Market Overview - The year 2026 began with mixed performance in major indices, with the S&P 500 showing modest gains, the Dow Jones Industrial Average increasing by 1.9%, and the Nasdaq declining by approximately 2.5% due to AI-related concerns, stronger-than-expected wholesale inflation, trade policy changes, and geopolitical tensions [1] - Investor sentiment was somewhat supported by decent fourth-quarter earnings [1] Dividend Stocks - In a volatile market, dividend stocks are highlighted as an attractive option for steady income and long-term growth, particularly focusing on fundamentally strong banks with stable earnings and attractive dividend yields [2] - Capital City Bank Group, Red River Bancshares, Unity Bancorp, and Simmons First National Corporation announced dividend increases, showcasing their solid balance sheets and diversified revenue streams [2] Capital City Bank Group (CCBG) - CCBG, headquartered in Tallahassee, FL, had $4.4 billion in assets as of December 31, 2025 [3] - On February 26, CCBG announced a quarterly cash dividend of 27 cents per share, a 3.8% increase from the previous payout, to be paid on March 23 [3][4] - The company has increased its dividend eight times in the past five years, with an annualized growth rate of 13.25%, a dividend yield of 2.43%, and a payout ratio of 29% [4][7] Red River Bancshares (RRBI) - RRBI, based in Alexandria, LA, had total assets of $3.35 billion as of December 31, 2025 [8] - On February 26, RRBI announced a quarterly cash dividend of 25 cents per share, a 67% increase from the prior payout, to be paid on March 19 [9] - The company has increased its dividend six times in the past five years, with an annualized growth rate of 16.43%, a dividend yield of 0.68%, and a payout ratio of 9% [9][11] Unity Bancorp (UNTY) - Unity Bancorp, headquartered in Clinton, NJ, had $3 billion in assets as of December 31, 2025 [12] - On February 26, UNTY announced a quarterly cash dividend of 16 cents per share, a 6.7% increase from the prior year, to be paid on March 20 [13] - The company has increased its dividend eight times in the past five years, with an annualized growth rate of 12.11%, a dividend yield of 1.13%, and a payout ratio of 12% [13][15] Simmons First National Corporation (SFNC) - SFNC, based in Pine Bluff, AR, had total assets of $24.5 billion as of December 31, 2025 [16] - On February 24, SFNC announced a quarterly cash dividend of 21.5 cents per share, a 1.2% increase from the previous payout, to be paid on April 1 [17] - The company has increased its dividend six times in the past five years, with an annualized growth rate of 4.25%, a dividend yield of 4.27%, and a payout ratio of 50% [17][20]

Asset Management - CCBG's principal asset is the capital stock of CCB, accounting for nearly 100% of consolidated assets and net income as of December 31, 2025[25]. - The market value of trust assets under discretionary management exceeded $1.326 billion, with total assets under administration exceeding $1.375 billion as of December 31, 2025[28]. - The market value of total assets under administration for Capital City Investments exceeded $1.541 billion as of December 31, 2025[29]. - Leon County deposits totaled $1.195 billion, representing 32.6% of consolidated deposits as of December 31, 2025[44]. Revenue Sources - Revenues from Banking Services and Wealth Management Services for the year ended 2025 were approximately 92.8% and 7.2% of total revenue, respectively[26]. Market Position - CCBG's market share in Gadsden County was 82.3% as of June 30, 2025, indicating a strong competitive position[46]. - The company has a significant presence in Florida, Georgia, and Alabama, with a primary market area consisting of 21 counties in Florida, six counties in Georgia, and one county in Alabama[44]. Loan Portfolio Composition - CCBG's residential home equity loan portfolio included approximately 47% first mortgages as of December 31, 2025[37]. - As of December 31, 2025, commercial mortgage loans comprised approximately 30.2% of the total loan portfolio[146]. - At the same date, commercial loans accounted for about 7.1% of the total loan portfolio[146]. - Construction loans represented approximately 5.8% of the total loan portfolio as of December 31, 2025[146]. - Vacant land loans made up around 3.8% of the total loan portfolio at the end of 2025[146]. - Home equity lines of credit (HELOCs) constituted approximately 9.5% of the total loan portfolio as of December 31, 2025[146]. - Consumer loans, primarily indirect auto loans, comprised about 7.2% of the total loan portfolio, with indirect auto loans making up approximately 85.9% of this segment[147]. - A significant portion of the loan portfolio, approximately 85.7%, included real estate as a primary, secondary, or tertiary component of collateral[148]. - As of December 31, 2025, approximately 31.5% of the $2.546 billion loan portfolio was secured by commercial real estate, while 54.2% was secured by residential real estate[150]. Workforce and Community Engagement - As of December 31, 2025, the company had approximately 902 full-time associates and 25 part-time associates, with 68% of the workforce being female and 22% being ethnic minorities[52]. - The company recorded 7,914 community service hours in 2025, compared to 9,542 hours in 2024 and 10,526 hours in 2023[67]. - The CCBG Foundation donated approximately $0.3 million in 2025 to various non-profit organizations in the communities served[67]. - In 2025, the CCBG Foundation made grants totaling $173,000 to Community Reinvestment Act eligible organizations in the market area[68]. - The average tenure of associates is approximately 9.8 years, while the average tenure of the management team is 24.3 years[54]. - The company has been recognized as one of the "Best Companies to Work for in Florida" for 14 consecutive years and ranked 13 among America's Best Banks by Forbes in 2025[53]. Regulatory Compliance - The company is subject to extensive regulation under federal and state law, which may impact its operations and business prospects[72]. - The Company and the Bank are required to maintain a CET1 risk-based capital ratio of at least 6.5%, a Tier 1 capital ratio of 8.0%, and a total capital ratio of 10.0%[95]. - As of 2025, the Company's and the Bank's regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer[93]. - The Federal Reserve requires a minimum leverage ratio of 4% for all banks and bank holding companies[88]. - The capital conservation buffer of 2.5% above minimum risk-based capital ratios is required to absorb losses during economic stress[89]. - The Company must act as a source of financial strength to its subsidiary bank, providing financial assistance in times of distress[85]. - The Change in Bank Control Act requires prior notice to the Federal Reserve before acquiring control of any bank holding company[81]. - Under Florida law, a person must obtain permission from the Florida Office of Financial Regulation to acquire control of a Florida-chartered bank[82]. - The Federal Reserve may restrict dividend payments if they would constitute an unsafe or unsound banking practice[96]. - The Company is subject to various regulatory policies regarding dividend payments, including maintaining adequate capital above regulatory minimums[98]. - The Federal Deposit Insurance Corporation Improvement Act establishes five regulatory capital tiers, affecting operations and capital distributions based on capital levels[90]. Financial Performance and Risks - The bank's net income available to shareholders for the past four quarters is insufficient to fully fund dividends[101]. - The bank's ratio of construction, land development, and other land loans to total tier 1 risk-based capital was 49% as of December 31, 2025, below the 100% threshold[114]. - The bank has a "Satisfactory" rating in its most recent Community Reinvestment Act evaluation[111]. - The bank is subject to FDIC assessments for deposit insurance, calculated quarterly based on average total consolidated assets[105]. - The bank's deposits are insured by the FDIC's DIF up to $250,000 per depositor, per insured bank[105]. - The bank is expected to have active board and senior management oversight and adequate risk management systems[104]. - The bank has augmented its systems to comply with anti-money laundering regulations, including the USA PATRIOT Act[116]. - The Federal Reserve raised the federal funds rate 11 times for a cumulative increase of 5.25% during 2022 and 2023, and began lowering it in 2024 with three cuts totaling 1.00%[132]. - 62.9% of the investment securities portfolio was designated as available-for-sale as of December 31, 2025, which may impact shareowners' equity due to unrealized gains and losses[140]. - The average daily trading volume of the company's common stock over the 12-month period ending December 31, 2025, was approximately 37,371 shares, indicating limited trading activity that may contribute to price volatility[143]. - The company's profitability is significantly influenced by economic conditions in Florida and Georgia, where it primarily operates[138]. - Changes in interest rates can materially impact mortgage-related revenues, with a decline in mortgage rates generally increasing demand for mortgage loans[136]. - Inflationary pressures may adversely affect the ability of business customers to repay loans, impacting the company's financial condition[137]. - The company continuously monitors interest rates and employs strategies to manage interest rate risk, which is critical for maintaining net interest income[131]. - Future legislative developments may unpredictably change the banking and tax statutes affecting the company's operations[125]. Operational and Technological Risks - The company faces liquidity risk due to the mismatch between the demand for liquid deposits and the illiquid nature of its loan assets[160]. - A significant decrease in public fund deposit balances due to increased competition and seasonal nature could adversely affect liquidity[161]. - The company has experienced significant unrealized losses on its available-for-sale securities portfolio due to rising market interest rates, impacting book capital and tangible common equity[162]. - Future capital raising may be necessary, but conditions in capital markets could limit availability on acceptable terms[163]. - The company may face restrictions on dividend payments if it does not maintain sufficient capital and earnings[165]. - Regulatory compliance costs and restrictions could materially affect business operations and financial condition[168]. - Increased regulatory scrutiny may lead to higher operational costs and reduced profitability[173]. - U.S. federal banking agencies may require increased regulatory capital or liquidity, potentially necessitating asset sales or issuance of additional securities[174]. - Changes in accounting standards could adversely affect financial reporting and require restatements of prior-period financial statements[177]. - Operational risks include reliance on digital platforms and potential failures in technological systems, which could negatively impact earnings[181]. - The company is subject to evolving data privacy regulations, and non-compliance could lead to liability and reputational damage[179]. - The company faces credit and settlement risks due to interrelated relationships with various financial institutions, which could adversely affect its financial condition and operations[185]. - Cybersecurity incidents pose significant risks, potentially leading to unauthorized access to sensitive information and operational disruptions, which could materially impact the company's business[186]. - The company has reported an increase in fraudulent activities, including wire and card fraud, which could lead to financial losses and damage to its brand[189]. - The rapid development of Artificial Intelligence (AI) presents both opportunities and risks, with potential impacts on compliance costs and operational efficiency[190]. - The company relies on external vendors for critical services, and any failure in their performance could disrupt operations and adversely affect financial results[193]. - Severe weather events and natural disasters, particularly in Florida, could negatively impact loan originations and property values, affecting the company's operations[196]. - Ongoing litigation and regulatory actions could result in significant financial liabilities and reputational harm, impacting business prospects[197]. - The company must maintain effective internal controls over financial reporting to ensure accurate financial results and prevent fraud, as failures could lead to investor distrust and stock price declines[200]. - The evolving legal and regulatory environment surrounding AI could increase compliance costs and risks associated with non-compliance[191]. - The company may face substantial uninsured liabilities, which could adversely affect its financial condition and operational results[199]. Competitive Landscape - The company faces intense competition from larger banks and non-bank financial service providers, which may impact its ability to attract deposits and loans[202][203]. - The recently enacted GENIUS Act could lead to increased competition for deposit products, potentially reducing net income and market share[204]. - The company relies on a diversified mix of financial products and services, and its success depends on timely adaptation to evolving industry standards and consumer preferences[205]. - Emerging technologies, including artificial intelligence and blockchain, present both opportunities and risks, requiring substantial investment to keep pace[206]. - The company may face challenges in developing and marketing new products, with potential delays and uncertainties impacting profitability[207]. - Strategic acquisitions and transactions may not yield expected benefits and could adversely affect financial performance[216]. - Reputation risk is inherent in the business, with negative public opinion potentially harming customer retention and attracting regulatory scrutiny[218]. - Changes in tax laws could increase effective tax rates, negatively impacting financial performance and leading to challenges from tax authorities[221]. - Cybersecurity is a critical risk area, with the company implementing an enterprise risk management program to mitigate potential threats[223].

Financial Performance - Net income attributable to common shareholders for Q4 2025 was $13.7 million, or $0.80 per diluted share, down from $16.0 million, or $0.93 per diluted share in Q3 2025[2]. - For the full year 2025, net income attributable to common shareholders totaled $61.6 million, or $3.60 per diluted share, compared to $52.9 million, or $3.12 per diluted share in 2024, representing a 16.5% increase[3]. - Net income attributable to common shareholders for Q4 2025 was $13,705,000, a decrease of 14.1% from Q3 2025 ($15,950,000) but an increase of 4.7% from Q4 2024 ($13,090,000)[38]. - Basic net income per share for 2025 was $3.61, an increase from $3.12 in 2024[42]. Income and Revenue - Tax-equivalent net interest income for Q4 2025 was $43.4 million, slightly down from $43.6 million in Q3 2025, while for the full year 2025, it totaled $171.8 million, an increase of 7.9% from $159.2 million in 2024[4][7]. - Total interest income for 2025 reached $204.387 million, an increase of 4.2% compared to $194.657 million in 2024[42]. - Noninterest income for Q4 2025 was $20.1 million, a decrease of $2.2 million, or 10.0%, from Q3 2025, while for the full year, it totaled $82.4 million, an increase of 8.4% from $76.0 million in 2024[11][12]. - Noninterest income totaled $82.355 million for 2025, a 8.4% increase from $75.976 million in 2024[42]. Asset and Liability Management - Total assets increased to $4,385,765,000 in Q4 2025 from $4,323,774,000 in Q3 2025, reflecting a growth of 1.4%[40]. - Total liabilities stood at $3,810,936 thousand, with total interest-bearing liabilities at $2,429,150 thousand and an interest expense of $8,355 thousand[44]. - Average total deposits were $3.648 billion for Q4 2025, up $35.2 million or 1.0% from Q3 2025, and up $47.1 million or 1.3% from Q4 2024[22]. - Total deposits at December 31, 2025, were $3.662 billion, an increase of $47.4 million or 1.3% from September 30, 2025, but a decrease of $9.7 million or 0.3% from December 31, 2024[23]. Credit Quality - The allowance for credit losses for loans HFI was $31.0 million at December 31, 2025, compared to $30.2 million at September 30, 2025, and $29.3 million at December 31, 2024[20]. - Nonperforming assets totaled $10.6 million at December 31, 2025, representing 0.24% of total assets, an increase from 0.15% a year earlier[21]. - The provision for credit losses for the fourth quarter of 2025 was $1.984 million, up from $1.550 million in the third quarter[43]. - The allowance for credit losses (ACL) for held for investment loans increased to $31.001 million, or 1.22% of loans HFI, compared to 1.10% in the previous year[43]. Capital and Equity - Shareowners' equity increased to $552.9 million at December 31, 2025, from $540.6 million at September 30, 2025, and $495.3 million at December 31, 2024[28]. - The total risk-based capital ratio was 21.45% at December 31, 2025, up from 20.59% at September 30, 2025, and 18.64% at December 31, 2024[29]. - The tangible common equity ratio was 10.79% at December 31, 2025, compared to 10.66% at September 30, 2025, and 9.51% at December 31, 2024[29]. - The company reported a total equity of $556,100 thousand, an increase from $542,216 thousand in Q3 2025[44]. Efficiency and Performance Ratios - The efficiency ratio improved to 67.50% in Q4 2025 from 69.74% in Q4 2024, indicating better cost management[38]. - Return on average assets (annualized) for Q4 2025 was 1.25%, down from 1.47% in Q3 2025 and up from 1.22% in Q4 2024[38]. - Tier 1 capital ratio increased to 20.20% in Q4 2025 from 19.33% in Q3 2025, demonstrating enhanced capital strength[38]. Market Activity - Average daily trading volume increased to 54,533 shares in Q4 2025 from 42,187 shares in Q3 2025, showing increased market activity[38]. - Book value per diluted share rose to $32.23 in Q4 2025 from $31.59 in Q3 2025, reflecting an increase in shareholder equity[40].

分组1 - Capital City Bank (CCBG) reported quarterly earnings of $0.8 per share, missing the Zacks Consensus Estimate of $0.89 per share, but showing an increase from $0.77 per share a year ago, resulting in an earnings surprise of -10.11% [1] - The bank's revenues for the quarter ended December 2025 were $63.46 million, which also missed the Zacks Consensus Estimate by 0.99%, compared to $59.86 million in the same quarter last year [2] - The stock has gained approximately 4.9% since the beginning of the year, outperforming the S&P 500's gain of 1.5% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.88 on revenues of $63.7 million, and for the current fiscal year, it is $3.65 on revenues of $261.3 million [7] - The Zacks Industry Rank for Banks - Southeast is in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Capital City Bank has a Zacks Rank of 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6]

Core Insights - Capital City Bank Group, Inc. reported a net income of $13.7 million for Q4 2025, a decrease from $16.0 million in Q3 2025 but an increase from $13.1 million in Q4 2024 [1] - For the full year 2025, net income reached $61.6 million, up from $52.9 million in 2024, reflecting strong financial performance [2] Income Statement - Tax-equivalent net interest income for Q4 2025 was $43.4 million, slightly down from $43.6 million in Q3 2025 but up from $41.2 million in Q4 2024 [4] - Noninterest income for Q4 2025 totaled $20.1 million, a decrease of 10.0% from $22.3 million in Q3 2025, primarily due to lower other income and mortgage revenues [8][9] - Noninterest expense for Q4 2025 was $42.9 million, comparable to Q3 2025, reflecting higher performance-based pay offset by a pension plan settlement gain [11] Balance Sheet - Average earning assets increased to $4.036 billion in Q4 2025, up 1.4% from Q3 2025 and 2.9% from Q4 2024 [14] - Total deposits at December 31, 2025, were $3.662 billion, an increase of 1.3% from September 30, 2025, but a slight decrease from December 31, 2024 [20] Credit Quality - The allowance for credit losses for loans held for investment (HFI) was $31.0 million at December 31, 2025, up from $30.2 million at September 30, 2025 [17] - Nonperforming assets totaled $10.6 million at December 31, 2025, compared to $10.0 million at September 30, 2025, indicating a slight deterioration in asset quality [18] Capital Adequacy - Shareowners' equity increased to $552.9 million at December 31, 2025, compared to $540.6 million at September 30, 2025, driven by net income and a decrease in accumulated other comprehensive loss [24] - The total risk-based capital ratio was 21.45% at December 31, 2025, up from 20.59% at September 30, 2025, indicating strong capital position [25]

Core Viewpoint - Capital City Bank Group, Inc. will release its fourth quarter and year-end 2025 financial results on January 27, 2026, before the market opens, with access available on its Investor Relations website [1] Group 1: Company Overview - Capital City Bank Group, Inc. is one of the largest publicly traded financial holding companies based in Florida, with approximately $4.3 billion in assets [2] - The company offers a comprehensive range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services [2] - Capital City Bank, the bank subsidiary, was established in 1895 and currently operates 62 banking offices and 108 ATMs/ITMs across Florida, Georgia, and Alabama [2]

Core Insights - Capital City Bank has been recognized as one of American Banker's "Best Banks to Work For" for the 13th consecutive year, ranking 37 nationwide and 8 among banks with assets between $3 billion and $10 billion, showing significant improvement from its previous year's rankings of 56 and 15 respectively [1] Company Overview - Capital City Bank Group, Inc. is a publicly traded financial holding company based in Florida with approximately $4.3 billion in assets, offering a full range of banking services including traditional deposit and credit services, mortgage banking, asset management, and securities brokerage [5] Employee Engagement and Culture - The recognition reflects the commitment of the bank's associates, emphasizing a workplace culture that values, supports, and inspires personal and professional growth [2] - The bank provides a comprehensive benefits package, including insurance, a stock purchase plan, 401(k), paid time off, and tuition assistance, alongside continuous learning programs to encourage skill development [2] Initiatives for Associate Support - Capital City Bank launched initiatives such as The Spotlight and Navigator to enhance associate engagement and support, focusing on both work-related and personal needs [3][6] Evaluation Process for Rankings - The "Best Banks to Work For" rankings are determined through a two-step evaluation process, with 25% based on workplace policies and practices, and 75% based on associate surveys assessing individual experiences and attitudes [3][4]

Core Insights - Capital City Bank has been recognized as one of American Banker's "Best Banks to Work For" for the 13th consecutive year, ranking 37 out of 90 banks nationwide and 8 among banks with assets between $3 billion and $10 billion, showing significant improvement from its previous year's rankings of 56 and 15 respectively [1] Company Overview - Capital City Bank Group, Inc. is a publicly traded financial holding company headquartered in Florida with approximately $4.3 billion in assets, offering a full range of banking services including traditional deposit and credit services, mortgage banking, asset management, and securities brokerage [5] Employee Engagement and Culture - The recognition reflects the commitment of the bank's associates, emphasizing a workplace culture where employees feel valued and supported, with a focus on personal and professional growth [2] - The bank provides a comprehensive benefits package, including insurance, a stock purchase plan, 401(k), paid time off, and tuition assistance, alongside continuous learning programs to encourage skill development [2] Initiatives for Associate Support - Capital City Bank launched initiatives such as The Spotlight and Navigator to enhance associate engagement, providing platforms for recognition and resources for essential needs [3][6] - The evaluation process for the "Best Banks to Work For" involved assessing workplace policies and practices (25% of total evaluation) and associate surveys (75% of total evaluation) to gauge employee experiences [3][4]

Core Insights - Capital City Bank has appointed Alicia Williams-Ronan as the new chief retail officer, succeeding Randy Lashua who will retire on December 31 after 20 years of service [1][2] - Williams-Ronan will oversee strategy and management for retail sales, service, and operations, leading 350 associates across 63 banking offices in Florida, Georgia, and Alabama [1][6] Company Overview - Capital City Bank Group, Inc. is one of the largest publicly traded financial holding companies in Florida, with approximately $4.3 billion in assets [5] - The bank provides a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, and financial advisory services [5] Leadership Background - Alicia Williams-Ronan has been with Capital City Bank since 2005, advancing through various roles in client service, technology, and senior operations leadership [2][3] - Prior to her new role, she served as the Bank Operations Group manager for over five years, focusing on optimizing workflows and enhancing client satisfaction [3][4] Community Engagement - Williams-Ronan is dedicated to community service and has been a long-time supporter of the United Way of the Big Bend [4]

Financial Performance - Net income attributable to common shareholders for Q3 2025 was $16.0 million, or $0.93 per diluted share, compared to $15.0 million, or $0.88 per diluted share in Q2 2025, and $13.1 million, or $0.77 per diluted share in Q3 2024 [170]. - For the first nine months of 2025, net income attributable to common shareholders was $47.9 million, or $2.80 per diluted share, compared to $39.8 million, or $2.35 per diluted share for the same period in 2024 [170]. - Noninterest income for Q3 2025 was $22.3 million, compared to $20.0 million in Q2 2025 and $19.5 million in Q3 2024 [168]. - Noninterest income for the first nine months of 2025 totaled $62.3 million, a 9.3% increase from $57.2 million in the same period of 2024, driven by increases in wealth management fees, mortgage banking revenues, and other income [189]. - Net interest income for Q3 2025 was $43.6 million, an increase from $43.2 million in Q2 2025 and $40.3 million in Q3 2024 [184]. - Net interest income for the three months ended September 30, 2025, was $43,602 thousand, up from $40,260 thousand in the same period of 2024, representing an increase of 5.8% [256]. - The company reported a net interest income of $128,421 thousand for the nine months ended September 30, 2025, compared to $118,029 thousand for the same period in 2024, marking an increase of 8.5% [256]. Asset and Capital Management - Total assets as of Q3 2025 were $4.32 billion, a decrease from $4.39 billion in Q2 2025 [167]. - Total assets increased to $4,317,951 thousand in Q3 2025 from $4,215,862 thousand in Q3 2024, reflecting a growth of 2.6% [256]. - The tangible common equity ratio for Q3 2025 was 10.66%, up from 10.09% in Q2 2025 and 9.28% in Q3 2024 [167]. - Shareowners' equity rose to $540.6 million at September 30, 2025, up from $526.4 million at June 30, 2025, driven by net income of $47.9 million and a decrease in accumulated other comprehensive loss [247]. - The total risk-based capital ratio was 20.59% at September 30, 2025, compared to 19.60% at June 30, 2025, indicating strong capital adequacy [248]. Income and Expense Analysis - Noninterest expense for Q3 2025 was $42.9 million, a slight increase of $0.4 million or 0.9% from Q2 2025, and unchanged from Q3 2024 [174]. - Noninterest expense for the first nine months of 2025 totaled $124.2 million, a 0.5% increase from $123.5 million in the same period of 2024, primarily due to a $4.2 million increase in compensation expense [199]. - Total noninterest expense for Q3 2025 was $42.9 million, comparable to Q3 2024, with a slight increase from $42.5 million in Q2 2025 [198]. - Compensation expense for the first nine months of 2025 was $78.8 million, a $4.2 million increase from $74.6 million in the same period of 2024, driven by increases in salary and associate benefit expenses [202]. Credit Quality and Loss Provisions - The provision for credit losses in Q3 2025 was $1.9 million, significantly higher than $0.6 million in Q2 2025 and $1.2 million in Q3 2024 [168]. - Nonperforming assets increased to $10.0 million in Q3 2025 from $6.6 million in Q2 2025 [168]. - The allowance for credit losses for loans HFI was $30.2 million at September 30, 2025, representing 1.17% of loans HFI, up from 1.13% at June 30, 2025 [221]. - Nonperforming assets totaled $10.0 million at September 30, 2025, representing 0.23% of total assets, up from $6.6 million (0.15%) at June 30, 2025 [217]. Deposits and Funding - Average total deposits were $3.612 billion in Q3 2025, a decrease of $68.4 million or 1.86% from Q2 2025 [178]. - Total deposits at September 30, 2025, were $3.615 billion, a decrease of $89.9 million (2.4%) from June 30, 2025 [224]. - Average short-term borrowings totaled $34.7 million in Q3 2025, slightly up from $33.1 million in Q2 2025, primarily due to mortgage warehouse borrowing activity [243]. - The company continues to monitor its cost of deposits and deposit mix amid the current rate environment [226]. Interest Rates and Economic Value - The interest rate spread improved to 3.81% in Q3 2025 from 3.49% in Q3 2024 [256]. - The estimated changes in net interest income (NII) for a 12-month shock indicate a potential increase of 18.9% to 4.9% under rising rate scenarios, while a decrease of -5.3% to -23.8% is expected under falling rate scenarios as of September 30, 2025 [233]. - The economic value of equity (EVE) is projected to increase by 34.2% to 10.5% in rising rate environments, but decrease by -12.0% to -40.7% in falling rate environments as of September 30, 2025 [235].