Financial Performance - The Company reported net income of $1.9 million, or $0.32 per diluted share, for the three months ended September 30, 2025, down from $2.2 million, or $0.36 per diluted share, for the same period in 2024[166]. - For the nine months ended September 30, 2025, net income totaled $3.9 million, or $0.64 per diluted share, compared to $6.5 million, or $1.04 per diluted share, for the same period in 2024[166]. - Cash dividends declared totaled $0.21 per share for the nine months ended September 30, 2025, compared to $0.15 per share for the same period in 2024[182]. - The provision for income taxes decreased to $1.1 million for the nine months ended September 30, 2025, from $2.0 million in 2024, with an effective tax rate of 22.9% compared to 23.5%[205]. Asset and Loan Growth - Total assets increased by 4.2% to $1,147.2 million as of September 30, 2025, compared to $1,101.1 million as of December 31, 2024[175]. - Total loans increased by $44.5 million, or 5.4%, as of September 30, 2025, primarily driven by a $75.9 million growth in consumer indirect loans[176]. - The total loan portfolio increased by $44.5 million, or 5.4%, as of September 30, 2025, compared to December 31, 2024[214]. - As of September 30, 2025, total loans amounted to $867.52 million, with real estate loans comprising $606.44 million, representing 69.9% of total loans[215]. Credit Quality - The provision for credit losses for the nine months ended September 30, 2025, was $3.8 million, significantly higher than $0.2 million for the same period in 2024[170]. - Nonperforming assets decreased to $2.2 million, or 0.19% of total assets, as of September 30, 2025, down from $5.5 million, or 0.50%, as of December 31, 2024[177]. - Net charge-offs totaled $3.3 million for the nine months ended September 30, 2025, up from $0.6 million in the prior year[200]. - The Company's allowance for credit losses (ACL) as a percentage of total loans and leases was 1.23% as of September 30, 2025, slightly down from 1.24% at the end of 2024[201]. Deposits and Equity - Total deposits increased by $29.9 million, or 3.1%, during the nine months ended September 30, 2025, with core deposits totaling $838.4 million, or 83.6% of total deposits[178]. - Shareholders' equity increased by $5.6 million, or 5.7%, as of September 30, 2025, primarily due to earnings net of dividends and share repurchases[181]. - Total deposits increased to $1,002.5 million as of September 30, 2025, from $972.6 million as of December 31, 2024, representing a 3.1% increase[221]. - Core deposits totaled $838.4 million, or 83.6% of total deposits, as of September 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024[221]. Interest Income and Expense - Net interest income increased by $0.6 million, or 2.3%, for the nine months ended September 30, 2025, compared to the same period in 2024[169]. - The net interest margin decreased to 3.57% for the nine months ended September 30, 2025, down from 3.65% for the same period in 2024[169]. - Interest expense decreased by $0.3 million for the nine months ended September 30, 2025, compared to the same period in 2024[197]. - Net interest income for the three months ended September 30, 2025, was $9.662 million, compared to $9.185 million for the same period in 2024[189]. Liquidity and Funding - Total readily available liquidity was $423.9 million as of September 30, 2025, compared to $397.7 million as of December 31, 2024[236]. - The Company had $200.9 million in unused borrowing capacity with the FRB's discount window as of September 30, 2025[232]. - The Company maintained a strong core deposit base and sufficient funding capacity for loan growth and operations as of September 30, 2025[185]. - The Company had approximately 28 thousand deposit accounts with an average balance of approximately $32.2 thousand per account as of September 30, 2025[239]. Investment Portfolio - The yield on investment securities increased to 3.52% for the nine months ended September 30, 2025, compared to 2.93% for the same period in 2024[180]. - As of September 30, 2025, available-for-sale securities totaled $164.0 million, representing 99.7% of the total investment portfolio, down from $167.9 million as of December 31, 2024[209]. - The average life of securities in the investment portfolio increased to 4.2 years as of September 30, 2025, from 3.6 years as of December 31, 2024[208]. - The investment securities portfolio had an estimated average life of 4.2 years as of September 30, 2025, compared to 3.6 years as of December 31, 2024[229]. Operational Developments - The Company is renovating a banking center in Daphne, Alabama, expected to open in the first half of 2026, and opened a new automated banking facility in Mountain Brook, Alabama in October 2025[186]. - Significant increases in non-interest expenses were noted in collection and other real estate/foreclosure expenses, while salaries and benefits decreased[204]. - Non-interest income for the nine months ended September 30, 2025, was $2,584 million, a slight decrease from $2,601 million in 2024[202]. - Total non-interest expense increased by 6.4% to $7.4 million for the three months ended September 30, 2025, and by 1.8% to $21.8 million for the nine months ended September 30, 2025, compared to the same periods in 2024[204]. Interest Rate Risk Management - The Company uses financial simulation models to measure interest rate exposure and assess the potential impact on net interest income[242]. - Under various interest rate scenarios, the pre-tax net interest margin is forecasted to change, with a +1% rate scenario resulting in a 5 basis points increase in net interest margin over one year[244]. - In a +2% interest rate scenario, the cumulative change in net interest income is projected to be $930 thousand over one year[244]. - A -1% interest rate scenario is expected to result in a decrease of $1,166 thousand in net interest income over one year[244].

Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.48 from $1.37 in Q3 2024, reflecting higher net interest income and noninterest income [19]. - Net income for Q3 2025 reached $222 million, a 3.7% increase from $214 million in Q3 2024 [199]. - Net income for the nine months ended September 30, 2025, was $636 million, an increase of 12% compared to $568 million in 2024 [202]. - Basic earnings per share for Q3 2025 were $1.48, up from $1.37 in Q3 2024, reflecting a growth of 8% [198]. - Comprehensive income for Q3 2025 was $330 million, down from $427 million in Q3 2024, indicating a decline of 22.7% [199]. Interest Income and Expenses - Total interest income for Q3 2025 was $1,064 million, down $40 million, or 4%, from Q3 2024 [22]. - Total interest expense decreased by $92 million, or 19%, to $392 million compared to the prior year [22]. - Net interest income (GAAP) for the three months ended September 30, 2025, was $672 million, compared to $620 million for the same period in 2024, representing an 8.4% increase [195]. - Net interest income after provision for credit losses increased to $623 million in Q3 2025, compared to $607 million in Q3 2024, reflecting a growth of 2.6% [198]. Noninterest Income - Customer-related noninterest income increased by $5 million, or 3%, driven by higher loan-related fees, despite an $11 million net credit valuation adjustment loss [20]. - Noninterest income for Q3 2025 was $189 million, up 9.9% from $172 million in Q3 2024 [198]. - Noncustomer-related noninterest income increased by $12 million, or 86%, primarily due to higher dividends and a gain on the sale of a bank-owned property [23]. - Total noninterest income for the nine months ended September 30, 2025, was $550 million, an increase of $43 million, or 8%, compared to the same period in 2024 [57]. Credit Losses and Provisions - The provision for credit losses was $60 million, primarily related to two commercial borrowers, with $50 million charged off and a full reserve established for the remaining $10 million [20]. - The provision for credit losses was $49 million in Q3 2025, up from $13 million in Q3 2024, primarily due to credit losses related to two commercial loans [53]. - The allowance for credit losses (ACL) was $725 million as of September 30, 2025, down from $736 million a year earlier, reflecting lower reserves for commercial real estate risks [47]. - The ratio of ACL to total loans and leases decreased to 1.20% at September 30, 2025, compared to 1.25% at the same date in 2024 [47]. Loans and Leases - Total loans and leases increased by $1.4 billion, or 2%, driven by growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios [23]. - Average loans and leases increased by $2.1 billion, or 4%, to $60.8 billion, primarily due to growth in average consumer and commercial loans [34]. - The loan and lease portfolio increased by $892 million, or 2%, to $60,302 million at September 30, 2025, driven by growth in consumer 1-4 family residential mortgages, commercial and industrial loans, and term commercial real estate loans [81]. - The net loan and lease charge-offs totaled $56 million, or 0.37% of average loans and leases annualized, compared to $3 million, or 0.02%, in the prior year quarter [23]. Deposits and Borrowings - Total deposits decreased by $840 million, or 1%, with a notable reduction in interest-bearing deposits due to product migration [23]. - Total borrowed funds increased by $1.8 billion, or 51%, compared to the prior year quarter, driven by higher levels of long-term debt and short-term advances from the FHLB [23]. - Average deposits decreased by $726 million, or 1%, to $74.3 billion, with average noninterest-bearing deposits increasing by $199 million, or 1% [38]. - The estimated amount of uninsured deposits was $33,588 million, or 45% of total deposits, consistent with the previous period [88]. Efficiency and Cost Management - The efficiency ratio improved, indicating better cost management in operations [19]. - Noninterest expense increased by $25 million, or 5%, year-over-year, with salaries and employee benefits rising by $20 million due to higher severance and base salaries [62]. - Adjusted noninterest expense increased by $21 million, or 4%, with an efficiency ratio improving to 59.6% from 62.5% as adjusted pre-provision net revenue increased by $53 million, or 18% [63]. - The efficiency ratio (non-GAAP) improved to 59.6% for the three months ended September 30, 2025, from 62.5% in the same period last year [195]. Capital and Shareholder Equity - Total shareholders' equity rose by $741 million, or 12%, to $6.9 billion at September 30, 2025, compared to $6.1 billion at December 31, 2024 [180]. - The common equity tier 1 (CET1) capital totaled $7.7 billion, a 7% increase from $7.2 billion in the prior year [187]. - The CET1 capital ratio improved to 11.3%, compared to 10.7% in the previous year [187]. - Tangible book value per common share increased by $5.52, or 17%, to $38.64, primarily due to increased retained earnings and reduced unrealized losses [187]. Technology and Operational Improvements - The company plans to continue focusing on technology and information security systems to mitigate risks and enhance operational efficiency [15]. - The company completed the final phase of a multi-year project to replace its core loan and deposit banking systems, enhancing operational performance and customer experience [85]. - Total technology spend increased by $15 million, or 13%, compared to the same prior year quarter, driven by higher capitalized technology investments [65]. Risk Management - The company actively manages interest rate risk through a combination of interest rate swaps and investments in fixed-rate securities to moderate the expected sensitivity of net interest income [146]. - Interest rate risk remains within established policy limits despite shifts in the composition of deposit balances, with a weighted average modeled beta of 50% for interest-bearing deposits with indeterminable maturities [157]. - The Earnings at Risk (EaR) analysis showed a potential decrease in net interest income of 9.7% under a -200 bps rate shift scenario as of September 30, 2025 [157].

Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.48 from $1.37 in the third quarter of 2024, reflecting higher net interest income and noninterest income [19]. - Net income for Q3 2025 reached $222 million, a 3.7% increase from $214 million in Q3 2024 [199]. - Net income for the nine months ended September 30, 2025, was $636 million, an increase of 12% compared to $568 million in 2024 [202]. - Basic earnings per share for Q3 2025 were $1.48, up from $1.37 in Q3 2024, reflecting a growth of 8% [198]. - Comprehensive income for Q3 2025 was $330 million, down from $427 million in Q3 2024, indicating a decrease of 22.7% [199]. Interest Income and Expenses - Total interest income for the third quarter was $1,064 million, down $40 million, or 4%, from the previous year [22]. - Total interest expense decreased by $92 million, or 19%, resulting in net interest income of $672 million [22]. - Net interest income (GAAP) for the three months ended September 30, 2025, was $672 million, compared to $620 million for the same period in 2024, representing an 8.4% increase [195]. - Net interest income after provision for credit losses increased to $623 million in Q3 2025, compared to $607 million in Q3 2024, reflecting a growth of 2.6% [198]. Noninterest Income - Customer-related noninterest income increased by $5 million, or 3%, driven by higher loan-related fees, despite an $11 million net credit valuation adjustment loss [20]. - Noninterest income for Q3 2025 was $189 million, up 9.9% from $172 million in Q3 2024 [198]. - Noncustomer-related noninterest income increased by $12 million, or 86%, primarily due to higher dividends and a gain on the sale of a bank-owned property [23]. - Total noninterest income for the nine months ended September 30, 2025, was $550 million, an increase of $43 million, or 8%, compared to the same period in 2024 [57]. Credit Losses and Provisions - The provision for credit losses was $60 million, primarily related to two commercial borrowers, with $50 million charged off and a full reserve established for the remaining $10 million [20]. - The provision for credit losses was $49 million in Q3 2025, compared to $13 million in Q3 2024, primarily due to credit losses from two related commercial loans [53]. - Provision for credit losses increased to $66 million in 2025 from $31 million in 2024, indicating a rise in expected credit losses [202]. - The allowance for credit losses (ACL) was $725 million as of September 30, 2025, down from $736 million a year earlier, reflecting lower reserves for commercial real estate risks [47]. Loans and Leases - Total loans and leases increased by $1.4 billion, or 2%, driven by growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios [23]. - Average loans and leases increased by $2.1 billion, or 4%, to $60.8 billion, primarily due to growth in average consumer and commercial loans [34]. - The loan and lease portfolio increased by $892 million, or 2%, to $60,302 million at September 30, 2025, driven by growth in consumer 1-4 family residential mortgages, commercial and industrial loans, and term commercial real estate loans [81]. - The net loan and lease charge-offs totaled $56 million, or 0.37% of average loans and leases annualized, compared to $3 million, or 0.02%, in the prior year quarter [23]. Deposits and Borrowings - Total deposits decreased by $840 million, or 1%, with a notable reduction in interest-bearing deposits due to product migration [23]. - Total deposits declined by $1.3 billion, or 2%, to $74,878 million, primarily due to a migration of consumer interest-bearing products to noninterest-bearing offerings [87]. - Total borrowed funds increased by $1.8 billion, or 51%, compared to the prior year quarter, driven by higher levels of long-term debt and short-term advances from the FHLB [23]. - The loan-to-deposit ratio increased to 81% at September 30, 2025, compared to 78% at December 31, 2024 [88]. Efficiency and Cost Management - The efficiency ratio improved, indicating better cost management and operational efficiency [19]. - Noninterest expense increased by $25 million, or 5%, compared to the prior year quarter, with salaries and employee benefits rising by $20 million due to higher severance and base salaries [62]. - Adjusted noninterest expense increased by $21 million, or 4%, with an efficiency ratio improving to 59.6% from 62.5% as adjusted pre-provision net revenue increased by $53 million, or 18% [63]. - The efficiency ratio (non-GAAP) improved to 59.6% for the three months ended September 30, 2025, from 62.5% in the same period last year [195]. Capital and Shareholder Equity - Total shareholders' equity rose by $741 million, or 12%, to $6.9 billion at September 30, 2025, compared to $6.1 billion at December 31, 2024 [180]. - As of September 30, 2025, common equity tier 1 (CET1) capital totaled $7.7 billion, a 7% increase from $7.2 billion in the prior year [187]. - The CET1 capital ratio improved to 11.3%, compared to 10.7% in the previous year [187]. - Tangible book value per common share increased by $5.52, or 17%, to $38.64, primarily due to increased retained earnings and reduced unrealized losses [187]. Investment and Securities - The amortized cost of total investment securities declined by $832 million, or 4%, from December 31, 2024, primarily due to principal reductions, net of reinvestments [72]. - Total investment securities amounted to $20.935 billion as of September 30, 2025, with a fair value of $18.276 billion [72]. - The estimated duration of the investment securities portfolio was 3.7 years, compared to 3.4 years at December 31, 2024, reflecting revised prepayment assumptions [70]. Risk Management and Interest Rate Sensitivity - The company actively manages interest rate risk through a combination of interest rate swaps and investments in fixed-rate securities [147]. - The Earnings at Risk (EaR) analysis showed a potential decrease in net interest income of 9.7% under a -200 bps rate shift scenario as of September 30, 2025 [157]. - The projected latent interest rate sensitivity is expected to increase net interest income by approximately 8.0% in Q3 2026 compared to Q3 2025 [161]. - Under a parallel interest rate shock of +/- 100 bps, cumulative net interest income sensitivity is projected to range between -1.9% and 4.7% [162].

Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.48 from $1.37 in the third quarter of 2024, reflecting higher net interest income and noninterest income [19]. - Net interest income grew by $52 million, or 8%, compared to the prior year period, leading to an improved net interest margin of 3.28%, up from 3.03% [20]. - The overall financial outlook remains cautious due to potential economic uncertainties and regulatory changes impacting the banking sector [10]. - Net income for Q3 2025 reached $222 million, a 3.7% increase from $214 million in Q3 2024 [199]. - Net income for the nine months ended September 30, 2025, was $636 million, an increase of 12% compared to $568 million in 2024 [202]. Interest Income and Expense - Total interest income for the third quarter was $1,064 million, down $40 million, or 4%, from the previous year [22]. - Total interest expense decreased by $92 million, or 19%, resulting in net interest income of $672 million for the quarter [22]. - The net interest margin improved to 3.28%, compared with 3.03% in the prior year period [24]. - Net interest income accounted for 78% of total net revenue, increasing by $52 million, or 8%, for the three months ended September 30, 2025 [24]. - Net interest income after provision for credit losses increased to $623 million in Q3 2025, compared to $607 million in Q3 2024, reflecting a growth of 2.6% [198]. Noninterest Income - Customer-related noninterest income increased by $5 million, or 3%, driven by higher loan-related fees, despite an $11 million net credit valuation adjustment loss [20]. - Noncustomer-related noninterest income increased by $12 million, or 86%, primarily due to higher dividends and a gain on the sale of a bank-owned property [23]. - Noninterest income accounted for 22% of total net revenue in both the third quarters of 2025 and 2024, increasing by $17 million, or 10%, for the three months ended September 30, 2025 [57]. - Total noninterest income for the nine months ended September 30, 2025, was $550 million, an increase of $43 million, or 8%, compared to the same period in 2024 [57]. Credit Losses and Provisions - The provision for credit losses was $60 million, primarily related to two commercial borrowers, with $50 million charged off and a full reserve established for the remaining $10 million [20]. - The provision for credit losses was $49 million in Q3 2025, compared to $13 million in Q3 2024, primarily due to credit losses from two related commercial loans [53]. - The allowance for credit losses (ACL) was $725 million as of September 30, 2025, down from $736 million a year earlier, reflecting lower reserves for commercial real estate risks [47]. - The ratio of ACL to total loans and leases decreased to 1.20% at September 30, 2025, compared to 1.25% at the same date in 2024 [47]. Loans and Leases - Total loans and leases increased by $1.4 billion, or 2%, driven by growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios [23]. - Average loans and leases increased by $2.1 billion, or 4%, to $60.8 billion, primarily due to growth in average consumer and commercial loans [34]. - The loan and lease portfolio increased by $892 million, or 2%, to $60,302 million at September 30, 2025, driven by growth in consumer 1-4 family residential mortgages, commercial and industrial loans, and term commercial real estate loans [81]. - The net loan and lease charge-offs totaled $56 million, or 0.37% of average loans and leases annualized, compared to $3 million, or 0.02%, in the prior year quarter [23]. Deposits and Borrowings - Total deposits decreased by $840 million, or 1%, with a notable reduction in interest-bearing deposits due to product migration [23]. - Total borrowed funds increased by $1.8 billion, or 51%, compared to the prior year quarter, driven by higher levels of long-term debt and short-term advances from the FHLB [23]. - Average deposits decreased by $726 million, or 1%, to $74.3 billion, with average noninterest-bearing deposits increasing by $199 million, or 1% [38]. - Total deposits declined by $1.3 billion, or 2%, to $74,878 million from $76,223 million at December 31, 2024, primarily due to a migration of consumer interest-bearing products to noninterest-bearing offerings [87]. Expenses and Efficiency - Noninterest expense increased by $25 million, or 5%, year-over-year, with salaries and employee benefits rising by $20 million due to higher severance and base salaries [62]. - Adjusted noninterest expense increased by $21 million, or 4%, with an efficiency ratio improving to 59.6% from 62.5% as adjusted pre-provision net revenue increased by $53 million, or 18% [63]. - The efficiency ratio improved, indicating better cost management and operational efficiency [19]. - Noninterest expense (GAAP) for the three months ended September 30, 2025, was $527 million, compared to $502 million for the same period in 2024, reflecting a 5% increase [195]. Shareholder Equity and Capital - Total shareholders' equity rose by $741 million, or 12%, to $6.9 billion at September 30, 2025, compared to $6.1 billion at December 31, 2024 [180]. - Common equity tier 1 (CET1) capital totaled $7.7 billion, a 7% increase from $7.2 billion in the prior year [187]. - The CET1 capital ratio improved to 11.3%, compared to 10.7% in the previous year [187]. - Tangible book value per common share increased by $5.52, or 17%, to $38.64, primarily due to increased retained earnings and reduced unrealized losses [187]. Market and Economic Conditions - The company plans to continue focusing on loan syndication activity and enhancing customer swap fees to drive future growth [20]. - The estimated amount of uninsured deposits was $33.6 billion, or 45% of total deposits, consistent with the previous period [88]. - The company actively trades in municipal, agency, and U.S. Treasury securities, exposing it to potential losses from adverse price movements in fixed-income markets [164]. - Changes in the fair value of available-for-sale (AFS) securities and interest rate swaps that qualify as cash flow hedges are recognized in AOCI each reporting period [165].

Financial Performance - Net earned premiums for the three months ended September 30, 2025, were $2,013 million, a decrease of 2.0% compared to $2,055 million for the same period in 2024[9] - Net earnings for the three months ended September 30, 2025, were $215 million, an increase of 18.8% from $181 million in the same period of 2024[10] - Earnings per share for the three months ended September 30, 2025, were $2.58, up from $2.16 in the same period of 2024, marking a 19.5% increase[9] - Total revenues for Q3 2025 were $2,331 million, a slight decrease of 1.6% compared to $2,369 million in Q3 2024[63] - Total revenues for the nine months ended September 30, 2025, were $6,111 million, a decrease of 1.0% from $6,175 million in the same period of 2024[63] - Net earnings for the nine months ended September 30, 2025, were $543 million, a decrease of 14.1% compared to $632 million in 2024[16] - Earnings before income taxes (EBT) for Q3 2025 was $268 million, compared to $229 million in Q3 2024, reflecting an increase of 17%[133] Assets and Liabilities - Total assets increased to $33,834 million as of September 30, 2025, up from $30,836 million at December 31, 2024, representing a growth of 9.7%[7] - Total liabilities increased to $29,104 million as of September 30, 2025, compared to $26,370 million at December 31, 2024, indicating an increase of 10.4%[7] - Shareholders' equity rose to $4,730 million as of September 30, 2025, compared to $4,466 million at December 31, 2024, reflecting a growth of 5.9%[7] - The balance of recoverables from reinsurers was $5,565 million as of September 30, 2025, compared to $5,176 million at the end of 2024[139] - The net liability for losses and LAE at the end of Q3 2025 was $9,708 million, an increase from $9,221 million at the end of Q3 2024[136] Investment Income - Net investment income rose to $205 million for the three months ended September 30, 2025, compared to $200 million in the same period of 2024, reflecting a 2.5% increase[9] - The company reported a gross investment income of $211 million for the three months ended September 30, 2025, compared to $206 million for the same period in 2024[102] - The company reported a net investment income of $27 million for the nine months ended September 30, 2025, compared to $34 million for the same period in 2024[86] Dividends - The company declared dividends of $0.80 per share for the three months ended September 30, 2025, compared to $0.71 per share in the same period of 2024[11] - The company paid dividends of $4.40 per share in 2025, totaling $368 million, compared to $4.63 per share totaling $387 million in 2024, indicating a decrease in total dividends paid[14] Underwriting and Claims - Underwriting profit for the property and casualty insurance segment increased to $138 million in Q3 2025, up 20.0% from $115 million in Q3 2024[66] - Losses and loss adjustment expenses for the property and casualty insurance segment were $1,355 million in Q3 2025, a decrease of 5.2% from $1,430 million in Q3 2024[66] - Total losses and loss adjustment expenses (LAE) incurred for the first nine months of 2025 were $3,327 million, slightly up from $3,279 million in the same period of 2024[136] Cash Flow - The company reported a net cash provided by operating activities of $749 million for the nine months ended September 30, 2025, compared to $478 million for the same period in 2024, representing a 56.6% increase[16] - The company reported a net cash used in investing activities of $(71) million, a decrease from $116 million in 2024[16] - The net cash used in financing activities decreased to $242 million in 2025 from $497 million in 2024, indicating a reduction of 51.3%[16] Fair Value Measurements - Total assets accounted for at fair value as of September 30, 2025, amounted to $15,374 million, with Level 3 assets representing approximately 7% of this total[74] - Total liabilities accounted for at fair value as of September 30, 2025, were $3,840 million[74] - Level 3 assets experienced a balance of $1,004 million as of September 30, 2025, after accounting for various gains and losses[79] Acquisitions - In the third quarter of 2025, AFG acquired 52% of Radion Insurance Holdings, LLC for $7 million, resulting in $5 million of amortizing intangible assets and $22 million in goodwill[56] - The company recognized a $3 million realized gain from the remeasurement of its existing investment in Radion at fair value upon acquisition[56] Other Comprehensive Income - Other comprehensive income for Q3 2025 was $59 million, compared to $195 million in Q3 2024[10] - The accumulated other comprehensive income (AOCI) ending balance for the quarter ended September 30, 2025, was $(73) million, reflecting net unrealized gains and losses on securities and cash flow hedges[128]

Financial Position - As of September 30, 2025, the fair value of residential mortgage-backed securities was $4,845,524,000, while available-for-sale debt securities totaled $4,985,888,000[40]. - The company had $4,993,310,000 in available-for-sale securities as of December 31, 2024, with residential mortgage-backed securities valued at $4,835,176,000[43]. - The total investment securities held by the company as of September 30, 2025, amounted to $4,980,342,000, with residential mortgage-backed securities valued at $4,845,524,000[99]. - The balance in equity securities with readily determinable fair values was $5,546,000 as of September 30, 2025, reflecting an increase from $5,394,000 at December 31, 2024[107]. - The company reported a total of $9.400969 billion in the loan portfolio as of September 30, 2025, compared to $8.809826 billion as of December 31, 2024[89]. Loan Performance - As of September 30, 2025, total loans amounted to $9,400,969,000, an increase from $8,809,826,000 as of December 31, 2024, representing a growth of approximately 6.67%[67]. - The total commercial real estate loans reached $6,261,871,000 as of September 30, 2025, up from $5,722,372,000 as of December 31, 2024, reflecting an increase of approximately 9.4%[71]. - The total balance of loans classified as Watch List—Doubtful is evaluated using the fair value of collateral method, with specific reserves allocated as necessary based on borrower conditions and economic factors[76]. - The total non-accrual loans as of September 30, 2025, amounted to $153,882,000, a decrease from $169,136,000 at December 31, 2024, representing a decline of about 9%[85]. - The total past due loans as of December 31, 2024, were $138.946 million, indicating a significant increase in past due loans year-over-year[89]. Credit Losses and Allowance - The allowance for credit losses (ACL) methodology measures lifetime losses on loan pools with similar risk characteristics, ensuring a conservative approach to risk management[68]. - The allowance for credit losses (ACL) increased from $154,983,000 on June 30, 2025, to $155,506,000 on September 30, 2025, reflecting a net increase of $523,000[81]. - The credit loss expense for the three months ended September 30, 2025, was $1,827,000, compared to $8,602,000 for the same period in 2024, indicating a significant decrease in credit loss expense year-over-year[81]. - The total balance of the allowance for credit losses for domestic loans was $28,656,000 as of September 30, 2025, showing a slight increase from $28,414,000 on June 30, 2025[81]. - The company reported a net recovery of $721,000 credited to the allowance for the three months ended September 30, 2025, compared to a net loss recovery of $1,304,000 for the same period in 2024[81]. Capital Adequacy - The company continues to exceed all capital adequacy requirements under the Basel III capital rules as of September 30, 2025[123]. - CET1 to risk-weighted assets ratio was 23.20% as of September 30, 2025, compared to 22.42% on December 31, 2024[125]. - Tier 1 capital-to-average-total-asset (leverage) ratio was 19.35% as of September 30, 2025, up from 18.84% on December 31, 2024[125]. - Risk-weighted Tier 1 capital ratio stood at 23.80% as of September 30, 2025, compared to 23.06% on December 31, 2024[125]. - Total capital ratio was 24.99% as of September 30, 2025, compared to 24.31% on December 31, 2024[125]. Stock-Based Compensation - Stock-based compensation expense for the three months ended September 30, 2025, was $20,000, compared to $47,000 for the same period in 2024[94]. - As of September 30, 2025, there were 170,835 options outstanding with a weighted average exercise price of $35.46[94]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $132,000, expected to be recognized over a weighted average period of 1.25 years[94]. - A total of 434,529 Stock Appreciation Rights (SARs) had been issued under the SAR Plan as of September 30, 2025[95]. - The total expense recorded in connection with all grants under the SAR Plan for the nine months ended September 30, 2025, was $2,020,000, a decrease from $2,271,000 for the same period in 2024[97]. Economic Environment - The economic environment has posed challenges for borrowers, with increasing capitalization rates and elevated office vacancies contributing to the risk in large loans[77]. - Management's evaluation of the ACL considers various qualitative factors, including trends in portfolio volume, classified loans, and economic conditions, which could impact future credit loss estimates[79]. - The company has implemented a large loan operational risk factor in its ACL calculation starting Q2 2023, acknowledging the heightened risk of default associated with large loans in the current economic environment[77]. - The company did not provide any modifications to borrowers experiencing financial difficulties for the nine months ended September 30, 2025[85]. - The past due loans in the commercial real estate sector increased due to two loans secured by commercial properties placed on non-accrual status in Q4 2024[89].

Financial Performance - Net sales for Q3 2025 reached $3,072 million, a 7.3% increase from $2,862 million in Q3 2024[20] - The net loss attributable to DuPont common stockholders for Q3 2025 was $123 million, compared to a net income of $455 million in Q3 2024[20] - Comprehensive loss income for Q3 2025 was $185 million, a significant decrease from a comprehensive income of $859 million in Q3 2024[22] - The company reported a net income from continuing operations of $747 million for the nine months ended September 30, 2025, slightly down from $753 million in 2024[26] - For the three months ended September 30, 2025, net income attributable to common stockholders was $(123) million, compared to $455 million in 2024, representing a decrease of 127%[9] - Earnings per share (EPS) from continuing operations for the three months ended September 30, 2025, was $0.70, down from $1.06 in 2024, a decline of 34%[9] Assets and Liabilities - Total assets as of September 30, 2025, were $38,044 million, an increase from $36,636 million at the end of 2024[24] - Long-term debt rose to $7,049 million as of September 30, 2025, compared to $5,323 million at the end of 2024, indicating a 32.5% increase[24] - DuPont's total liabilities increased to $14,703 million as of September 30, 2025, compared to $12,843 million at the end of 2024[24] - The company’s cash and cash equivalents at the end of Q3 2025 were $3,826 million, up from $1,686 million at the end of Q3 2024[26] - The company’s total assets of discontinued operations were valued at $1.813 billion as of September 30, 2025, down from $3.003 billion at December 31, 2024[60] Acquisitions and Divestitures - DuPont completed the acquisition of Donatelle Plastics for a net purchase price of $365 million, which includes a contingent earn-out liability of $40 million[48] - DuPont signed an agreement to acquire Sinochem for $56 million, with the transaction closing on October 10, 2025[46] - DuPont announced the Aramids Divestiture for a gross consideration of $1.8 billion, expecting to receive approximately $1.2 billion in cash proceeds, a $300 million interest-bearing note, and a $325 million equity interest, with the transaction expected to close in Q1 2026[56] - The Aramids Divestiture resulted in a net loss from discontinued operations of $372 million for Q3 2025 and $1,118 million for the nine months ended September 30, 2025[63] Research and Development - Research and development expenses increased to $140 million in Q3 2025, up from $127 million in Q3 2024, reflecting a 10.2% rise[20] Cash Flow and Operating Activities - Cash provided by operating activities from continuing operations for the nine months ended September 30, 2025, was $1,260 million, down from $1,517 million in the same period of 2024[26] - The company recorded $139 million in acquisition, integration, and separation costs for Q3 2025, compared to $43 million in Q3 2024, primarily related to the Electronics Separation[67] Restructuring and Charges - Restructuring charges for the three months ended September 30, 2025, were $20 million, compared to $21 million for the same period in 2024, while for the nine months ended September 30, 2025, charges were $67 million, up from $56 million in 2024[77] - The 2023-2024 Restructuring Program recorded pre-tax restructuring charges of $174 million, including $101 million in severance and related benefits and $73 million in asset-related charges[80] Environmental and Legal Matters - The company has accrued obligations of $265 million for probable environmental remediation and restoration costs[164] - DuPont's contribution to the Water District Settlement Fund was $400 million, part of a total settlement of $1.185 billion for PFAS-related claims[142][143] - As of September 30, 2025, there are approximately 10,000 personal injury cases filed in the AFFF MDL, with many cases including multiple plaintiffs[148] Shareholder Returns - The company declared dividends of $1.23 per common share, totaling $515 million[31] - The company repurchased a total of 27.9 million shares at an average price of $71.67 per share under the $2 billion accelerated share repurchase transaction[173] Tax and Interest - The effective tax rate on continuing operations for Q3 2025 was 5.8%, significantly lower than 17.9% for Q3 2024, primarily due to the release of a valuation allowance[94] - Interest income for the three months ended September 30, 2025, was $27 million, compared to $14 million for the same period in 2024[84]

Acquisitions and Investments - Sunoco LP completed the acquisition of Parkland, with shareholders receiving 0.295 SunocoCorp units and C$19.80 for each Parkland share[200]. - Sunoco LP agreed to acquire TanQuid for approximately €500 million (approximately $587 million), including €300 million of assumed debt, expected to close in Q4 2025[201]. - In Q1 2025, Sunoco LP acquired fuel equipment and supply agreements for approximately $17 million, including $12 million in cash and newly issued common units valued at approximately $5 million[202]. - In Q2 2025, Sunoco LP acquired 151 fuel distribution consignment sites for approximately $105 million, including $92 million in cash and newly issued common units valued at approximately $13 million[203]. - In Q3 2025, Sunoco LP acquired approximately 70 fuel distribution consignment sites and 100 supply agreements for approximately $85 million in cash[204]. Financial Performance - For the three months ended September 30, 2025, Segment Adjusted EBITDA decreased by $121 million, or 3%, compared to the same period last year, primarily due to lower segment margin and higher operating expenses in multiple reportable segments[225]. - For the nine months ended September 30, 2025, net income decreased by $648 million, or 13%, primarily due to a $598 million gain recognized by Sunoco LP on its sale of West Texas assets in the prior period[224]. - For the nine months ended September 30, 2025, Adjusted EBITDA increased by $203 million, or 2%, primarily due to higher segment margin in the midstream segment and the investment in Sunoco LP segment[226]. - The consolidated Adjusted EBITDA for the three months ended September 30, 2025, was $3,838 million, compared to $3,959 million for the same period in 2024, reflecting a decrease of $121 million[222]. - The Partnership's net income for the three months ended September 30, 2025, was $1,292 million, a decrease of $142 million, or 10%, compared to the same period in 2024[223]. Revenue and Expenses - Revenues for the three months ended September 30, 2025, were $869 million, an increase of $191 million compared to the same period last year[240]. - Segment Adjusted EBITDA decreased by $99 million to $230 million for the three months ended September 30, 2025, compared to the same period last year[240]. - Operating expenses for the NGL and refined products segment increased by $241 million, primarily due to recently acquired assets and adjustments in estimates recorded in the prior period[254]. - The depreciation, depletion, and amortization expenses increased by $400 million for the nine months ended September 30, 2025, compared to the same period last year, primarily due to additional depreciation from recently placed assets[226]. Tax and Regulatory Changes - The One Big Beautiful Bill Act reinstates 100% bonus depreciation on qualified property, expected to defer a significant portion of corporate subsidiaries' U.S. federal income taxes[206]. - The FERC's revised policy on income tax allowances may impact the rates charged for FERC-regulated transportation services, with potential revenue reductions[208]. - The FERC initiated a review of its policies on certification of natural gas pipelines, with new policy statements issued in 2022[212]. Debt and Financing - As of September 30, 2025, total consolidated indebtedness was $63.10 billion, up from $59.76 billion at the end of 2024[288]. - The company issued $1.25 billion of 5.70% senior notes due April 2035 in March 2025 to refinance existing indebtedness[289]. - Sunoco LP issued $1.00 billion of 6.25% senior notes due 2033 in March 2025, using proceeds to repay existing senior notes[293]. - Cash used in financing activities during 2025 was $562 million, significantly lower than $4.34 billion in 2024, with a net increase in debt of $3.41 billion compared to $4.24 billion in 2024[284]. Operational Metrics - Natural gas transported increased to 13,861 BBtu/d for the three months ended September 30, 2025, up by 647 BBtu/d from the previous year[240]. - Gathered volumes in the midstream segment increased by 554 BBtu/d to 21,581 BBtu/d for the three months ended September 30, 2025, primarily due to newly acquired assets[250]. - NGL transportation volumes increased to 2,487 MBbls/d for Q3 2025, up 11.2% from 2,237 MBbls/d in Q3 2024[252]. - Crude oil transportation volumes were 7,023 MBbls/d in Q3 2025, slightly down from 7,025 MBbls/d in Q3 2024, while nine-month volumes increased to 6,932 MBbls/d, up 6.0% from 6,540 MBbls/d[258]. Capital Expenditures - Total capital expenditures for 2025 are expected to be approximately $4,600 million for growth and $1,100 million for maintenance[269]. - Sunoco LP plans to invest approximately $150 million in maintenance capital expenditures and at least $400 million in growth capital for the full year 2025[270]. - USAC plans to invest between $38 million and $42 million in maintenance capital expenditures and between $115 million and $125 million in expansion capital expenditures for the full year 2025[272].

Goodwill and Intangible Assets - The Company reported goodwill of $5.4 million as of September 30, 2025, related to the acquisition of 12 branches in the St. Louis market[149]. - The Company has total amortizable intangible assets of $4.4 million for arena naming rights, which are fully amortized over a period not to exceed 15 years[150][151]. Economic Indicators - The Federal Reserve raised the federal funds interest rates to more than 5.50%, the highest level in 22 years, to combat inflation[158]. - The personal consumption expenditures (PCE) price index eased from a peak of 7.1% in June 2022 to 2.9% in December 2023[159]. - Real GDP in 2025 is projected to rise 1.8% on an annual average basis, an increase from prior forecasts of 1.1%[160]. - The federal government deficit was $2.8 trillion in fiscal 2021, close to $1.4 trillion in fiscal 2022, and $1.7 trillion in fiscal 2023[158]. - The national unemployment rate increased to 4.3% in August 2025, up from 4.1% in June 2025, with 7.4 million unemployed individuals[161]. Housing Market - Existing-home sales rose by 1.5% in September 2025 compared to August 2025, reaching an annual rate of 4.06 million, with a year-over-year increase of 4.1%[163]. - The median existing-home sales price increased by 2.1% year-over-year to $415,200 in September 2025, with the Midwest median price at $320,800, up 4.7%[164]. - Total housing inventory at the end of September 2025 was 1.55 million units, a 1.3% increase from August 2025 and a 14.0% increase from one year ago[165]. - New single-family housing starts in August 2025 were at a rate of 890,000, which is 7% below July 2025 and 11.7% below August 2024[166]. - Sales of new single-family houses in August 2025 were at a seasonally adjusted annual rate of 800,000, a 20.5% increase from July 2025[167]. Company Financials - Great Southern's total assets decreased by $243.8 million, or 4.1%, from $5.98 billion at December 31, 2024, to $5.74 billion at September 30, 2025[191]. - Net outstanding loans decreased by $222.7 million to $4.47 billion at September 30, 2025, primarily in construction and commercial real estate loans[191]. - Total deposit balances decreased by $77.5 million, or 1.7%, with transaction account balances increasing by $66.7 million, or 2.2%, to $3.12 billion[197]. - Available-for-sale securities decreased by $2.0 million, or 0.4%, to $531.3 million at September 30, 2025[195]. - Held-to-maturity securities decreased by $6.1 million, or 3.3%, to $181.3 million at September 30, 2025[196]. - Short-term borrowings and other interest-bearing liabilities decreased by $88.3 million to $425.9 million at September 30, 2025[201]. - Total liabilities decreased by $277.1 million to $5.10 billion, mainly due to the repayment of BTFP borrowings and subordinated notes[228]. - Total stockholders' equity increased by $33.3 million, or 5.6%, to $632.9 million, driven by net income of $54.7 million for the nine months ended September 30, 2025[234]. - Net income for the three months ended September 30, 2025, was $17.8 million, a 7.7% increase from $16.5 million in the same period of 2024, attributed to a $2.8 million increase in net interest income[235]. - Cash and cash equivalents were $196.2 million at September 30, 2025, reflecting a slight increase of $479,000, or 0.2%, from December 31, 2024[224]. Interest Income and Expense - Total interest income decreased by $4.7 million or 5.6% during the three months ended September 30, 2025, primarily due to a $4.4 million or 5.8% decrease in interest income on loans[237]. - Interest income on loans decreased by $2.9 million during the nine months ended September 30, 2025, attributed to a decrease in average interest rates from 6.31% to 6.23%[240]. - Total interest expense decreased by $7.5 million or 21.0% during the three months ended September 30, 2025, with interest expense on deposits decreasing by $4.5 million or 15.8%[249]. - Interest expense on demand and savings deposits decreased by $5.4 million during the nine months ended September 30, 2025, due to a decrease in average rates from 1.76% to 1.43%[253]. - Interest income on investments increased by $1.8 million in the nine months ended September 30, 2025, driven by higher average interest rates from 3.10% to 3.35%[246]. Credit Losses and Non-Performing Assets - The Company expects to maintain an allowance for credit losses sufficient to absorb estimated credit losses, calculated using an average historical loss model[145]. - The Company’s allowance for credit losses is measured on a collective basis, aggregating loans into pools based on similar risk characteristics[146]. - The allowance for credit losses as a percentage of total loans was 1.43% at September 30, 2025, compared to 1.36% at December 31, 2024[276]. - The Company did not record a provision expense for outstanding loans in Q3 2025, compared to $1.2 million in Q3 2024[275]. - Net charge-offs for Q3 2025 were $66,000, significantly lower than $1.5 million in Q3 2024[275]. - As of September 30, 2025, non-performing assets decreased by $1.8 million to $7.8 million, representing 0.14% of total assets compared to 0.16% at December 31, 2024[277]. - Non-performing loans decreased by $1.8 million to $1.7 million, while foreclosed assets increased by $90,000 to $6.1 million at September 30, 2025[278]. - Potential problem loans decreased by $5.7 million to $1.4 million at September 30, 2025, from $7.1 million at December 31, 2024[280]. Non-Interest Income and Expenses - Non-interest income for the three months ended September 30, 2025, increased by $70,000 to $7.1 million compared to the same period in 2024[286]. - Non-interest income for the nine months ended September 30, 2025, decreased by $1.8 million to $21.9 million, primarily due to a $1.7 million decrease in other income[287]. - Non-interest expense for the three months ended September 30, 2025, increased by $2.4 million to $36.1 million, primarily due to a $735,000 increase in net occupancy and equipment expenses[290]. - Salaries and employee benefits increased by $636,000, or 3.3%, from the prior-year period, mainly due to annual merit increases[291]. - Non-interest expense for the nine months ended September 30, 2025, increased by $1.4 million to $105.9 million, driven by a $2.0 million increase in net occupancy and equipment expenses, primarily due to computer license and support expenses[294]. Stockholder Equity and Dividends - The Company declared a common stock cash dividend of $0.43 per share for the three months ended September 30, 2025, which is 28% of net income per diluted common share for that period[326]. - The Company's common equity Tier 1 capital ratio was 13.3% as of September 30, 2025, indicating it was well capitalized[323]. - The Company reported a decrease in net interest income of $4.71 million for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to changes in rates and volumes[307]. Stock Repurchase Program - During the three months ended September 30, 2025, the Company repurchased 165,116 shares at an average price of $60.33 per share, compared to 2,971 shares repurchased at an average price of $53.04 per share in the same period of 2024[327]. - For the nine months ended September 30, 2025, the Company repurchased 514,458 shares at an average price of $57.89 per share, up from 239,933 shares at an average price of $51.69 per share in the same period of 2024[328]. - As of September 30, 2025, approximately 929,000 shares remained available under the new stock repurchase program authorized in April 2025, which allows for the purchase of up to one million additional shares[329].

Acquisitions - The Partnership completed the acquisition of Parkland on October 31, 2025, with Parkland shareholders receiving 0.295 SunocoCorp units and C$19.80 for each Parkland share[108]. - The Partnership entered into an agreement to acquire TanQuid for approximately €500 million (approximately $587 million), expected to close in Q4 2025[112]. - In Q1 2025, the Partnership acquired fuel equipment and supply agreements for approximately $17 million, including $12 million in cash[113]. - In Q2 2025, the Partnership acquired 151 fuel distribution consignment sites for approximately $105 million, including $92 million in cash[114]. - In Q3 2025, the Partnership acquired approximately 70 fuel distribution consignment sites for total cash consideration of approximately $85 million[115]. Financial Performance - For the three months ended September 30, 2025, consolidated Adjusted EBITDA increased to $489 million, up $33 million from $456 million in the same period last year[125]. - For the nine months ended September 30, 2025, consolidated Adjusted EBITDA rose to $1.401 billion, an increase of $383 million compared to $1.018 billion in the prior year[125]. - Net income for the three months ended September 30, 2025, was $137 million, a significant increase from $2 million in the same period last year[125]. - Net income for the nine months ended September 30, 2025, decreased to $430 million from $733 million, primarily due to a $598 million gain on the West Texas Sale in April 2024[125]. - Revenues for the nine months ended September 30, 2025 were $16.071 billion, with a net income of $200 million[171]. Segment Performance - Segment Adjusted EBITDA for Fuel Distribution decreased by $21 million to $232 million for the three months ended September 30, 2025, and by $58 million to $658 million for the nine months[125]. - Segment Adjusted EBITDA for Pipeline Systems increased by $46 million to $182 million for the three months ended September 30, 2025, and by $342 million to $531 million for the nine months[125]. - Fuel Distribution segment profit for Q3 2025 was $329 million, up 101% from $164 million in Q3 2024[140]. - Pipeline Systems segment profit increased by 19% to $189 million in Q3 2025 from $159 million in Q3 2024[141]. - Terminals segment profit rose by 27% to $128 million in Q3 2025 compared to $101 million in Q3 2024[141]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2025 was $800 million, compared to $426 million for the same period in 2024[150]. - As of September 30, 2025, the company had $3.24 billion in cash and cash equivalents and $1.45 billion in borrowing capacity on its Credit Facility[147]. - The company expects to utilize cash from operations and Credit Facility capacity to fund growth capital expenditures for 2025[147]. - The unused availability on the Credit Facility as of September 30, 2025 was $1.45 billion, with a weighted average interest rate of 6.42%[166]. Debt and Financing - As of September 30, 2025, total consolidated indebtedness was $9.478 billion, an increase from $7.486 billion as of December 31, 2024[161]. - The Partnership issued $1.00 billion aggregate principal amount of 6.250% senior notes due 2033 in March 2025 to repay $600 million of senior notes due 2025[162]. - In September 2025, the Partnership issued $1.00 billion of 5.625% senior notes due 2031 and $900 million of 5.875% senior notes due 2034 to fund the Parkland Acquisition[163]. - Net cash provided by financing activities during 2025 was $2.94 billion, compared to net cash used in financing activities of $948 million in 2024[158]. Capital Expenditures - Capital expenditures for 2025 were $418 million, which included $310 million for growth capital and $108 million for maintenance capital[159]. - The company expects to spend approximately $150 million in maintenance capital expenditures and at least $400 million in growth capital for the full year 2025[160]. Accounting and Compliance - The Partnership's critical accounting estimates remain unchanged since the filing of the Annual Report on Form 10-K for the year ended December 31, 2024[174]. - The company was in compliance with all financial covenants as of September 30, 2025[166].