Commerce Bancshares, Inc. Reports First Quarter Earnings Per Share of $.96

Commerce Bancshares, Inc. Reports First Quarter Earnings Per Share of $.96 KANSAS CITY, Mo.--( BUSINESS WIRE)--Commerce Bancshares, Inc. announced earnings of $.96 per share for the three months ended March 31, 2026, compared to $.93 per share in the same quarter last year and $1.01 per share in the fourth quarter of 2025. Net income for the first quarter of 2026 amounted to $141.6 million, compared to $131.6 million in the first quarter of 2025 and $140.7 million in the prior quarter.

In making this announcement, John Kemper, Chief Executive Officer, said, “We delivered a strong first quarter highlighted by solid profitability and continued momentum across our diversified fee businesses. This was also our first full quarter incorporating FineMark, a strategic investment that meaningfully enhances our private banking and wealth management capabilities and expands our presence in highly attractive growth markets. Our overall performance reflected the strength of our franchise, supported by resilient net interest income, continued trust fee growth, and solid returns across our core profitability measures.

Mr. Kemper continued, “Our return on average assets remained solid at 1.62% while maintaining excellent credit quality, with non-accrual loans at just .05% of total loans. Non-interest income was $175.9 million and comprised 37% of total revenue.”

“We also remained focused on thoughtful capital deployment, returning excess capital to shareholders through the repurchase of more than $84 million of common stock this quarter while maintaining a conservative capital posture that underpins our long‑term strength and flexibility. As we look ahead, Commerce is well positioned to navigate an uncertain economic environment with discipline and confidence, balancing near‑term conditions with continued investment in long‑term growth. Our strategy remains centered on delivering consistent performance and creating durable, long‑term value for our shareholders."

First Quarter 2026 Financial Highlights:

Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services through its subsidiaries, including payment solutions, wealth management and securities brokerage. Commerce Bank, its primary subsidiary, brings over 160 years of experience helping individuals and businesses through high-touch service and sophisticated, personalized financial solutions. Commerce maintains an extensive network of banking centers, wealth offices, and ATMs throughout the Midwest, as well as commercial offices in 11 states and offers payment solutions nationwide. With the acquisition of FineMark Holdings, Inc., Commerce builds on its existing private banking and wealth management presence in Florida and adds wealth offices in Arizona and South Carolina. Customers can conveniently access their account 24/7 using mobile and online platforms, as well as a customer service line.

This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

FINANCIAL HIGHLIGHTS

For the Three Months Ended

(Unaudited)

(Dollars in thousands, except per share data)

Mar. 31,

2026

Dec. 31,

2025

Mar. 31,

2025

FINANCIAL SUMMARY

Net interest income

$299,840

$283,152

$269,102

Non-interest income

175,851

166,208

158,949

Total revenue

475,691

449,360

428,051

Investment securities gains (losses)

11,647

2,929

(7,591

)

Provision for credit losses

10,960

15,993

14,487

Non-interest expense

291,126

252,995

238,376

Income before taxes

185,252

183,301

167,597

Income taxes

40,881

40,620

36,964

Non-controlling interest expense (income)

2,748

2,019

(959

)

Net income attributable to Commerce Bancshares, Inc.

$141,623

$140,662

$131,592

Earnings per common share:

Net income — basic

$0.96

$1.01

$0.93

Net income — diluted

$0.96

$1.01

$0.93

Effective tax rate

22.40

22.41

21.93

Fully-taxable equivalent net interest income

$302,204

$285,830

$271,416

Average total interest earning assets (1)

$34,130,985

$31,468,907

$30,901,110

Diluted wtd. average shares outstanding

145,856,608

137,599,105

139,725,305

RATIOS

Average loans to deposits (2)

73.44

69.01

69.38

Return on total average assets

1.62

1.73

1.69

Return on average equity (3)

13.22

14.70

15.82

Non-interest income to total revenue

36.97

36.99

37.13

Efficiency ratio (4)

60.00

56.23

55.61

Net yield on interest earning assets

3.59

3.60

3.56

EQUITY SUMMARY

Cash dividends per share

$.275

$.262

Cash dividends on common stock

$40,355

$36,236

$36,866

Book value per share (5)

$29.64

$27.75

$24.94

Market value per share (5)

$49.20

$52.34

$59.27

High market value per share

$56.06

$57.36

$65.59

Low market value per share

$46.99

$48.69

$56.00

Common shares outstanding (5)

145,979,271

137,457,138

140,277,275

Tangible common equity to tangible assets (6)

11.07

11.11

10.33

Tier I leverage ratio

12.60

12.65

12.29

OTHER QTD INFORMATION

Number of bank/ATM locations

249

236

242

Full-time equivalent employees

4,960

4,667

4,662

(1) Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities.

(2) Includes loans held for sale.

(3) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.

(4) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.

(5) As of period end.

(6) The tangible common equity ratio is a non-gaap ratio and is calculated as stockholders’ equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).

All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2025.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

For the Three Months Ended

Mar. 31,

2026

Dec. 31,

2025

Sep. 30,

2025

Jun. 30,

2025

Mar. 31,

2025

Interest income

$396,507

$373,617

$374,105

$371,636

$364,365

Interest expense

96,667

90,465

94,648

91,489

95,263

Net interest income

299,840

283,152

279,457

280,147

269,102

Provision for credit losses

10,960

15,993

20,061

5,597

14,487

Net interest income after credit losses

288,880

267,159

259,396

274,550

254,615

NON-INTEREST INCOME

Trust fees

71,049

62,125

58,412

55,571

56,592

Bank card transaction fees

45,585

46,761

45,551

46,362

45,593

Deposit account charges and other fees

28,578

27,949

27,427

26,248

26,622

Consumer brokerage services

5,444

5,185

6,698

5,383

4,785

Capital market fees

5,338

4,230

5,138

6,175

5,112

Loan fees and sales

3,243

3,594

3,465

3,419

3,404

Other

16,614

16,364

14,820

22,455

16,841

Total non-interest income

175,851

166,208

161,511

165,613

158,949

INVESTMENT SECURITIES GAINS (LOSSES), NET

11,647

2,929

7,885

437

(7,591

)

NON-INTEREST EXPENSE

Salaries and employee benefits

180,787

162,889

157,461

155,025

153,078

Data processing and software

38,328

35,273

33,555

32,904

32,238

Professional and other services

18,792

14,573

11,284

12,973

10,026

Net occupancy

15,308

13,172

13,474

13,654

14,020

Marketing

6,957

6,201

6,670

5,974

5,843

Equipment

5,671

5,682

5,421

5,157

5,248

Supplies and communication

5,238

4,841

4,837

4,962

5,046

Deposit Insurance

3,914

(81

)

3,074

3,312

3,744

Other

16,131

10,445

8,242

10,476

9,133

Total non-interest expense

291,126

252,995

244,018

244,437

238,376

Income before income taxes

185,252

183,301

184,774

196,163

167,597

Less income taxes

40,881

40,620

41,152

42,400

36,964

Net income

144,371

142,681

143,622

153,763

130,633

Less non-controlling interest expense (income)

2,748

2,019

2,104

1,284

(959

)

Net income attributable to Commerce Bancshares, Inc.

$141,623

$140,662

$141,518

$152,479

$131,592

Net income per common share — basic

$0.96

$1.01

$1.09

$0.93

Net income per common share — diluted

$0.96

$1.01

$1.09

$0.93

OTHER INFORMATION

Return on total average assets

1.62

1.73

1.78

1.95

1.69

Return on average equity (1)

13.22

14.70

15.26

17.40

15.82

Efficiency ratio (2)

60.00

56.23

55.26

54.77

55.61

Effective tax rate

22.40

22.41

22.53

21.76

21.93

Net yield on interest earning assets

3.59

3.60

3.64

3.70

3.56

Fully-taxable equivalent net interest income

$302,204

$285,830

$281,770

$282,428

$271,416

(1) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.

(2) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - PERIOD END

(Unaudited)

(In thousands)

Mar. 31,

2026

Dec. 31,

2025

Mar. 31,

2025

ASSETS

Loans

Business

$6,750,356

$6,439,380

$6,239,276

Real estate — construction and land

1,581,789

1,438,012

1,419,572

Real estate — business

4,059,539

3,674,567

3,628,635

Real estate — personal

4,407,606

3,053,435

3,047,809

Consumer

2,475,353

2,196,822

2,116,160

Revolving home equity

619,178

375,159

356,675

Consumer credit card

557,733

589,694

568,163

Overdrafts

9,510

4,194

3,131

Total loans

20,461,064

17,771,263

17,379,421

Allowance for credit losses on loans

(198,605

)

(179,468

)

(167,031

)

Net loans

20,262,459

17,591,795

17,212,390

Loans held for sale

2,081

4,329

2,890

Investment securities:

Available for sale debt securities

8,646,127

9,095,513

9,264,947

Trading debt securities

44,329

40,080

56,569

Equity securities

56,193

57,354

58,182

Other securities

248,339

230,459

221,370

Total investment securities

8,994,988

9,423,406

9,601,068

Federal funds sold

630

—

Securities purchased under agreements to resell

850,000

Interest earning deposits with banks

3,270,046

2,744,393

2,756,521

Cash and due from banks

572,588

803,239

517,332

Premises and equipment — net

527,211

485,700

476,921

Goodwill

253,805

146,539

Other intangible assets — net

145,985

13,311

13,441

Other assets

837,463

852,377

787,862

Total assets

$35,717,256

$32,915,089

$32,364,964

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:

Non-interest bearing

$8,058,024

$8,205,711

$7,518,243

Savings, interest checking and money market

17,877,836

15,047,406

15,975,283

Certificates of deposit of less than $100,000

1,032,114

1,023,406

985,878

Certificates of deposit of $100,000 and over

1,416,345

1,363,053

1,362,393

Total deposits

28,384,319

25,639,576

25,841,797

Federal funds purchased and securities sold under agreements to repurchase

2,576,723

2,989,641

2,400,036

Other borrowings

8,045

12,798

17,743

Other liabilities

421,771

458,302

606,986

Total liabilities

31,390,858

29,100,317

28,866,562

Stockholders’ equity:

Common stock

742,606

692,944

676,054

Capital surplus

3,986,353

3,522,292

3,381,960

Retained earnings

233,094

131,826

140,220

Treasury stock

(120,692

)

(48,001

)

(85,871

)

Accumulated other comprehensive income (loss)

(539,592

)

(507,690

)

(634,576

)

Total stockholders’ equity

4,301,769

3,791,371

3,477,787

Non-controlling interest

24,629

23,401

20,615

Total equity

4,326,398

3,814,772

3,498,402

Total liabilities and equity

$35,717,256

$32,915,089

$32,364,964

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

AVERAGE BALANCE SHEETS

(Unaudited)

(In thousands)

For the Three Months Ended

Mar. 31,

2026

Dec. 31,

2025

Sep. 30,

2025

Jun. 30,

2025

Mar. 31,

2025

ASSETS:

Loans:

Business

$6,687,131

$6,317,805

$6,230,019

$6,247,252

$6,106,185

Real estate — construction and land

1,592,328

1,408,339

1,396,977

1,430,758

1,415,349

Real estate — business

4,045,670

3,730,679

3,715,597

3,692,405

3,667,833

Real estate — personal

4,417,131

3,058,834

3,059,913

3,048,895

3,045,876

Consumer

2,421,541

2,200,500

2,160,637

2,148,666

2,082,360

Revolving home equity

611,101

372,194

360,820

362,312

358,684

Consumer credit card

555,697

565,896

563,351

559,858

560,534

Overdrafts

7,144

6,592

7,037

5,663

5,860

Total loans

20,337,743

17,660,839

17,494,351

17,495,809

17,242,681

Allowance for credit losses on loans

(201,769

)

(175,129

)

(164,623

)

(166,391

)

(162,186

)

Net loans

20,135,974

17,485,710

17,329,728

17,329,418

17,080,495

Loans held for sale

2,361

2,532

2,369

1,741

1,584

Investment securities:

U.S. government and federal agency obligations

3,190,796

3,197,720

2,693,327

2,623,896

2,586,944

Government-sponsored enterprise obligations

54,800

54,955

55,014

55,038

55,330

State and municipal obligations

709,332

724,737

756,137

780,063

804,363

Mortgage-backed securities

4,211,068

4,316,799

4,461,056

4,641,295

4,788,102

Asset-backed securities

1,201,187

1,336,859

1,466,770

1,585,364

1,655,701

Other debt securities

176,676

196,633

204,281

237,385

258,136

Unrealized gain (loss) on debt securities

(630,778

)

(645,595

)

(766,025

)

(838,028

)

(935,054

)

Total available for sale debt securities

8,913,081

9,182,108

8,870,560

9,085,013

9,213,522

Trading debt securities

97,801

61,160

56,032

51,131

38,298

Equity securities

50,378

52,387

50,823

54,472

57,028

Other securities

250,641

227,395

220,041

216,560

233,461

Total investment securities

9,311,901

9,523,050

9,197,456

9,407,176

9,542,309

Federal funds sold

862

—

158

2,089

Securities purchased under agreements to resell

850,000

788,889

Interest earning deposits with banks

2,997,340

2,786,891

2,422,441

2,036,803

2,388,504

Other assets

2,074,538

1,700,147

1,709,247

1,671,763

1,698,296

Total assets

$35,372,976

$32,348,330

$31,511,264

$31,297,059

$31,502,166

LIABILITIES AND EQUITY:

Non-interest bearing deposits

$7,874,488

$7,592,431

$7,345,156

$7,356,882

$7,298,686

Savings

1,301,768

1,261,285

1,283,671

1,303,391

1,294,174

Interest checking and money market

16,019,323

14,335,613

13,740,770

13,901,634

13,906,827

Certificates of deposit of less than $100,000

1,035,130

1,015,617

991,877

984,845

991,826

Certificates of deposit of $100,000 and over

1,465,168

1,389,149

1,416,572

1,371,428

1,363,655

Total deposits

27,695,877

25,594,095

24,778,046

24,918,180

24,855,168

Borrowings:

Federal funds purchased

141,888

130,487

130,622

129,891

128,340

Securities sold under agreements to repurchase

2,674,484

2,429,746

2,519,660

2,371,031

2,723,227

Other borrowings

90,796

1,230

1,860

2,748

616

Total borrowings

2,907,168

2,561,463

2,652,142

2,503,670

2,852,183

Other liabilities

423,998

395,336

402,265

360,204

421,370

Total liabilities

31,027,043

28,550,894

27,832,453

27,782,054

28,128,721

Equity

4,345,933

3,797,436

3,678,811

3,515,005

3,373,445

Total liabilities and equity

$35,372,976

$32,348,330

$31,511,264

$31,297,059

$31,502,166

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

AVERAGE RATES

(Unaudited)

For the Three Months Ended

Mar. 31,

2026

Dec. 31,

2025

Sep. 30,

2025

Jun. 30,

2025

Mar. 31,

2025

ASSETS:

Loans:

Business (1)

5.41

5.48

5.72

5.75

Real estate — construction and land

6.59

7.05

7.37

7.39

7.30

Real estate — business

5.75

5.76

5.92

5.88

Real estate — personal

4.82

4.38

4.34

4.30

4.28

Consumer

6.20

6.23

6.42

6.43

6.52

Revolving home equity

7.29

7.25

7.94

7.41

7.26

Consumer credit card

12.64

12.81

13.21

13.18

13.49

Overdrafts

—

Total loans

5.79

5.84

6.02

6.01

6.02

Loans held for sale

4.98

5.01

6.03

9.22

5.89

Investment securities:

U.S. government and federal agency obligations

3.60

4.07

4.06

4.28

4.09

Government-sponsored enterprise obligations

2.40

2.36

2.35

2.38

2.40

State and municipal obligations (1)

2.10

2.06

2.05

Mortgage-backed securities

2.12

2.05

2.01

2.08

Asset-backed securities

3.80

3.78

3.69

3.73

3.46

Other debt securities

3.17

2.97

2.94

2.69

Total available for sale debt securities

2.85

2.96

2.86

2.95

2.83

Trading debt securities (1)

3.14

4.61

4.67

4.63

4.97

Equity securities (1)

6.49

6.35

6.09

6.26

8.02

Other securities (1)

6.81

9.08

7.29

11.63

7.85

Total investment securities

2.97

3.12

2.99

3.16

2.98

Federal funds sold

3.29

—

5.08

5.63

Securities purchased under agreements to resell

4.03

4.00

4.02

3.81

Interest earning deposits with banks

3.70

3.95

4.45

4.46

Total interest earning assets

4.74

4.86

4.90

4.81

LIABILITIES AND EQUITY:

Interest bearing deposits:

Savings

.07

.05

Interest checking and money market

1.48

1.45

1.54

1.49

1.52

Certificates of deposit of less than $100,000

3.17

3.25

3.33

3.44

3.65

Certificates of deposit of $100,000 and over

3.35

3.60

3.71

3.78

3.96

Total interest bearing deposits

1.61

1.62

1.71

1.67

1.72

Borrowings:

Federal funds purchased

3.66

3.92

4.34

4.37

Securities sold under agreements to repurchase

2.39

2.54

2.88

2.85

2.86

Other borrowings

3.88

.65

1.71

3.79

.66

Total borrowings

2.50

2.61

2.95

2.93

Total interest bearing liabilities

1.72

1.75

1.87

1.83

1.89

Net yield on interest earning assets

3.59

3.60

3.64

3.70

3.56

(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

CREDIT QUALITY

For the Three Months Ended

(Unaudited)

(In thousands, except ratios)

Mar. 31,

2026

Dec. 31,

2025

Sep. 30,

2025

Jun. 30,

2025

Mar. 31,

2025

ALLOWANCE FOR CREDIT LOSSES ON LOANS

Balance at beginning of period

$179,468

$175,671

$165,260

$167,031

$162,742

Initial allowance for credit loss at acquisition

22,828

—

Provision for credit losses on loans

11,283

13,660

20,739

7,919

15,095

Net charge-offs (recoveries):

Commercial portfolio:

Business

241

222

826

432

Real estate — construction and land

—

Real estate — business

5,405

(24

)

(23

)

(425

)

377

5,646

214

803

423

Personal banking portfolio:

Consumer credit card

7,139

6,488

6,515

7,085

6,967

Consumer

1,768

2,498

2,310

2,168

2,852

Overdraft

413

485

432

360

495

Real estate — personal

180

269

Revolving home equity

)

9,328

9,649

9,525

9,659

10,383

Total net loan charge-offs

14,974

9,863

10,328

9,690

10,806

Balance at end of period

$198,605

$179,468

$175,671

$165,260

$167,031

LIABILITY FOR UNFUNDED LENDING COMMITMENTS

$17,699

$17,660

$15,327

$16,005

$18,327

NET CHARGE-OFF RATIOS (1)

Commercial portfolio:

Business

.01

.05

.03

—

Real estate — construction and land

—

.01

—

Real estate — business

.54

—

(.05

)

.04

.19

.01

.03

—

.02

Personal banking portfolio:

Consumer credit card

5.21

4.55

4.59

5.08

5.04

Consumer

.30

.45

.42

.40

.56

Overdraft

23.45

29.19

24.36

25.50

34.26

Real estate — personal

—

.02

.03

—

.01

Revolving home equity

—

.01

—

.47

.62

.61

.63

.70

Total

.30

.22

.23

.22

.25

CREDIT QUALITY RATIOS

Non-accrual loans to total loans

.05

.09

.11

.13

Allowance for credit losses on loans to total loans

.97

1.01

.99

.94

.96

NON-ACCRUAL AND PAST DUE LOANS

Non-accrual loans:

Business

$201

$123

$255

$410

$1,112

Real estate — construction and land

—

191

426

220

Real estate — business

9,369

14,785

14,940

15,109

18,305

Real estate — personal

1,316

842

867

948

989

Revolving home equity

—

1,977

Total

10,920

15,750

16,253

18,870

22,603

Loans past due 90 days and still accruing interest

$22,824

$24,659

$21,536

$25,303

$19,417

(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).

COMMERCE BANCSHARES, INC.

Management Discussion of First Quarter Results

March 31, 2026

For the quarter ended March 31, 2026, net income amounted to $141.6 million, compared to $140.7 million in the previous quarter and $131.6 million in the same quarter last year. The increase in net income over the previous quarter was primarily the result of higher net interest income, non-interest income, gains on investment securities, and a decrease in the provision for credit losses, partly offset by higher non-interest expense. The net yield on interest earning assets decreased one basis point from the previous quarter to 3.59%. Average loans and deposits increased $2.7 billion and $2.1 billion, respectively, while available for sale investment securities, at fair value, decreased $269.0 million compared to the prior quarter. For the quarter, the return on average assets was 1.62%, the return on average equity was 13.22%, and the efficiency ratio was 60.0%.

On January 1, 2026, the Company closed on its previously announced acquisition of FineMark Holdings, Inc. (“FineMark”), Ft. Meyers, Florida, with 13 banking locations in Florida, Arizona, and South Carolina. The acquisition added total assets of approximately $3.9 billion, including loans of $2.7 billion, total deposits of $3.1 billion and assets under administration of $8.7 billion.

Balance Sheet Review

During the 1 st quarter of 2026, average loans totaled $20.3 billion, an increase of $2.7 billion over the prior quarter, and an increase of $3.1 billion over the same quarter last year. The increase in average balances over both periods was primarily due to the acquisition of FineMark, which added $2.7 billion in loan balances. Compared to the previous quarter, average balances of personal real estate, business, business real estate, revolving home equity and consumer loans grew $1.4 billion, $369.3 million, $315.0 million, $238.9 million and $221.0 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $26.2 million, compared to $27.0 million in the prior quarter.

Total average available for sale debt securities decreased $269.0 million from the previous quarter to $8.9 billion, at fair value. The decrease in available for sale debt securities was mainly the result of lower average balances of mortgage-backed and asset-backed securities. During the 1 st quarter of 2026, the unrealized loss on available for sale debt securities increased $40.7 million to $687.5 million, at period end. Also, during the 1 st quarter of 2026, maturities and pay downs of available for sale debt securities were $410.7 million. On March 31, 2026, the duration of the available for sale investment portfolio was 4.2 years, and maturities and pay downs of approximately $1.2 billion are expected to occur during the next 12 months.

Average interest earning deposits with banks increased $210.4 million over average balances in the previous quarter, and the average balances within other assets increased $374.4 million mainly due to increases in goodwill, intangible assets, and premises and equipment related to the Company's acquisition of FineMark.

Total average deposits increased $2.1 billion this quarter over the previous quarter. The increase in average balances was primarily due to the acquisition of FineMark, which added $2.7 billion of interest bearing and $425 million of non-interest bearing deposit balances. Shortly after the acquisition, the Company moved $1.0 billion of FineMark’s high-cost, money market deposit balances off-balance sheet. Compared to the prior quarter, average interest checking and money market deposits and demand deposits increased $1.7 billion and $282.1 million, respectively. Additionally, average balances of certificates of deposit of $100,000 and over increased $76.0 million compared to the prior quarter, mainly due to deposit balances acquired from FineMark. Compared to the previous quarter, total average wealth and retail banking deposits grew $2.3 billion and $251.0 million, respectively, while commercial deposits declined $408.3 million. The average loans to deposits ratio was 73.4% in the current quarter and 69.0% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.7 billion, increased $345.7 million to $2.9 billion in the 1 st quarter of 2026. Federal Home Loan Bank advances of $350.0 million, which the Company acquired from the FineMark acquisition, were paid off in January 2026.

Net Interest Income

Net interest income in the 1 st quarter of 2026 amounted to $299.8 million, an increase of $16.7 million over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $16.4 million over the previous quarter to $302.2 million. The increase in net interest income was mostly due to the acquisition of FineMark on January 1, 2026. Accretion income on FineMark’s loans resulting from purchase accounting adjustments totaled $6.9 million. The net yield (FTE) on earning assets decreased to 3.59%, from 3.60% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) increased $30.4 million, mostly due to higher average balances in all loan categories, except consumer credit cards, and higher average rates earned on personal real estate loans, partly offset by lower average rates earned on business, construction, and business real estate loans. The average yield (FTE) on the loan portfolio decreased five basis points to 5.79% this quarter.

Interest income on investment securities (FTE) decreased $7.3 million compared to the prior quarter, mostly due to lower average rates earned on U.S. government and federal agency obligations and other securities and lower average balances of asset-backed and mortgage-backed securities. Interest income earned on U.S. government and federal agency obligations included the impact of a $3.8 million decrease in inflation income from Treasury inflation-protected securities compared to the previous quarter. In the prior quarter, interest on other securities included dividend income of $2.1 million related to a private equity investment that did not reoccur in the current quarter. Additionally, the Company recorded a $940 thousand adjustment to premium amortization on March 31, 2026, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $731 thousand adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 2.97% in the current quarter, compared to 3.12% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks decreased $401 thousand as lower average rates more than offset higher average balances. Interest expense increased $6.2 million over the previous quarter, mainly due to higher average interest bearing deposit balances, partly offset by lower average rates paid on interest bearing deposit balances. Interest expense on deposits increased $5.1 million mostly due to higher average interest checking and money market deposit account balances. The average rate paid on interest bearing deposits totaled 1.61% in the current quarter compared to 1.62% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.72% in the current quarter and 1.75% in the prior quarter.

Non-Interest Income

In the 1 st quarter of 2026, total non-interest income amounted to $175.9 million, an increase of $16.9 million, or 10.6%, over the same period last year and an increase of $9.6 million over the prior quarter. The increase in non-interest income compared to the same period last year was mainly due to higher trust fees and deposit account fees. The increase in non-interest income compared to the prior quarter was mainly due to higher trust fees.

Total net bank card fees in the current quarter were flat compared to the same period last year and decreased $1.2 million compared to the prior quarter. Net corporate card fees were flat compared to the same quarter last year. Net merchant fees decreased $184 thousand, or 3.2%, while net debit card fees increased $301 thousand, or 2.9%, mainly due to higher interchange income. Net credit card fees decreased $173 thousand, or 4.8%, mostly due to higher rewards expense. Total net bank card fees this quarter were comprised of fees on corporate card ($26.0 million), debit card ($10.6 million), merchant ($5.6 million) and credit card ($3.4 million) transactions.

In the current quarter, trust fees increased $14.5 million, or 25.5%, over the same period last year, and increased $8.9 million, or 14.4%, over the prior quarter, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $2.0 million, or 7.3%, mostly due to higher corporate cash management fees.

For the 1 st quarter of 2026, non-interest income comprised 37.0% of the Company’s total revenue.

Investment Securities Gains and Losses

The Company recorded net securities gains of $11.6 million in the current quarter, compared to net gains of $2.9 million in the prior quarter and net securities losses of $7.6 million in the 1 st quarter of 2025. Net securities gains in the current quarter mostly resulted from net fair value adjustments of $10.9 million on the Company’s portfolio of private equity investments.

Non-Interest Expense

Non-interest expense for the current quarter amounted to $291.1 million, compared to $238.4 million in the same period last year and $253.0 million in the prior quarter. The current quarter included $14.0 million in acquisition-related expense, compared to $2.8 million in the previous quarter, as well as acquisition-related intangible amortization expense of $5.4 million. The increase in non-interest expense over the same period last year was mainly due to higher salaries and benefits expense, data processing and software expense, professional and other services expense, and intangible amortization expense. The increase in non-interest expense over the prior quarter was mainly due to higher salaries and benefits expense, data processing and software expense, professional and other services expense, intangible amortization expense and deposit insurance expense.

Compared to the 1 st quarter of 2025, salaries and employee benefits expense increased $27.7 million, or 18.1%, mostly due to an accrual for retention bonuses, acquisition-related compensation payments and the onboarding of FineMark’s team members. Acquisition-related salaries and benefits expense was $6.6 million in the current quarter. Full-time equivalent employees totaled 4,960 and 4,662 at March 31, 2026 and 2025, respectively.

Compared to the same period last year, data processing and software expense increased $6.1 million due to higher costs for service providers and software. Professional and other services, which increased $8.8 million compared to the 1 st quarter of 2025, included $4.7 million in acquisition-related legal and professional services expense. The increase in other non-interest expense was mainly due to increases of $5.4 million in intangible amortization expense related to the FineMark acquisition and $2.0 million in other acquisition-related expense. Compared to the prior quarter, deposit insurance expense increased $4.0 million due to a $3.9 million accrual adjustment to the FDIC’s special assessment, recorded in the 4 th quarter of 2025.

Income Taxes

The effective tax rate for the Company was 22.4% in the current quarter, 22.4% in the prior quarter, and 21.9% in the 1 st quarter of 2025.

Credit Quality

Net loan charge-offs in the 1 st quarter of 2026 amounted to $15.0 million, compared to $9.9 million in the prior quarter, and $10.8 million in the same period last year. The ratio of annualized net charge-offs to total average loans was .30% in the current quarter, .22% in the previous quarter, and .25% in the same quarter of last year. Compared to the prior quarter, net charge-offs on business real estate loans and consumer credit card loans increased $5.4 million and $651 thousand, respectively, while net charge-offs on consumer loans decreased $730 thousand. The increase in business real estate loan net charge-offs was mainly due to a charge-off on a senior living non-accrual loan.

In the 1 st quarter of 2026, annualized net charge-offs on average consumer credit card loans were 5.21%, compared to 4.55% in the previous quarter and 5.04% in the same quarter last year. Consumer loan net charge-offs were .30% of average consumer loans in the current quarter, .45% in the prior quarter, and .56% in the same quarter last year.

At March 31, 2026, the allowance for credit losses on loans totaled $198.6 million, or .97% of total loans, and increased $19.1 million compared to the prior quarter. The increase was mostly attributed to the acquisition of FineMark, which added $22.8 million to the allowance for credit losses on January 1, 2026. Additionally, the liability for unfunded lending commitments on March 31, 2026 was $17.7 million, flat compared to the liability on December 31, 2025.

At March 31, 2026, total non-accrual loans amounted to $10.9 million, a decrease of $4.8 million compared to the previous quarter. At March 31, 2026, the balance of non-accrual loans, which represented .05% of loans outstanding, included business real estate loans of $9.4 million, personal real estate loans of $1.3 million and business loans of $201 thousand. Loans more than 90 days past due and still accruing interest totaled $22.8 million at March 31, 2026.

Other

During the 1 st quarter of 2026, the Company paid a cash dividend of $.275 per common share, representing a 5% increase over the same period last year. The Company purchased approximately 1.6 million shares of treasury stock during the current quarter at an average price of $51.57.

Forward Looking Information

This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Additional information about risks and uncertainties is included in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company's Annual Report on Form 10-K.