and broader risk indicators that may be impacting certain segments in our portfolio, and we have not seen signs of significant weakening in any particular industry, sector or geographic segment beyond what we believe has been experienced by the banking industry as a whole. Our criticized commercial loans at June 30, 2026 are diversified across many industries, with the largest concentrations as follows: $86.5 million in real estate, rental and leasing; $72.1 million in accommodation, food service and entertainment; $70.0 million in healthcare and social assistance; $67.3 million in retail trade; $54.0 million in manufacturing; $46.0 million in transportation and warehousing; and $27.7 million in wholesale trade. Commercial loans risk rated pass-watch totaled $457.2 million at June 30, 2026, down $93.5 million, or 17%, from March 31, 2026, and $157.6 million, or 26%, from December 31, 2025. The pass-watch risk rating includes credits with performance trends that reflect sufficient risk to cause concern but have not risen to the level of criticized.
Net charge-offs were $9.4 million, or 0.16% of average total loans on an annualized basis in the second quarter of 2026, compared to $11.1 million, or 0.19% of average total loans on an annualized basis in the first quarter of 2026. Net charge-offs in the second quarter of 2026 included $6.6 million in the commercial portfolio, $2.7 million in the consumer portfolio and $0.1 million in the residential mortgage portfolio. Net charge-offs in the first quarter of 2026 included $7.4 million in the commercial portfolio, $3.5 million in the consumer portfolio and $0.2 million in the residential mortgage portfolio.
59
The following table provides a rollforward of the allowance for credit losses, coverage ratios and net charge-off ratios for the periods indicated.
Provision and Allowance for Credit Losses
Allowance for loan losses at beginning of period
311,316
318,119
Loans charged-off:
Commercial non real estate
8,354
8,506
18,352
24,484
Commercial real estate - owner-occupied
Total commercial & industrial
8,514
16,868
27,225
219
Total commercial
8,383
8,733
18,377
17,116
27,292
281
250
429
3,517
3,689
7,900
Total charge-offs
12,181
13,393
22,328
25,574
35,621
Recoveries of loans previously charged-off:
1,561
3,392
190
142
268
1,751
1,265
3,660
1,755
3,673
3,024
5,528
132
71
851
917
803
Total recoveries
2,738
2,257
4,542
Total net charge-offs
9,443
11,136
17,786
20,579
28,033
Provision for loan losses
10,735
14,721
12,856
Allowance for loan losses at end of period
Reserve for Unfunded Lending Commitments:
Reserve for unfunded lending commitments at beginning of period
32,379
25,031
Provision for losses on unfunded lending commitments
3,040
(1,549
2,069
Reserve for unfunded lending commitments at end of period
Total Allowance for Credit Losses
343,695
Total Provision for Credit Losses
Coverage Ratios:
Allowance for loan losses to period-end loans
Allowance for credit losses to period-end loans
Charge-offs ratios:
Gross charge-offs to average loans
0.23
0.39
0.21
Recoveries to average loans
Net charge-offs to average loans
Net Charge-offs to average loans by portfolio
0.62
0.29
0.41
(0.02
)%
(0.04
(0.00
(0.01
0.33
0.02
0.80
1.06
0.87
0.93
0.95
The following table sets forth for the periods indicated nonaccrual loans and reportable loan modifications to borrowers experiencing financial difficulty by type, and foreclosed and surplus ORE and other foreclosed assets. The table also includes loans past due 90 days or more and still accruing.
Loans accounted for on a nonaccrual basis:
33,611
31,949
29,678
39,108
20,196
Commercial non-real estate - modified
6,594
9,432
4,847
8,084
11,710
Total commercial non-real estate
41,381
47,192
31,906
6,729
5,699
6,482
6,667
3,237
Commercial real estate - owner-occupied - modified
231
341
Total commercial real estate - owner-occupied
5,930
7,008
3,589
2,010
4,782
5,094
Commercial real estate - income producing - modified
841
Total commercial real estate - income producing
5,935
1,019
1,028
3,281
1,932
Construction and land development - modified
Total construction and land development
1,166
Residential mortgage
47,085
46,786
46,399
40,284
41,122
Residential mortgage - modified
4,423
4,476
587
742
178
Total residential mortgage
51,262
41,026
41,300
10,555
10,115
10,260
Consumer - modified
Total consumer
11,732
10,265
Total nonaccrual loans
113,682
113,343
113,554
94,922
ORE and foreclosed assets
11,257
11,140
26,847
Total nonaccrual loans and ORE and foreclosed assets
126,540
124,600
121,658
124,694
121,769
Modified loans - still accruing:
94,006
78,225
98,468
65,284
45,123
31,546
28,697
28,698
13,957
1,846
6,401
7,203
14,572
16,891
15,265
251
Total modified loans - still accruing
142,898
128,480
157,026
82,218
62,234
142,767
91,535
75,315
Loans 90 days past due still accruing
29,885
24,576
58,702
Ratios:
Nonaccrual loans to total loans
Nonaccrual loans plus ORE and foreclosed assets to loans plus ORE and foreclosed assets
0.51
0.52
0.53
Allowance for loan losses to nonaccrual loans
274.99
274.67
287.95
276.20
329.94
Allowance for loan losses to nonaccrual loans and accruing loans 90 days past due
221.03
217.36
226.83
227.06
203.87
Loans 90 days past due still accruing to loans
0.12
0.10
Nonaccrual loans plus ORE and foreclosed assets totaled $126.5 million at June 30, 2026, up $1.9 million from March 31, 2026 and $4.9 million from December 31, 2025. Nonaccrual loans of $113.7 million were up $0.3 million from March 31, 2026, and $6.8 million from December 31, 2025. The ratio of nonaccrual loans to total loans remains relatively low at 0.46% of the total portfolio. ORE and foreclosed assets were $12.9 million at June 30, 2026, up $1.6 million from March 31, 2026 and down $1.9 million from December 31, 2025. Nonaccrual loans plus ORE and other foreclosed assets as a percentage of total loans, ORE and other foreclosed assets was 0.51% at June 30, 2026.
Deposits provide the most significant source of funding for our interest earning assets. Generally, our ability to compete for market share depends on our deposit pricing and our wide range of products and services that are focused on customer needs, among other factors. We offer high-quality banking services with convenient delivery channels, including online and mobile banking. We provide specialized services to our commercial customers to promote commercial deposit growth. These services include treasury management, industry expertise and lockbox services.
Lack of diversity in concentration within a deposit base may increase the risk of events or trends that could prompt a larger-scale demand for deposits outflow. Concerns over a financial institution's ability to protect deposit balances in excess of the federally insured limit may increase the risk of a deposit run. We consider our deposit base to be seasoned, stable and well-diversified. We also offer our customers an insured cash sweep product (ICS) that allows customers to secure deposits above FDIC insured limits. We continue to see demand for the ICS product, with the balance totaling $263.3 million at June 30, 2026, compared to $326.6 million at March 31, 2026 and $322.2 million at December 31, 2025. At June 30, 2026, we have calculated our average deposit account size by dividing period-end deposits by the population of accounts with balances to be approximately $38,200, which includes $212,200 in
our commercial and small business lines (excluding public funds), $118,000 in our wealth management business line, and $17,900 in our consumer business line.
Further, at June 30, 2026, our sources of liquidity exceed uninsured deposits. We have estimated the Bank’s amount of uninsured deposits using the methodologies and assumptions required for FDIC regulatory reporting to be approximately $15.5 billion at June 30, 2026. Our uninsured deposit total at June 30, 2026, includes approximately $3.2 billion of public funds that have pledged securities as collateral, leaving approximately $12.4 billion of noncollateralized, uninsured deposits compared to total liquidity of $19.5 billion. Our ratio of noncollateralized, uninsured deposits to total deposits was approximately 41.8% at June 30, 2026, compared to 39.2% at March 31, 2026 and 38.6% at December 31, 2025.
Total deposits were $29.6 billion at June 30, 2026, up $547.6 million, or 2%, from March 31, 2026 and $350.0 million, or 1%, from December 31, 2025, due primarily to growth in transaction and savings deposits that was partially offset by retail time deposit maturities and typical seasonal movement in public funds deposits. Average deposits for the second quarter of 2026 were $28.8 billion, down $53.8 million, or less than 1%, from the first quarter of 2026.
The following table shows the composition of our deposits at each date indicated.
Interest-bearing retail transaction and savings deposits
13,044,253
12,259,441
11,998,892
11,776,338
11,498,300
Interest-bearing public fund deposits:
Public fund transaction and savings deposits
2,786,086
2,833,149
3,120,389
2,706,540
2,902,513
Public fund time deposits
94,251
104,132
96,925
93,417
83,472
Total interest-bearing public fund deposits
2,880,337
2,937,281
3,217,314
2,799,957
2,985,985
Retail time deposits
3,368,304
3,540,534
3,688,577
3,778,152
3,923,542
Brokered time deposits
18,737,256
18,354,447
18,407,827
Noninterest-bearing demand deposits totaled $10.3 billion at June 30, 2026, down $8.0 million, or less than 1%, from March 31, 2026 and $38.1 million, or less than 1%, from December 31, 2025. Noninterest-bearing demand deposits comprised 35% of total deposits at June 30, 2026, compared to 36% at March 31, 2026 and 35% in December 31, 2025.
Interest-bearing transaction and savings accounts totaled $13.0 billion at June 30, 2026, up $784.8 million, or 6%, from March 31, 2026 and up $1.0 billion, or 9%, from December 31, 2025, reflective of growth and shifting in mix within interest-bearing deposits, driven in part by promotional money market product offerings to new and certain existing customers. Interest-bearing public fund deposits totaled $2.9 billion at June 30, 2026, down $56.9 million, or 2%, from March 31, 2026, and down $337.0 million, or 10%, from December 31, 2025, mostly attributable to seasonal outflows. Retail time deposits totaled $3.4 billion at June 30, 2026, down $172.2 million, or 5%, from March 31, 2026, and $320.3 million, or 9%, from December 31, 2025. The decline in retail time deposits is mostly attributable to maturities that did not renew, reflective of the interest rate environment. We had no brokered time deposits at June 30, 2026, March 31, 2026 or December 31, 2025. The Company uses brokered deposits as one component of its funding strategy, subject to certain policies regarding the amount, term and interest rate.
The rate paid on interest-bearing deposits for the second quarter of 2026 was 2.20%, down 5 bps from 2.25% in the first quarter of 2026, reflective of the interest rate environment and product pricing, both of which may have fostered a favorable shift in the mix of interest-bearing deposits. Rates paid on deposits will vary based on prevailing interest rates and promotional rate offerings on the various product types. The following table sets forth average balances and weighted-average rates paid on deposits for the second and first quarters of 2026 and the second quarter of 2025.
Three months ended
Mix
Interest-bearing deposits:
Interest-bearing transaction deposits
3,242.0
11.3
3,107.2
1.21
10.8
2,840.7
1.37
9.9
Money market deposits
6,859.4
23.8
6,708.9
2.41
23.3
6,380.4
2.90
22.2
Savings deposits
2,303.9
1.04
8.0
2,232.7
7.7
2,138.8
0.72
7.5
3,420.7
3.11
11.9
3,631.8
3.36
12.6
4,026.4
14.1
Public Funds
10.3
64.9
65.2
64.0
Noninterest-bearing demand deposits
10,104.0
35.1
10,033.0
34.8
10,317.4
36.0
28,780.9
100.0
28,834.7
28,649.9
The following sets forth the maturities of time certificates of deposit greater than $250,000 at June 30, 2026.
Three months
596,987
Over three months through six months
407,860
Over six months through one year
316,572
Over one year
10,363
1,331,782
Short-Term Borrowings
At June 30, 2026, short-term borrowings totaled $1.6 billion, up $210.5 million from March 31, 2026 and $553.7 million from December 31, 2025, driven primarily by FHLB borrowings and reflective of funding needs for the quarter. Average short-term borrowings of $2.0 billion in the second quarter of 2026 were up $553.9 million from the first quarter of 2026.
Short-term borrowings are a core portion of the Company’s funding strategy and can fluctuate depending on our funding needs and the sources utilized. Customer repurchase agreements and borrowings from the Federal Home Loan Bank (FHLB) are the major sources of short-term borrowings. Customer repurchase agreements are offered mainly to commercial customers to assist them with their cash management strategies or to provide a temporary investment vehicle for their excess liquidity pending redeployment for corporate or investment purposes. While customer repurchase agreements provide a recurring source of funds to the Bank, amounts available will vary. FHLB borrowings are collateralized by certain residential mortgage and commercial real estate loans included in the Bank’s loan portfolio, subject to specific criteria. FHLB borrowings totaled $950 million at June 30, 2026 compared to $700 million at March 31, 2026 and $400 million at December 31, 2025.
Long-Term Debt
Long-term debt totaled $193.8 million at June 30, 2026, virtually unchanged from March 31, 2026 and down $5.6 million, or 3%, from December 31, 2025, due to tax credit entity activity.
Long-term debt at June 30, 2026 includes subordinated notes payable with an aggregate principal amount of $172.5 million, a stated maturity of June 15, 2060, and a fixed rate of 6.25% per annum that qualify as Tier 2 capital of certain regulatory capital ratios. Subject to prior approval by the Federal Reserve, the Company may redeem these notes in whole or in part on any of its quarterly interest payment dates.
OFF-BALANCE SHEET ARRANGEMENTS
Loan Commitments and Letters of Credit
Commitments to extend credit include revolving commercial credit lines, non-revolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The
63
availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent our future cash requirements.
A substantial majority of the letters of credit are standby agreements that obligate the Bank to fulfill a customer’s financial commitments to a third party if the customer is unable to perform. The Bank issues standby letters of credit primarily to provide credit enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.
The contractual amounts of these instruments reflect our exposure to credit risk. The Bank undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support. At June 30, 2026, the Company had a reserve for credit losses on unfunded lending commitments totaling $35.4 million.
The following table shows the commitments to extend credit and letters of credit at June 30, 2026 according to expiration date.
Expiration Date
Less than
1-3
3-5
More than
1 year
years
5 years
4,282,000
2,506,710
2,276,695
736,661
331,550
65,183
4,456
10,203,255
4,613,550
2,571,893
2,281,151
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and with those generally practiced within the banking industry which require management to make estimates and assumptions about future events. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, and the resulting estimates form the basis for making judgments about the carrying values of certain assets and liabilities not readily apparent from other sources. Actual results could differ significantly from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 16 to our consolidated financial statements included elsewhere in this report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk is interest rate risk that stems from uncertainty with respect to the absolute and relative levels of future market interest rates that affect our financial products and services. In an attempt to manage our exposure to interest rate risk, management measures the sensitivity of our net interest income and cash flows under various market interest rate scenarios, establishes interest rate risk management policies and implements asset/liability management strategies designed to promote a relatively stable net interest margin under varying rate environments.
Net Interest Income at Risk
The following table presents an analysis of our interest rate risk as measured by the estimated changes in net interest income resulting from an instantaneous and sustained parallel shift in rates at June 30, 2026. Shifts are measured in 100 basis point increments in a range from -500 to +500 basis points from base case, with -300 through +300 basis points presented in the table below. Our interest rate sensitivity modeling incorporates a number of assumptions including loan and deposit repricing characteristics, the rate of loan prepayments and other factors. The base scenario assumes that the current interest rate environment is held constant over a 24-month forecast period and is the scenario to which all others are compared in order to measure the change in net interest income. Policy limits
on the change in net interest income under a variety of interest rate scenarios are approved by the Board of Directors. All policy scenarios assume a static volume forecast where the balance sheet is held constant, although other scenarios are modeled.
Estimated Increase
(Decrease) in NII
Change in Interest Rates
Year 1
Year 2
(basis points)
-
300
-6.70
-14.18
200
-4.85
-9.68
-2.28
-4.45
+
1.80
3.47
7.25
5.09
10.60
The results indicate a general asset sensitivity across most scenarios driven primarily by repricing of cash flows in the investment and loan portfolios. With short-term rates stabilizing, the funding mix continues a gradual shift to more rate sensitive deposits. This shift leads to lower overall net interest income at risk, as deposit repricing is expected to offset rate adjustments in the floating rate loan book. Furthermore, due to the funding mix shift, the Company is currently less sensitive to changes in short-term rate movements with interest rate risk being driven more by changes in the mid to long-term segment of the yield curve. When deemed prudent, management has taken actions to mitigate exposure to interest rate risk with on- or off-balance sheet financial instruments and intends to do so in the future. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying or terminating existing interest rate swap agreements or other financial instruments used for interest rate risk management purposes.
Even if interest rates change in the designated amounts, there can be no assurance that our assets and liabilities would perform as anticipated. Additionally, a change in the U.S. Treasury rates in the designated amounts accompanied by a change in the shape of the U.S. Treasury yield curve would cause significantly different changes to net interest income than indicated above. Strategic management of our balance sheet and earnings is fluid and would be adjusted to accommodate these movements. As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented above. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Certain assets such as adjustable-rate loans have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Also, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. All of these factors are considered in monitoring exposure to interest rate risk.
Economic Value of Equity (EVE)
EVE simulation involves calculating the present value of all future cash flows from assets and subtracting the present value of all future cash outflows from liabilities including the impact of off-balance sheet items such as interest rate hedges. This analysis results in a theoretical market value of the Bank's equity or EVE. Management’s focus on EVE analysis is not on the resulting calculation of EVE itself, but instead on the sensitivity of EVE to changes in market rates. Policy limits on the change in EVE under a variety of interest rate scenarios are approved by the Board of Directors. The following table presents an analysis of the change in the Bank’s EVE resulting from instantaneous and parallel shifts in rates as of June 30, 2026. Shifts are measured in 100 basis point increments ranging from -500 to +500 basis points from base case, with -300 through +300 basis points presented in table below.
Estimated Changein EVE at
3.69%
3.19%
2.04%
-2.75%
-5.87%
-9.05%
The net changes in EVE presented in the preceding table are within the parameters approved by the Board of Directors. Because EVE measures the present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, EVE does not consider factors
65
such as future balance sheet growth, changes in product mix, changes in yield curve relationships, possible hedging activities, or changing product spreads, each of which could mitigate the adverse impact of changes in interest rates.
Item 4. Controls and Procedures
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2026, the Company’s disclosure controls and procedures were effective.
Our management, including the Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during the three month period ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company, including subsidiaries, is party to various legal proceedings arising in the ordinary course of business. We do not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on our consolidated financial position or liquidity.
Item 1A. Risk Factors
In addition to the other information set forth in this Report, in evaluating an investment in the Company’s securities, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our 2025 Form 10-K. which could materially affect the Company's business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.
There are no material changes during the period covered by this Report to the risk factors previously disclosed in our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company has in place a Board-approved stock buyback program whereby the Company is authorized to repurchase up to 5% of its common stock outstanding at December 31, 2025, or 4,112,966 shares, through the program’s expiration date of December 31, 2026. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or otherwise, in one or more transactions in accordance with the rules and regulations of the Securities and Exchange Commission. The Company is not obligated to purchase any shares under this program and the repurchase authorization may be terminated or amended by the Board of Directors at any time prior to the expiration date.
The following is a summary of common share repurchases during the three months ended June 30, 2026.
Total Number of Shares Purchased (a)
Average Price Paidper Share (b)
Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program
Maximum Number of Shares that may yet be Purchased under such Plans or Programs
April 1, 2026 - April 30, 2026
2,712,966
May 1, 2026 - May 31, 2026
202,180
67.70
200,000
2,512,966
June 1, 2026 - June 30, 2026
512,966
68.54
2,000,000
715,146
68.31
712,966
(a) Includes common stock purchased in connection with our share-based payment plans related shares used to cover payroll tax withholding requirements. See Note 19 – Share-Based Payment Arrangements in our 2025 Form 10-K, which includes additional information regarding our share-based incentive plans.
(b) Average price paid does not include the one percent excise tax charged on public company net share repurchases.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Item 5. Other Information
Pursuant to Item 408(a) of Regulation S-K, none of the Company's directors or executive officers adopted, terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2026.
Item 6. Exhibits
(a) Exhibits:
Exhibit Number
Description
Filed Herewith
Form
Exhibit
Filing Date
Agreement and Plan of Merger, dated as of May 15, 2026, by and among Hancock Whitney Corporation, OFB Bancshares, Inc, and Citrus Acquisition Corp.
8-K
5/19/2026
3.1
Second Amended and Restated Articles of Hancock Whitney Corporation
5/1/2020
3.2
Second Amended and Restated Bylaws of Hancock Whitney Corporation
31.1
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By:
/s/ John M. Hairston
John M. Hairston
President & Chief Executive Officer
(Principal Executive Officer)
/s/ Michael M. Achary
Michael M. Achary
Senior Executive Vice President & Chief Financial Officer
(Principal Financial Officer)
August 6, 2026