Financial Data and Key Metrics Changes - Reported net income available to common shareholders was $89.2 million, with earnings per common share at $0.63. Adjusted operating earnings available to common shareholders were $119.7 million or $0.84 per common share, resulting in an adjusted operating return on tangible common equity of 20.1% and an adjusted operating return on assets of 1.3% [16][17] - The total allowance for credit losses decreased to $320 million, down approximately $22.4 million from the second quarter, with net charge-offs increasing to $38.6 million or 56 basis points annualized [17][18] - Tax equivalent net interest income was $323.6 million, a decrease of $2.1 million from the second quarter, while the reported net interest margin remained steady at 3.83% [20][21] Business Line Data and Key Metrics Changes - Quarterly loan growth was approximately 0.5% annualized, with average loan growth quarter over quarter at 4.3% annualized. The company expects loan balances to end the year between $27.7 billion and $28 billion [8][27] - Non-interest income decreased to $51.8 million, primarily due to a $15.7 million preliminary pretax gain on the CRE loan sale in the prior quarter compared to a $4.8 million pretax loss in the current quarter [22] - Adjusted operating non-interest income increased to $56.6 million, driven by a $4.2 million increase in loan-related interest rate swap fees [23] Market Data and Key Metrics Changes - The company maintains a well-diversified portfolio, with approximately 23% of total loans in the Washington metro area and the remaining 77% across a broader footprint [12] - The unemployment rate in the greater Washington, D.C. region stood at 3.6%, well below the national average of 4.3% [14] - The company is monitoring the impact of government employment reductions and the government shutdown, but believes the economic data indicates resilience in the market [11][14] Company Strategy and Development Direction - The integration of the Sandy Spring acquisition is progressing smoothly, with expectations to achieve cost-savings targets and enhanced earnings power by 2026 [7][15] - The company aims to deliver sustainable growth and top-tier financial performance, leveraging strategic advantages gained from the acquisition and continued organic growth opportunities [7][15] - The focus remains on disciplined execution and the integration of Sandy Spring, with plans to capitalize on expanded markets and pursue new growth opportunities in North Carolina [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality, reaffirming the forecast for the full year 2025 net charge-off ratio to be between 15 and 20 basis points [11] - The company anticipates some increases in unemployment rates across its markets but expects these to remain manageable and below the national average [14] - Management highlighted the resilience of government contractors and essential services during government shutdowns, indicating a positive outlook for the government contractor finance portfolio [13][89] Other Important Information - The company paid a common stock dividend of $0.34 per share, an increase of 6.3% from the previous year's third quarter dividend amount [26] - The full-year financial outlook for 2025 includes preliminary estimates of purchase accounting adjustments related to the Sandy Spring acquisition [27][30] Q&A Session Summary Question: Loan growth outlook and sustainability - Management expects mid-single-digit loan growth for next year, with potential for high single-digit growth in a more normalized environment, emphasizing strength in specialty lines [36][37] Question: Expense outlook and efficiency ratio - The efficiency ratio is expected to be in the mid-40s, inclusive of investments in North Carolina, with a focus on maintaining a flat expense base [40][41] Question: Credit trends and health of the portfolio - Overall credit trends appear strong, with low non-performing assets and past dues, despite two specific charge-offs [70][72] Question: Impact of government shutdown on operations - Management believes government contractors will remain resilient, drawing on lines of credit during shutdowns, and does not foresee significant issues arising from the current situation [89][90]

Financial Data and Key Metrics Changes - The reported net income available to common shareholders for Q3 2025 was $89.2 million, with earnings per common share at $0.63. Adjusted operating earnings were $119.7 million or $0.84 per common share, resulting in an adjusted operating return on tangible common equity of 20.1% and an adjusted operating return on assets of 1.3% [18][19] - The total allowance for credit losses decreased to $320 million, down from $342.4 million in the previous quarter, with the total allowance as a percentage of total loans held for investment decreasing to 117 basis points from 125 basis points [19] - The tax equivalent net interest income was $323.6 million, a decrease of $2.1 million from the previous quarter, while the net interest margin remained steady at 3.83% [20][21] Business Line Data and Key Metrics Changes - Quarterly loan growth was approximately 0.5% annualized, with average loan growth quarter over quarter at 4.3% annualized. Non-interest bearing deposits grew by approximately 4% annualized in Q3 [9][10] - Non-interest income decreased by $29.7 million to $51.8 million, primarily due to a loss related to the final CRE loan sale settlement [21] - Reported non-interest expense decreased by $41.3 million to $238.4 million, driven by a decline in merger-related costs associated with the Sandy Spring acquisition [22] Market Data and Key Metrics Changes - The Greater Washington DC region showed resilience despite concerns over government employment reductions and the government shutdown, with unemployment rates in Maryland and Virginia at 3.6%, below the national average of 4.3% [14][16] - The company maintains a diversified portfolio, with approximately 23% of total loans in the Washington Metro Area, and the remaining 77% across broader markets [14][16] Company Strategy and Development Direction - The company is focused on delivering sustainable growth and top-tier financial performance, leveraging strategic advantages from the Sandy Spring acquisition while pursuing organic growth opportunities in Virginia and North Carolina [8][17] - The integration of Sandy Spring is progressing smoothly, with expectations to achieve cost savings targets and enhanced earnings power by 2026 [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's asset quality, with non-performing assets at 0.49% of loans held for investment and a forecast for the full year 2025 net charge-off ratio to remain between 15 and 20 basis points [12][13] - The company anticipates mid-single-digit loan growth for 2026, with potential for high single-digit growth in a more normalized environment [31][32] Other Important Information - The company paid a common stock dividend of $0.34 per share, an increase of 6.3% from the previous year's third quarter dividend [24] - The financial outlook for year-end loan balances is projected to be between $27.7 billion and $28 billion, with deposit balances expected between $30.8 billion and $31 billion [25] Q&A Session Summary Question: What are the expectations for loan growth in 2026? - Management expects mid-single-digit loan growth for 2026, with potential for high single-digit growth in a normalized environment [31][32] Question: What is the outlook for expenses and efficiency ratios? - The efficiency ratio is expected to be in the mid-40s for 2026, with a focus on maintaining a flat expense base while expanding in North Carolina [36][37] Question: How is the company addressing competition in the market? - The company is experiencing increased competition, particularly from traditional banks returning to the market, but remains committed to consistent capital provision [90][92] Question: What are the revenue synergies expected from the Sandy Spring acquisition? - The acquisition allows for expanded lending capabilities and additional services such as interest rate hedging, with a focus on new client acquisition [94][96]

Financial Data and Key Metrics Changes - Reported net income available to common shareholders was $89.2 million, with earnings per common share at $0.63. Adjusted operating earnings available to common shareholders were $119.7 million or $0.84 per common share, resulting in an adjusted operating return on tangible common equity of 20.1% and an adjusted operating return on assets of 1.3% [15][16] - Total allowance for credit losses decreased to $320 million, down approximately $22.4 million from the second quarter, with net charge-offs increasing to $38.6 million or 56 basis points annualized [16][17] - Tax equivalent net interest income was $323.6 million, a decrease of $2.1 million from the second quarter, with a steady net interest margin at 3.83% [18][19] Business Line Data and Key Metrics Changes - Quarterly loan growth was approximately 0.5% annualized, with average loan growth quarter over quarter at 4.3% annualized. The company expects year-end loan balances to range between $27.7 billion and $28 billion [6][8] - Non-interest income decreased by $29.7 million to $51.8 million, primarily due to a pretax loss related to the final CRE loan sale settlement [20] - Adjusted operating non-interest income increased by $5.1 million to $56.6 million, driven by higher loan-related interest rate swap fees and increased equity method investment income [21] Market Data and Key Metrics Changes - The company maintains a well-diversified portfolio, with approximately 23% of total loans in the Washington metro area and 77% across a broader footprint. Non-performing assets as a percentage of loans held for investment remained low at 0.49% [10][11] - The unemployment rate in Maryland to Virginia stood at 3.6%, below the national average of 4.3%, indicating resilience in the market despite government employment reductions and shutdown concerns [12] Company Strategy and Development Direction - The integration of Sandy Spring Bank is progressing smoothly, with expectations to achieve cost-savings targets and enhanced earnings power visible on a reported basis by 2026 [4][5] - The company aims to deliver sustainable growth and top-tier financial performance, leveraging strategic advantages gained from the Sandy Spring acquisition and continued organic growth opportunities [5][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality, reaffirming the forecast for the full year 2025 net charge-off ratio to be between 15 and 20 basis points [10] - The company anticipates mid-single-digit loan growth for 2026, with potential for high single-digit growth in a more normalized environment [33][34] Other Important Information - The company paid a common stock dividend of $0.34 per share, an increase of 6.3% from the previous year's third quarter dividend amount [24] - Full-year projections include net interest income between $1.16 billion and $1.165 billion, with an expected net interest margin for the full year between 3.75% and 3.8% [25][26] Q&A Session Summary Question: Loan growth outlook for 2026 - Management expects mid-single-digit loan growth for 2026, with potential for high single-digit growth in a normalized environment, supported by strong pipelines and new client acquisition [33][34] Question: Expense outlook and efficiency ratio - The efficiency ratio is expected to be in the mid-40s for 2026, with a focus on maintaining a flat expense base while expanding in North Carolina [35][36] Question: Credit health and trends - Overall credit trends are positive, with low non-performing assets and past dues. The two charge-offs were isolated events, and management remains confident in the portfolio's health [60][61]

Financial Data and Key Metrics Changes - The reported net income available to common shareholders was $16.8 million, with earnings per common share at $0.12. Adjusted operating earnings were $135.1 million or $0.95 per common share, resulting in an adjusted operating return on tangible common equity of 23.8% and an adjusted operating return on assets of 1.46% [18][19] - The CET1 capital ratio was 9.8%, and the loan to deposit ratio was approximately 88% at quarter end [10][24] - The tax equivalent net interest margin expanded by 38 basis points to 3.83%, driven by the incremental net accretion of purchase accounting adjustments related to the Sandy Spring acquisition [20][21] Business Line Data and Key Metrics Changes - The total loan portfolio fair value mark discount was $789.7 million, with loans held for investment totaling $8.6 billion and loans held for sale at $1.9 billion [17] - Non-interest income increased by $52.3 million to $81.5 million, primarily due to gains from the sale of commercial real estate loans and equity interest [22] - Reported non-interest expense increased by $145.5 million to $279.7 million, largely driven by merger-related costs [23] Market Data and Key Metrics Changes - Approximately 23% of total loans are in the Washington Metro Area, with the remaining 77% across other regions [14] - The unemployment rate in Maryland was reported at 3.3%, while Virginia's rate was 3.5%, indicating a robust economic environment [15] Company Strategy and Development Direction - The acquisition of Sandy Spring Bank is expected to bolster the company's position as a premier regional bank in the Lower Mid Atlantic, with plans for organic growth in North Carolina [9][30] - The company plans to open 10 new branches in North Carolina starting in 2026, focusing on markets with significant population growth [31][32] - The strategic plan will be shared during an Analyst Day in December, highlighting the next phase of growth and expansion [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Sandy Spring and the potential for sustainable growth, despite economic uncertainties [7][12] - The company has lowered its forecast for the 2025 net charge-off ratio to between 15 and 20 basis points, reflecting a stable credit quality outlook [13] - Management noted an improvement in business sentiment and loan pipelines, indicating a positive trajectory for loan growth in the second half of the year [11][66] Other Important Information - The company paid a common stock dividend of $0.34 per share, an increase of 6.3% from the previous year [25] - The effective tax rate for the second quarter was a negative 13.2%, reflecting an income tax benefit related to the reevaluation of state deferred tax assets [23] Q&A Session Summary Question: Loan growth outlook and plans for the Carolinas - Management indicated strong momentum in the loan pipeline and expressed optimism about growth in the Carolinas, particularly with the integration of American National Bank [38][40] Question: Expense outlook and efficiency ratio - The company is targeting a mid-40s efficiency ratio, inclusive of investments in the Carolinas, while maintaining a focus on technology investments [41][42] Question: Capital levels and deployment strategies - The CET1 ratio is expected to increase, with plans to invest in organic growth and consider share repurchases as capital accumulates [44][47] Question: Credit quality and government contractor segment - Credit quality remains stable, with the government contractor finance portfolio performing well due to increased defense spending [52][54] Question: Trends in loan yields and pricing competition - Loan yields have remained stable, with fixed-rate loans repricing in the 6.25% to 6.5% range [80][81] Question: Integration opportunities from the Sandy Spring acquisition - Management highlighted the potential for liquidity and new product offerings to enhance the former Sandy Spring franchise [85][86]

Financial Data and Key Metrics Changes - The reported net income available to common shareholders was $16.8 million, with earnings per common share at $0.12. Adjusted operating earnings were $135.1 million or $0.95 per common share, resulting in an adjusted operating return on tangible common equity of 23.8% and an adjusted operating return on assets of 1.46% [18][19] - The CET1 capital ratio was 9.8%, and the loan to deposit ratio was approximately 88% at quarter end [9][24] - The tax equivalent net interest margin expanded by 38 basis points to 3.83%, driven by the addition of Sandy Spring acquired loans and deposits [19][20] Business Line Data and Key Metrics Changes - The total loan portfolio fair value mark discount was $789.7 million, with loans held for investment totaling $27.3 billion, an increase of $8.9 billion from the prior quarter [16][24] - Non-interest income increased by $52.3 million to $81.5 million, primarily due to gains from the sale of commercial real estate loans and equity interest [20][21] - Reported non-interest expense increased by $145.5 million to $279.7 million, driven by merger-related costs and the full quarter impact of the Sandy Spring acquisition [22][23] Market Data and Key Metrics Changes - Approximately 23% of total loans are in the Washington Metro Area, with the remaining 77% across other regions [12] - The unemployment rate in Maryland was reported at 3.3%, while Virginia's rate was 3.5%, indicating a robust economic environment [14] Company Strategy and Development Direction - The company is focused on organic growth opportunities in North Carolina, planning to open 10 new branches starting in 2026 [31][32] - The acquisition of Sandy Spring Bank is seen as a strategic move to enhance market presence in Maryland and Virginia, with a goal to leverage this for further growth [30][29] - The company aims to maintain a mid-40s efficiency ratio while investing in technology and organic growth initiatives [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Sandy Spring and the potential for sustainable growth, despite economic uncertainties [6][8] - The company anticipates solid loan growth in the second half of the year, supported by a robust loan pipeline [10][66] - The outlook for net charge-offs has been lowered to between 15 and 20 basis points for the full year, reflecting confidence in asset quality [12][25] Other Important Information - The company plans to host an Analyst Day in December to share a new three-year strategic plan [28] - The effective tax rate for the second quarter was a negative 13.2%, with an expected increase to 21% to 22% for the full year [23] Q&A Session Summary Question: How should we think about the pro forma growth outlook on a larger balance sheet and plans for The Carolinas? - Management indicated a strong pipeline and record levels of loan growth, particularly in The Carolinas, with optimism for the second half of the year [37][39] Question: What is the expense outlook beyond what has been provided for this year? - The company is targeting a mid-40s efficiency ratio, inclusive of investments in The Carolinas [40][41] Question: How are capital levels being managed, and is there interest in exploring the reversal of the CECL double count? - The CET1 ratio is expected to increase, with plans to evaluate the CECL double count impact and consider share repurchases in the future [43][46] Question: What is the credit quality perspective on the legacy Atlantic Union basis? - The overall credit quality remains stable, with the increase in NPAs attributed to the Sandy Spring portfolio [50][52] Question: What opportunities are there for growth in the DC market? - Management emphasized the focus on Maryland and Northern Virginia, with confidence in the existing team and capabilities to drive growth [95][100]

Core Insights - Freedom Financial Holdings, Inc. has appointed Scott Clark as Executive Vice President and Chief Financial Officer, enhancing the bank's leadership team with his extensive experience in community banking and finance [1][4][6] Company Overview - The Freedom Bank of Virginia is a next-generation community bank based in Fairfax, Virginia, offering a range of banking solutions including commercial, personal, and mortgage banking [7] Leadership and Strategy - Scott Clark will oversee all financial operations, including budgeting, financial reporting, asset liability management, investment performance, regulatory compliance, and investor relations, positioning the bank for growth and profitability [3][4] - The bank's President and CEO, Joe Thomas, expressed confidence in Clark's ability to enhance operational efficiency and balance sheet management, aligning with the bank's values and commitment to community banking [4][5] Experience and Qualifications - Scott Clark has a significant background in financial strategy, regulatory compliance, and capital management, having previously served as Treasurer for Sandy Spring Bank and EagleBank [6] - His focus on long-term sustainability and customer satisfaction positions him uniquely to guide Freedom Bank through a rapidly changing financial environment [6]