COMMERCE BANCSHARES INC /MO/ 10-Q

Item 1. FINANCIAL STATEMENTS Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 (Unaudited) (In thousands) ASSETS Loans $ 17,665,468 $ 17,220,103 Allowance for credit losses on loans ( 165,260 ) ( 162,742 ) Net loans 17,500,208 17,057,361 Loans held for sale (including $ 3,488,000 and $ 2,981,000 of residential mortgage loans carried at fair value at June 30, 2025 and December 31, 2024, respectively) 3,592 3,242 Investment securities: Available for sale debt, at fair value (amortized cost of $ 9,680,135,000 and $ 10,127,426,000 at June 30, 2025 and December 31, 2024, respectively, and allowance for credit losses of $ — at both June 30, 2025 and December 31, 2024) 8,915,779 9,136,853 Trading debt 46,630 38,034 Equity 54,511 57,442 Other 219,906 230,051 Total investment securities 9,236,826 9,462,380 Federal funds sold — 3,000 Securities purchased under agreements to resell 850,000 625,000 Interest earning deposits with banks 2,624,264 2,624,553 Cash and due from banks 522,049 748,357 Premises and equipment – net 477,401 475,275 Goodwill 146,539 146,539 Other intangible assets – net 13,333 13,632 Other assets 910,035 837,288 Total assets $ 32,284,247 $ 31,996,627 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $ 7,393,559 $ 8,150,669 Savings, interest checking and money market 15,727,549 14,754,571 Certificates of deposit of less than $100,000 986,014 996,721 Certificates of deposit of $100,000 and over 1,386,906 1,391,683 Total deposits 25,494,028 25,293,644 Federal funds purchased and securities sold under agreements to repurchase 2,596,461 2,926,758 Other borrowings 15,049 56 Other liabilities 518,595 443,694 Total liabilities 28,624,133 28,664,152 Commerce Bancshares, Inc. stockholders’ equity: Common stock, $ 5 par value Authorized 190,000,000 ; issued 135,210,812 shares at both June 30, 2025 and December 31, 2024 676,054 676,054 Capital surplus 3,386,218 3,395,645 Retained earnings 255,938 45,494 Treasury stock of 1,530,278 shares at June 30, 2025 and 784,203 shares at December 31, 2024, at cost ( 96,589 ) ( 48,401 ) Accumulated other comprehensive income (loss) ( 581,049 ) ( 758,911 ) Total Commerce Bancshares, Inc. stockholders' equity 3,640,572 3,309,881 Non-controlling interest 19,542 22,594 Total equity 3,660,114 3,332,475 Total liabilities and equity $ 32,284,247 $ 31,996,627 See accompanying notes to consolidated financial statements. 3 Table of Contents Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands, except per share data) 2025 2024 2025 2024 (Unaudited) INTEREST INCOME Interest and fees on loans $ 260,444 $ 267,463 $ 514,638 $ 532,140 Interest and fees on loans held for sale 40 46 63 86 Interest on investment securities 79,998 70,776 156,450 136,704 Interest on federal funds sold 2 27 31 37 Interest on securities purchased under agreements to resell 8,516 2,421 15,934 4,055 Interest on deposits with banks 22,636 28,630 48,885 55,062 Total interest income 371,636 369,363 736,001 728,084 INTEREST EXPENSE Interest on deposits: Savings, interest checking and money market 51,835 56,829 104,238 112,409 Certificates of deposit of less than $100,000 8,445 10,523 17,377 20,714 Certificates of deposit of $100,000 and over 12,914 16,892 26,233 34,988 Interest on federal funds purchased 1,416 3,569 2,800 7,988 Interest on securities sold under agreements to repurchase 16,853 19,293 36,077 40,731 Interest on other borrowings 26 8 27 6 Total interest expense 91,489 107,114 186,752 216,836 Net interest income 280,147 262,249 549,249 511,248 Provision for credit losses 5,597 5,468 20,084 10,255 Net interest income after credit losses 274,550 256,781 529,165 500,993 NON-INTEREST INCOME Trust fees 55,571 52,291 112,163 103,396 Bank card transaction fees 46,362 47,477 91,955 94,407 Deposit account charges and other fees 26,248 25,325 52,870 49,476 Capital market fees 6,175 4,760 11,287 8,652 Consumer brokerage services 5,383 4,478 10,168 8,886 Loan fees and sales 3,419 3,431 6,823 6,572 Other 22,455 14,482 39,296 29,703 Total non-interest income 165,613 152,244 324,562 301,092 INVESTMENT SECURITIES GAINS (LOSSES), NET 437 3,233 ( 7,154 ) 2,974 NON-INTEREST EXPENSE Salaries and employee benefits 155,025 149,120 308,103 300,921 Data processing and software 32,904 31,529 65,142 62,682 Net occupancy 13,654 12,544 27,674 26,118 Professional and other services 12,973 8,617 22,999 17,265 Marketing 5,974 5,356 11,817 9,392 Equipment 5,157 5,091 10,405 10,101 Supplies and communication 4,962 4,636 10,008 9,380 Deposit insurance 3,312 2,354 7,056 10,371 Other 10,476 12,967 19,609 31,681 Total non-interest expense 244,437 232,214 482,813 477,911 Income before income taxes 196,163 180,044 363,760 327,148 Less income taxes 42,400 38,602 79,364 70,254 Net income 153,763 141,442 284,396 256,894 Less non-controlling interest expense (income) 1,284 1,889 325 4,678 Net income attributable to Commerce Bancshares, Inc. $ 152,479 $ 139,553 $ 284,071 $ 252,216 Net income per common share — basic $ 1.14 $ 1.03 $ 2.12 $ 1.85 Net income per common share — diluted $ 1.14 $ 1.03 $ 2.12 $ 1.85 See accompanying notes to consolidated financial statements. 4 Table of Contents Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) 2025 2024 2025 2024 (Unaudited) Net income $ 153,763 $ 141,442 $ 284,396 $ 256,894 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on available for sale debt securities 51,374 130,076 169,662 109,675 Change in pension loss 171 177 343 353 Unrealized gains (losses) on cash flow hedge derivatives 1,982 ( 7,043 ) 7,857 ( 26,433 ) Other comprehensive income (loss), net of tax 53,527 123,210 177,862 83,595 Comprehensive income (loss) 207,290 264,652 462,258 340,489 Less non-controlling interest (income) expense 1,284 1,889 325 4,678 Comprehensive income (loss) attributable to Commerce Bancshares, Inc. $ 206,006 $ 262,763 $ 461,933 $ 335,811 See accompanying notes to consolidated financial statements. 5 Table of Contents Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Three Months Ended June 30, 2025 and 2024 Commerce Bancshares, Inc. Shareholders (In thousands, except per share data) Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest Total (Unaudited) Balance March 31, 2025 $ 676,054 $ 3,381,960 $ 140,220 $ ( 85,871 ) $ ( 634,576 ) $ 20,615 $ 3,498,402 Net income 152,479 1,284 153,763 Other comprehensive income (loss) 53,527 53,527 Distributions to non-controlling interest ( 2,357 ) ( 2,357 ) Purchases of treasury stock ( 10,497 ) ( 10,497 ) Issuance under stock purchase and equity compensation plans 219 ( 221 ) ( 2 ) Stock-based compensation 4,039 4,039 Cash dividends paid on common stock ($ 0.275 per share) ( 36,761 ) ( 36,761 ) Balance June 30, 2025 $ 676,054 $ 3,386,218 $ 255,938 $ ( 96,589 ) $ ( 581,049 ) $ 19,542 $ 3,660,114 Balance March 31, 2024 $ 655,322 $ 3,148,649 $ 130,706 $ ( 59,674 ) $ ( 931,027 ) $ 19,913 $ 2,963,889 Net Income 139,553 1,889 141,442 Other comprehensive income (loss) 123,210 123,210 Distributions to non-controlling interest ( 1,202 ) ( 1,202 ) Purchases of treasury stock ( 38,229 ) ( 38,229 ) Issuance under stock purchase and equity compensation plans 273 ( 273 ) — Stock-based compensation 4,185 4,185 Cash dividends paid on common stock ($ .257 per share) ( 34,960 ) ( 34,960 ) Balance June 30, 2024 $ 655,322 $ 3,153,107 $ 235,299 $ ( 98,176 ) $ ( 807,817 ) $ 20,600 $ 3,158,335 See accompanying notes to consolidated financial statements. 6 Table of Contents Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Six Months Ended June 30, 2025 and 2024 Commerce Bancshares, Inc. Shareholders (In thousands, except per share data) Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest Total (Unaudited) Balance December 31, 2024 $ 676,054 $ 3,395,645 $ 45,494 $ ( 48,401 ) $ ( 758,911 ) $ 22,594 $ 3,332,475 Net income 284,071 325 284,396 Other comprehensive income (loss) 177,862 177,862 Distributions to non-controlling interest ( 3,377 ) ( 3,377 ) Purchases of treasury stock ( 66,076 ) ( 66,076 ) Issuance under stock purchase and equity compensation plans ( 17,892 ) 17,888 ( 4 ) Stock-based compensation 8,465 8,465 Cash dividends paid on common stock ($ .550 per share) ( 73,627 ) ( 73,627 ) Balance June 30, 2025 $ 676,054 $ 3,386,218 $ 255,938 $ ( 96,589 ) $ ( 581,049 ) $ 19,542 $ 3,660,114 Balance December 31, 2023 $ 655,322 $ 3,162,622 $ 53,183 $ ( 35,599 ) $ ( 891,412 ) $ 20,114 $ 2,964,230 Net income 252,216 4,678 256,894 Other comprehensive income (loss) 83,595 83,595 Distributions to non-controlling interest ( 4,192 ) ( 4,192 ) Purchases of treasury stock ( 80,543 ) ( 80,543 ) Issuance under stock purchase and equity compensation plans ( 17,966 ) 17,966 — Stock-based compensation 8,451 8,451 Cash dividends paid on common stock ($ .514 per share) ( 70,100 ) ( 70,100 ) Balance June 30, 2024 $ 655,322 $ 3,153,107 $ 235,299 $ ( 98,176 ) $ ( 807,817 ) $ 20,600 $ 3,158,335 See accompanying notes to consolidated financial statements. 7 Table of Contents Commerce Bancshares, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30 (In thousands) 2025 2024 (Unaudited) OPERATING ACTIVITIES: Net income $ 284,396 $ 256,894 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 20,084 10,255 Provision for depreciation and amortization 27,702 26,800 Amortization of investment security premiums, net ( 9,393 ) 1,649 Investment securities (gains) losses, net (A) 7,154 ( 2,974 ) Net (gains) losses on sales of loans held for sale ( 1,053 ) ( 988 ) Originations of loans held for sale ( 51,798 ) ( 43,505 ) Proceeds from sales of loans held for sale 52,203 45,453 Net (increase) decrease in trading debt securities, excluding unsettled transactions ( 2,023 ) ( 13,589 ) Stock-based compensation 8,465 8,451 (Increase) decrease in interest receivable 117 2,794 Increase (decrease) in interest payable 6,540 ( 2,303 ) Increase (decrease) in income taxes payable ( 23,039 ) 528 Other changes, net ( 69,559 ) ( 6,630 ) Net cash provided by (used in) operating activities 249,796 282,835 INVESTING ACTIVITIES: Proceeds from sales of investment securities (A) 46,094 1,157,176 Proceeds from maturities/pay downs of investment securities (A) 958,189 1,166,452 Purchases of investment securities (A) ( 540,370 ) ( 1,100,450 ) Net (increase) decrease in loans ( 466,478 ) 23,692 Securities purchased under agreements to resell ( 350,000 ) ( 350,000 ) Repayments of securities purchased under agreements to resell 125,000 325,000 Purchases of premises and equipment ( 23,267 ) ( 19,504 ) Sales of premises and equipment 100 3,281 Net cash provided by (used in) investing activities ( 250,732 ) 1,205,647 FINANCING ACTIVITIES: Net increase (decrease) in non-interest bearing, savings, interest checking and money market deposits 246,122 ( 669,259 ) Net increase (decrease) in certificates of deposit ( 15,484 ) ( 456,891 ) Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase ( 330,297 ) ( 357,416 ) Net increase (decrease) in other borrowings 14,993 2,580 Purchases of treasury stock ( 67,047 ) ( 79,889 ) Cash dividends paid on common stock and distributions to non-controlling interest ( 77,004 ) ( 70,100 ) Other, net ( 4 ) — Net cash provided by (used in) financing activities ( 228,721 ) ( 1,630,975 ) Increase (decrease) in cash, cash equivalents and restricted cash ( 229,657 ) ( 142,493 ) Cash, cash equivalents and restricted cash at beginning of year 3,375,992 2,687,283 Cash, cash equivalents and restricted cash at June 30 $ 3,146,335 $ 2,544,790 Income tax payments, net $ 97,116 $ 65,890 Interest paid on deposits and borrowings $ 180,212 $ 219,139 Loans transferred to foreclosed real estate $ 617 $ 88 (A) Available for sale debt securities, equity securities, and other securities. See accompanying notes to consolidated financial statements. Restricted cash is comprised of cash collateral posted by the Company to secure interest rate swap agreements. This balance is included in other assets in the consolidated balance sheets and totaled $ 22 thousand at June 30, 2025. The Company had $ 41 thousand in restricted cash at June 30, 2024. 8 Table of Contents Commerce Bancshares, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2025 (Unaudited) 1. Principles of Consolidation and Presentation The accompanying consolidated financial statements include the accounts of Commerce Bancshares, Inc. and all majority-owned subsidiaries (the Company). Most of the Company's operations are conducted by its subsidiary bank, Commerce Bank (the Bank). The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments necessary to present fairly the financial position and the results of operations for the interim periods have been made. All such adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated. Certain reclassifications were made to 2024 data to conform to current year presentation. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and revenues and expenses for the periods. Actual results could differ significantly from those estimates. Management has evaluated subsequent events for potential recognition or disclosure. The results of operations for the six month period ended June 30, 2025 are not necessarily indicative of results to be attained for the full year or any other interim period. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's most recent Annual Report on Form 10-K, containing the latest audited consolidated financial statements and notes thereto. 2. Loans and Allowance for Credit Losses Major classifications within the Company’s held for investment loan portfolio at June 30, 2025 and December 31, 2024 are as follows: (In thousands) June 30, 2025 December 31, 2024 Commercial: Business $ 6,328,684 $ 6,053,820 Real estate – construction and land 1,405,398 1,409,901 Real estate – business 3,757,778 3,661,218 Personal Banking: Real estate – personal 3,058,845 3,058,195 Consumer 2,157,867 2,073,123 Revolving home equity 364,429 356,650 Consumer credit card 576,151 595,930 Overdrafts 16,316 11,266 Total loans $ 17,665,468 $ 17,220,103 Accrued interest receivable totaled $ 69.0 million and $ 70.6 million at June 30, 2025 and December 31, 2024, respectively, and was included within other assets on the consolidated balance sheets. For the three months ended June 30, 2025, the Company wrote-off accrued interest by reversing interest income of $ 91 thousand and $ 1.6 million in the Commercial and Personal Banking portfolios, respectively. Similarly, for the six months ended June 30, 2025, the Company wrote off accrued interest of $ 203 thousand and $ 3.3 million in the Commercial and Personal Banking portfolios, respectively. For the three months ended June 30, 2024, the Company reversed $ 341 thousand and $ 1.6 million in the Commercial and Personal Banking portfolios, respectively, and in the six months ended June 30, 2024, reversed $ 435 thousand and $ 3.1 million in the Commercial and Personal Banking portfolios. At June 30, 2025, loans of $ 3.4 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. Additional loans of $ 2.7 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings. 9 Table of Contents Allowance for credit losses The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given a single path economic forecast of key macroeconomic variables including GDP, disposable income, various interest rates, unemployment rate, consumer price index (CPI) inflation rate, housing price index (HPI), commercial real estate price index (CREPI) and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting back to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the amortized cost of loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications. Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. 10 Table of Contents Key assumptions in the Company’s allowance for credit loss model include the economic forecast, the reasonable and supportable period, forecasted macro-economic variables, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions. The assumptions utilized in estimating the Company’s allowance for credit losses at June 30, 2025 and March 31, 2025 are discussed below. Key Assumption June 30, 2025 December 31, 2024 Overall economic forecast • Economy in the next year is expected to benefit from deregulation, fiscal stimulus and less policy uncertainty • The forecast assumes recent reduction in tariffs between China and the US will be permanent while increases in steel and aluminum tariffs were included • Layoffs remain low • The United States economy will grow • Expansionary fiscal policy and less immigration cause the labor market to tighten, pushing the unemployment rate lower Reasonable and supportable period and related reversion period • Reasonable and supportable period of one year • Reversion to historical average loss rates within two quarters using a straight-line method • Reasonable and supportable period of one year • Reversion to historical average loss rates within two quarters using a straight-line method Forecasted macro-economic variables • Unemployment rate ranges from 4.3% to 4.4% during the supportable forecast period • Real GDP growth ranges from 1.0% to 1.6% • BBB corporate yield from 5.9% to 6.2% • Housing Price Index from 332.8 to 341.0 • Unemployment rate ranges from 4.2% to 4.3% during the supportable forecast period • Real GDP growth ranges from 2.5% to 2.7% • BBB corporate yield from 5.2% to 5.3% • Housing Price Index from 324.8 to 335.4 Prepayment assumptions Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 8.1% to 23.3% for most loan pools • Consumer credit cards 66.4% Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 8.9% to 23.1% for most loan pools • Consumer credit cards 66.5% Qualitative factors Added qualitative factors related to: • Changes in the composition of the loan portfolios • Certain industries experiencing stress or emerging concerns within the portfolio • Loans downgraded to special mention, substandard, or non-accrual status • Consumer auto and other vehicle portfolios loss expectation adjustment • Other consumer portfolio loss expectation adjustment • Certain portfolios where the model assumptions do not capture all identified loss risk Added qualitative factors related to: • Changes in the composition of the loan portfolios • Certain industries experiencing stress or emerging concerns within the portfolio • Loans downgraded to special mention, substandard, or non-accrual status • Consumer auto portfolio • Certain portfolios where the model assumptions do not capture all identified loss risk The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded. Sensitivity in the Allowance for Credit Loss model The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment. The forecasted macro-economic environment continuously changes which can cause fluctuations in the estimate of expected credit losses. The current forecast includes projections on the impact of the tariffs the United States ("U.S.") administration announced and noted policy uncertainty. Policy changes and the market's response to the changes could impact inflation, labor market trends, Federal Reserve monetary policy, business growth and consumer spending. Economic, political, and social developments regionally, nationally, and even globally could significantly modify economic projections used in the estimation of the allowance for credit losses. 11 Table of Contents Potential changes in any one economic variable may or may not affect the overall allowance because a variety of economic variables and inputs are considered in estimating the allowance, and changes in those variables and inputs may not occur at the same rate, may not be consistent across product types, and may have offsetting impacts to other changing variables and inputs. A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments for the three and six months ended June 30, 2025 and 2024, respectively, follows: For the Three Months Ended June 30, 2025 For the Six Months Ended June 30, 2025 (In thousands) Commercial Personal Banking Total Commercial Personal Banking Total ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $ 106,700 $ 60,331 $ 167,031 $ 106,769 $ 55,973 $ 162,742 Provision for credit losses on loans 185 7,734 7,919 539 22,475 23,014 Deductions: Loans charged off 495 11,530 12,025 1,221 24,097 25,318 Less recoveries on loans 464 1,871 2,335 767 4,055 4,822 Net loan charge-offs (recoveries) 31 9,659 9,690 454 20,042 20,496 Balance June 30, 2025 $ 106,854 $ 58,406 $ 165,260 $ 106,854 $ 58,406 $ 165,260 LIABILITY FOR UNFUNDED LENDING COMMITMENTS Balance at beginning of period $ 17,047 $ 1,280 $ 18,327 $ 17,887 $ 1,048 $ 18,935 Provision for credit losses on unfunded lending commitments ( 2,276 ) ( 46 ) ( 2,322 ) ( 3,116 ) 186 ( 2,930 ) Balance June 30, 2025 $ 14,771 $ 1,234 $ 16,005 $ 14,771 $ 1,234 $ 16,005 ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 121,625 $ 59,640 $ 181,265 $ 121,625 $ 59,640 $ 181,265 For the Three Months Ended June 30, 2024 For the Six Months Ended June 30, 2024 (In thousands) Commercial Personal Banking Total Commercial Personal Banking Total ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $ 105,464 $ 55,001 $ 160,465 $ 108,201 $ 54,194 $ 162,395 Provision for credit losses on loans 2,367 5,482 7,849 ( 488 ) 15,284 14,796 Deductions: Loans charged off 850 11,018 11,868 1,166 21,867 23,033 Less recoveries on loans 236 1,875 2,111 670 3,729 4,399 Net loan charge-offs (recoveries) 614 9,143 9,757 496 18,138 18,634 Balance June 30, 2024 $ 107,217 $ 51,340 $ 158,557 $ 107,217 $ 51,340 $ 158,557 LIABILITY FOR UNFUNDED LENDING COMMITMENTS Balance at beginning of period $ 21,636 $ 1,450 $ 23,086 $ 23,909 $ 1,337 $ 25,246 Provision for credit losses on unfunded lending commitments ( 2,273 ) ( 108 ) ( 2,381 ) ( 4,546 ) 5 ( 4,541 ) Balance June 30, 2024 $ 19,363 $ 1,342 $ 20,705 $ 19,363 $ 1,342 $ 20,705 ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 126,580 $ 52,682 $ 179,262 $ 126,580 $ 52,682 $ 179,262 12 Table of Contents Delinquent and non-accrual loans The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day. The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at June 30, 2025 and December 31, 2024. (In thousands) Current or Less Than 30 Days Past Due 30 – 89 Days Past Due 90 Days Past Due and Still Accruing Non-accrual Total June 30, 2025 Commercial: Business $ 6,325,992 $ 1,168 $ 1,114 $ 410 $ 6,328,684 Real estate – construction and land 1,404,827 145 — 426 1,405,398 Real estate – business 3,742,041 628 — 15,109 3,757,778 Personal Banking: Real estate – personal 3,041,262 5,053 11,582 948 3,058,845 Consumer 2,130,176 23,700 3,991 — 2,157,867 Revolving home equity 360,725 1,037 690 1,977 364,429 Consumer credit card 560,937 7,288 7,926 — 576,151 Overdrafts 16,090 226 — — 16,316 Total $ 17,582,050 $ 39,245 $ 25,303 $ 18,870 $ 17,665,468 December 31, 2024 Commercial: Business $ 6,051,654 $ 1,501 $ 564 $ 101 $ 6,053,820 Real estate – construction and land 1,409,681 — — 220 1,409,901 Real estate – business 3,640,643 5,621 — 14,954 3,661,218 Personal Banking: Real estate – personal 3,021,017 25,267 10,885 1,026 3,058,195 Consumer 2,029,115 40,398 3,610 — 2,073,123 Revolving home equity 351,056 2,798 819 1,977 356,650 Consumer credit card 579,670 7,622 8,638 — 595,930 Overdrafts 10,953 313 — — 11,266 Total $ 17,093,789 $ 83,520 $ 24,516 $ 18,278 $ 17,220,103 At both June 30, 2025 and December 31, 2024, the Company had $ 2.0 million in non-accrual loans that had no allowance for credit loss. The Company did not record any interest income on non-accrual loans during the six months ended June 30, 2025 and 2024, respectively. Credit quality indicators The following table provides information about the credit quality of the Commercial loan portfolio. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment based on borrower specific information including, but not limited to, current financial information, historical payment experience, industry information, collateral levels and collateral types. The “pass” category consists of a range of loan grades that reflect increasing, though still acceptable, risk. A loan is assigned the risk rating at origination and then monitored throughout the contractual term for possible risk rating changes. Movement of risk through the various grade levels in the “pass” category is monitored for early identification of credit deterioration. The “special mention” rating is applied to loans where the borrower exhibits negative financial trends due to borrower specific or systemic conditions that, if left uncorrected, threaten its capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. It is a transitional grade that is closely monitored for improvement or deterioration. The “substandard” rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. All loans are analyzed for risk rating updates annually. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans 13 Table of Contents are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated special mention, substandard or non-accrual are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. The risk category of loans in the Commercial portfolio as of June 30, 2025 and December 31, 2024 are as follows: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total June 30, 2025 Business Risk Rating: Pass $ 945,508 $ 1,186,213 $ 710,351 $ 491,234 $ 310,530 $ 401,536 $ 2,050,589 $ 6,095,961 Special mention 2,524 8,267 5,751 5,048 377 1,792 90,028 113,787 Substandard — 1,130 5,600 19,110 9,181 8,216 75,289 118,526 Non-accrual — 248 161 — — 1 — 410 Total Business: $ 948,032 $ 1,195,858 $ 721,863 $ 515,392 $ 320,088 $ 411,545 $ 2,215,906 $ 6,328,684 Gross write-offs for the six months ended June 30, 2025 $ — $ 184 $ — $ — $ — $ 10 $ 603 $ 797 Real estate-construction Risk Rating: Pass $ 159,498 $ 367,770 $ 431,180 $ 381,011 $ 22,414 $ 3,548 $ 22,129 $ 1,387,550 Special mention 1,912 — — 12,996 — — — 14,908 Substandard — — 2,514 — — — — 2,514 Non-accrual — 426 — — — — — 426 Total Real estate-construction: $ 161,410 $ 368,196 $ 433,694 $ 394,007 $ 22,414 $ 3,548 $ 22,129 $ 1,405,398 Gross write-offs for the six months ended June 30, 2025 $ — $ 24 $ — $ — $ — $ — $ — $ 24 Real estate-business Risk Rating: Pass $ 573,010 $ 632,354 $ 470,837 $ 694,361 $ 434,922 $ 594,359 $ 149,678 $ 3,549,521 Special mention 829 18,301 3,055 12,780 1,117 2,346 — 38,428 Substandard — 958 40,611 27,393 14,163 64,642 6,953 154,720 Non-accrual — — 144 292 165 14,508 — 15,109 Total Real estate-business: $ 573,839 $ 651,613 $ 514,647 $ 734,826 $ 450,367 $ 675,855 $ 156,631 $ 3,757,778 Gross write-offs for the six months ended June 30, 2025 $ — $ — $ 400 $ — $ — $ — $ — $ 400 Commercial loans Risk Rating: Pass $ 1,678,016 $ 2,186,337 $ 1,612,368 $ 1,566,606 $ 767,866 $ 999,443 $ 2,222,396 $ 11,033,032 Special mention 5,265 26,568 8,806 30,824 1,494 4,138 90,028 167,123 Substandard — 2,088 48,725 46,503 23,344 72,858 82,242 275,760 Non-accrual — 674 305 292 165 14,509 — 15,945 Total Commercial loans: $ 1,683,281 $ 2,215,667 $ 1,670,204 $ 1,644,225 $ 792,869 $ 1,090,948 $ 2,394,666 $ 11,491,860 Gross write-offs for the six months ended June 30, 2025 $ — $ 208 $ 400 $ — $ — $ 10 $ 603 $ 1,221 14 Table of Contents Term Loans Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total December 31, 2024 Business Risk Rating: Pass $ 1,505,299 $ 956,449 $ 596,681 $ 405,669 $ 148,483 $ 350,106 $ 1,887,596 $ 5,850,283 Special mention 13,576 7,978 8,941 4,155 263 2,065 34,997 71,975 Substandard 2,218 5,596 19,145 5,069 928 10,086 88,419 131,461 Non-accrual 1 47 1 — — 52 — 101 Total Business: $ 1,521,094 $ 970,070 $ 624,768 $ 414,893 $ 149,674 $ 362,309 $ 2,011,012 $ 6,053,820 Gross write-offs for the year ended December 31, 2024 $ 200 $ 275 $ 40 $ 53 $ — $ 18 $ 1,387 $ 1,973 Real estate-construction Risk Rating: Pass $ 419,562 $ 442,720 $ 451,606 $ 53,462 $ 3,143 $ 2,450 $ 34,075 $ 1,407,018 Special mention — — — — — — — — Substandard — 2,663 — — — — — 2,663 Non-accrual 220 — — — — — — 220 Total Real estate-construction: $ 419,782 $ 445,383 $ 451,606 $ 53,462 $ 3,143 $ 2,450 $ 34,075 $ 1,409,901 Gross write-offs for the year ended December 31, 2024 $ — $ — $ — $ — $ — $ — $ — $ — Real estate- business Risk Rating: Pass $ 755,498 $ 604,936 $ 753,023 $ 448,041 $ 363,717 $ 368,350 $ 129,868 $ 3,423,433 Special mention 324 — 12,383 12,524 1,643 298 — 27,172 Substandard 1,280 23,420 36,657 18,429 4,416 104,382 7,075 195,659 Non-accrual — — 170 — 14,668 116 — 14,954 Total Real-estate business: $ 757,102 $ 628,356 $ 802,233 $ 478,994 $ 384,444 $ 473,146 $ 136,943 $ 3,661,218 Gross write-offs for the year ended December 31, 2024 $ — $ — $ — $ — $ — $ 62 $ — $ 62 Commercial loans Risk Rating: Pass $ 2,680,359 $ 2,004,105 $ 1,801,310 $ 907,172 $ 515,343 $ 720,906 $ 2,051,539 $ 10,680,734 Special mention 13,900 7,978 21,324 16,679 1,906 2,363 34,997 99,147 Substandard 3,498 31,679 55,802 23,498 5,344 114,468 95,494 329,783 Non-accrual 221 47 171 — 14,668 168 — 15,275 Total Commercial loans: $ 2,697,978 $ 2,043,809 $ 1,878,607 $ 947,349 $ 537,261 $ 837,905 $ 2,182,030 $ 11,124,939 Gross write-offs for the year ended December 31, 2024 $ 200 $ 275 $ 40 $ 53 $ — $ 80 $ 1,387 $ 2,035 15 Table of Contents The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of June 30, 2025 and December 31, 2024 below. Term Loans Amortized Cost Basis by Origination Year (In thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total June 30, 2025 Real estate-personal Current to 90 days past due $ 192,556 $ 349,967 $ 365,298 $ 386,310 $ 458,799 $ 1,285,630 $ 7,755 $ 3,046,315 Over 90 days past due — 573 1,000 2,642 1,938 5,429 — 11,582 Non-accrual — — — — 105 843 — 948 Total Real estate-personal: $ 192,556 $ 350,540 $ 366,298 $ 388,952 $ 460,842 $ 1,291,902 $ 7,755 $ 3,058,845 Gross write-offs for the six months ended June 30, 2025 $ — $ — $ 45 $ 35 $ 48 $ 13 $ — $ 141 Consumer Current to 90 days past due $ 287,128 $ 318,037 $ 306,721 $ 167,131 $ 117,950 $ 84,518 $ 872,391 $ 2,153,876 Over 90 days past due 80 507 435 266 99 359 2,245 3,991 Total Consumer: $ 287,208 $ 318,544 $ 307,156 $ 167,397 $ 118,049 $ 84,877 $ 874,636 $ 2,157,867 Gross write-offs for the six months ended June 30, 2025 $ 7 $ 2,123 $ 1,564 $ 1,019 $ 399 $ 235 $ 1,023 $ 6,370 Revolving home equity Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 361,762 $ 361,762 Over 90 days past due — — — — — — 690 690 Non-accrual — — — — — — 1,977 $ 1,977 Total Revolving home equity: $ — $ — $ — $ — $ — $ — $ 364,429 $ 364,429 Gross write-offs for the six months ended June 30, 2025 $ — $ — $ — $ — $ — $ — $ 15 $ 15 Consumer credit card Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 568,225 $ 568,225 Over 90 days past due — — — — — — 7,926 7,926 Total Consumer credit card: $ — $ — $ — $ — $ — $ — $ 576,151 $ 576,151 Gross write-offs for the six months ended June 30, 2025 $ — $ — $ — $ — $ — $ — $ 16,319 $ 16,319 Overdrafts Current to 90 days past due $ 16,316 $ — $ — $ — $ — $ — $ — $ 16,316 Total Overdrafts: $ 16,316 $ — $ — $ — $ — $ — $ — $ 16,316 Gross write-offs for the six months ended June 30, 2025 $ 1,252 $ — $ — $ — $ — $ — $ — $ 1,252 Personal banking loans Current to 90 days past due $ 496,000 $ 668,004 $ 672,019 $ 553,441 $ 576,749 $ 1,370,148 $ 1,810,133 $ 6,146,494 Over 90 days past due 80 1,080 1,435 2,908 2,037 5,788 10,861 24,189 Non-accrual — — — — 105 843 1,977 2,925 Total Personal banking loans: $ 496,080 $ 669,084 $ 673,454 $ 556,349 $ 578,891 $ 1,376,779 $ 1,822,971 $ 6,173,608 Gross write-offs for the six months ended June 30, 2025 $ 1,259 $ 2,123 $ 1,609 $ 1,054 $ 447 $ 248 $ 17,357 $ 24,097 16 Table of Contents Term Loans Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total December 31, 2024 Real estate-personal Current to 90 days past due $ 387,119 $ 387,486 $ 404,680 $ 482,733 $ 637,115 $ 736,217 $ 10,934 $ 3,046,284 Over 90 days past due 665 892 1,431 1,890 3,180 2,827 — 10,885 Non-accrual — 8 — 108 — 910 — 1,026 Total Real estate-personal: $ 387,784 $ 388,386 $ 406,111 $ 484,731 $ 640,295 $ 739,954 $ 10,934 $ 3,058,195 Gross write-offs for the year ended December 31, 2024 $ — $ 82 $ 115 $ 83 $ — $ 22 $ — $ 302 Consumer Current to 90 days past due $ 418,902 $ 369,855 $ 228,189 $ 165,030 $ 72,314 $ 49,890 $ 765,333 $ 2,069,513 Over 90 days past due 465 584 406 213 47 367 1,528 3,610 Total Consumer: $ 419,367 $ 370,439 $ 228,595 $ 165,243 $ 72,361 $ 50,257 $ 766,861 $ 2,073,123 Gross write-offs for the year ended December 31, 2024 $ 1,438 $ 3,109 $ 2,859 $ 1,308 $ 540 $ 255 $ 2,309 $ 11,818 Revolving home equity Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 353,854 $ 353,854 Over 90 days past due — — — — — — 819 819 Non-accrual — — — — — — 1,977 $ 1,977 Total Revolving home equity: $ — $ — $ — $ — $ — $ — $ 356,650 $ 356,650 Gross write-offs for the year ended December 31, 2024 $ — $ — $ — $ — $ — $ — $ — $ — Consumer credit card Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 587,292 $ 587,292 Over 90 days past due — — — — — — 8,638 8,638 Total Consumer credit card: $ — $ — $ — $ — $ — $ — $ 595,930 $ 595,930 Gross write-offs for the year ended December 31, 2024 $ — $ — $ — $ — $ — $ — $ 30,427 $ 30,427 Overdrafts Current to 90 days past due $ 11,266 $ — $ — $ — $ — $ — $ — $ 11,266 Total Overdrafts: $ 11,266 $ — $ — $ — $ — $ — $ — $ 11,266 Gross write-offs for the year ended December 31, 2024 $ 2,689 $ — $ — $ — $ — $ — $ — $ 2,689 Personal banking loans Current to 90 days past due $ 817,287 $ 757,341 $ 632,869 $ 647,763 $ 709,429 $ 786,107 $ 1,717,413 $ 6,068,209 Over 90 days past due 1,130 1,476 1,837 2,103 3,227 3,194 10,985 23,952 Non-accrual — 8 — 108 — 910 1,977 3,003 Total Personal banking loans: $ 818,417 $ 758,825 $ 634,706 $ 649,974 $ 712,656 $ 790,211 $ 1,730,375 $ 6,095,164 Gross write-offs for the year ended December 31, 2024 $ 4,127 $ 3,191 $ 2,974 $ 1,391 $ 540 $ 277 $ 32,736 $ 45,236 17 Table of Contents Collateral-dependent loans The Company's collateral-dependent loans are comprised of large loans on non-accrual status. The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan. The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2025 and December 31, 2024. (In thousands) Real Estate Total June 30, 2025 Commercial: Real estate - business $ 14,508 $ 14,508 Personal Banking: Revolving home equity 1,977 1,977 Total $ 16,485 $ 16,485 December 31, 2024 Commercial: Real estate - business $ 14,667 $ 14,667 Personal Banking: Revolving home equity 1,977 1,977 Total $ 16,644 $ 16,644 Modifications for borrowers experiencing financial difficulty When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. The Company's modifications of loans to borrowers experiencing financial difficulty are generally in the form of term extensions, repayment plans, payment deferrals, forbearance agreements, interest rate reductions, forgiveness of interest and/or fees, or any combination thereof. Commercial loans modified to borrowers experiencing financial difficulty are primarily loans that are substandard or non-accrual, where the maturity date was extended. Modifications on personal real estate loans are primarily those placed on forbearance plans, repayment plans, or deferral plans where monthly payments are suspended for a period of time or past due amounts are paid off over a certain period of time in the future or set up as a balloon payment at maturity. Modifications to certain credit card and other small consumer loans are often modified under debt counseling programs that can reduce the contractual rate or, in certain instances, forgive certain fees and interest charges. Other consumer loans modified to borrowers experiencing financial difficulty consist of various other workout arrangements with consumer customers. 18 Table of Contents The following tables present the amortized cost at June 30, 2025 of loans that were modified during the three and six months ended June 30, 2025 and the amortized cost of at June 30, 2024 of loans that were modified during the three and six months ended June 30, 2024. For the Three Months Ended June 30, 2025 (Dollars in thousands) Term Extension Payment Delay Interest Rate Reduction Other Total % of Total Loan Category June 30, 2025 Commercial: Business $ 35,461 $ — $ — $ — $ 35,461 0.6 % Real estate – business 1,122 — — — 1,122 — Personal Banking: Real estate – personal — 3,633 — — 3,633 0.1 Consumer — 37 8 — 45 — Consumer credit card — — 932 — 932 0.2 Total $ 36,583 $ 3,670 $ 940 $ — $ 41,193 0.2 % For the Six Months Ended June 30, 2025 June 30, 2025 Commercial: Business $ 52,075 $ — $ — $ — $ 52,075 0.8 % Real estate – business 77,440 — — — 77,440 2.1 Personal Banking: Real estate – personal — 6,810 — — 6,810 0.2 Consumer — 37 68 — 105 — Consumer credit card — — 1,696 — 1,696 0.3 Total $ 129,515 $ 6,847 $ 1,764 $ — $ 138,126 0.8 % For the Three Months Ended June 30, 2024 (Dollars in thousands) Term Extension Payment Delay Interest Rate Reduction Other Total % of Total Loan Category June 30, 2024 Commercial: Business $ 19,335 $ — $ — $ — $ 19,335 0.3 % Real estate – business 45,513 — — — 45,513 1.3 Personal Banking: Real estate – personal 70 1,704 — — 1,774 0.1 Consumer — — 30 44 74 — Consumer credit card — — 1,124 — 1,124 0.2 Total $ 64,918 $ 1,704 $ 1,154 $ 44 $ 67,820 0.4 % For the Six Months Ended June 30, 2024 June 30, 2024 Commercial: Business $ 30,575 $ — $ — $ — $ 30,575 0.5 % Real estate – business 47,787 — — — 47,787 1.3 Personal Banking: Real estate – personal 309 3,975 — — 4,284 0.1 Consumer — — 58 44 102 — Consumer credit card — — 1,958 — 1,958 0.3 Total $ 78,671 $ 3,975 $ 2,016 $ 44 $ 84,706 0.5 % The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical experience on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon 19 Table of Contents modification. For modifications to loans made to borrowers experiencing financial difficulty that are placed on non-accrual status, the Company determines the allowance for credit losses on an individual evaluation, using the same process that it utilizes for other loans on non-accrual status. Modifications made to commercial loans which are not on non-accrual status for borrowers experiencing financial difficulty are collectively evaluated based on internal risk rating, loan type, delinquency, historical experience, and current economic factors. Modifications made to borrowers experiencing financial difficulty for personal banking loans which are not on non-accrual status are collectively evaluated based on loan type, delinquency, historical experience, and current economic factors. If a loan to a borrower experiencing financial difficulty is modified and subsequently deemed uncollectible, the allowance for credit losses continues to be based on individual evaluation, if that loan is already on non-accrual status. For those loans, the allowance for credit losses is estimated using discounted expected cash flows or the fair value of collateral. If an accruing loan made to a borrower experiencing financial difficulty is modified and subsequently deemed uncollectible, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begin. The following tables summarize the financial impact of loan modifications and payment deferrals during the three and six months ended June 30, 2025 and June 30, 2024. Term Extension Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Commercial: Business Extended maturity by a weighted average of 2 months. Extended maturity by a weighted average of 6 months. Real estate – business Extended maturity by a weighted average of 12 months. Extended maturity by a weighted average of 11 months. Personal Banking: Real estate – personal Extended maturity by a weighted average of 3 months. Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Commercial: Business Extended maturity by a weighted average of 7 months. Extended maturity by a weighted average of 6 months. Real estate – business Extended maturity by a weighted average of 18 months. Extended maturity by a weighted average of 10 months. Personal Banking: Real estate – personal Extended maturity by a weighted average of 6 months. Payment Delay Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Personal Banking: Real estate – personal Deferred certain payments by a weighted average of 22 years . Deferred certain payments by a weighted average of 4 years . Consumer Deferred certain payments by a weighted average of 8 years . Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Personal Banking: Real estate – personal Deferred certain payments by a weighted average of 23 years . Deferred certain payments by a weighted average of 6 years . Consumer Deferred certain payments by a weighted average of 8 years . 20 Table of Contents Interest Rate Reduction Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Personal Banking: Consumer Reduced contractual interest rate from average 22% to 6%. Reduced contractual interest rate from average 22% to 6%. Consumer credit card Reduced contractual interest rate from average 22% to 6%. Reduced contractual interest rate from average 22% to 6%. Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Personal Banking: Consumer Reduced contractual interest rate from average 22% to 6%. Reduced contractual interest rate from average 22% to 6%. Consumer credit card Reduced contractual interest rate from average 22% to 6%. Reduced contractual interest rate from average 22% to 6%. The Company had commitments of $ 12.7 million and $ 14.9 million at June 30, 2025 and December 31, 2024, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of an interest rate reduction; an other-than-insignificant payment delay; forgiveness of principal, interest, or fees; or a term extension during the current reporting period. The following tables provide the amortized cost basis at June 30, 2025 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2025 and were modified within the 12 months preceding the payment default, as well as the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2024 and had been modified within the 12 months preceding the payment default. For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal. For the Three Months Ended June 30, 2025 For the Six Months Ended June 30, 2025 (Dollars in thousands) Term Extension Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total Term Extension Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total June 30, 2025 Commercial: Business $ 44 $ — $ — $ — $ 44 $ 44 $ — $ — $ — $ 44 Real estate – business 14,792 — — — 14,792 14,792 — — — 14,792 Personal Banking: Real estate – personal — 1,822 — — 1,822 — 2,836 — — 2,836 Consumer — — 7 — 7 — — 32 — 32 Consumer credit card — — 248 — 248 — — 322 — 322 Total $ 14,836 $ 1,822 $ 255 $ — $ 16,913 $ 14,836 $ 2,836 $ 354 $ — $ 18,026 For the Three Months Ended June 30, 2024 For the Six Months Ended June 30, 2024 (Dollars in thousands) Term Extension Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total Term Extension Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total June 30, 2024 Personal Banking: Real estate – personal $ — $ 1,740 $ — $ — $ 1,740 $ — $ 1,956 $ — $ — $ 1,956 Consumer — — 12 — 12 — — 12 — 12 Consumer credit card — — 349 12 361 — — 457 12 469 Total $ — $ 1,740 $ 361 $ 12 $ 2,113 $ — $ 1,956 $ 469 $ 12 $ 2,437 21 Table of Contents The following tables present the amortized cost basis at June 30, 2025 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months as well as the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the 12 months preceding June 30, 2024. (In thousands) Current 30-89 Days Past Due 90 Days Past Due Total June 30, 2025 Commercial: Business $ 81,600 $ — $ 45 $ 81,645 Real estate – business 108,690 — 14,632 123,322 Personal Banking: Real estate – personal 9,498 1,117 1,822 12,437 Consumer 138 723 7 868 Consumer credit card 2,447 233 248 2,928 Total $ 202,373 $ 2,073 $ 16,754 $ 221,200 (In thousands) Current 30-89 Days Past Due 90 Days Past Due Total June 30, 2024 Commercial: Business $ 32,565 $ — $ — $ 32,565 Real estate – business 74,512 — — 74,512 Personal Banking: Real estate – personal 2,129 2,004 1,740 5,873 Consumer 172 1 12 185 Consumer credit card 2,337 478 321 3,136 Total $ 111,715 $ 2,483 $ 2,073 $ 116,271 Loans held for sale The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company has elected the fair value option for these loans. The election of the fair value option aligns the accounting for these loans with the related economic hedges discussed in Note 11. The loans are primarily sold to Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA). At June 30, 2025, the fair value of these loans was $ 3.5 million, and the unpaid principal balance was $ 3.4 million. At June 30, 2025, none of the loans held for sale were on non-accrual status or 90 days past due and still accruing interest. Foreclosed real estate/repossessed assets The Company’s holdings of foreclosed real estate totaled $ 397 thousand and $ 343 thousand at June 30, 2025 and December 31, 2024, respectively, and included in those amounts were $ 397 thousand and $ 343 thousand at June 30, 2025 and December 31, 2024, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession. Personal property acquired in repossession, generally autos, totaled $ 2.7 million and $ 2.2 million at June 30, 2025 and December 31, 2024. Upon acquisition, these assets are recorded at fair value less estimated selling costs at the date of foreclosure, establishing a new cost basis. They are subsequently carried at the lower of this cost basis or fair value less estimated selling costs. 22 Table of Contents 3. Investment Securities Investment securities consisted of the following at June 30, 2025 and December 31, 2024. (In thousands) June 30, 2025 December 31, 2024 Available for sale debt securities $ 8,915,779 $ 9,136,853 Trading debt securities 46,630 38,034 Equity securities: Readily determinable fair value 45,098 48,359 No readily determinable fair value 9,413 9,083 Other: Federal Reserve Bank stock 35,736 35,545 Federal Home Loan Bank stock 10,100 10,120 Private equity investments 174,070 184,386 Total investment securities (1) $ 9,236,826 $ 9,462,380 (1) Accrued interest receivable totaled $ 36.1 million and $ 35.0 million at June 30, 2025 and December 31, 2024, respectively, and was included within other assets on the consolidated balance sheets. Most of the Company’s investment securities are classified as available for sale debt securities, and this portfolio is discussed in more detail below. The Company’s equity securities are also discussed below. Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, and investments in portfolio concerns held by the Company’s private equity subsidiary. FRB stock and FHLB stock are held for liquidity management and regulatory purposes. Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is tied to the asset size of the borrowing bank and the level of borrowings from the FHLB. These holdings are carried at cost. The Company’s private equity investments are carried at estimated fair value. Equity Securities The Company’s equity securities portfolio includes mutual funds, common stock, and preferred stock with readily determinable fair values as well as equity securities with no readily determinable fair value. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer. At March 31, 2024, this portfolio included the Company’s 823,447 shares of Visa Inc. (“Visa”) Class B-1 common stock (formerly Class B common stock), which were held by Commerce Bancshares, Inc. The Company’s Visa Class B-1 shares had a carrying value of zero at March 31, 2024, as there had not been observable price changes in orderly transactions for identical or similar investments of the same issuer. On April 8, 2024, Visa announced the commencement of a public offering to permit the exchange of its Class B-1 common stock for a combination of shares of its Class B-2 common stock and its Class C common stock (“Exchange Offer”). The Company tendered all of its Visa Class B-1 shares pursuant to the Exchange Offer. On May 3, 2024, the Exchange Offer closed, and in exchange for its 823,447 shares of Visa Class B-1 common stock, the Company received 411,723 shares of Visa Class B-2 common stock (which will be convertible under certain circumstances, as further described below, into Visa’s publicly traded Class A common stock at an initial rate of 1.5875 shares of Class A common for each share of Class B-2 common stock, subject to adjustment) and 163,404 shares of Visa Class C common stock which automatically convert into four shares of Visa's Class A common stock (subject to future adjustments for any stock splits, recapitalizations or similar transactions) upon any transfer to a person other than a Visa member or an affiliate of a Visa member. As a condition of participating in the exchange, the Company entered into a Makewhole Agreement with Visa that provides for cash payments to Visa to the extent (if any) that future adjustments to the conversion ratio for the Visa Class B-2 common stock to Class A common stock cause such ratio to fall below zero. Changes to the conversion ratio occur when Visa deposits funds to a litigation escrow established by Visa to pay settlements for certain covered litigation that pre-dated Visa’s initial public offering, for which Visa has been effectively indemnified by Visa USA members through reductions to the conversion ratio for its Class B-1 common stock. The purpose of the Makewhole Agreement is to preserve the economic benefit of these adjustments to the Class B-1 conversion ratio for the benefit of Visa’s Class A and Class C common stockholders following the exchange. As further described in Visa’s related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 8, 2024, publicly filed with the U. S. Securities and Exchange Commission, both the Makewhole Agreement and the related escrow fund and transfer restrictions on Visa’s Class B-1 common stock and the new Class B-2 common stock will terminate whenever the covered litigation is ultimately resolved, at which future date outstanding shares of Visa Class B-2 common stock will be convertible into shares of its Class A common stock at the then-applicable conversion ratio. 23 Table of Contents As a result of the exchange, the Company elected the measurement alternative approach for its Visa Class C common stock and marked the stock to fair value, recording a gain based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock. During the second quarter of 2024, the Company sold 436 thousand shares of Visa Class A common stock at an average price of $ 274.91 , resulting in proceeds of $ 119.8 million. During the third quarter of 2024, the Company sold 218 thousand Visa Class A shares at an average price of $ 260.56 , resulting of proceeds of $ 56.8 million. The Company sold all of the Visa Class C shares during the second and third quarters of 2024. The Company’s Visa Class B-2 common stock will continue to be carried at cost of $ 0 as the Company elected the measurement alternative approach for these shares as well, and there are not observable price changes in orderly transactions for identical or similar investments of the same issuer for the Visa Class B-2 shares held by the Company. Changes in equity investments with no readily determinable fair value for each period were as follows: Three Months Ended June 30 Six Months Ended June 30 (In thousands) 2024 2024 Balance at beginning of period $ 6,988 $ 6,978 Observable upward price adjustments 178,227 178,227 Observable downward price adjustments — — Impairment charges — — Sales of securities and other activity ( 119,435 ) ( 119,425 ) Balance at end of period $ 65,780 $ 65,780 Net gains and losses for the Company's equity securities portfolio for each period were as follows: Three Months Ended June 30 Six Months Ended June 30 (In thousands) 2024 2024 Net gains (losses) recognized during the period on equity securities $ 178,164 $ 178,306 Less: Net (gains) losses recognized during the period on equity securities sold during the period ( 119,987 ) ( 119,987 ) Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date $ 58,177 $ 58,319 Available for sale debt securities portfolio The majority of the Company’s investment portfolio is comprised of available for sale debt securities, which are carried at fair value with changes in fair value reported in accumulated other comprehensive income (AOCI). A summary of the available for sale debt securities by maturity groupings as of June 30, 2025 is shown below. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as FHLMC, FNMA, and Government National Mortgage Association (GNMA), in addition to non-agency mortgage-backed securities, which have no guarantee but are collateralized by commercial and residential mortgages. Also included are certain other asset-backed securities, which are primarily collateralized by credit cards, automobiles, student loans, and commercial loans. These securities differ from traditional debt securities primarily in that they may have uncertain maturity dates and are priced based on estimated prepayment rates on the underlying collateral. 24 Table of Contents (In thousands) Amortized Cost Fair Value U.S. government and federal agency obligations: Within 1 year $ 439,321 $ 439,782 After 1 but within 5 years 1,429,778 1,437,921 After 5 but within 10 years 717,757 720,034 Total U.S. government and federal agency obligations 2,586,856 2,597,737 Government-sponsored enterprise obligations: After 5 but within 10 years 35,212 30,195 After 10 years 19,820 13,953 Total government-sponsored enterprise obligations 55,032 44,148 State and municipal obligations: Within 1 year 70,837 70,298 After 1 but within 5 years 416,047 393,723 After 5 but within 10 years 176,358 155,555 After 10 years 111,498 95,382 Total state and municipal obligations 774,740 714,958 Mortgage and asset-backed securities: Agency mortgage-backed securities 3,991,521 3,356,039 Non-agency mortgage-backed securities 539,853 499,996 Asset-backed securities 1,516,911 1,496,323 Total mortgage and asset-backed securities 6,048,285 5,352,358 Other debt securities: Within 1 year 24,459 24,152 After 1 but within 5 years 73,750 68,648 After 5 but within 10 years 92,265 89,325 After 10 years 24,748 24,453 Total other debt securities 215,222 206,578 Total available for sale debt securities $ 9,680,135 $ 8,915,779 Investments in U.S. government and federal agency obligations include U.S. Treasury inflation-protected securities, which totaled $ 413.4 million, at fair value, at June 30, 2025. Interest earned on these securities increases with inflation and decreases with deflation, as measured by the non-seasonally adjusted Consumer Price Index (CPI-U). At maturity, the principal paid is the greater of an inflation-adjusted principal or the original principal. Allowance for credit losses on available for sale debt securities Securities for which fair value is less than amortized cost are reviewed for impairment. Special emphasis is placed on securities whose credit rating has fallen below Baa3 (Moody's) or BBB- (Standard & Poor's), whose fair values have fallen more than 20 % below purchase price, or those which have been identified based on management’s judgment. These securities are placed on a watch list and cash flow analyses are prepared on an individual security basis. Certain securities are analyzed using a projected cash flow model, discounted to present value, and compared to the current amortized cost bases of the securities. The model uses input factors such as cash flow projections, contractual payments required, expected delinquency rates, credit support from other tranches, prepayment speeds, collateral loss severity rates (including loan to values), and various other information related to the underlying collateral. Securities not analyzed using the cash flow model are analyzed by reviewing credit ratings, credit support agreements, and industry knowledge to project future cash flows and any possible credit impairment. At June 30, 2025, the fair value of securities on this watch list was $ 1.1 billion compared to $ 1.6 billion at December 31, 2024. Almost all of the securities included on the Company's watch list in the current quarter were experiencing unrealized loss positions due to the increase in interest rates since their purchase and were analyzed outside of the cash flow model. At June 30, 2025, the securities on the Company's watch list that were not deemed to be solely related to increasing interest rates were securities backed by government-guaranteed student loans and are expected to perform as contractually required. As of June 30, 2025, the Company did not identify any securities for which a credit loss exists, and for the six months ended June 30, 2025 and 2024, the Company did not recognize a credit loss expense on any available for sale debt securities. 25 Table of Contents The table below summarizes debt securities available for sale in an unrealized loss position, aggregated by length of loss period, for which an allowance for credit losses has not been recorded at June 30, 2025 and December 31, 2024. Unrealized losses on these available for sale securities have not been recognized into income because after review, the securities were deemed not to be impaired. The unrealized losses on these securities are primarily attributable to changes in interest rates and current market conditions. At June 30, 2025, the Company does not intend to sell the securities, nor is it anticipated that it would be required to sell any of these securities at a loss. Less than 12 months 12 months or longer Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2025 U.S. government and federal agency obligations $ 690,639 $ 4,040 $ 291,903 $ 8,709 $ 982,542 $ 12,749 Government-sponsored enterprise obligations — — 44,148 10,884 44,148 10,884 State and municipal obligations 10,292 272 690,932 59,513 701,224 59,785 Mortgage and asset-backed securities: Agency mortgage-backed securities 1,964 16 3,308,242 636,145 3,310,206 636,161 Non-agency mortgage-backed securities — — 454,609 40,278 454,609 40,278 Asset-backed securities 110,990 479 701,808 26,682 812,798 27,161 Total mortgage and asset-backed securities 112,954 495 4,464,659 703,105 4,577,613 703,600 Other debt securities 26,800 170 129,891 9,116 156,691 9,286 Total $ 840,685 $ 4,977 $ 5,621,533 $ 791,327 $ 6,462,218 $ 796,304 December 31, 2024 U.S. government and federal agency obligations $ 1,492,875 $ 24,662 $ 353,129 $ 17,197 $ 1,846,004 $ 41,859 Government-sponsored enterprise obligations — — 42,848 12,576 42,848 12,576 State and municipal obligations 14,860 230 724,587 79,685 739,447 79,915 Mortgage and asset-backed securities: Agency mortgage-backed securities 3,882 42 3,409,405 750,664 3,413,287 750,706 Non-agency mortgage-backed securities 10 — 564,637 56,986 564,647 56,986 Asset-backed securities 219,414 2,371 1,083,938 36,824 1,303,352 39,195 Total mortgage and asset-backed securities 223,306 2,413 5,057,980 844,474 5,281,286 846,887 Other debt securities 26,390 579 198,936 12,718 225,326 13,297 Total $ 1,757,431 $ 27,884 $ 6,377,480 $ 966,650 $ 8,134,911 $ 994,534 The entire available for sale debt portfolio included $ 6.5 billion of securities that were in a loss position at June 30, 2025, compared to $ 8.1 billion at December 31, 2024. The total amount of unrealized loss on these securities was $ 796.3 million at June 30, 2025, a decrease of $ 198.2 million compared to the unrealized loss at December 31, 2024. Securities with significant unrealized losses are discussed in the "Allowance for credit losses on available for sale debt securities" section above. 26 Table of Contents For debt securities classified as available for sale, the following table shows the amortized cost, fair value, and allowance for credit losses of securities available for sale at June 30, 2025 and December 31, 2024, and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type. (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value June 30, 2025 U.S. government and federal agency obligations $ 2,586,856 $ 23,630 $ ( 12,749 ) $ — $ 2,597,737 Government-sponsored enterprise obligations 55,032 — ( 10,884 ) — 44,148 State and municipal obligations 774,740 3 ( 59,785 ) — 714,958 Mortgage and asset-backed securities: Agency mortgage-backed securities 3,991,521 679 ( 636,161 ) — 3,356,039 Non-agency mortgage-backed securities 539,853 421 ( 40,278 ) — 499,996 Asset-backed securities 1,516,911 6,573 ( 27,161 ) — 1,496,323 Total mortgage and asset-backed securities 6,048,285 7,673 ( 703,600 ) — 5,352,358 Other debt securities 215,222 642 ( 9,286 ) — 206,578 Total $ 9,680,135 $ 31,948 $ ( 796,304 ) $ — $ 8,915,779 December 31, 2024 U.S. government and federal agency obligations $ 2,594,130 $ 2,981 $ ( 41,859 ) $ — $ 2,555,252 Government-sponsored enterprise obligations 55,425 — ( 12,576 ) — 42,849 State and municipal obligations 822,790 16 ( 79,915 ) — 742,891 Mortgage and asset-backed securities: Agency mortgage-backed securities 4,195,182 415 ( 750,706 ) — 3,444,891 Non-agency mortgage-backed securities 625,539 136 ( 56,986 ) — 568,689 Asset-backed securities 1,595,797 413 ( 39,195 ) — 1,557,015 Total mortgage and asset-backed securities 6,416,518 964 ( 846,887 ) — 5,570,595 Other debt securities 238,563 — ( 13,297 ) — 225,266 Total $ 10,127,426 $ 3,961 $ ( 994,534 ) $ — $ 9,136,853 The following table presents proceeds from sales of securities and the components of investment securities gains and losses which have been recognized in earnings. For the Six Months Ended June 30 (In thousands) 2025 2024 Proceeds from sales of securities: Available for sale debt securities $ 36,065 $ 1,015,845 Equity securities — 120,012 Other investments 10,029 21,319 Total proceeds $ 46,094 $ 1,157,176 Investment securities gains (losses), net: Available for sale debt securities: Gains realized on sales $ 4 $ — Losses realized on sales ( 4,218 ) ( 187,543 ) Equity securities: Gains (losses) on equity securities, net 1,777 178,306 Other: Gains realized on sales 1,167 956 Losses realized on sales ( 1,773 ) ( 1,522 ) Fair value adjustments, net ( 4,111 ) 12,777 Total investment securities gains (losses), net $ ( 7,154 ) $ 2,974 Net losses on investment securities for the six months ended June 30, 2025 were mainly comprised of net losses of $ 4.2 million on sales of available for sale securities, net losses of $ 606 thousand on sales of private equity investments, and net 27 Table of Contents losses in fair value of $ 4.1 million recorded on private equity investments. These losses were partially offset by net gains of $ 1.8 million on equity investments. During 2024, the Company executed a plan to to reposition a portion of its available for sale debt securities portfolio through the sale of securities with an amortized cost of $ 1.2 billion. The securities that the Company sold had a yield of approximately 2.1 %, which resulted in a loss of $ 179.1 million, and the Company reinvested $ 928.8 million of the proceeds into U.S. Treasury securities yielding approximately 4.6 %. Pledged securities At June 30, 2025, securities totaling $ 6.9 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $ 6.9 billion at December 31, 2024. Excluding obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeded 10 % of stockholders’ equity. 28 Table of Contents 4. Goodwill and Other Intangible Assets The following table presents information about the Company's intangible assets which have estimable useful lives. June 30, 2025 December 31, 2024 (In thousands) Gross Carrying Amount Accumulated Amortization Valuation Allowance Net Amount Gross Carrying Amount Accumulated Amortization Valuation Allowance Net Amount Amortizable intangible assets: Core deposit premium $ 5,550 $ ( 5,365 ) $ — $ 185 $ 5,550 $ ( 5,286 ) $ — $ 264 Mortgage servicing rights 13,611 ( 4,063 ) — 9,548 13,673 ( 3,905 ) — 9,768 Total $ 19,161 $ ( 9,428 ) $ — $ 9,733 $ 19,223 $ ( 9,191 ) $ — $ 10,032 Aggregate amortization expense on intangible assets was $ 306 thousand and $ 320 thousand for the three month periods ended June 30, 2025 and 2024, respectively and was $ 644 thousand and $ 651 thousand for the six months ended June 30, 2025 and 2024, respectively. The following table shows the estimated annual amortization expense for the next five fiscal years. This expense is based on existing asset balances and the interest rate environment as of June 30, 2025. The Company’s actual amortization expense in any given period may be different from the estimated amounts depending upon the acquisition of intangible assets, changes in mortgage interest rates, prepayment rates and other market conditions. (In thousands) 2025 $ 1,250 2026 1,116 2027 966 2028 841 2029 757 Changes in the carrying amount of goodwill and other intangible assets for the six month period ended June 30, 2025 are as follows: (In thousands) Goodwill Easement Core Deposit Premium Mortgage Servicing Rights Balance January 1, 2025 $ 146,539 $ 3,600 $ 264 $ 9,768 Originations, net of disposals — — — 345 Amortization — — ( 79 ) ( 565 ) Balance June 30, 2025 $ 146,539 $ 3,600 $ 185 $ 9,548 Goodwill allocated to the Company’s operating segments at June 30, 2025 and December 31, 2024 is shown below. (In thousands) June 30, 2025 December 31, 2024 Consumer segment $ 70,721 $ 70,721 Commercial segment 75,072 75,072 Wealth segment 746 746 Total goodwill $ 146,539 $ 146,539 29 Table of Contents 5. Guarantees The Company, as a provider of financial services, routinely issues financial guarantees in the form of financial and performance standby letters of credit. Standby letters of credit are contingent commitments issued by the Company generally to guarantee the payment or performance obligation of a customer to a third party. While these represent a potential outlay by the Company, a significant amount of the commitments may expire without being drawn upon. The Company has recourse against the customer for any amount it is required to pay to a third party under a standby letter of credit. The letters of credit are subject to the same credit policies, underwriting standards and approval process as loans made by the Company. Most of the standby letters of credit are secured, and in the event of nonperformance by customers, the Company has rights to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. Upon issuance of standby letters of credit, the Company recognizes a liability for the fair value of the obligation undertaken, which is estimated to be equivalent to the amount of fees received from the customer over the life of the agreement. At June 30, 2025, that net liability was $ 4.0 million, which will be accreted into income over the remaining life of the respective commitments. The contractual amount of these letters of credit, which represents the maximum potential future payments guaranteed by the Company, was $ 610.3 million at June 30, 2025. The Company periodically enters into credit risk participation agreements (RPAs) as a guarantor to other financial institutions, in order to mitigate those institutions’ credit risk associated with interest rate swaps with third parties. The RPA stipulates that, in the event of default by the third party on the interest rate swap, the Company will reimburse a portion of the loss borne by the financial institution. These interest rate swaps are normally collateralized (generally with real property, inventories and equipment) by the third party, which limits the credit risk associated with the Company’s RPAs. The third parties usually have other borrowing relationships with the Company. The Company monitors overall borrower collateral and at June 30, 2025, believes sufficient collateral is available to cover potential swap losses. The RPAs are carried at fair value throughout their term with all changes in fair value, including those due to a change in the third party’s creditworthiness, recorded in current earnings. The terms of the RPAs, which correspond to the terms of the underlying swaps, range from 1 to 15 years. At June 30, 2025, the fair value of the Company's guarantee liabilities for RPAs was $ 127 thousand, and the notional amount of the underlying swaps was $ 373.1 million. The maximum potential future payment guaranteed by the Company cannot be readily estimated but is dependent upon the fair value of the interest rate swaps at the time of default. 30 Table of Contents 6. Leases The Company has net investments in direct financing and sales-type leases to commercial, industrial, and tax-exempt entities. These leases are included within business loans on the Company's consolidated balance sheets. The Company primarily leases various types of equipment, trucks and trailers, and office furniture and fixtures. Lease agreements may include options for the lessee to renew or purchase the leased equipment at the end of the lease term. The Company has elected to adopt the lease component expedient in which the lease and nonlease components are combined into the total lease receivable. The Company also leases office space to third parties, and these leases are classified as operating leases. The leases may include options to renew or expand the leased space, and currently the leases have remaining terms of 3 months to 13 years. The following table provides the components of lease income. For the Three Months Ended June 30 For the Six Months Ended June 30 (in thousands) 2025 2024 2025 2024 Direct financing and sales-type leases $ 9,852 $ 9,043 $ 19,695 $ 18,055 Operating leases (a) 4,188 4,260 8,485 8,392 Total lease income $ 14,040 $ 13,303 $ 28,180 $ 26,447 (a) Includes rent from Tower Properties Company, a related party, of $ 0 and $ 19 thousand for the three month periods ended June 30, 2025 and 2024, respectively, and $ 0 and $ 38 thousand for the six month periods ended June 30, 2025 and 2024, respectively. Tower Properties Company was no longer a lessee of the Company as of January 1, 2025. 7. Pension The amount of net pension cost is shown in the table below: For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) 2025 2024 2025 2024 Service cost $ 135 $ 96 $ 271 $ 193 Interest cost on projected benefit obligation 1,074 1,113 2,147 2,225 Expected return on plan assets ( 980 ) ( 1,019 ) ( 1,960 ) ( 2,038 ) Amortization of prior service cost — ( 46 ) — ( 91 ) Amortization of unrecognized net loss (gain) 229 282 458 562 Net periodic pension cost $ 458 $ 426 $ 916 $ 851 All benefits accrued under the Company’s defined benefit pension plan have been frozen since January 1, 2011. During the first six months of 2025, the Company made no funding contributions to its defined benefit pension plan and made minimal funding contributions to a supplemental executive retirement plan (the CERP), which carries no segregated assets. 31 Table of Contents 8. Common Stock * Presented below is a summary of the components used to calculate basic and diluted income per share. The Company applies the two-class method of computing income per share, as nonvested share-based awards that pay nonforfeitable common stock dividends are considered securities which participate in undistributed earnings with common stock. The two-class method requires the calculation of separate income per share amounts for the nonvested share-based awards and for common stock. Income per share attributable to common stock is shown in the table below. Nonvested share-based awards are further discussed in Note 13. For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands, except per share data) 2025 2024 2025 2024 Basic income per common share: Net income attributable to Commerce Bancshares, Inc. $ 152,479 $ 139,553 $ 284,071 $ 252,216 Less income allocated to nonvested restricted stock 1,461 1,313 2,720 2,357 Net income allocated to common stock $ 151,018 $ 138,240 $ 281,351 $ 249,859 Weighted average common shares outstanding 132,455 134,881 132,685 135,187 Basic income per common share $ 1.14 $ 1.03 $ 2.12 $ 1.85 Diluted income per common share: Net income attributable to Commerce Bancshares, Inc. $ 152,479 $ 139,553 $ 284,071 $ 252,216 Less income allocated to nonvested restricted stock 1,460 1,312 2,718 2,355 Net income allocated to common stock $ 151,019 $ 138,241 $ 281,353 $ 249,861 Weighted average common shares outstanding 132,455 134,881 132,685 135,187 Net effect of the assumed exercise of stock-based awards - based on the treasury stock method using the average market price for the respective periods 128 160 141 156 Weighted average diluted common shares outstanding 132,583 135,041 132,826 135,343 Diluted income per common share $ 1.14 $ 1.03 $ 2.12 $ 1.85 Unexercised stock appreciation rights of 287 thousand and 431 thousand for the three month periods ended June 30, 2025 and 2024, respectively, and 225 thousand and 401 thousand for the six month periods ended June 30, 2025 and 2024, respectively, were excluded from the computation of diluted income per common share because their inclusion would have been anti-dilutive. * All prior year share and per share amounts in this note have been restated for the 5% common stock dividend distributed in December 2024. 32 Table of Contents 9. Accumulated Other Comprehensive Income The table below shows the activity and accumulated balances for components of other comprehensive income. Information about unrealized gains and losses on securities can be found in Note 3, and information about unrealized gains and losses on cash flow hedge derivatives is located in Note 11. Unrealized Gains (Losses) on Securities (1) Pension Loss Unrealized Gains (Losses) on Cash Flow Hedge Derivatives (2) Total Accumulated Other Comprehensive Income (Loss) (In thousands) Balance January 1, 2025 $ ( 742,926 ) $ ( 12,059 ) $ ( 3,926 ) $ ( 758,911 ) Other comprehensive income (loss) before reclassifications to current earnings 222,002 — 15,381 237,383 Amounts reclassified to current earnings from accumulated other comprehensive income 4,214 458 ( 4,905 ) ( 233 ) Current period other comprehensive income (loss), before tax 226,216 458 10,476 237,150 Income tax (expense) benefit ( 56,554 ) ( 115 ) ( 2,619 ) ( 59,288 ) Current period other comprehensive income (loss), net of tax 169,662 343 7,857 177,862 Balance June 30, 2025 $ ( 573,264 ) $ ( 11,716 ) $ 3,931 $ ( 581,049 ) Balance January 1, 2024 $ ( 915,001 ) $ ( 13,596 ) $ 37,185 $ ( 891,412 ) Other comprehensive income (loss) before reclassifications to current earnings ( 41,310 ) — ( 29,367 ) ( 70,677 ) Amounts reclassified to current earnings from accumulated other comprehensive income 187,543 471 ( 5,877 ) 182,137 Current period other comprehensive income (loss), before tax 146,233 471 ( 35,244 ) 111,460 Income tax (expense) benefit ( 36,558 ) ( 118 ) 8,811 ( 27,865 ) Current period other comprehensive income (loss), net of tax 109,675 353 ( 26,433 ) 83,595 Balance June 30, 2024 $ ( 805,326 ) $ ( 13,243 ) $ 10,752 $ ( 807,817 ) (1) The pre-tax amounts reclassified from accumulated other comprehensive income to current earnings are included in "investment securities gains (losses), net" in the consolidated statements of income. (2) The pre-tax amounts reclassified from accumulated other comprehensive income to current earnings are included in "interest and fees on loans" in the consolidated statements of income. 10. Segments The Company segregates financial information for use in assessing its performance and allocating resources among three operating segments: Consumer, Commercial and Wealth. The Consumer segment consists of various consumer loan and deposit products offered through its retail branch network of approximately 140 locations. This segment also includes residential mortgage, indirect and other consumer loan financing businesses, along with debit and credit card loan and fee businesses. The Commercial segment provides corporate lending (including the Small Business Banking product line within the branch network), leasing, and international services, along with business and governmental deposit products and commercial cash management services. This segment also includes both merchant and commercial bank card products as well as the Commercial Tradable Products division, which sells fixed income securities, underwrites municipal bonds, and provides securities safekeeping and accounting services to its business and correspondent bank customers. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment management, and brokerage services. This segment also provides various loan and deposit related services to its private banking customers. The Company’s chief executive officer is its chief operating decision maker ("CODM"). The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with the Company’s executive management committee, of which the CODM is a member. The Company’s CODM primarily utilizes net income before taxes to evaluate each segment’s performance and allocate resources (including employees, financial, or capital resources), primarily through the Company’s annual budgeting process and periodic segment performance reviews. To manage operations and make decisions regarding resource allocations, the CODM is regularly provided and reviews total non-interest expense at a consolidated level and total non-interest expense for each segment. 33 Table of Contents The following table presents selected financial information by segment and reconciliations of combined segment totals to consolidated totals. There were no material intersegment revenues between the three segments. Management periodically makes changes to methods of assigning costs and income to its business segments to better reflect operating results. If appropriate, these changes are reflected in prior year information presented below. (In thousands) Consumer Commercial Wealth Other/Elimination Consolidated Totals Three Months Ended June 30, 2025 Net interest income $ 126,967 $ 127,763 $ 23,036 $ 2,381 $ 280,147 Provision for credit losses ( 9,569 ) ( 108 ) ( 18 ) 4,098 ( 5,597 ) Non-interest income 23,704 75,381 63,846 2,682 165,613 Investment securities gains (losses), net — — — 437 437 Non-interest expense ( 82,277 ) ( 108,813 ) ( 40,823 ) ( 12,524 ) ( 244,437 ) Income before income taxes $ 58,825 $ 94,223 $ 46,041 $ ( 2,926 ) $ 196,163 Six Months Ended June 30, 2025 Net interest income $ 252,352 $ 260,878 $ 45,195 $ ( 9,176 ) $ 549,249 Provision for credit losses ( 19,819 ) ( 640 ) ( 18 ) 393 ( 20,084 ) Non-interest income 47,691 144,980 127,885 4,006 324,562 Investment securities gains (losses), net — — — ( 7,154 ) ( 7,154 ) Non-interest expense ( 166,082 ) ( 212,057 ) ( 82,102 ) ( 22,572 ) ( 482,813 ) Income before income taxes $ 114,142 $ 193,161 $ 90,960 $ ( 34,503 ) $ 363,760 Three Months Ended June 30, 2024 Net interest income $ 127,217 $ 125,536 $ 22,226 $ ( 12,730 ) $ 262,249 Provision for loan losses ( 9,037 ) ( 725 ) 3 4,291 ( 5,468 ) Non-interest income 24,572 66,580 59,600 1,492 152,244 Investment securities gains (losses), net — — — 3,233 3,233 Non-interest expense ( 79,996 ) ( 100,989 ) ( 38,902 ) ( 12,327 ) ( 232,214 ) Income before income taxes $ 62,756 $ 90,402 $ 42,927 $ ( 16,041 ) $ 180,044 Six Months Ended June 30, 2024 Net interest income $ 255,374 $ 252,223 $ 45,424 $ ( 41,773 ) $ 511,248 Provision for credit losses ( 17,925 ) ( 766 ) 4 8,432 ( 10,255 ) Non-interest income 48,907 130,382 117,999 3,804 301,092 Investment securities gains (losses), net — — — 2,974 2,974 Non-interest expense ( 160,713 ) ( 201,345 ) ( 78,453 ) ( 37,400 ) ( 477,911 ) Income before income taxes $ 125,643 $ 180,494 $ 84,974 $ ( 63,963 ) $ 327,148 Non-interest expense for the Consumer, Commercial, and Wealth segments above is primarily comprised of salaries, incentives, benefits, and allocated overhead costs for service and support. Non-interest expense for the segments also includes expenses for data processing and software, occupancy, and professional and other services. The information presented above was derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting procedures and methods, which have been developed to reflect the underlying economics of the businesses. The methodologies are applied in connection with funds transfer pricing and assignment of overhead costs among segments. Funds transfer pricing was used in the determination of net interest income by assigning a standard cost (credit) for funds used (provided by) assets and liabilities based on their maturity, prepayment and/or repricing characteristics. The segment activity, as shown above, includes both direct and allocated items. Amounts in the “Other/Elimination” column include activity not related to the segments, such as that relating to administrative functions, the investment securities portfolio, and the effect of certain expense allocations to the segments. The provision for credit losses in this category contains the difference between net loan charge-offs assigned directly to the segments and the recorded provision for credit loss expense. Included in this category’s net interest income are earnings of the investment portfolio, which are not allocated to a segment. Additionally, interest expense on the Company's brokered certificates of deposit is included in this column, as the Company's brokered certificates of deposit are not allocated to a segment. 34 Table of Contents The performance measurement of the operating segments is based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution. The information is also not necessarily indicative of the segments' financial condition and results of operations if they were independent entities. 11. Derivative Instruments The notional amounts of the Company’s derivative instruments are shown in the table below. These contractual amounts, along with other terms of the derivative, are used to determine amounts to be exchanged between counterparties and are not a measure of loss exposure. The Company's derivatives are not accounted for as accounting hedges except for the interest rate floors, as discussed below. (In thousands) June 30, 2025 December 31, 2024 Interest rate swaps $ 1,953,737 $ 2,065,400 Interest rate floors 2,000,000 2,000,000 Interest rate caps 76,785 37,488 Credit risk participation agreements 540,569 503,196 Foreign exchange contracts 18,913 16,978 Mortgage loan commitments 10,346 3,060 Mortgage loan forward sale contracts 225 1,759 Forward TBA contracts 10,500 3,500 Total notional amount $ 4,611,075 $ 4,631,381 Interest rate swap contracts are sold to commercial customers who wish to modify their interest rate sensitivity. The customers are engaged in a variety of businesses, including real estate, manufacturing, retail product distribution, education, and retirement communities. These interest rate swap contracts with customers are offset by matching interest rate swap contracts purchased by the Company from other financial institutions (dealers). Contracts with dealers that require central clearing are novated to a clearing agency who becomes the Company's counterparty. Because of the matching terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in fair value subsequent to initial recognition have a minimal effect on earnings. Many of the Company’s interest rate swap contracts with large financial institutions contain contingent features relating to debt ratings or capitalization levels. Under these provisions, if the Company’s debt rating falls below investment grade or if the Company ceases to be “well-capitalized” under risk-based capital guidelines, certain counterparties can require immediate and ongoing collateralization on interest rate swaps in net liability positions or instant settlement of the contracts. The Company maintains debt ratings and capital well above these minimum requirements. As of June 30, 2025, the Company held four interest rate floors indexed to 1-month SOFR to hedge the risk of declining interest rates on certain floating rate commercial loans. The floors have a combined notional value of $2.0 billion and are forward-starting. Each of the four interest rate floors has a six-year term and a notional amount of $500.0 million. In the event that the index rate falls below zero, the maximum rate that the Company can earn on the notional amount of each floor is limited to the strike rate. Information about the floors is provided in the table below. Strike Rate Effective Date Maturity Date 3.50 % July 1, 2024 July 1, 2030 3.25 % November 1, 2024 November 1, 2030 3.00 % March 1, 2025 March 1, 2031 2.75 % July 1, 2025 July 1, 2031 The premium paid for the floors totaled $ 90.2 million. At June 30, 2025, the maximum length of time over which the Company is hedging its exposure to lower rates is approximately 6.0 years. These interest rate floors qualified and were designated as cash flow hedges and were assessed for effectiveness using regression analysis. The change in the fair value of these interest rate floors is recorded in AOCI, net of the amortization of the premiums paid, which are recorded against interest and fees on loans in the consolidated statements of income. As of June 30, 2025, net deferred losses on the interest rate floors totaled $ 13.6 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet. As of June 30, 2025, it is expected 35 Table of Contents that $ 11.6 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months for the outstanding interest rate floors. During the year ended December 31, 2020, the Company monetized three interest rate floors that were previously classified as cash flow hedges with a combined notional balance of $ 1.5 billion and an asset fair value of $ 163.2 million. As of June 30, 2025, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 18.9 million (pre-tax), which will be reclassified into interest income over the next 1.5 years. The estimated amount of net gains related to the cash flow hedges remaining in AOCI at June 30, 2025 that is expected to be reclassified into income within the next 12 months is $ 16.0 million. The Company also contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps through risk participation agreements. The Company’s risks and responsibilities as guarantor are further discussed in Note 5 on Guarantees. In addition, the Company enters into foreign exchange contracts, which are mainly comprised of contracts with customers to purchase or deliver specific foreign currencies at specific future dates. Under its program to sell residential mortgage loans in the secondary market, the Company designates certain newly-originated residential mortgage loans as held for sale. Derivative instruments arising from this activity include mortgage loan commitments and forward loan sale contracts. Changes in the fair values of the loan commitments and funded loans prior to sale that are due to changes in interest rates are economically hedged with forward contracts to sell residential mortgage-backed securities in the to-be-announced (TBA) market. These forward TBA contracts are also considered to be derivatives and are settled in cash at the security settlement date. The fair values of the Company's derivative instruments, whose notional amounts are listed above, are shown in the table below. Information about the valuation methods used to determine fair value is provided in Note 15 on Fair Value Measurements. The Company's policy is to present its derivative assets and derivative liabilities on a gross basis on its consolidated balance sheets, and these are reported in other assets and other liabilities. In prior years, certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swap. There was no reduction to positive or negative fair values of cleared swaps at June 30, 2025 and December 31, 2024. Asset Derivatives Liability Derivatives June 30, 2025 Dec. 31, 2024 June 30, 2025 Dec. 31, 2024 (In thousands ) Fair Value Fair Value Derivatives designated as hedging instruments: Interest rate floors $ 50,925 $ 35,544 $ — $ — Total derivatives designated as hedging instruments $ 50,925 $ 35,544 $ — $ — Derivative instruments not designated as hedging instruments: Interest rate swaps $ 22,450 $ 26,759 $ ( 22,450 ) $ ( 26,759 ) Interest rate caps 10 44 ( 10 ) ( 44 ) Credit risk participation agreements 86 35 ( 127 ) ( 58 ) Foreign exchange contracts 494 179 ( 632 ) ( 101 ) Mortgage loan commitments 254 58 — — Mortgage loan forward sale contracts 3 14 — — Forward TBA contracts — 15 ( 58 ) ( 1 ) Total derivatives not designated as hedging instruments $ 23,297 $ 27,104 $ ( 23,277 ) $ ( 26,963 ) Total $ 74,222 $ 62,648 $ ( 23,277 ) $ ( 26,963 ) 36 Table of Contents The Company made an election to exclude the initial premiums paid on the interest rate floors from the hedge effectiveness measurement. Those initial premiums are amortized over the periods between the premium payment month and the contract maturity month. The pre-tax effects of the gains and losses (both the included and excluded amounts for hedge effectiveness assessment) recognized in the other comprehensive income from the cash flow hedging instruments and the amounts reclassified from accumulated other comprehensive income into income (both included and excluded amounts for hedge effectiveness measurement) are shown in the table below. Amount of Gain or (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income (In thousands) Total Included Component Excluded Component Total Included Component Excluded Component For the Three Months Ended June 30, 2025 Derivatives in cash flow hedging relationships: Interest rate floors $ 5,015 $ 5,387 $ ( 372 ) Interest and fees on loans $ 2,372 $ 6,582 $ ( 4,210 ) Total $ 5,015 $ 5,387 $ ( 372 ) Total $ 2,372 $ 6,582 $ ( 4,210 ) For the Six Months Ended June 30, 2025 Derivatives in cash flow hedging relationships: Interest rate floors $ 15,381 $ 6,034 $ 9,347 Interest and fees on loans $ 4,905 $ 13,279 $ ( 8,374 ) Total $ 15,381 $ 6,034 $ 9,347 Total $ 4,905 $ 13,279 $ ( 8,374 ) For the Three Months Ended June 30, 2024 Derivatives in cash flow hedging relationships: Interest rate floors $ ( 6,502 ) $ ( 131 ) $ ( 6,371 ) Interest and fees on loans $ 2,888 $ 7,098 $ ( 4,210 ) Total $ ( 6,502 ) $ ( 131 ) $ ( 6,371 ) Total $ 2,888 $ 7,098 $ ( 4,210 ) For the Six Months Ended June 30, 2024 Derivatives in cash flow hedging relationships: Interest rate floors $ ( 29,367 ) $ ( 10,108 ) $ ( 19,259 ) Interest and fees on loans $ 5,877 $ 14,297 $ ( 8,420 ) Total $ ( 29,367 ) $ ( 10,108 ) $ ( 19,259 ) Total $ 5,877 $ 14,297 $ ( 8,420 ) The gain and loss recognized through various derivative instruments on the consolidated statements of income are shown in the table below. Location of Gain or (Loss) Recognized in Consolidated Statements of Income Amount of Gain or (Loss) Recognized in Income on Derivatives For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) 2025 2024 2025 2024 Derivative instruments: Interest rate swaps Other non-interest income $ 642 $ 1,197 $ 747 $ 1,323 Credit risk participation agreements Other non-interest income 186 ( 240 ) 178 ( 214 ) Foreign exchange contracts Other non-interest income ( 184 ) ( 17 ) ( 216 ) 21 Mortgage loan commitments Loan fees and sales 151 38 195 53 Mortgage loan forward sale contracts Loan fees and sales ( 1 ) 8 ( 11 ) — Forward TBA contracts Loan fees and sales ( 35 ) 8 ( 100 ) 14 Total $ 759 $ 994 $ 793 $ 1,197 The following table shows the extent to which assets and liabilities relating to derivative instruments have been offset in the consolidated balance sheets. It also provides information about these instruments which are subject to an enforceable master netting arrangement, irrespective of whether they are offset, and the extent to which the instruments could potentially be offset. Also shown is collateral received or pledged in the form of other financial instruments, which is generally cash or marketable securities. The collateral amounts in this table are limited to the outstanding balances of the related asset or liability (after netting is applied); thus, amounts of excess collateral are not shown. Most of the derivatives in the following table were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default. 37 Table of Contents While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company does not offset derivative assets and liabilities under these agreements on its consolidated balance sheets. Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums, and usually consists of marketable securities. By contract, these may be sold or re-pledged by the secured party until recalled at a subsequent valuation date by the pledging party. For those swap transactions requiring central clearing, the Company posts cash or securities to its clearing agent. Collateral positions are valued daily, and adjustments to amounts received and pledged by the Company are made as appropriate to maintain proper collateralization for these transactions. Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below. Gross Amounts Not Offset in the Balance Sheet (In thousands) Gross Amount Recognized Gross Amounts Offset in the Balance Sheet Net Amounts Presented in the Balance Sheet Financial Instruments Available for Offset Collateral Received/ Pledged Net Amount June 30, 2025 Assets: Derivatives subject to master netting agreements $ 73,832 $ — $ 73,832 $ ( 11,277 ) $ ( 49,871 ) $ 12,684 Derivatives not subject to master netting agreements 390 — 390 Total derivatives $ 74,222 $ — $ 74,222 Liabilities: Derivatives subject to master netting agreements $ 22,797 $ — $ 22,797 $ ( 11,277 ) $ — $ 11,520 Derivatives not subject to master netting agreements 480 — 480 Total derivatives $ 23,277 $ — $ 23,277 December 31, 2024 Assets: Derivatives subject to master netting agreements $ 62,437 $ — $ 62,437 $ ( 3,780 ) $ ( 54,620 ) $ 4,037 Derivatives not subject to master netting agreements 211 — 211 Total derivatives $ 62,648 $ — $ 62,648 Liabilities: Derivatives subject to master netting agreements $ 26,848 $ — $ 26,848 $ ( 3,780 ) $ — $ 23,068 Derivatives not subject to master netting agreements 115 — 115 Total derivatives $ 26,963 $ — $ 26,963 12. Resale and Repurchase Agreements The Company regularly enters into resale and repurchase agreement transactions with other financial institutions and with its own customers. Resale and repurchase agreements are agreements to purchase/sell securities subject to an obligation to resell/repurchase the same or similar securities. They are accounted for as secured lending and collateralized borrowing (e.g. financing transactions), not as true sales and purchases of the underlying collateral securities. Some of the resale and repurchase agreements were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default. The security collateral accepted or pledged in resale and repurchase agreements with other financial institutions may be sold or re-pledged by the secured party, but is usually delivered to and held by third party trustees. The Company generally retains custody of securities pledged for repurchase agreements with its customers. 38 Table of Contents The following table shows the extent to which resale agreement assets and repurchase agreement liabilities with the same counterparty have been offset on the consolidated balance sheets, in addition to the extent to which they could potentially be offset. Also shown is collateral received or pledged, which consists of marketable securities. The collateral amounts in the table are limited to the outstanding balances of the related asset or liability (after offsetting is applied); thus amounts of excess collateral are not shown. Gross Amounts Not Offset in the Balance Sheet (In thousands) Gross Amount Recognized Gross Amounts Offset in the Balance Sheet Net Amounts Presented in the Balance Sheet Financial Instruments Available for Offset Securities Collateral Received/Pledged Unsecured Amount June 30, 2025 Total resale agreements, subject to master netting arrangements $ 850,000 $ — $ 850,000 $ — $ ( 850,000 ) $ — Total repurchase agreements, subject to master netting arrangements 2,470,486 — 2,470,486 — ( 2,470,486 ) — December 31, 2024 Total resale agreements, subject to master netting arrangements $ 625,000 $ — $ 625,000 $ — $ ( 625,000 ) $ — Total repurchase agreements, subject to master netting arrangements 2,803,043 — 2,803,043 — ( 2,803,043 ) — The table below shows the remaining contractual maturities of repurchase agreements outstanding at June 30, 2025 and December 31, 2024, in addition to the various types of marketable securities that have been pledged by the Company as collateral for these borrowings. Remaining Contractual Maturity of the Agreements (In thousands) Overnight and continuous Up to 90 days Greater than 90 days Total June 30, 2025 Repurchase agreements, secured by: U.S. government and federal agency obligations $ 277,127 $ — $ — $ 277,127 Government-sponsored enterprise obligations 10,520 — — 10,520 Agency mortgage-backed securities 1,548,484 7,100 27,250 1,582,834 Non-agency mortgage-backed securities 33,628 — — 33,628 Asset-backed securities 456,838 21,080 28,733 506,651 Other debt securities 59,726 — — 59,726 Total repurchase agreements, gross amount recognized $ 2,386,323 $ 28,180 $ 55,983 $ 2,470,486 December 31, 2024 Repurchase agreements, secured by: U.S. government and federal agency obligations $ 518,937 $ — $ — $ 518,937 Government-sponsored enterprise obligations 9,969 — — 9,969 Agency mortgage-backed securities 1,641,156 9,600 22,250 1,673,006 Non-agency mortgage-backed securities 24,273 — — 24,273 Asset-backed securities 462,841 30,623 18,227 511,691 Other debt securities 65,167 — — 65,167 Total repurchase agreements, gross amount recognized $ 2,722,343 $ 40,223 $ 40,477 $ 2,803,043 39 Table of Contents 13. Stock-Based Compensation The Company issues stock-based compensation in the form of nonvested restricted stock and stock appreciation rights (SARs). Historically, most of the awards have been issued during the first quarter of each year. The stock-based compensation expense charged against income was $ 4.1 million and $ 4.2 million in the three months ended June 30, 2025 and 2024 respectively, and $ 8.5 million in the six months ended both June 30, 2025 and 2024, respectively. Nonvested stock awards granted generally vest in 4 to 7 years and contain restrictions as to transferability, sale, pledging, or assigning, among others, prior to the end of the vesting period. Dividend and voting rights are conferred upon grant. A summary of the status of the Company’s nonvested share awards as of June 30, 2025, and changes during the six month period then ended, is presented below. Shares Weighted Average Grant Date Fair Value Nonvested at January 1, 2025 1,252,653 $ 55.41 Granted 287,040 65.29 Vested ( 241,921 ) 55.05 Forfeited ( 28,060 ) 57.18 Nonvested at June 30, 2025 1,269,712 $ 57.68 SARs are granted with exercise prices equal to the market price of the Company’s stock at the date of grant. SARs vest ratably over 4 years of continuous service and have contractual terms of 10 years. All SARs must be settled in stock under provisions of the plan. In determining compensation cost, the Black-Scholes option-pricing model is used to estimate the fair value of SARs on date of grant. The current year per share average fair value and the model assumptions are shown in the table below. Weighted per share average fair value at grant date $ 19.72 Assumptions: Dividend yield 1.7 % Volatility 29.6 % Risk-free interest rate 4.1 % Expected term 6.0 years A summary of SAR activity during the first six months of 2025 is presented below. (Dollars in thousands, except per share data) Rights Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2025 841,962 $ 48.90 Granted 38,770 64.93 Forfeited ( 2,200 ) 54.70 Expired ( 1,518 ) 54.82 Exercised ( 54,848 ) 39.13 Outstanding at June 30, 2025 822,166 $ 50.28 5.2 years $ 9,881 40 Table of Contents 14. Revenue from Contracts with Customers Revenue from contracts with customers, Accounting Standard Codification 606 ("ASC 606"), requires revenue recognition for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For the six months ended June 30, 2025, approximately 63 % of the Company’s total revenue was comprised of net interest income, which is not within the scope of this guidance. Of the remaining revenue, those items that were subject to this guidance mainly included fees for bank card, trust, deposit account services and consumer brokerage services. The following table disaggregates revenue from contracts with customers by major product line. Three Months Ended June 30 Six Months Ended June 30 (In thousands) 2025 2024 2025 2024 Trust fees $ 55,571 $ 52,291 $ 112,163 $ 103,396 Bank card transaction fees 46,362 47,477 91,955 94,407 Deposit account charges and other fees 26,248 25,325 52,870 49,476 Consumer brokerage services 5,383 4,478 10,168 8,886 Other non-interest income 18,817 12,325 33,208 22,841 Total non-interest income from contracts with customers 152,381 141,896 300,364 279,006 Other non-interest income (1) 13,232 10,348 24,198 22,086 Total non-interest income $ 165,613 $ 152,244 $ 324,562 $ 301,092 (1) This revenue is not within the scope of ASC 606, and includes fees relating to bond trading activities, loan fees and sales, derivative instruments, standby letters of credit and various other transactions. For bank card transaction fees, nearly all of debit and credit card fees are earned in the Consumer segment, while corporate card and merchant fees are earned in the Commercial segment. The Consumer and Commercial segments contributed approximately 28 % and 72 %, respectively, of the Company's deposit account charge revenue. All trust fees and nearly all consumer brokerage services income were earned in the Wealth segment. The following table presents the opening and closing receivable balances for the six month periods ended June 30, 2025 and 2024 for the Company’s significant revenue from contracts with customers. (In thousands) June 30, 2025 December 31, 2024 June 30, 2024 December 31, 2023 Bank card transaction fees $ 14,296 $ 17,754 $ 15,824 $ 18,069 Trust fees 1,937 2,165 2,174 1,764 Deposit account charges and other fees 8,039 7,897 7,366 6,588 Consumer brokerage services — — — 8 For these revenue categories, none of the transaction price has been allocated to performance obligations that are unsatisfied as of the end of a reporting period. 41 Table of Contents 15. Fair Value Measurements The Company uses fair value measurements to record fair value adjustments to certain financial and nonfinancial assets and liabilities and to determine fair value disclosures. Various financial instruments such as available for sale debt securities, equity securities, trading debt securities, certain investments relating to private equity activities, and derivatives are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets and liabilities on a nonrecurring basis, such as mortgage servicing rights and certain other investment securities. These nonrecurring fair value adjustments typically involve lower of cost or fair value accounting or write-downs of individual assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value. For accounting disclosure purposes, a three-level valuation hierarchy of fair value measurements has been established. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds). • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company’s best information and assumptions that a market participant would consider. The valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis are described in the Fair Value Measurements note in the Company's 2024 Annual Report on Form 10-K. There have been no significant changes in these methodologies since then. 42 Table of Contents Instruments Measured at Fair Value on a Recurring Basis The table below presents the June 30, 2025 and December 31, 2024 carrying values of assets and liabilities measured at fair value on a recurring basis. There were no transfers among levels during the first six months of 2025 or the year ended December 31, 2024. Fair Value Measurements Using (In thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2025 Assets: Residential mortgage loans held for sale $ 3,488 $ — $ 3,488 $ — Available for sale debt securities: U.S. government and federal agency obligations 2,597,737 2,597,737 — — Government-sponsored enterprise obligations 44,148 — 44,148 — State and municipal obligations 714,958 — 714,008 950 Agency mortgage-backed securities 3,356,039 — 3,356,039 — Non-agency mortgage-backed securities 499,996 — 499,996 — Asset-backed securities 1,496,323 — 1,496,323 — Other debt securities 206,578 — 206,578 — Trading debt securities 46,630 12,941 33,689 — Equity securities 45,098 45,098 — — Private equity investments 174,070 — — 174,070 Derivatives * 74,222 — 73,882 340 Assets held in trust for deferred compensation plan 22,456 22,456 — — Total assets 9,281,743 2,678,232 6,428,151 175,360 Liabilities: Derivatives * 23,277 — 23,150 127 Liabilities held in trust for deferred compensation plan 22,456 22,456 — — Total liabilities $ 45,733 $ 22,456 $ 23,150 $ 127 December 31, 2024 Assets: Residential mortgage loans held for sale $ 2,981 $ — $ 2,981 $ — Available for sale debt securities: U.S. government and federal agency obligations 2,555,252 2,555,252 — — Government-sponsored enterprise obligations 42,849 — 42,849 — State and municipal obligations 742,891 — 741,927 964 Agency mortgage-backed securities 3,444,891 — 3,444,891 — Non-agency mortgage-backed securities 568,689 — 568,689 — Asset-backed securities 1,557,015 — 1,557,015 — Other debt securities 225,266 — 225,266 — Trading debt securities 38,034 10,219 27,815 — Equity securities 48,359 48,359 — — Private equity investments 184,386 — — 184,386 Derivatives * 62,648 — 62,555 93 Assets held in trust for deferred compensation plan 21,849 21,849 — — Total assets 9,495,110 2,635,679 6,673,988 185,443 Liabilities: Derivatives * 26,963 — 26,905 58 Liabilities held in trust for deferred compensation plan 21,849 21,849 — — Total liabilities $ 48,812 $ 21,849 $ 26,905 $ 58 * The fair value of each class of derivative is shown in Note 11. 43 Table of Contents The changes in the Company's Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In thousands) State and Municipal Obligations Private Equity Investments Total For the three months ended June 30, 2025 Balance March 31, 2025 $ 947 $ 175,618 $ 176,565 Total gains (losses) realized/unrealized: Included in earnings — 4,414 4,414 Included in other comprehensive income * 2 — 2 Discount accretion 1 — 1 Purchases of private equity investments — 728 728 Sale/pay down of private equity investments — ( 6,707 ) ( 6,707 ) Capitalized interest/dividends — 17 17 Balance June 30, 2025 $ 950 $ 174,070 $ 175,020 Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 $ — $ 4,414 $ 4,414 *Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 $ 2 $ — $ 2 For the six months ended June 30, 2025 Balance January 1, 2025 $ 964 $ 184,386 $ 185,350 Total gains (losses) realized/unrealized: Included in earnings — ( 4,111 ) ( 4,111 ) Included in other comprehensive income * ( 16 ) — ( 16 ) Discount accretion 2 — 2 Purchases of private equity investments — 6,426 6,426 Sale/pay down of private equity investments — ( 12,665 ) ( 12,665 ) Capitalized interest/dividends — 34 34 Balance June 30, 2025 $ 950 $ 174,070 $ 175,020 Total gains (losses) for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 $ — $ ( 3,312 ) $ ( 3,312 ) *Total gains (losses) for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 $ ( 16 ) $ — $ ( 16 ) 44 Table of Contents Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In thousands) State and Municipal Obligations Private Equity Investments Total For the three months ended June 30, 2024 Balance March 31, 2024 $ 956 $ 183,706 $ 184,662 Total gains (losses) realized/unrealized: Included in earnings — 5,677 5,677 Included in other comprehensive income * ( 4 ) — ( 4 ) Discount accretion 1 — 1 Purchases of private equity investments — 1,470 1,470 Sale/pay down of private equity investments — ( 12,564 ) ( 12,564 ) Capitalized interest/dividends — 32 32 Balance at June 30, 2024 $ 953 $ 178,321 $ 179,274 Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 $ — $ 5,677 $ 5,677 *Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 $ ( 4 ) $ — $ ( 4 ) For the six months ended June 30, 2024 Balance January 1, 2024 $ 947 $ 176,667 $ 177,614 Total gains (losses) realized/unrealized: Included in earnings — 12,777 12,777 Included in other comprehensive income * 5 — 5 Discount accretion 1 — 1 Purchases of private equity investments — 10,947 10,947 Sale/pay down of private equity investments — ( 21,964 ) ( 21,964 ) Capitalized interest/dividends — ( 106 ) ( 106 ) Balance at June 30, 2024 $ 953 $ 178,321 $ 179,274 Total gains (losses) for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 $ — $ 11,002 $ 11,002 *Total gains (losses) for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 $ 5 $ — $ 5 * Included in "net unrealized gains (losses) on available for sale debt securities" in the consolidated statements of comprehensive income. Gains and losses included in earnings for the Company's Level 3 assets and liabilities in the previous table are reported in the following line items in the consolidated statements of income: (In thousands) Investment Securities Gains (Losses), Net For the three months ended June 30, 2025 Total gains or losses included in earnings $ 4,414 Change in unrealized gains or losses relating to assets still held at June 30, 2025 $ 4,414 For the six months ended June 30, 2025 Total gains or losses included in earnings $ ( 4,111 ) Change in unrealized gains or losses relating to assets still held at June 30, 2025 $ ( 3,312 ) For the three months ended June 30, 2024 Total gains or losses included in earnings $ 5,677 Change in unrealized gains or losses relating to assets still held at June 30, 2024 $ 5,677 For the six months ended June 30, 2024 Total gains or losses included in earnings $ 12,777 Change in unrealized gains or losses relating to assets still held at June 30, 2024 $ 11,002 45 Table of Contents Level 3 Inputs The Company's Level 3 measurements at June 30, 2025, which employ unobservable inputs that are readily quantifiable, pertain to investments in portfolio concerns held by the Company's private equity subsidiaries. Information about these inputs is presented in the table below. Quantitative Information about Level 3 Fair Value Measurements Weighted Valuation Technique Unobservable Input Range Average* Private equity investments Market comparable companies EBITDA multiple 3.8 - 6.0 5.0 * Unobservable inputs were weighted by the relative fair value of the instruments. Instruments Measured at Fair Value on a Nonrecurring Basis For assets measured at fair value on a nonrecurring basis during the first six months of 2025 and 2024, and still held as of June 30, 2025 and 2024, the following table provides the adjustments to fair value recognized during the respective periods, the level of valuation inputs used to determine each adjustment, and the carrying value of the related individual assets or portfolios at June 30, 2025 and 2024. Fair Value Measurements Using (In thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Gains (Losses) Recognized During the Six Months Ended June 30 June 30, 2025 Collateral dependent loans $ 251 $ — $ — $ 251 $ ( 147 ) June 30, 2024 Collateral dependent loans $ 15,081 $ — $ — $ 15,081 $ ( 2,850 ) Equity securities 58,376 — 57,185 1,191 58,241 46 Table of Contents 16. Fair Value of Financial Instruments The carrying amounts and estimated fair values of financial instruments held by the Company are set forth below. Fair value estimates are made at a specific point in time based on relevant market information. They do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for many of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, risk characteristics and economic conditions. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The estimated fair values of the Company’s financial instruments and the classification of their fair value measurement within the valuation hierarchy are as follows at June 30, 2025 and December 31, 2024: Carrying Amount Estimated Fair Value at June 30, 2025 (In thousands) Level 1 Level 2 Level 3 Total Financial Assets Loans: Business $ 6,328,684 $ — $ — $ 6,254,565 $ 6,254,565 Real estate - construction and land 1,405,398 — — 1,381,719 1,381,719 Real estate - business 3,757,778 — — 3,697,770 3,697,770 Real estate - personal 3,058,845 — — 2,762,320 2,762,320 Consumer 2,157,867 — — 2,142,476 2,142,476 Revolving home equity 364,429 — — 361,334 361,334 Consumer credit card 576,151 — — 520,865 520,865 Overdrafts 16,316 — — 16,180 16,180 Total loans 17,665,468 — — 17,137,229 17,137,229 Loans held for sale 3,592 — 3,592 — 3,592 Investment securities 9,227,413 2,655,776 6,350,781 220,856 9,227,413 Securities purchased under agreements to resell 850,000 — — 876,442 876,442 Interest earning deposits with banks 2,624,264 2,624,264 — — 2,624,264 Cash and due from banks 522,049 522,049 — — 522,049 Derivative instruments 74,222 — 73,882 340 74,222 Assets held in trust for deferred compensation plan 22,456 22,456 — — 22,456 Total $ 30,989,464 $ 5,824,545 $ 6,428,255 $ 18,234,867 $ 30,487,667 Financial Liabilities Non-interest bearing deposits $ 7,393,559 $ 7,393,559 $ — $ — $ 7,393,559 Savings, interest checking and money market deposits 15,727,549 15,727,549 — — 15,727,549 Certificates of deposit 2,372,920 — — 2,399,532 2,399,532 Federal funds purchased 125,975 125,975 — — 125,975 Securities sold under agreements to repurchase 2,470,486 — — 2,473,298 2,473,298 Other borrowings 14,975 359 14,616 — 14,975 Derivative instruments 23,277 — 23,150 127 23,277 Liabilities held in trust for deferred compensation plan 22,456 22,456 — — 22,456 Total $ 28,151,197 $ 23,269,898 $ 37,766 $ 4,872,957 $ 28,180,621 47 Table of Contents Carrying Amount Estimated Fair Value at December 31, 2024 (In thousands) Level 1 Level 2 Level 3 Total Financial Assets Loans: Business $ 6,053,820 $ — $ — $ 5,943,565 $ 5,943,565 Real estate - construction and land 1,409,901 — — 1,384,029 1,384,029 Real estate - business 3,661,218 — — 3,558,862 3,558,862 Real estate - personal 3,058,195 — — 2,738,880 2,738,880 Consumer 2,073,123 — — 2,053,191 2,053,191 Revolving home equity 356,650 — — 353,731 353,731 Consumer credit card 595,930 — — 549,874 549,874 Overdrafts 11,266 — — 11,120 11,120 Total loans 17,220,103 — — 16,593,252 16,593,252 Loans held for sale 3,242 — 3,242 — 3,242 Investment securities 9,453,297 2,613,830 6,608,452 231,015 9,453,297 Federal funds sold 3,000 3,000 — — 3,000 Securities purchased under agreements to resell 625,000 — — 622,021 622,021 Interest earning deposits with banks 2,624,553 2,624,553 — — 2,624,553 Cash and due from banks 748,357 748,357 — — 748,357 Derivative instruments 62,648 — 62,555 93 62,648 Assets held in trust for deferred compensation plan 21,849 21,849 — — 21,849 Total $ 30,762,049 $ 6,011,589 $ 6,674,249 $ 17,446,381 $ 30,132,219 Financial Liabilities Non-interest bearing deposits $ 8,150,669 $ 8,150,669 $ — $ — $ 8,150,669 Savings, interest checking and money market deposits 14,754,571 14,754,571 — — 14,754,571 Certificates of deposit 2,388,404 — — 2,409,537 2,409,537 Federal funds purchased 123,715 123,715 — — 123,715 Securities sold under agreements to repurchase 2,803,043 — — 2,806,428 2,806,428 Derivative instruments 26,963 — 26,905 58 26,963 Liabilities held in trust for deferred compensation plan 21,849 21,849 — — 21,849 Total $ 28,269,214 $ 23,050,804 $ 26,905 $ 5,216,023 $ 28,293,732 17. Legal and Regulatory Proceedings The Company has various legal proceedings pending at June 30, 2025, arising in the normal course of business. While some matters pending against the Company specify damages claimed by plaintiffs, others do not seek a specified amount of damages or are at early stages of the legal process. The Company records a loss accrual for all legal and regulatory matters for which it deems a loss is probable and can be reasonably estimated. Some matters, which are in the early stages, have not yet progressed to the point where a loss amount can be determined to be probable and estimable. 48 Table of Contents