Financial Data and Key Metrics Changes - The company reported net income of $20 million for the second quarter, equating to $0.69 per share, while loan outstandings contracted by $31.9 million during the quarter [3] - Year-to-date commercial loan production was $507 million compared to $422 million in the prior year, but loan outstanding contracted by $25.4 million compared to growth of $117.6 million in the prior year [4] - Deposits decreased by $75.8 million during the quarter, primarily due to seasonal declines in public funds deposits and broker deposits, but excluding these declines, deposits increased by $77.5 million [4] - The net interest margin (NIM) reported was 3.2%, an increase of 11 basis points from the prior quarter, with core NIM at 3.24%, expanding by 12 basis points compared to the first quarter [6] Business Line Data and Key Metrics Changes - Noninterest income increased by $521,000 or 2.5% compared to the second quarter of 2024, driven by increases in investment management fees, gains on sale of SBA loans, and treasury management fees [7] - Noninterest expense increased by $1.6 million or 3.3% compared to the second quarter of 2024, primarily due to compensation costs, including annual merit increases and medical costs [7] Market Data and Key Metrics Changes - The company expects loan growth of approximately 1% to 3% for the full year and net interest income growth of 10% to 12% compared to 2024 [8] - The provision for credit loss guidance remains unchanged at $12 million to $14 million for 2025, with the provision being event-driven [8] Company Strategy and Development Direction - The company will continue to be active in share buybacks, viewing it as a good use of capital, while M&A is not an immediate strategic priority but remains an option for the future [17] - The company is focused on managing expenses prudently, with a revised expense growth forecast of 2% to 4% [15] Management Comments on Operating Environment and Future Outlook - Management noted that loan activity and origination remain strong, despite being impacted by significant payoff activity in the first half of the year [14] - The competitive environment for deposits is tough, with ongoing efforts to grow deposits through targeted campaigns [20] - For the third quarter, core NIM is expected to pull back slightly due to the repricing of sub debt issuance and higher cost public funds [21] Other Important Information - The company reported $7.8 million of net charge-offs predominantly related to one credit, which accounted for $7.3 million of the charge-offs, with credit quality remaining strong overall [5] Q&A Session Summary Question: Update on loan growth and expenses - Loan growth is expected to be 1% to 3%, with interest income growth of 10% to 12%, and expenses are projected to grow by 2% to 4% [12] Question: Changes in loan environment and competition - Loan activity is strong, but significant payoff activity has impacted growth; management anticipates a slowdown in prepayment activity in the second half of the year [14] Question: Strategy for capital deployment - The company will continue share buybacks and is open to M&A opportunities, particularly on the non-bank side [17] Question: Deposit competition outlook - The competitive environment for deposits is challenging, with ongoing efforts to grow deposits through targeted campaigns [20] Question: NIM trajectory outlook - Core NIM is expected to pull back slightly in the third quarter, with a flat to slightly up trend thereafter, assuming stable interest rates [21]

Financial Data and Key Metrics Changes - Core pretax pre-provision income increased to $49 million in Q2 2025 from $28 million a year ago, resulting in a core ROA of 85 basis points [7] - Core EPS was $0.64 per share, representing a 12% increase on a linked quarter basis and a 49% increase year over year [14] - The reported NIM increased to 2.98%, with a potential adjusted NIM of 2.95% when excluding prepayment fees [14][16] Business Line Data and Key Metrics Changes - Business loans grew by over $110 million in Q2 and by over $370 million or 15% year over year [9] - Loan origination, including new lines of credit, reached $450 million for the quarter, with a weighted average rate of approximately 7% [9] - Core deposits increased by $1.2 billion year over year, with the deposit teams growing their portfolios to approximately $2.2 billion [7] Market Data and Key Metrics Changes - Non-brokered deposits rose by approximately $210 million at June 30 compared to the prior quarter [14] - The loan pipeline currently stands at $1.2 billion, up from approximately $1.1 billion at the end of March [10] Company Strategy and Development Direction - The company is focused on growing business loans and managing its commercial real estate (CRE) ratio lower, with a strategic emphasis on diversifying lending verticals [11][12] - Plans to open new branches in Lakewood, New Jersey, and Manhattan are underway, indicating a commitment to expanding its physical presence [11] - The company aims to maintain a strong liquidity position and capitalize on lending opportunities as they arise [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and ability to attract talented bankers, differentiating itself from local competitors [12] - The company anticipates gradual upward bias in NIM for the third quarter, with more pronounced expansion expected in the fourth quarter as asset repricing occurs [17] - Management is optimistic about the potential for a structurally higher NIM and enhanced earnings power over time [18] Other Important Information - The common equity Tier one ratio increased to 11.25%, and the total capital ratio grew to 15.8%, providing a competitive advantage [16] - The company is not currently focused on buying securities but plans to redeploy cash into new lending verticals over the medium to long term [80] Q&A Session Summary Question: Was there anything one-time in nature regarding DDA balances? - Management confirmed that there was nothing one-time and noted continued strength in retail and private banking groups [24][25] Question: What is the impact of a 25 basis point rate cut on NII or margin? - Historically, a 25 basis point rate cut results in approximately five basis points of NIM expansion [31] Question: What are the operating expenses for the third quarter? - Operating expenses are expected to be approximately $61.5 million, excluding intangible amortization [30] Question: How does the company view M&A opportunities? - The company is open to M&A opportunities but is currently focused on organic growth [39] Question: What are the plans for loan loss reserves? - The goal is to reach a loan loss reserve ratio of 90 basis points to 1% over the medium to long term [57] Question: What is the outlook for loan growth with new verticals? - Each new vertical is expected to reach $300 million to $500 million in balances over time [55]

Financial Data and Key Metrics Changes - The bank's average deposits grew at a healthy pace of 16% year-on-year, while average advances or assets under management (AUM) growth slowed to about 7% last year, aligning with strategic objectives to reduce the credit deposit (CD) ratio from 110% to about 95% [6][9] - The growth in AUM improved to 8% in the quarter ended June FY '26, with expectations for loan growth to continue improving [6][7] Business Line Data and Key Metrics Changes - The bank's asset quality remains healthy, with a gross non-performing loan (NPL) ratio in the retail segment, excluding agriculture, steady at 82 basis points [101][104] - The bank is seeing healthy demand from the rural side, with positive inquiries expected to increase due to better monsoon conditions [22][24] Market Data and Key Metrics Changes - The bank's credit deposit ratio is currently at 95%, with a medium-term target to return to levels of 87-88% prior to the merger [92][93] - The bank's approach to growth is focused on customer-centricity, technology, and people, with expectations for loan growth to align with system growth rates in FY '26 and exceed it in FY '27 [7][8] Company Strategy and Development Direction - The bank aims to improve its loan growth while maintaining a focus on reducing the CD ratio, with a strategic shift towards upselling products to existing customers [44][45] - The management emphasizes the importance of customer experience and technology initiatives to drive growth in various segments, including rural, MSME, and corporate [66][68] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a volatile global situation but remains optimistic about India's stable macro environment, supported by domestic factors such as normal monsoons and tax cuts [4][5] - The management expects a pickup in demand during the festive season, which could serve as a trigger for growth [20][24] Other Important Information - The bank announced an interim dividend of INR 5 per share and recommended a bonus share issue in a 1:1 ratio [10] - The bank's contingent provision increased to 57 basis points of the loan portfolio, aimed at providing resiliency and a strong reserving position for the future [99] Q&A Session Summary Question: Margin and EDLR Repricing - The management explained that the full impact of recent rate changes on the EDLR book will take one to three months to fully reflect, with a current yield change of about 20 basis points [18][19] Question: Growth Triggers - Management indicated that improved consumption demand, especially during the festive season, is expected to trigger growth, with a focus on retail and rural segments [20][21] Question: Asset Quality and NPL Recognition - The management confirmed that any one-time settlements would typically lead to NPL recognition, following RBI regulations [35] Question: Credit Cost Outlook - The management noted that credit costs are expected to remain benign, with seasonal fluctuations due to agricultural portfolios [37] Question: Loan Growth and Fee Income - The management acknowledged subdued fee income this quarter but remains optimistic about the overall outlook for the year [82][83] Question: CD Ratio Comfort Zone - The management aims to return the CD ratio to 87-88% in the medium term, with a focus on ensuring deposit growth outpaces loan growth [92][93] Question: Contingent Provision Explanation - The management clarified that the contingent provision is based on various probability scenarios and is intended to strengthen the bank's reserving position [99]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $51.1 million for Q2 2025, with diluted EPS of $1.20, resulting in a 1.04% return on assets and a 6.68% return on average common equity [21] - Adjusted operating net income for the quarter was $53.5 million or $1.25 diluted EPS, representing a 1.09% return on assets [21] - Tangible book value per share increased by $0.99 during the quarter, reflecting solid earnings retention [22] Business Line Data and Key Metrics Changes - C&I loans increased by 3.4% in the second quarter, while CRE and construction loan balances decreased by 1.7% [8][10] - Total loans increased modestly, with C&I balances driving growth, while transactional CRE balances experienced attrition [24] - Wealth Management business grew AUA by 4% to $7.4 billion, driven mostly by market appreciation [17] Market Data and Key Metrics Changes - Non-performing loans decreased significantly from $89.5 million to $56.2 million, representing 39 basis points of total loans [24] - The cost of deposits was reported at 1.54%, highlighting the value of the deposit franchise [16] Company Strategy and Development Direction - The company aims to reduce its CRE concentration below 300%, with a current concentration of 274% expected to rise to 310-315% post-acquisition of Enterprise Bank [10] - The strategic focus includes growing C&I loans to reduce dependence on CRE and drive deposit and fee income growth [10][20] - The company is preparing for a core conversion scheduled for May 2026, which is expected to enhance technology infrastructure and support future growth [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic uncertainty has improved, the impact of tariffs and federal government actions remains unclear, causing customers to pause significant expansion initiatives [7] - The management expressed confidence in the ability to unlock earnings power through prudent expense and capital management, alongside the benefits from the Enterprise acquisition [20] Other Important Information - The company announced a $150 million stock buyback plan to be opportunistic in buying back stock [5] - The acquisition of Enterprise Bank is expected to enhance shareholder value and provide cross-sell opportunities [15][19] Q&A Session Summary Question: Where were new loan originations during the quarter? - Management indicated good loan originations across most segments, with a competitive landscape remaining challenging [37][38] Question: Why has small business lending been successful? - The success is attributed to experienced bankers and a centralized underwriting unit that enables quick loan request turnaround [40] Question: What is the outlook for the net interest margin? - Management expects the margin to gradually rise, particularly if the Fed cuts rates, with a focus on asset repricing [49] Question: Is the worst behind for credit? - Management is cautious, acknowledging progress but not ready to declare that the worst is over [50][51] Question: Can you provide details on a large loan modification? - A large syndicated loan was restructured into a Note A and Note B structure, with no cash payments until mid-2026 [55][56] Question: What is the expected pro forma CET1 ratio? - The pro forma CET1 ratio is expected to be in the mid-12% range, around 12.5% [92]

Financial Data and Key Metrics Changes - Outstanding loans increased by $271 million or 4.3% in the second quarter, while core deposits rose by $342 million or 5.3% [3][4] - Net interest margin (NIM) expanded by 15 basis points to 3.83%, marking the seventh consecutive quarter of margin expansion [4][12] - Reported earnings per share for the second quarter was $1.76, a 21% increase from the first quarter [5][14] - Tangible book value per share increased by over 4%, reaching $68.44, representing the tenth consecutive quarter of book value accretion [5][14] Business Line Data and Key Metrics Changes - Total loan originations and draws were approximately $570 million at a weighted average coupon of 7.72% [9] - The second quarter provision expense was $6.4 million, reflecting continued loan growth and adverse macroeconomic factors [7][15] - Non-interest income decreased by $1 million primarily due to the recognition of BaaS program fees in the prior period [15] Market Data and Key Metrics Changes - Deposit growth was concentrated in the municipal, trustee, and lending verticals, with a total deposit increase of about $340 million [11] - The cost of interest-bearing deposits declined by 13 basis points, driven by a mix change and hedging activity [11][12] Company Strategy and Development Direction - The company aims to capture additional market share and strategically position itself to enhance shareholder value [8] - Continued investment in a new technology stack is expected to support the bank's growth for years to come [6][8] - The strategic plan emphasizes strong credit underwriting, core funding, and disciplined risk management [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for further balance sheet growth despite ongoing market uncertainties [4][6] - The company does not anticipate significant negative trends in asset quality across any loan segment or geography [6] - Management expects modest further expansion of NIM as loan yields increase and funding costs decline [12] Other Important Information - The company successfully completed a $50 million share repurchase program and announced a second $50 million program [4][5] - The effective tax rate for the quarter was approximately 30%, expected to remain consistent for the remainder of the year [16][17] Q&A Session Summary Question: Plans for capital raising near term - Management indicated that they likely do not plan to raise capital in the near term but are continuously reevaluating opportunities [20] Question: Plans for ramping fee-based revenues - Management confirmed that they are focused on replacing low-cost deposits and increasing non-interest income through strategic opportunities [21] Question: Loan originations mix - Management clarified that the current mix is due to timing and expects a balanced mix between commercial and commercial real estate by year-end [22] Question: Clarification on provision tied to specific credit - Management confirmed that $2.4 million of the $6.4 million provision was tied to an existing non-accrual loan [23] Question: Expense guidance clarification - Management confirmed that the expense guidance includes all costs, including digital transformation expenses [27] Question: Future of deposit growth in municipal vertical - Management expressed confidence in continued growth and stability in the municipal deposit vertical and other verticals [31][33] Question: Impact of Medicaid concerns on skilled nursing loan portfolio - Management does not expect cuts to resident payments to nursing homes, indicating stability in the skilled nursing loan portfolio [38]

Financial Data and Key Metrics Changes - The company continues to be pleased with ongoing trends in business performance, with an acceleration in performance improvement exceeding internal expectations [7] - The net interest margin (NIM) has surpassed the 3% level ahead of schedule, indicating potential for further expansion [9] - The company is experiencing a remixing of deposits from higher-cost to lower-cost deposits, which is positively impacting financial performance [11] Business Line Data and Key Metrics Changes - The loan pipeline and production remain strong, although there are headwinds from elevated paydowns and market financing [10] - Fixed-rate loans, which make up about 46% of the total loan book, continue to reprice at a consistent spread, contributing positively to loan yields [14] - The company has shifted towards a higher percentage of variable production, which is expected to provide a positive tailwind for future performance [15] Market Data and Key Metrics Changes - The company is seeing a competitive market for loan pricing, which is affecting overall loan growth [10] - There is a noted seasonality in the agricultural sector, which impacts pipeline trends [24] Company Strategy and Development Direction - The company is focused on continuous improvement in expense discipline while making significant investments in talent and technology [26][28] - The hiring environment is favorable, with the company actively pursuing talent acquisition amidst competitive market conditions [29] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in executing business strategies and achieving performance targets, despite uncertainties in the economic environment [8] - The outlook for paydowns is expected to remain consistent with the first half of the year, with no significant changes anticipated [18] Other Important Information - The company emphasizes the importance of employee engagement and the need to provide resources for team success [41] - Management is optimistic about profitability improvement going into the second half of the year [42] Q&A Session Summary Question: Changes in guidance for 2025 - Management noted that guidance is typically provided in January, and while there are uncertainties, they remain confident in business trends [6][7] Question: Loan growth expectations and pipeline dynamics - Management indicated that the loan pipeline remains strong, with a shift towards commercial and industrial (C&I) relationships contributing to future growth [34] Question: Credit quality and classified loans - Management reported stable credit quality metrics, with no significant concerns regarding classified loans or past dues [36]

Financial Data and Key Metrics Changes - The company reported one of its best quarters ever, driven by strong loan and deposit growth, maintaining a net interest margin (NIM) on the higher end of its historical range, and benefiting from a low efficiency ratio [6][7] - Core earnings showed significant strength due to solid loan growth and asset quality remained high [6][7] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in the energy sector, with production loans increasing by approximately $30 million to $35 million [41] - The company has shifted its energy portfolio focus from service deals to hedged oil and gas production, indicating a strategic pivot towards more stable revenue sources [41][45] Market Data and Key Metrics Changes - The competitive pricing environment in Texas and Oklahoma is described as historically normal, with new loans expected to come in slightly lower than the 7.6% core yield reported in Q2 [22] - The company is experiencing a mix of loan types, with notable activity in commercial and industrial (C&I) lending and owner-occupied real estate [42] Company Strategy and Development Direction - The company is focused on evaluating merger and acquisition opportunities, particularly in dynamic markets, while maintaining a disciplined approach [14][15] - There is an emphasis on maintaining a strong credit quality and underwriting fundamentals, with no new business lines being added [58] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of the year, citing strong economic conditions in their operating regions [65] - The company is prepared for potential rate cuts, with expectations that loan and deposit betas will remain aligned [48][50] Other Important Information - The company anticipates a slight increase in expenses in the second half of the year, with Q2 serving as a solid guide for future expense run rates [25][39] - The recovery of cash from oil and gas assets is projected to be complete by mid-next year, indicating a positive outlook for this segment [34][35] Q&A Session Summary Question: Loan growth momentum for the second half of the year - Management indicated that the loan pipeline looks solid, with strong origination in Q1 and Q2, but acknowledged potential unpredictability due to chunky paydowns [10][11] Question: NIM outlook with expected growth - Management noted that while deposit costs may rise to support growth, they expect to remain within historical ranges for NIM [12][13] Question: Update on M&A activity - Management confirmed ongoing discussions and evaluations for potential partnerships, emphasizing a disciplined approach to M&A [14][15] Question: Competitive pricing dynamics and loan yields - Management observed that the current pricing environment is normal, with some pressure on loan yields but overall stability in the market [22] Question: Expense run rate expectations - Management projected a slight increase in expenses, with Q2 figures serving as a baseline for future expectations [25][39] Question: Credit quality and charge-offs outlook - Management reported a cleaner NPA number and stable credit quality, with no significant changes expected in the near term [57][58]

Financial Data and Key Metrics Changes - The company reported one of its best quarters ever, driven by strong loan and deposit growth, maintaining a net interest margin (NIM) on the higher end of its historical range, and benefiting from a low efficiency ratio [6][7] - Core earnings showed significant strength due to solid loan growth and asset quality remained high [6][7] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in the energy sector, with production loans increasing by approximately $30 million to $35 million [38] - The company experienced growth in owner-occupied real estate, with an increase of about $19 million, and some growth in the hospitality portfolio [40][41] Market Data and Key Metrics Changes - The competitive pricing environment in Texas and Oklahoma is described as historically normal, with loan pricing slightly lower than the 7.6% core yield reported in Q2 [22] - The company noted a solid deal pipeline in Oklahoma and Texas, indicating a favorable economic environment for business [11] Company Strategy and Development Direction - The company is focused on evaluating merger and acquisition opportunities, maintaining a disciplined approach, and seeking partnerships in dynamic markets [15][16] - There is an emphasis on maintaining credit quality and underwriting fundamentals while exploring growth in various segments [56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of the year, citing strong markets and a talented team of bankers [63] - The economic environment is viewed positively, with management noting a continuous path toward cleaner non-performing asset (NPA) numbers [55][56] Other Important Information - The company is projecting a slight increase in expenses for the second half of the year, with Q2 serving as a solid guide for future expense run rates [26][28] - The recovery of cash outlay from oil and gas assets is expected to be complete by mid-next year [31] Q&A Session Summary Question: Loan growth momentum for the second half of the year - Management indicated a solid deal pipeline and expressed confidence in loan growth despite potential paydown unpredictability [11][12] Question: NIM outlook and deposit costs - Management acknowledged that deposit costs may rise to fund growth but expects to remain within historical ranges for NIM [13][14] Question: M&A activity updates - Management confirmed ongoing discussions and evaluations for potential mergers, emphasizing a disciplined approach [15][16] Question: Competitive pricing dynamics and loan portfolio yields - Management noted that new loans are expected to come in slightly lower than the previous quarter's yield but described the pricing environment as normal [22] Question: Appetite for adding talent and producers - Management is exploring opportunities for talent acquisition but emphasized the importance of cultural fit and careful evaluation [25] Question: Expense run rate expectations - Management projected a slight increase in expenses but maintained that it would not significantly impact the efficiency ratio [26][28] Question: Credit quality and charge-offs outlook - Management reported a cleaner NPA number and maintained a positive outlook on credit quality, despite some economic uncertainties [55][56]

Financial Data and Key Metrics Changes - The company reported an adjusted net income of $118 million or $1.37 per share for the second quarter, compared to $120 million or $1.38 per share in the first quarter [12] - The net interest margin (NIM) expanded by six basis points, reaching 1.37% after adjusting for transaction-related expenses [5][12] - Total loans increased by $364 million or 6% annualized, driven by stronger demand and increased line utilization [5][12] - Total deposits decreased by $148 million, primarily due to a reduction in certificates of deposit (CDs) [6][12] Business Line Data and Key Metrics Changes - Fee income grew by $4 million or 4%, with trust fees being the primary driver of this growth [12][13] - The efficiency ratio improved to 54.91% from 55.22% in the previous quarter, indicating better cost management [13] - The company added 10 net new bankers during the quarter, contributing to its organic growth strategy [8] Market Data and Key Metrics Changes - The company reported a solid allowance for credit losses at 1.45%, indicating a strong position to navigate economic challenges [10] - Criticized commercial loans decreased by 4% to $594 million, while nonaccrual loans decreased by 9% to $95 million [18] Company Strategy and Development Direction - The company remains focused on organic growth, with a guidance of low single-digit loan growth for 2025, inferring mid single-digit growth for the second half of the year [6][12] - The company is optimistic about its growth prospects, particularly in the Dallas market, with plans to open five new financial centers [9] - The acquisition of Sable Trust Company is expected to enhance the company's capabilities and client base [7][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic macroeconomic environment but expressed confidence in the company's ample liquidity and strong capital ratios [10] - The management noted that clients have become less sensitive to economic headlines and are returning to making business decisions based on facts [30] - The company expects modest NIM expansion and net interest income (NII) growth of 3-4% for the year [17] Other Important Information - The company repurchased 750,000 shares of common stock during the quarter, reflecting its commitment to returning capital to shareholders [7][19] - The company anticipates two rate cuts of 25 basis points in September and December, which may impact deposit costs and NIM [17][44] Q&A Session Summary Question: What is the target CET1 ratio for buybacks? - Management indicated a comfortable operating range for Tier 1 common capital between 11% and 11.5% and around 8% for TCE [23][24] Question: What is the outlook for loan growth and borrower health? - Management noted that net new loans to new clients are the primary driver for growth, with a positive outlook barring macroeconomic changes [29][30] Question: Can you provide more insight into NIM outlook? - Management expects NIM to continue expanding in the second half of the year, driven by loan growth and reduced deposit costs [41][44] Question: How much of the expense base came from the Sable acquisition? - The increase in expenses related to Sable was approximately $2.5 million for the quarter [50] Question: What is the outlook for criticized loans? - Management reported a decrease in criticized loans and expressed confidence in the portfolio's health moving forward [105][106] Question: What is the company's stance on M&A? - Management reiterated that M&A is not a current focus but remains opportunistic for the future [58][112]

Core Insights - The company reported an expansion in Net Interest Margin (NIM) by six basis points in Q2 2025, indicating improved profitability [2][15] - Adjusted Return on Assets (ROA) was 1.37% for Q2 2025, reflecting transaction expenses related to the Sable Trust acquisition [3][20] - Adjusted net income decreased slightly to $118 million, or $1.37 per share, compared to $120 million, or $1.38 per share, in the previous quarter [3][20] - Pre-Provision Net Revenue (PPNR) increased by $5 million, or 3%, reaching 1.95% of assets [3][20] - Fee income rose by $4 million, or 4%, primarily driven by trust fees from the Sable Trust acquisition [4][20] Financial Performance - Net Interest Income (NII) increased by $7 million, or 2%, quarter-over-quarter [3][20] - Expenses rose by $5 million, or 2%, after adjusting for one-time items, with $2.5 million attributed to the Sable Trust acquisition [4][20] - Efficiency Ratio improved to 54.91% from 55.22% in the previous quarter, indicating better cost management [5][21] - Loans grew by $364 million, representing 6% annualized linked-quarter growth, with guidance for low single-digit annual growth remaining unchanged [5][15] Deposits and Funding - Deposit balances decreased by $148 million, primarily due to certificate of deposit (CD) run-off and reduced public funds [5][16] - Demand Deposit Account (DDA) mix increased to 37%, with management guiding for 37%-38% by year-end 2025 [5][24] - CD maturities repriced from 3.85% to 3.59%, with an 86% renewal rate; an additional $3.6 billion is expected to mature in the second half of 2025 [6][23] Capital and Shareholder Returns - Tangible common equity (TCE) stood at 9.84% and common equity Tier 1 at 14.03% post-acquisition [7][25] - The company repurchased 750,000 shares, spending approximately $40 million, with plans to maintain this capital return pace [8][26] - Management expects a common equity Tier 1 operating level of 11%-11.5% and a TCE comfort zone near 8% [9][29] Credit Quality - Allowance for Credit Losses (ACL) was maintained at 1.45% of loans, down four basis points from the last quarter [7][25] - Net charge-offs increased to 31 basis points, with full-year 2025 guidance unchanged at 15-25 basis points [7][25] - Criticized commercial loans declined by 4% to $594 million, and nonaccrual loans fell by 9% to $95 million, indicating stable credit quality [7][25] Growth Initiatives - The company added ten new bankers and finalized five new financial center locations in the Dallas area, with three openings slated for late 2025 and the remainder in early 2026 [8][17] - Management expects continued CD repricing at lower rates, forecasting at least an 81% renewal rate in the second half of 2025 [12][24] - The organic hiring plan targets a compounded 10% increase in bankers annually, with flexibility to exceed this if high-quality talent becomes available [12][76]