Financial Performance - Net income available to common shareholders increased by $27.9 million, or 19.2%, for the three months ended September 30, 2025, and by $54.6 million, or 12.9%, for the nine months ended September 30, 2025, compared to the same periods in 2024[144]. - Return on average assets improved to 1.32% for the three months ended September 30, 2025, compared to 1.16% for the same period in 2024[145]. - Return on average common equity increased to 16.72% for the three months ended September 30, 2025, compared to 15.48% for the same period in 2024[145]. - Net income for the Banking segment increased by $25.5 million, or 17.9%, for the three months ended September 30, 2025, and by $51.8 million, or 12.5%, for the nine months ended September 30, 2025, compared to the same periods in 2024[201]. - Net income for the Frost Wealth Advisors segment increased by $1.7 million, or 22.3%, for the three months ended September 30, 2025, and by $1.7 million, or 6.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[207]. Revenue and Income Sources - Net interest income for the three months ended September 30, 2025, was $441.6 million, up from $404.3 million in the same period of 2024, representing an increase of $37.3 million[145]. - Non-interest income increased by $11.9 million to $125.6 million for the three months ended September 30, 2025, compared to $113.7 million in the same period of 2024[145]. - Total non-interest income increased by $11.9 million, or 10.5%, for the three months and $30.7 million, or 9.1%, for the nine months ended September 30, 2025, compared to the same periods in 2024[175]. - Trust and investment management fees rose by $3.8 million, or 9.3%, for the three months and $9.9 million, or 8.2%, for the nine months ended September 30, 2025[176]. - Service charges on deposit accounts increased by $4.0 million, or 14.7%, for the three months and $10.9 million, or 13.9%, for the nine months ended September 30, 2025[178]. Expenses and Costs - Total non-interest expense increased by $29.1 million, or 9.0%, for the three months ended September 30, 2025, and by $81.1 million, or 8.4%, for the nine months ended September 30, 2025, compared to the same periods in 2024[192]. - Salaries and wages increased by $12.5 million, or 8.0%, for the three months ended September 30, 2025, and by $36.3 million, or 8.0%, for the nine months ended September 30, 2025, compared to the same periods in 2024[193]. - Employee benefits expense increased by $5.4 million, or 18.6%, for the three months ended September 30, 2025, and by $15.6 million, or 16.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[194]. - Other non-interest expense increased by $4.2 million, or 6.9%, for the three months ended September 30, 2025, and by $18.0 million, or 9.9%, for the nine months ended September 30, 2025, compared to the same periods in 2024[199]. Credit and Loans - Credit loss expense decreased by $12.6 million to $6.8 million for the three months ended September 30, 2025, compared to $19.4 million for the same period in 2024[145]. - Credit loss expense totaled $6.779 million for the three months and $32.978 million for the nine months ended September 30, 2025, compared to $19.386 million and $48.823 million in 2024[174]. - Total accruing past due loans amounted to $132.9 million, or 0.62% of total loans, as of September 30, 2025, compared to $117.5 million, or 0.57%, at December 31, 2024[221]. - The total allowance for credit losses on loans was $280.2 million as of September 30, 2025, representing 1.31% of total loans[229]. - The allowance allocated to commercial and industrial loans increased by $9.1 million to $96.7 million, or 1.55% of total commercial and industrial loans[229]. Assets and Deposits - Total assets increased to $51,344,145 as of September 30, 2025, from $49,240,256 a year earlier, representing a growth of approximately 4.3%[157]. - The company’s total deposits reached $42,071,151 for the quarter ending September 30, 2025, compared to $40,733,070 for the same period in 2024, reflecting an increase of approximately 3.3%[156]. - Interest-bearing deposits totaled $28,232,079 with a cost of 1.94% for the quarter ending September 30, 2025, down from $27,074,557 and 2.41% in the same quarter of 2024[156]. - The average balance of taxable securities rose to $13.32 billion, generating $372.36 million in income, compared to $12.27 billion and $296.64 million in the previous year[157]. - As of September 30, 2025, the company had approximately $7.3 billion held in an interest-bearing account at the Federal Reserve, with a total borrowing capacity with the FHLB of approximately $6.8 billion[260]. Dividends and Shareholder Equity - Dividends per common share increased to $1.00 for the three months ended September 30, 2025, compared to $0.95 for the same period in 2024[145]. - The company declared a year-to-date dividend of $2.95 per share for 2025, with a dividend payout ratio of 40.1%[259]. - Shareholders' equity increased to $4.5 billion at September 30, 2025, from $3.9 billion at December 31, 2024, driven by net income of $482.3 million[255]. - The accumulated other comprehensive income/loss component of shareholders' equity showed a net, after-tax, unrealized loss of $924.4 million at September 30, 2025, improved from a loss of $1.3 billion at December 31, 2024[256]. Economic Outlook - The average U.S. unemployment rate is projected to be 4.41% for the remainder of 2025, with a forecasted average of 4.44% in 2026[236]. - The average oil price is expected to be $64.61 per barrel during the remainder of 2025, decreasing to $61.73 per barrel in 2026[236]. - The projected average 10-year Treasury rate is 4.35% during the remainder of 2025 and 4.40% in 2026[236]. - The average Texas unemployment rate is projected to be 4.22% for the remainder of 2025, with a forecasted average of 4.17% in 2026[236].

Financial Data and Key Metrics Changes - In Q3 2025, Cullen/Frost Bankers, Inc. earned $172.7 million, or $2.67 per share, representing a 19.2% increase from $144.8 million, or $2.24 per share, in the same quarter last year [4] - Return on average assets and average common equity were 1.32% and 16.72%, respectively, compared to 1.16% and 15.48% in Q3 last year [4] Business Line Data and Key Metrics Changes - Average deposits increased to $42.1 billion, up 3.3% from $40.7 billion in Q3 last year, while average loans grew to $21.5 billion, a 6.8% increase from $20.1 billion in Q2 last year [5] - Consumer checking households grew by 5.4% year over year, marking the strongest quarter in new checking household growth since the post-Silicon Valley flight to safety [6] - The overall consumer real estate loan portfolio reached $3.5 billion, growing by $547 million year over year, or 18.7% [7] Market Data and Key Metrics Changes - Period-end commercial loans grew by 5.1% year over year, with energy loans up 17% and C&I loans up 6.8% [7] - New commercial relationships reached 3,082 year to date, setting the pace for the largest number of new relationships in a year [8] Company Strategy and Development Direction - The company continues to focus on organic growth through strategic expansion, which has generated positive results, with expansion deposits and loans standing at $2.9 billion and $2.1 billion, respectively [5] - Expansion locations contributed $0.09 of EPS accretion, with Houston 1.0 generating $0.14 per share [12] - The company is optimistic about its strategy and believes it is well-positioned to succeed in competitive markets [11] Management's Comments on Operating Environment and Future Outlook - Management noted increasing competition in the market but expressed confidence in their ability to compete effectively [29] - The company expects net interest income growth for the full year to fall in the range of 7% to 8%, with an anticipated improvement in net interest margin of about 12 to 15 basis points [18] - Credit quality remains strong, with non-performing assets declining to $47 million from $64 million last quarter [9] Other Important Information - The company utilized $69.3 million of its $150 million approved share repurchase plan to buy back approximately 549,000 shares [20] - The effective tax rate expectation for full year 2025 remains unchanged at 16% to 17% [19] Q&A Session Summary Question: Thoughts on NIM with Fed cuts coming - Management indicated that while Fed cuts may impact NIM, they expect it to remain relatively stable due to backbook repricing and upcoming maturities [24] Question: Expense growth moderation - Management is focused on reducing expense growth from high single digits to mid-single digits, but specific guidance for 2026 is not yet available [25] Question: Competitive pressures in the market - Management acknowledged increased competition but remains confident in their ability to compete effectively, citing a strong pipeline and customer relationships [28][30] Question: Capital generation and buyback strategy - Management clarified that stock buybacks do not indicate a lack of optimism for growth; rather, they are utilizing excess capital to benefit shareholders [43][44] Question: Loan growth trends and competition - Management noted that while competition exists, they expect to continue growing despite headwinds from commercial real estate paydowns [65][67]

Financial Performance - Net income available to common shareholders for Q3 2025 was $172.7 million, up 19.3% from $144.8 million in Q3 2024, with diluted EPS increasing to $2.67 from $2.24[2][3] - Non-interest income for Q3 2025 totaled $125.6 million, up 10.5% from $113.7 million in Q3 2024[6] - Non-interest expense was $352.5 million in Q3 2025, an increase of 9.0% from $323.4 million in Q3 2024[6][7] - Credit loss expense for Q3 2025 was $6.8 million, down from $19.4 million in Q3 2024, with net loan charge-offs of $6.6 million compared to $9.6 million a year earlier[7] - Net income available to common shareholders for Q3 2025 was $172.7 million, compared to $155.3 million in Q2 2025, reflecting a 11.2% increase[16] - Earnings per common share (diluted) for Q3 2025 was $2.67, up from $2.39 in Q2 2025, indicating a 11.8% growth[16] - Net income available to common shareholders reached $477,299, a 12.9% increase from $422,684 in 2024[20] - Earnings per common share (basic) improved to $7.36, up from $6.52, marking a growth of 12.8%[20] Income and Expenses - Net interest income on a taxable-equivalent basis for Q3 2025 was $463.7 million, a 9.1% increase from $425.2 million in Q3 2024[3][6] - Net interest income for Q3 2025 was $441.6 million, an increase from $429.6 million in Q2 2025, representing a 2.3% quarter-over-quarter growth[16] - Total non-interest income reached $125.6 million in Q3 2025, up from $117.3 million in Q2 2025, marking a 7.3% increase[16] - Net interest income for the nine months ended September 30, 2025, increased to $1,287,442, up from $1,191,094 in 2024, representing a growth of 8.1%[20] - Total non-interest income rose to $366,931, compared to $336,274 in the previous year, reflecting an increase of 9.1%[20] Loans and Deposits - Average loans increased by $1.4 billion, or 6.8%, to $21.5 billion in Q3 2025 compared to $20.1 billion in Q3 2024[3][5] - Average loans for Q3 2025 were $21.5 billion, up from $21.1 billion in Q2 2025, showing a 1.8% increase[18] - Loans averaged $21,103 million, up from $19,618 million, representing an increase of 7.6%[22] - Average deposits rose by $1.3 billion, or 3.3%, to $42.1 billion in Q3 2025 from $40.7 billion in Q3 2024[3][5] Capital and Ratios - The Common Equity Tier 1 capital ratio was 14.14% at the end of Q3 2025, exceeding Basel III minimum requirements[6] - Common Equity Tier 1 Risk-Based Capital Ratio improved to 14.14% in Q3 2025 from 13.98% in Q2 2025[18] - Common Equity Tier 1 Risk-Based Capital Ratio improved to 14.14%, compared to 13.55% in the previous year[22] Asset Management - Total assets as of Q3 2025 were $52.5 billion, an increase from $51.4 billion in Q2 2025, representing a 2.1% growth[18] - Total assets as of September 30, 2025, were $52,533, an increase from $51,008 in 2024, indicating a growth of 3.0%[22] Dividends - The board declared a fourth-quarter cash dividend of $1.00 per common share, payable on December 15, 2025[8] - Cash dividends per common share remained stable at $1.00 for both Q3 2025 and Q2 2025[16] - Cash dividends per common share increased to $2.95, compared to $2.79 in the previous year, reflecting a growth of 5.7%[20] Strategic Focus - Cullen/Frost is focused on expanding its market presence and enhancing digital banking tools to improve customer experience[4] Loan Quality - The allowance for credit losses on loans was $280.2 million, representing 1.31% of period-end loans in Q3 2025, consistent with Q2 2025[18] - Non-accrual loans decreased to $44.8 million in Q3 2025 from $62.4 million in Q2 2025, a reduction of 28.0%[18]

Core Points - Cullen/Frost Bankers, Inc. will host a conference call on October 30, 2025, to discuss its third quarter 2025 earnings [1] - The earnings release will be available at approximately 8:00 a.m. Central Time on the company's investor relations website [1] Conference Call Details - The conference call will begin at 1:00 p.m. CT and will be hosted by key executives including Phil Green, Dan Geddes, and A.B. Mendez [2] - A question and answer session will follow the prepared remarks, allowing analysts to engage with the executives [2] Access Information - The live webcast can be accessed via the company's investor relations website, and it will be archived for playback after 5:00 p.m. CT on the day of the call [3] - A domestic telephone number for the conference call is provided, with a recommendation to dial in 5 to 10 minutes early for efficient registration [3]

Core Insights - Cullen/Frost Bankers (CFR) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 5.41% [1][5] - For the last reported quarter, the company achieved earnings of $2.39 per share, surpassing the Zacks Consensus Estimate of $2.28 per share by 4.82% [2] - The previous quarter also saw a positive surprise, with actual earnings of $2.30 per share against an expected $2.17 per share, resulting in a 5.99% surprise [2] Earnings Estimates and Predictions - Estimates for Cullen/Frost have been increasing, driven by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +1.40% [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data indicating that nearly 70% of stocks with this combination exceed consensus estimates [6][8] - The Zacks Earnings ESP measures the Most Accurate Estimate against the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [7] Investment Considerations - While many companies may beat consensus EPS estimates, this does not always correlate with stock price increases, making it essential to consider the Earnings ESP before quarterly releases [9] - Investors are encouraged to utilize the Earnings ESP Filter to identify promising stocks ahead of earnings announcements [9]

Core Insights - The discussion highlights the impact of tariffs on inflation, particularly in the appliance sector, where prices increased by 3.3% in the first seven months of this year compared to a 6% decrease in the same period last year, indicating a direct correlation with tariffs [2] - There is a bullish sentiment towards gold as a diversifier in investment portfolios, with central banks purchasing approximately 1,000 tons of gold annually over the last three years, which is double the previous decade's pace [4] - Retail and institutional investors are increasingly turning to gold as a complementary diversifier, especially during market downturns, where gold has historically performed better than Bitcoin during significant S&P 500 declines [5][6] Economic Indicators - The current economic environment shows a higher 10-year yield following Federal Reserve cuts, contrasting with historical trends where yields would typically decrease during economic slowdowns [7][8] - Inflation remains elevated, with core PCE projected at 2.9% for August, and GDP growth is reported to be over 3% for the third quarter, indicating a robust economy despite a slowing labor market [9][10]

Core Viewpoint - Cullen/Frost (CFR) has experienced mixed results recently, with earnings performing slightly better than expected, yet the market response has been negative [1]. Financial Performance - The earnings of Cullen/Frost are tracking better than anticipated, indicating a potential for sustainable high-quality earnings [1]. Investment Strategy - The investment approach favored is a long-term, buy-and-hold strategy, particularly focusing on stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1].

Core Insights - SINTX Technologies has published a peer-reviewed study validating the use of silicon nitride (Si₃N₄) surface coatings on carbon fiber-reinforced polyetherketoneketone (CFR-PEKK) trauma plates, expanding its biomaterial platform into polymer-carbon-ceramic constructs [1][2][3] Group 1: Study Findings - The study demonstrates that SINTX's proprietary process can integrate silicon nitride into 3D-printed continuous carbon fiber PEKK composites without compromising flexural strength or stiffness [2] - Hybrid-manufactured CFR-PEKK trauma plates achieved flexural modulus values within the range of cortical bone (1.7–16.3 GPa), optimizing stress distribution for bone healing [6] - Si₃N₄ surface coatings had no statistically significant effect on flexural modulus or strength, confirmed by standardized four-point bending tests [6] Group 2: Clinical and Market Implications - The integration of silicon nitride with CFR-PEKK positions SINTX to address unmet needs in orthopedic trauma, spine, and custom surgical implants [3] - Si₃N₄'s osteoconductive and antimicrobial properties may enhance clinical outcomes by promoting osseointegration and reducing infection risk, which are critical in trauma and reconstructive surgery [6] - The findings support SINTX's commercialization strategy to develop differentiated implant solutions using hybrid manufacturing and surface bioactivation [5]

Core Viewpoint - Cullen/Frost Bankers, Inc. (CFR) reported a strong second-quarter 2025 performance with earnings per share of $2.39, reflecting an 8.1% year-over-year increase, surpassing estimates by 4.8% [1][8] Financial Performance - The company's net income available to common shareholders was $155.3 million, up 7.9% from the prior year [2] - Total revenues reached $567.8 million, a 7.4% increase year-over-year, exceeding estimates by 1.9% [3] - Net interest income (NII) increased by 6.9% to $450.6 million, with the net interest margin (NIM) expanding by 13 basis points to 3.67% [3] - Non-interest income improved by 5.5% to $117.2 million, driven by growth in all components except for other non-interest income [4] Expenses and Concerns - Non-interest expenses rose by 9.5% to $347.1 million, which was higher than estimates [4][8] - The allowance for credit losses on loans increased, raising investor concerns despite the earnings beat [2][8] Loan and Deposit Trends - Total loans as of June 30, 2025, were $21.2 billion, up 1.7% sequentially, while total deposits decreased by 1.7% to $41.7 billion [5] Credit Quality - Credit loss expenses were recorded at $13.1 million, down from $15.8 million in the prior year [6] - The allowance for credit losses on loans was 1.31%, an increase of 3 basis points year-over-year [6] Capital Ratios and Profitability - The Tier 1 risk-based capital ratio improved to 14.43% from 13.82% year-over-year [7] - Return on average assets and return on average common equity were 1.20% and 15.59%, respectively, showing slight improvements from the prior year [9] Dividend Announcement - The company declared a third-quarter cash dividend of $1.00 per common share, marking a 5.3% increase from the previous payout [10] Strategic Outlook - The company is positioned for revenue growth due to steady improvements in NII and non-interest income, supported by a solid capital position [11]

Part I - Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited statements show a slight asset decrease to $51.4 billion, while Q2 net income rose to $155.3 million Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $51,409,360 | $52,520,259 | -2.1% | | Total Cash and Cash Equivalents | $7,116,087 | $10,234,258 | -30.5% | | Net Loans | $20,976,692 | $20,484,662 | +2.4% | | Total Deposits | $41,683,614 | $42,722,748 | -2.4% | | Total Liabilities | $47,209,050 | $48,621,671 | -2.9% | | Total Shareholders' Equity | $4,200,310 | $3,898,588 | +7.7% | Consolidated Income Statement Highlights (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $429,604 | $396,712 | $845,824 | $786,763 | | Credit Loss Expense | $13,129 | $15,787 | $26,199 | $29,437 | | Non-interest Income | $117,273 | $111,190 | $241,284 | $222,567 | | Non-interest Expense | $347,128 | $316,964 | $695,194 | $643,181 | | Net Income | $157,003 | $145,499 | $307,925 | $281,189 | | Net Income Available to Common Shareholders | $155,334 | $143,830 | $304,587 | $277,851 | | Diluted EPS | $2.39 | $2.21 | $4.69 | $4.27 | - Q2 2025 comprehensive income rose to **$145.7 million** from **$112.4 million** YoY, while six-month comprehensive income improved to **$419.5 million** from **$91.1 million** due to a positive swing in other comprehensive income[10](index=10&type=chunk) - Total shareholders' equity increased from **$3.90 billion** to **$4.20 billion**, driven by net income of **$307.9 million** and other comprehensive income of **$111.5 million**, offset by **$129.9 million** in dividends[13](index=13&type=chunk) - Cash dividends per common share increased to **$1.00** in Q2 2025 from **$0.92** in Q2 2024, and six-month dividends rose to **$1.95** from **$1.84**[12](index=12&type=chunk)[13](index=13&type=chunk) Six Months Ended June 30, Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $(155,339) | $618,013 | | Net Cash from Investing Activities | $(1,876,213) | $(65,589) | | Net Cash from Financing Activities | $(1,086,619) | $(2,094,916) | | **Net Change in Cash and Cash Equivalents** | **$(3,118,171)** | **$(1,542,492)** | - The significant decrease in cash was driven by net cash used in investing activities, including **$8.3 billion** in securities purchases, and financing activities, including a **$1.0 billion** net decrease in deposits[14](index=14&type=chunk) - Notes detail accounting policies, financial instruments, credit quality, capital adequacy, and segment performance, including key portfolio and risk disclosures[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Higher net interest income drove a 9.6% YoY increase in six-month net income, with the net interest margin expanding to 3.63% Key Performance Metrics | Metric | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Net Income Available to Common Shareholders | $304.6M | $277.9M | | Diluted EPS | $4.69 | $4.27 | | Return on Average Assets | 1.20% | 1.14% | | Return on Average Common Equity | 15.59% | 16.13% | - The six-month net income increase was driven by higher net interest income (**$59.1M**), non-interest income (**$18.7M**), and lower credit loss expense (**$3.2M**), partially offset by higher non-interest expense (**$52.0M**)[141](index=141&type=chunk) - Q2 2025 taxable-equivalent net interest income increased **7.9% YoY** to **$450.6 million**, with the net interest margin expanding to **3.67%**[152](index=152&type=chunk)[155](index=155&type=chunk) - NII growth was driven by lower deposit costs and higher asset volumes, partially offset by lower yields on loans and Federal Reserve deposits[157](index=157&type=chunk)[158](index=158&type=chunk) - As of June 30, 2025, **40.6%** of the loan portfolio had a fixed interest rate, with the remainder tied to SOFR and the prime rate[144](index=144&type=chunk) - Six-month credit loss expense decreased to **$26.2 million** in 2025 from **$29.4 million** in 2024, primarily related to loans[170](index=170&type=chunk) - The allowance for credit losses on loans increased to **$277.8 million**, remaining stable at **1.31%** of total loans[227](index=227&type=chunk) - Management used a deteriorating economic forecast and applied significant qualitative overlays (**$152.9 million**) for risks like office building exposure[227](index=227&type=chunk)[233](index=233&type=chunk)[240](index=240&type=chunk) - Six-month non-interest income increased **8.4%** to **$241.3 million**, with key drivers including[171](index=171&type=chunk]: - **Trust and investment management fees:** Increased **7.6%** to **$86.6 million** as trust assets reached **$50.9 billion**[172](index=172&type=chunk) - **Service charges on deposit accounts:** Increased **13.5%** to **$57.8 million**[174](index=174&type=chunk) - **Insurance commissions and fees:** Increased **8.3%** to **$34.9 million**[178](index=178&type=chunk) - Six-month non-interest expense increased **8.1%** to **$695.2 million**, with key drivers including[187](index=187&type=chunk]: - **Salaries and wages:** Increased **7.9%** to **$323.0 million** due to merit increases and higher headcount[188](index=188&type=chunk) - **Employee benefits:** Increased **15.8%** to **$75.0 million**[189](index=189&type=chunk) - **Technology, furniture, and equipment:** Increased **13.7%** to **$80.7 million** from higher cloud and software costs[193](index=193&type=chunk) - Total loans grew **2.4%** to **$21.3 billion** since year-end 2024, with growth in energy, commercial real estate, and consumer real estate loans[211](index=211&type=chunk) - Non-accrual loans decreased to **$62.4 million** (**0.29%** of total loans) from **$78.9 million** (**0.38%** of total loans) at year-end 2024[220](index=220&type=chunk)[221](index=221&type=chunk) - The company maintains a strong capital and liquidity position, with all regulatory capital ratios significantly exceeding 'well-capitalized' minimums[252](index=252&type=chunk)[257](index=257&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with a +100 bps rate shock projected to increase net interest income by 1.2% Interest Rate Sensitivity on Net Interest Income (Next 12 Months) | Rate Change | NII Variance (as of June 30, 2025) | NII Variance (as of Dec 31, 2024) | | :--- | :--- | :--- | | +200 bps | +2.4% | +2.8% | | +100 bps | +1.2% | +1.5% | | -100 bps | -1.0% | -1.1% | | -200 bps | -2.2% | -2.2% | - Model simulations indicate the balance sheet was slightly less asset-sensitive at June 30, 2025, compared to year-end 2024[263](index=263&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the period end[266](index=266&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal actions are not expected to have a material adverse impact on the company's financial statements - Management does not expect ongoing legal proceedings to materially impact the company's financial statements[267](index=267&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been identified since the 2024 Annual Report on Form 10-K - No material changes in risk factors were identified since the 2024 Form 10-K filing[268](index=268&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) A $150 million stock repurchase program is in place, with no shares repurchased under the plan during the quarter - The board authorized a **$150.0 million** stock repurchase program in January 2025, which remains fully available[270](index=270&type=chunk) - During Q2 2025, **606 shares** were repurchased solely in connection with the vesting of stock compensation awards[270](index=270&type=chunk)[271](index=271&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) The company maintains an Insider Trading Policy, and no directors or officers have established Rule 10b5-1 trading arrangements - The company has an established Insider Trading Policy for its directors, officers, and employees[274](index=274&type=chunk) - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were reported for the period[274](index=274&type=chunk)