Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $4.9 million, a decrease of $16.9 million or 77.5% compared to the previous quarter [12] - Diluted earnings per share were $0.16, down from $0.72 in the linked quarter [12] - Net interest income increased by $1.45 million or 2.7% compared to the linked quarter [16] - The tax equivalent net interest margin decreased by one basis point to 2.94% [16] Business Line Data and Key Metrics Changes - Loans increased to $4.77 billion, a linked quarter increase of $163.4 million or 3.5% [12] - The average rate of loans funded during the quarter was approximately 6.7% [12] - Non-interest income, excluding the net loss on the sales of available-for-sale (AFS) securities, increased by $260,000 or 2.1% [17] Market Data and Key Metrics Changes - The company’s securities portfolio was $2.56 billion, a decrease of $174.2 million or 6.4% from the previous quarter [13] - Deposits increased by $329.6 million or 5% on a linked quarter basis [15] - Non-performing assets increased to approximately $2.7 million, but remained low at 0.42% of total assets [10][13] Company Strategy and Development Direction - The company is focusing on repositioning its available-for-sale (AFS) securities portfolio to enhance future net interest income and provide balance sheet flexibility [4] - The company anticipates continued growth in the Texas economy, which is expected to outpace the overall U.S. growth rate [6] - The company is exploring potential acquisitions and hiring opportunities due to market disruptions caused by larger banks [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about net interest income growth due to favorable market conditions and loan growth [5][21] - The company expects net interest margin to improve slightly in Q4 2025, driven by loan growth and securities restructuring [21] - Management noted that competition in the market remains intense, particularly in commercial real estate and C&I lending [30] Other Important Information - The company issued $150 million of subordinated notes at a 7% fixed to floating rate in mid-August [15] - The company repurchased 26,692 shares of common stock at an average price of $30.24 during the third quarter [16] - The effective tax rate for Q3 was 3.7%, a decrease from 17.8% in the prior quarter [18] Q&A Session Summary Question: What is the expected net interest margin for Q4? - Management expects the net interest margin to be up slightly due to the impact of subordinated notes and loan growth [21] Question: Any updates on potential acquisitions? - Management indicated interest in a few institutions that might be for sale and mentioned ongoing hiring efforts due to market disruptions [24] Question: How is the loan pipeline looking entering Q4? - The loan pipeline rebounded to $1.8 billion, indicating strong future growth potential despite a dip mid-quarter [28] Question: What is the outlook for trust fees? - Management anticipates double-digit revenue growth in trust fees due to a strong team and increasing client base [37] Question: How many rate cuts are anticipated through year-end and into 2026? - Management anticipates at least two rate cuts next year, depending on inflation and employment conditions [39]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $37 million or $0.82 per diluted share on revenue of $116 million, reflecting a quarter-on-quarter revenue growth of 13.6% and EPS growth of 19% year-on-year [10][11] - Pre-tax, pre-provision income was $55 million, with a pre-tax, pre-provision ROA of 2.25%, ROA of 1.5%, and ROTC of 15.1%, indicating strong profitability metrics [10][11] - The net interest margin expanded by 9 basis points to 4.27%, supported by an improved deposit mix and higher asset yields [11][16] Business Line Data and Key Metrics Changes - Total loans grew by 6% linked quarter and 11% year-to-date, ending at $7.5 billion, with originations of $264 million driven by commercial banking and equipment leasing [11][13] - Non-interest income totaled $15.9 million, up 9.5% from the last quarter, primarily due to a $7 million gain on the sale of loans [17] - Non-interest expense increased by 1.5% to $60.5 million, reflecting higher salary and employee benefits [18] Market Data and Key Metrics Changes - Total deposits reached $7.8 billion, up 1% linked quarter and 7% year-to-date, with non-interest-bearing accounts increasing by $160 million or 9% linked quarter [11][14] - The company experienced stable demand for credit, with loan commitments growing and draw activity contributing to loan growth [13] Company Strategy and Development Direction - The company aims to build a preeminent commercial banking franchise in Chicago, focusing on expanding its commercial payments business and onboarding customers in 2026 [20] - The company is open to disciplined M&A opportunities that align with its strategic goals, maintaining a strong capital position to support growth and potential acquisitions [6][7][35] Management's Comments on Operating Environment and Future Outlook - Management noted stable to improving credit quality despite macroeconomic uncertainties and geopolitical tensions, emphasizing vigilance over risks [6] - The company anticipates crossing the $10 billion asset threshold in Q1 2026, which will delay the impact of the Durbin Amendment until 2027 [20][37] Other Important Information - The company was recognized with multiple awards, including the 2024 SBA 7A, 504, and Expert Lender of the Year awards, highlighting its strong employee engagement and workplace culture [8] Q&A Session Summary Question: Thoughts on margin and net interest income - Management indicated that they have been outperforming model assumptions due to competitive deposit rate resets and improved analytical capabilities [26][27] Question: M&A activity and capital management - The company remains open to M&A opportunities, focusing on transactions that deliver shareholder value while maintaining capital flexibility for growth and dividends [35][36] Question: Impact of government shutdown on SBA business - Management explained that while they continue to originate SBA loans, the shutdown affects their ability to sell and settle loans in the secondary market, potentially delaying gain on sale income [39][40] Question: Credit reserve levels and economic outlook - The decrease in reserves was attributed to the resolution of loans with specific reserves, and management would assess reserves based on the unguaranteed exposure if holding loans longer due to the shutdown [95][96]

Financial Data and Key Metrics Changes - The company reported a net income of $25.7 million or $0.50 per diluted share for Q3 2025, a slight decrease from $26.4 million or $0.51 per diluted share in Q2 2025, reflecting an annualized ROA of 0.97% and an annualized ROATCE of 11.45% [7] - Net interest income increased to $100.6 million in Q3 2025 from $98.3 million in Q2 2025, with a net interest margin of 4.2% compared to 4.18% in the previous quarter [7][8] - The allowance for credit losses on loans decreased to $78.9 million or 1.1% of loans, down from $83.2 million or 1.14% at the end of Q2 2025 [9] Business Line Data and Key Metrics Changes - Non-interest income decreased to $5 million in Q3 2025 from $5.8 million in Q2 2025, primarily due to write-downs on foreclosed assets [10] - Non-interest expenses increased to $73.1 million from $70 million in the previous quarter, driven by higher salaries and benefits, including severance expenses related to branch closures [10] Market Data and Key Metrics Changes - The company experienced a significant increase in loan originations, up 62% year-to-date compared to the same period last year, with a focus on commercial and industrial (C&I) loans [21] - Deposit growth was strong, with 51% of new deposits coming from new customers, indicating successful market share gains [28] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to building quality assets and protecting margins while focusing on full balance relationships to drive long-term shareholder value [6][12] - The management highlighted the importance of low-cost deposits and plans to continue acquiring customers while being cautious about competitive pressures in the market [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of credit trends and the overall market, despite some charge-offs, indicating a favorable outlook for the company's credit quality [4][25] - The company is positioned to take advantage of opportunities arising from M&A disruptions in Texas, emphasizing its unique franchise strength in a competitive landscape [12] Other Important Information - The company repurchased shares totaling just under $5 million in Q3 2025, with a year-to-date total of approximately $64 million in share repurchases [11] - The total risk-based capital ratio improved to 16.33% at the end of Q3 2025, up from 15.98% at the end of Q2 2025 [11] Q&A Session Summary Question: What is driving the payoffs and paydowns, and what is the growth outlook? - Management noted that payoffs were about $50 million more than the previous quarter, with 44% related to collateral sales and 25% due to refinancing elsewhere, indicating a competitive market [19][20] Question: What are the current credit concerns and management's approach? - Management emphasized the importance of stress testing and careful monitoring of credit quality, with a focus on maintaining a healthy loan-to-deposit ratio [24][25] Question: What are the drivers behind the strong deposit growth? - The company reported that 51% of new deposits were from new customers, reflecting successful brand awareness and market share gains [28] Question: What are the expectations for seasonal deposit strength in Q4? - Management acknowledged historical seasonal strength in government banking deposits but noted the unpredictability of timing [36][38] Question: What makes the current expense level an outlier? - Management indicated that the increase in expenses was due to severance payments and elevated medical insurance costs, expecting expenses to return closer to previous levels in Q4 [40][42] Question: How does the company plan to manage deposit costs moving forward? - The company plans to focus on lowering deposit costs where possible, particularly for price-sensitive customers, while defending its net interest margin [46][49] Question: What are the company's thoughts on M&A opportunities? - Management continues to explore M&A opportunities but remains cautious about protecting the balance sheet and deposit base [60][61]

Financial Data and Key Metrics Changes - The company reported a net income of $25.7 million or $0.50 per diluted share for Q3 2025, a slight decrease from $26.4 million or $0.51 per diluted share in Q2 2025, reflecting an annualized ROA of 0.97% and an annualized ROATCE of 11.45% [6][11] - Net interest income increased to $100.6 million in Q3 2025 from $98.3 million in Q2 2025, driven by higher earning assets and a net interest margin of 4.2%, up from 4.18% in the previous quarter [6][7] - The allowance for credit losses on loans decreased to $78.9 million or 1.1% of loans, down from $83.2 million or 1.14% at the end of Q2 2025 [9] Business Line Data and Key Metrics Changes - Non-interest income decreased to $5 million in Q3 2025 from $5.8 million in Q2 2025, primarily due to write-downs on foreclosed assets [10] - Non-interest expenses increased to $73.1 million from $70 million in the previous quarter, attributed to higher salaries and benefits, including severance expenses related to branch closures [10] Market Data and Key Metrics Changes - The company experienced strong deposit growth, with 51% of new deposits coming from new customers, indicating a successful strategy in expanding market share [24] - The total risk-based capital ratio improved to 16.33% at the end of Q3 2025, compared to 15.98% at the end of Q2 2025 [11] Company Strategy and Development Direction - The company aims to enhance shareholder value through disciplined asset building, protecting margins, and focusing on full client relationships [5] - The management emphasized the importance of maintaining a strong balance sheet to support quality growth and to be opportunistic in the current competitive landscape [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in credit quality, noting that charge-offs were primarily from small credits that were already identified and reserved for [4] - The company anticipates continued loan origination growth, with a healthy pipeline and a year-to-date increase of 62% in loan originations compared to the previous year [18] Other Important Information - The company repurchased shares and paid down $30 million of subordinated debt after the quarter ended, reinforcing its capital position [5] - The tangible book value per share increased by 9.3% year-over-year, from $19.28 to $21.08 [11] Q&A Session Summary Question: What is driving the payoffs and paydowns? - Payoffs were about $50 million more than the previous quarter, with 44% related to collateral sales and 25% to refinancing elsewhere [16][17] Question: What are the current credit concerns? - Management stated that stress testing and portfolio monitoring are in place, and they are cautious about the mix of C&I credits while maintaining a focus on real estate loans [19][20] Question: What are the drivers behind deposit growth? - The growth was driven by new accounts, with 51% of new deposits from new customers, reflecting brand awareness and customer satisfaction improvements [24] Question: What are the expectations for loan growth and payoffs? - Management expects a lift from advances exceeding paydowns, with a healthy pipeline and loan originations anticipated to continue growing [44][46] Question: What is the company's approach to M&A? - The company is cautious about M&A, focusing on finding partners that align with their funding structure and protecting their balance sheet [48]

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Financial Data and Key Metrics Changes - In Q3 2025, the company reported earnings of $0.73 per share, with total loans growing by 1% quarter-over-quarter and 3% year-over-year [8][10] - Net interest income reached a record $305 million in Q3, up 16% compared to 2024, while the net interest margin held steady at 3.04% [10][21] - The return on average tangible common equity improved to over 14%, a 250 basis point increase from Q3 of the previous year [12] Business Line Data and Key Metrics Changes - Commercial and industrial (C and I) loans grew by nearly $300 million in Q3 and by almost $1 billion year-to-date, leading the growth in total loans [9][15] - Core customer deposits increased by over $600 million in Q3, with a year-over-year growth of 4% or $1.2 billion [10][16] - Non-interest income for Q3 was $81 million, a 21% increase from the prior quarter, driven by capital markets revenue and wealth fees [10][24] Market Data and Key Metrics Changes - The company added $600 million in core deposits in Q3, contributing to a decrease in reliance on wholesale funding, which fell by 2% compared to Q2 [16] - The overall wholesale funding sources decreased, indicating a shift towards more stable funding sources [16] Company Strategy and Development Direction - The company is focused on organic growth, particularly in commercial lending and deposit acquisition, by hiring talented relationship managers in underpenetrated metro markets [12][13] - The strategy includes remixing the balance sheet to replace low-yielding residential mortgages with higher-yielding commercial loans, enhancing profitability [13][14] - The company aims to maintain a conservative credit culture while proactively managing existing portfolios and emerging risks [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow and deepen its customer base despite macroeconomic uncertainties [8][12] - The outlook for 2026 remains positive, with expectations for continued growth in C and I loans and core deposits as non-compete agreements expire [12][19] - Management is closely monitoring credit quality and macroeconomic factors, maintaining a high degree of confidence in the loan portfolio [29][31] Other Important Information - The company expects total bank loan growth of 5% to 6% for the year, with a focus on maintaining credit discipline [15][19] - Capital ratios increased, with the CET1 ratio rising to 10.33%, indicating a strong capital position [27] Q&A Session Summary Question: What happens when the remaining RMs come off their non-compete? - Management expects growth rates to accelerate as production is up 12% and the pipeline is up 31% [35][36] Question: Can you discuss the fee income and expectations for Q4? - Fee income can be lumpy, and a one-time asset gain in Q3 is not likely to repeat at the same level, but underlying capital markets and commercial production are expected to remain strong [39][40] Question: How do you see the return on average tangible common equity improving further? - Management believes there are opportunities to continue improving the return on equity, especially with the hiring of new talent and the response to rate cuts [41][42] Question: What drove the modest increase in deposit costs in Q3? - The increase was attributed to seasonality and higher pricing accounts coming back into play, but overall, management is comfortable with the net results [49][50] Question: What is the outlook for loan growth in residential and commercial real estate? - Residential loans are expected to continue running off, while commercial real estate payoffs may remain elevated, but new construction lending is increasing [59][62] Question: Is the company considering M&A for growth? - The focus remains on organic growth, but the company is open to opportunistic acquisitions if they align with its strategy [66] Question: How is the lending pipeline performing? - The increase in the lending pipeline is primarily due to new hires and market share gains rather than borrower optimism [72][74]

Financial Data and Key Metrics Changes - Adjusted total revenues reached $43.5 million, an increase of 30% over the second quarter [5] - Net interest income increased over 8% compared to the linked quarter and was up 40% compared to the third quarter of 2023 [6] - Net interest margin on a fully tax-equivalent basis increased 8 basis points to 2.12% [6][14] - The company reported a net loss of $41.6 million, or $0.476 per diluted share, with an adjusted net loss of $12.5 million, or $1.43 per diluted share [13] Business Line Data and Key Metrics Changes - The gain on sale of SBA loans generated $10.6 million in revenue, rebounding strongly in the third quarter [10] - Commercial loan balances were up $115 million, or 3.2%, while total loan balances increased by $105 million, or 2.4% [8] - Total revenue from fintech initiatives was up 14% compared to the second quarter and up 130% from the third quarter of 2024 [12] Market Data and Key Metrics Changes - Total delinquencies were 35 basis points as of September 30, down from 62 basis points in the second quarter [7] - Non-performing loans totaled $53.3 million at the end of the third quarter, up $9.7 million from the linked quarter [19] - The allowance for credit losses increased to $59.9 million, up $13.4 million, or almost 30% from the second quarter [20] Company Strategy and Development Direction - The company executed strategic actions that had a near-term negative impact on earnings but strengthened its financial position for future growth [6] - The focus remains on enhancing net interest margin and achieving a 1% return on average assets [7] - The company is exploring fintech opportunities and leasing opportunities that yield higher returns compared to previous investments [75] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the credit outlook, indicating that delinquencies are trending down and the worst may be behind them [30][33] - The company anticipates loan balances to increase at an unannualized rate of 4% to 6% in the fourth quarter [23] - The macro environment remains uncertain, but customer activity is stabilizing, and lending teams are performing well [80] Other Important Information - The company completed the sale of $837 million of single-tenant lease financing loans, which had a net loss of $37.8 million [22] - The company has proactively secured SBA authorizations for loans in its pipeline prior to the government shutdown [10] Q&A Session Summary Question: What is the credit outlook? - Management indicated that delinquencies are decreasing, with only four delinquent accounts in the franchise finance portfolio [30] Question: How are you managing the government shutdown's impact? - The company secured authorizations for loans before the shutdown and can continue to fund loans where authorization exists [41] Question: Can you provide insights on the franchise finance portfolio? - An external audit showed no downgrades and two upgrades in the franchise finance portfolio, boosting confidence [46]

Core Insights - Annaly Capital Management, Inc. (NLY) reported third-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, surpassing the Zacks Consensus Estimate of 72 cents, and an increase from 66 cents in the same quarter last year [1][9] - The average yield on interest-earning assets improved to 5.40%, contributing to a net interest margin of 1.70%, while the book value per share (BVPS) declined to $19.25 from $19.54 year-over-year [3][4][9] Financial Performance - Net interest income (NII) for the quarter was $275.8 million, which fell short of the Zacks Consensus Estimate by 38.3%, compared to $13.4 million in the prior-year quarter [2] - Total assets increased to $125.9 billion, reflecting a 12.2% rise from the previous quarter [2] - The net interest spread (excluding premium amortization adjustment) improved to 1.50%, up from 1.32% in the prior-year quarter [3] Key Ratios and Metrics - The economic capital ratio stood at 14.8%, an increase from 14.6% in the prior-year quarter [4] - The weighted average actual constant prepayment rate rose to 8.6%, compared to 7.6% in the year-ago quarter [4] - Economic leverage remained stable at 5.7X as of September 30, 2025 [4] Return Metrics - Annaly generated an annualized EAD return on average equity of 14.7%, up from 12.9% in the prior-year quarter [5] Market Outlook - The company's performance in the third quarter was bolstered by an increase in average yield and total assets, although the decline in BVPS raises concerns [6] - The financial market's uncertainty may pose challenges in achieving solid returns moving forward [6]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net earnings of $52.6 million or $0.38 per share, an increase from $50.6 million or $0.37 per share in Q2 2025 and $51.2 million or $0.37 per share in Q3 2024 [4][5] - The return on average tangible common equity was 14.11% and return on average assets was 1.35% for Q3 2025 [4] - Pre-tax pre-provision income increased to $70 million, up 2% from Q2 2025 and 3.5% from Q3 2024 [5] Business Line Data and Key Metrics Changes - Net interest income for Q3 2025 was $115.6 million, compared to $111.6 million in Q2 2025 and $113.6 million in Q3 2024 [13] - Noninterest income was $13 million in Q3 2025, down $1.7 million from Q2 2025, but increased by $260,000 when excluding a legal settlement and loss on sale of AFS [7] - Total loans increased by $112 million or 5% annualized from Q2 2025, with growth in nearly all loan categories [9][11] Market Data and Key Metrics Changes - Total deposits and customer repurchase agreements reached $12.6 billion, a $170 million increase from Q2 2025 and $108 million higher than Q3 2024 [8] - Noninterest-bearing deposits grew by $108 million compared to Q3 2024, while interest-bearing non-maturity deposits and customer repos increased by $100 million [9] - The cost of deposits and repos was 90 basis points for Q3 2025, compared to 87 basis points in Q2 2025 and 101 basis points in Q3 2024 [9] Company Strategy and Development Direction - The company is focused on banking small to medium-sized businesses and their owners through all economic cycles, maintaining a consistent performance over 48 years [49] - A new de novo office is being opened in the Temecula-Murrieta area, with a team of four bankers hired from City National Bank [25] - The company continues to invest in technology infrastructure and automation, with a notable increase in software expenses [20] Management's Comments on Operating Environment and Future Outlook - The economic forecast indicates lower GDP growth and a slightly lower unemployment rate, with real GDP expected to remain below 1.5% until the end of 2027 [15] - Management expressed confidence in maintaining low single-digit loan growth for the year, despite competitive pressures [28] - The company plans to continue matching deposit rate decreases with Fed funds rate cuts [23] Other Important Information - The allowance for credit loss was $79 million at September 30, 2025, or 0.94% of gross loans, reflecting a slight increase from the previous quarter [15] - The unrealized loss on AFS securities decreased by $31.6 million from June 30, 2025, to September 30, 2025 [16] - Shareholders' equity increased to $2.28 billion, with a tangible common equity ratio of 10.1% [18] Q&A Session Summary Question: Interest-bearing deposit costs and beta cycle - Management noted that the recent rate cut impacted the beta cycle, and they plan to reduce rates in line with Fed actions [23][24] Question: M&A updates - There is ongoing dialogue regarding M&A, but no imminent actions; a new office is being opened to enhance market presence [25] Question: Loan growth expectations - Management expects to maintain low single-digit growth, with strong pipelines and opportunities despite seasonal factors [28][29] Question: Pricing competition in loans - The company is willing to compete on pricing for quality relationships, but is cautious about maintaining credit quality [30] Question: Dairy and livestock line utilization - New relationships contributed to increased utilization, and management expects normal seasonal increases in the fourth quarter [33] Question: Interest rate swaps outlook - Management acknowledged potential negative impacts on net interest income from interest rate swaps but plans to maintain the current strategy [34] Question: Deposit gathering competition - Deposit gathering remains strong, with a focus on operating companies rather than high-rate products [38] Question: Cash balances and deployment - The company is preparing for seasonal increases in dairy and evaluating bond market opportunities for cash deployment [44] Question: Expense management heading into 2026 - Management plans to continue closely managing expenses, with a focus on technology investments [46]

Financial Data and Key Metrics Changes - Net interest income increased by $1.5 million compared to the second quarter and by $5 million year-over-year [4] - Net income rose by $3.5 million, or 43%, compared to Q3 of 2024 [5] - Return on average assets improved by 28 basis points to 1.16% compared to 0.88% in the third quarter of last year [5] - Earnings per share increased to $0.47 in the third quarter, a 46% increase compared to Q3 a year ago [5] - Return on tangible common equity was reported at 12.35% [5] Business Line Data and Key Metrics Changes - Loans increased by $47 million for the second quarter, or 5.6% annualized, and grew by $286 million, or over 9%, year-over-year [8] - C&I loans grew by $194 million, and owner-occupied commercial real estate loans increased by $40 million [8] - Specialized lending groups now constitute 16% of total loans, with no single niche exceeding 5% of total loans [5] - Non-performing assets declined to 36 basis points compared to 40 basis points at June 30 and 47 basis points one year ago [11] Market Data and Key Metrics Changes - Deposit balances increased by over $55 million during the quarter, or an annualized 7% [9] - Average cost of deposits declined by 3 basis points to 2.69% for the quarter [15] - Average non-interest-bearing deposits grew by $21 million during the quarter and by $52 million year-to-date [15] Company Strategy and Development Direction - The company is evolving into a middle-market commercial bank, focusing on relationship-driven strategies rather than growth for its own sake [19] - New branch openings and strategic closures are part of the company's efforts to optimize its branch network [17] - The company aims to maintain a balance between growing deposits and managing costs effectively [19] Management's Comments on Operating Environment and Future Outlook - The economic outlook remains uncertain, but the company is well-positioned for various rate environments [7] - Management is focused on maintaining credit quality despite some softness in the small business segment [6] - The company anticipates a modest increase in expenses due to new branches but aims to keep overall costs flat [35] Other Important Information - Non-interest income totaled $2.4 million in Q3 2025, down from $2.7 million in Q2 [12] - The efficiency ratio improved to 52%, remaining below 60% for the 25th consecutive quarter [13] - The company repurchased almost 120,000 shares at an average price of $14.91 during the quarter [7] Q&A Session Summary Question: Discussion on expenses and efficiency actions - Management highlighted ongoing focus on cost control while balancing investment opportunities, with no major new costs anticipated [32][33] Question: Insights on margin and deposit costs following Federal Reserve cuts - Management indicated that adjustments to deposit costs will be made in response to Federal Reserve actions, aiming for a neutral impact on margins [39][40] Question: Capital levels and buyback considerations - The company maintains a soft limit on total risk-based capital ratio around 11.5% and is open to various capital deployment strategies, including buybacks [44][45]