Financial Data and Key Metrics Changes - The company reported net income of $4,900,000, a decrease of $16,900,000 or 77.5% compared to the previous quarter [13] - Diluted earnings per share were $0.16 for the third quarter, down from $0.56 per share linked quarter [13] - Net interest income increased by $1,450,000 or 2.7% compared to the linked quarter [19] - The tax equivalent net interest margin was 2.94%, a decrease of one basis point from 2.95% [19] - Non-interest expense was $37,500,000, a decrease of $1,700,000 or 4.4% on a linked quarter basis [19] Business Line Data and Key Metrics Changes - Loans increased to $4,770,000,000, a linked quarter increase of $163,400,000 or 3.5% [13] - The increase in loans was driven by $82,600,000 in commercial real estate loans, $49,300,000 in commercial loans, and $49,100,000 in construction loans [14] - Non-performing assets increased by approximately $2,700,000, remaining at 0.42% of total assets [11][14] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall U.S. growth rate [6] - The loan pipeline rebounded to approximately $1,800,000,000, indicating strong market conditions [10] Company Strategy and Development Direction - The company is focusing on repositioning its available-for-sale securities portfolio to enhance future net interest income and provide balance sheet flexibility [4][5] - There is an interest in potential acquisitions and hiring due to market disruptions caused by larger banks acquiring smaller institutions [27] - The company plans to explore wealth management opportunities in metro markets, aiming for double-digit revenue growth in trust fees [45][46] 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 expectations [6][24] - The company anticipates a slight increase in net interest margin for the fourth quarter, driven by loan growth and securities restructuring [23][24] - Future rate cuts are expected, with management anticipating at least two cuts in the next year [47][48] Other Important Information - The company repurchased 26,692 shares of common stock at an average price of $30.24 during the third quarter [18] - The allowance for credit losses increased to $48,500,000, while the allowance for loan losses as a percentage of total loans decreased to 0.95% [14] Q&A Session Summary Question: What is the expected margin for the fourth quarter considering the recent restructuring? - Management expects the net interest margin to be up slightly in the fourth quarter, with loan growth anticipated [23][24] Question: Any updates on potential acquisitions or hiring opportunities? - Management indicated interest in a few institutions potentially for sale and mentioned ongoing hiring efforts due to market disruptions [27] Question: How is the loan pipeline looking entering the fourth quarter? - The loan pipeline is strong, rebounding to $1,800,000,000, with a good pull-through rate expected [10][34] Question: What is the pricing competition like in the current market? - There is significant competition in both commercial real estate and commercial loans, but the company is maintaining a disciplined pricing approach [35] Question: What are the expectations for trust fee growth? - Management anticipates double-digit revenue growth in trust fees due to a strong team and new client acquisitions [45][46]

Core Insights - Valley National Bancorp (VLY) reported better-than-expected quarterly results, with adjusted earnings per share of 28 cents, surpassing the Zacks Consensus Estimate of 26 cents, and a year-over-year increase of 55.6% [1][10] Financial Performance - The third-quarter 2025 net income reached $163.4 million, a 66.9% increase from the previous year, driven by higher net interest income (NII) and non-interest income, despite higher expenses and lower loan balances [2][10] - Total revenues on a fully-taxable-equivalent (FTE) basis were $512.4 million, an 8.4% year-over-year increase, although slightly below the Zacks Consensus Estimate of $513.9 million [3] - NII on an FTE basis was $447.5 million, up 8.7% year over year, with a net interest margin of 3.05%, expanding by 19 basis points [3] - Non-interest income rose 6.9% year over year to $64.9 million, primarily due to increases in various fee income components [4] Expense Management - Non-interest expenses totaled $282 million, a 4.6% increase year over year, while adjusted non-interest expenses rose 3.5% to $272.8 million [4] - The adjusted efficiency ratio improved to 53.37%, down from 56.13% in the prior-year quarter, indicating enhanced profitability [5] Loan and Deposit Trends - As of September 30, 2025, total loans were $49.3 billion, showing a slight decline, while total deposits increased to $51.2 billion, up approximately 1% from the previous quarter [6] Credit Quality - Total non-performing assets increased to $427.3 million, a 40.1% rise year over year, with the allowance for credit losses as a percentage of total loans at 1.21%, up 7 basis points [7] - Provision for credit losses was $19.2 million, down 74.4% year over year [7] Profitability and Capital Ratios - Adjusted annualized return on average assets improved to 1.04%, up from 0.62% in the previous year, while adjusted annualized return on average shareholders' equity rose to 8.62%, up from 5.64% [8] - The tangible common equity to tangible assets ratio was 8.79%, an increase from 7.68% in the corresponding period of 2024, and the Tier 1 risk-based capital ratio improved to 11.72% from 10.29% [9]

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $46 million or $0.74 per diluted share for Q3 2025, with a return on average assets of 1.2% and return on average equity of 8.35% [4] - Net interest income increased by $7.4 million or 7% year-over-year, driven by improving deposit costs and growth in higher yielding commercial loans [14] - The allowance for credit losses declined by $2.8 million to $95 million, resulting in a coverage ratio of 1.16% [12][13] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pre-tax income on $12.6 billion of average assets, with a return on average assets of 1.34% [4] - PrimeLending reported a pre-tax loss of $7 million due to subdued mortgage origination volumes, with existing home sales at their lowest level in over 30 years [6][7] - Hilltop Securities Inc. generated pre-tax income of $26.5 million on net revenues of $144.5 million, with a pre-tax margin of 18% [7][8] Market Data and Key Metrics Changes - Total core deposits at PlainsCapital increased by 6% on a linked quarter basis, attributed to seasonal cash inflows from large balance customers [5] - Mortgage revenues declined by $3.4 million year-over-year, with origination volumes stable but gain on sale margins improving by 8 basis points [17][18] - The fixed income business showed a 13% increase in net revenues year-over-year, reflecting robust industry volumes [8] Company Strategy and Development Direction - The company aims to increase market share despite elevated competition in Texas, focusing on core loan growth and managing interest expenses [5][22] - Hilltop Securities continues to invest in core areas of expertise, leveraging its national brand built on trust [9] - The leadership transition at PlainsCapital Bank is seen as an opportunity for continued growth while maintaining the bank's legacy and credit culture [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's ability to manage credit risks and maintain a conservative credit culture despite competitive pressures [22][23] - The outlook for 2025 reflects current assessments of the economy and market conditions, with a focus on producing quality outcomes for clients and communities [24] - Management anticipates continued challenges in the mortgage market but expects gradual improvement into 2026 [18] Other Important Information - Hilltop maintains strong capital levels with a common equity tier one capital ratio of 20% and tangible book value per share increased by $0.67 to $31.23 [9] - The company returned $11 million to stockholders through dividends and repurchased $55 million in shares during the quarter [9] Q&A Session Summary Question: NII guidance and near-term outlook - Management explained that the NII guidance was not increased due to expected rate cuts and potential paydowns impacting loan growth [26][28] Question: Stock buyback strategy and M&A outlook - Management confirmed a consistent approach to share repurchases given excess capital and discussed opportunities in the Texas market for potential M&A [30][31] Question: Auto portfolio exposure - Management addressed concerns regarding the auto portfolio, noting a reduction in commitments and ongoing workout efforts for non-accrual clients [32][33] Question: Broker-dealer fee income - Management highlighted strong performance in public finance and other segments, but anticipated a reversion to lower pre-tax margins in the future [42][44] Question: Effects of government shutdown - Management indicated no primary effects on the broker-dealer from the government shutdown, but noted potential processing delays in mortgage and SBA areas [51][52]

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $46 million or $0.74 per diluted share for Q3 2025, with a return on average assets of 1.2% and return on average equity of 8.35% [4][13] - Net interest income increased by $7.4 million or 7% year-over-year, driven by improving deposit costs and growth in higher yielding commercial loans [16][19] - The allowance for credit losses declined by $2.8 million to $95 million, resulting in a coverage ratio of 1.16% [13][14] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pre-tax income on $12.6 billion of average assets, with a return on average assets of 1.34% [4][5] - PrimeLending reported a pre-tax loss of $7 million due to subdued mortgage origination volumes and pressure on margins [6][8] - Hilltop Securities Inc. generated pre-tax income of $26.5 million on net revenues of $144.5 million, achieving a pre-tax margin of 18% [8][10] Market Data and Key Metrics Changes - Total core deposits at PlainsCapital increased by 6% on a linked quarter basis, attributed to seasonal cash inflows [5] - Existing home sales across the country reached their lowest level in over 30 years, impacting PrimeLending's performance [7][20] - Hilltop Securities experienced solid growth in public finance, structured finance, and wealth management, with net revenues increasing significantly year-over-year [9][21] Company Strategy and Development Direction - The company aims to focus on reducing fixed expenses and recruiting talented mortgage originators to restore profitability at PrimeLending [8][20] - Hilltop Securities continues to invest in core areas of expertise and leverage its national brand to serve clients effectively [10][21] - The company is exploring opportunities for growth through potential M&A in the Texas market, which has seen increased interest from out-of-market entrants [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong capital levels with a common equity tier one capital ratio of 20% and tangible book value per share increasing to $31.23 [10] - The outlook for 2025 reflects current assessments of the economy and market conditions, with expectations for continued challenges in the mortgage market [25] - Management remains vigilant regarding credit risks and is focused on early detection and aggressive workout strategies [24] Other Important Information - The company returned $11 million to stockholders through dividends and repurchased $55 million in shares during the quarter [10] - A leadership transition is occurring at PlainsCapital Bank, with the promotion of Brent Randall to Chief Credit Officer [11] Q&A Session Summary Question: NII guidance and margin expectations - Management explained that the NII guidance was not increased due to expected rate cuts and potential asset contraction, emphasizing the balance sheet's asset sensitivity [27][28] Question: Stock buyback strategy and M&A outlook - Management confirmed a consistent approach to share repurchases given the current stock price and excess capital, while also exploring M&A opportunities in Texas [30][31] Question: Auto portfolio exposure - Management acknowledged subprime exposure in the auto portfolio but stated that they are closely monitoring and managing the situation [32][38] Question: Broker-dealer fee income and future expectations - Management highlighted strong performance across all broker-dealer business lines in Q3 but anticipated a reversion to lower pre-tax margins in the future [40][41]

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] - 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, up from $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 securities [8] - Total loans increased by $112 million or 5% annualized from Q2 2025, with growth in nearly all loan categories [9][10] 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 in 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 maintaining profitability and has a history of 194 consecutive quarters of profitability and 144 consecutive quarters of paying cash dividends [4][5] - The company is actively pursuing M&A opportunities and has recently hired a team of bankers to open a new office in the Temecula-Murrieta area [28][29] - The company continues to invest in technology infrastructure and automation, with a focus on maintaining low single-digit growth in expenses [21][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining loan growth, targeting low single-digit growth for the year, with strong pipelines and opportunities [36] - The economic forecast indicates modest GDP growth below 1.5% until the end of 2027, with an unemployment rate expected to reach 5% by early 2026 [16][17] - Management acknowledged intense competition in loan pricing but emphasized a focus on maintaining credit quality [38][52] Other Important Information - The company experienced a $6 million legal settlement, which was offset by an $8.2 million loss on the sale of low-yielding AFS securities [5] - The unrealized loss on AFS securities decreased by $31.6 million from Q2 2025 to Q3 2025 [17] - 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 deposit costs and indicated plans to match Fed fund decreases with reductions in money market rates [26][27] Question: Update on M&A dialogue - Management confirmed ongoing discussions but no imminent deals, highlighting the recent hiring of a team from City National Bank [28][29] Question: Expectations on loan growth - Management expressed confidence in maintaining low single-digit growth, with strong pipelines and opportunities despite seasonal factors [36] Question: Pricing competition in the market - Management stated willingness to compete on price for quality relationships while maintaining credit standards [38] Question: Impact of interest rate swaps - Management acknowledged potential negative impacts on net interest income from interest rate swaps but plans to maintain the current strategy [45] Question: Utilization of cash balances - Management indicated that cash balances may be deployed depending on bond market conditions and anticipated seasonal increases in dairy loans [60] Question: Expense management heading into 2026 - Management plans to continue closely managing expenses with low single-digit growth expectations [61]

Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June 2025 quarter, but up $0.28 from the September quarter a year ago [4] - Net interest margin for the quarter was 3.57%, up from 3.47% for the fourth quarter of fiscal 2025 and from 3.34% in the year-ago quarter [5][18] - Non-interest income was down by 9.7% or $707,000 compared to the linked quarter, but was more than offset by lower non-interest expense of $925,000 or a 3.6% decrease quarter over quarter [5][22] - The allowance for credit losses at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans [23] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, with a year-over-year increase of $225 million or 5.7% [6] - The growth in the quarter was led by non-owner occupied commercial real estate, one-to-four family residential, commercial & industrial, and multifamily loans [6] - Deposit balances were relatively flat compared to the linked quarter but up $240 million or 5.9% over the last 12 months [7] Market Data and Key Metrics Changes - Strong growth was experienced in the east region, particularly in agricultural activity, while the south region also showed good growth [7] - The loan pipeline anticipated to fund in the next 90 days remains strong, totaling about $195 million at September 30 [7] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth due to seasonal factors [7][20] - The company is focusing on improving credit quality and has been proactive in working with borrowers to assess their positions and utilize government programs to mitigate risk [17] - There is a modest uptick in M&A discussions, with the company well-positioned to act when the right partner is ready [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about performance in the new fiscal year, despite a larger provision for credit losses due to the evolving economic environment [3][24] - The company expects to see continued net interest income growth through the year, despite historical seasonal slowdowns in loan growth [20][21] - Management noted that charge-off activity is expected to drop from the levels of the last two quarters, with current delinquency levels trending back to historical ranges [33] Other Important Information - The company has repurchased just over 8,000 shares at an average price of just under $55, with an average purchase price at 127% of tangible book value [9] - The tangible book value increased by $5.09 or 13.3% over the last 12 months, attributed to earnings retention and improvements in the bank's unrealized loss in the investment portfolio [8][9] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, with current delinquency levels running similar to historical ranges [33] Question: Bank's rate sensitivity and margin expansion - The bank remains overall liability-sensitive, with expectations of being a net beneficiary of rate cuts, estimating a 1% to 3% increase in net interest income per 100 basis points of rate cuts [36] Question: Update on loan pipeline and growth expectations - The loan pipeline remains consistent, with expectations of mid-single-digit growth for the fiscal year, though seasonal slowdowns are anticipated [44] Question: Buyback activity and M&A discussions - Management anticipates being more active in buyback activity given current pricing and is in discussions for potential M&A opportunities, ideally targeting banks in the billion-dollar asset range [50][27]

Financial Performance - The company reported a net income of $100 million for Q3 2025, a 25% increase from $80 million in Q2 2025, with normalized earnings per share growing 13% year-over-year [4][11] - Return on average assets for the quarter was 2.1%, significantly higher than the previous quarter [11] - Net interest income reached $217.9 million, an 8% increase compared to Q3 2024, with a net interest margin of 4.57%, up 32 basis points over the last four quarters [14][15] Loan and Deposit Growth - Total loans grew by $181 million, or 5.6% annualized, surpassing $13 billion for the first time since 2010 [5] - Core franchise deposits increased by $140 million, with favorable trends in market flows despite higher competition [7] - The company experienced a slowdown in consumer credit demand, particularly in the auto industry, which saw a 7% decline in total retail sales year-to-date [6][9] Asset Quality and Credit Trends - Non-performing assets decreased by 7% with a reduction in charge-offs and stable credit trends [7][19] - The allowance for credit losses decreased to 1.89% of loans, reflecting improved loss severities in the residential mortgage portfolio [20][21] - Net charge-offs for the quarter were $19.9 million, representing 0.62% of average loans, slightly up from the previous quarter [20] Strategic Outlook and Market Conditions - The company plans to strategically deploy excess capital to support organic growth, particularly in commercial and residential mortgage lending [9][10] - The operating environment remains stable, with potential impacts from evolving trade dynamics and inflationary pressures being monitored [8] - The company expects loan growth for the year to be in the range of 3% to 4%, down from previous guidance of 5% [10][64] Management Commentary - Management expressed confidence in the resilience of the labor market in Puerto Rico and the positive impact of federal disaster funds on local economies [9] - The company is optimistic about the ongoing expansion of the manufacturing sector and its potential benefits for the franchise [9] - Management noted that competitive pressures in the deposit market are primarily from smaller players, with expectations for some reduction in deposit costs due to rate cuts [38][41] Other Important Information - The board authorized an additional $200 million share buyback program, continuing the strategy of returning 100% of annual earnings to shareholders [8][22] - The effective tax rate for 2025 is estimated to be around 22.2%, reflecting some expected improvements [84] Q&A Session Summary Question: Is the tax situation a one-time benefit? - Management confirmed that while there will be no further reversals of deferred tax assets at the same level, there will be ongoing benefits from normal operating losses [26] Question: What is the health of the consumer in Puerto Rico? - Management indicated that auto sales are normalizing and credit demand has been lower, but overall consumer credit trends remain stable [30] Question: What are the expectations for deposit costs with upcoming rate cuts? - Management expects some reduction in deposit costs, but noted that the timing of these reductions may lag behind floating asset products [41] Question: What is the outlook for loan growth into Q4? - The company maintains a loan growth guidance of 3% to 4% for the year, with a strong pipeline in commercial lending [64] Question: Can you elaborate on competitive pressures in the deposit market? - Management noted that competitive pressures are primarily from smaller players and that they are managing this by offering additional services beyond just deposit products [39]

Financial Performance - Net income increased by $1 million to $211 million in Q3 2025 compared to Q2 2025[3] - Net interest income increased by $15 million to $647 million in Q3 2025[4, 18] - Earnings per share (EPS) increased by $006 to $315 in Q3 2025[3] - Tangible book value per share increased by $371 to $7912[6] Balance Sheet - Loans held in portfolio grew by $502 million or 13% to $38687 million[3, 4, 62] - Total deposits decreased by $704 million or 11% to $66513 million[3, 4] - Common Equity Tier 1 decreased 12 bps to 1579%[6] Credit Quality - Non-performing loans (NPLs) increased by $190 million to $502 million, with the NPL ratio at 130% versus 082% in Q2 2025[3, 6] - The ACL-NPL ratio decreased to 157% from 247% in Q2 2025[3, 6] - Net charge-offs (NCO) ratio increased to 060% from 045% in Q2 2025[3, 6] Business Segment Performance - BPPR's loans held in portfolio increased by $357 million to $27131 million[7, 9] - Popular US's loans held in portfolio increased by $145 million to $11525 million[7, 9]

Financial Performance - The company reported a net income of $100 million for Q3 2025, a 25% increase from $80 million in Q2 2025, with normalized earnings per share growing 13% year-over-year [4][10] - Return on average assets for the quarter was 2.1%, significantly higher than the previous quarter [10] - Net interest income reached $217.9 million, an 8% increase compared to Q3 2024, with a net interest margin of 4.57%, up 32 basis points over the last four quarters [12][10] Business Line Performance - Total loans grew by $181 million, or 5.6% annualized, surpassing $13 billion for the first time since 2010 [5] - The company experienced a slowdown in consumer credit demand, particularly in the auto industry, which saw a 7% decline in total retail sales year-to-date [5][6] - Commercial and construction lending segments showed growth, while residential mortgage business maintained steady loan production [6] Market Data - The company noted a 7% reduction in non-performing assets and stable credit quality, with consumer charge-offs normalizing [6][18] - The competitive landscape for deposits remains challenging, particularly from smaller players, but the company is optimistic about stabilizing deposit costs amid expected rate cuts [6][36] Strategic Direction - The company plans to continue its strategy of returning 100% of annual earnings to shareholders, with a new $200 million share buyback program authorized [7][21] - The management emphasized the importance of organic growth and potential M&A opportunities in the Florida market, focusing on franchises that complement existing operations [21][44] Management Commentary - Management expressed confidence in the resilience of the labor market in Puerto Rico and the positive impact of federal disaster funds on local economies [8] - The outlook for loan growth is projected to be between 3% and 4% for the year, influenced by the slowdown in auto lending but supported by strong pipelines in commercial lending [9][61] Other Important Information - The effective tax rate is expected to stabilize around 22.2% for 2025, reflecting improvements from recent legislative changes [10][78] - The company has seen a shift in deposit mix, with time deposits increasing while lower-cost non-maturity deposits decreased [13] Q&A Session Summary Question: Is the tax situation a one-time benefit? - Management confirmed that while there will be no further reversals of deferred tax assets at the same level, there will be ongoing benefits from normal operating losses [25] Question: What is the outlook for consumer health in Puerto Rico? - Management noted that while auto sales are normalizing, credit demand has been lower, but overall consumer credit trends remain stable [26][28] Question: What are the expectations for deposit costs with upcoming rate cuts? - Management expects some reduction in deposit costs due to rate cuts, but the timing of these reductions may lag behind asset repricing [40] Question: How does credit performance at other banks influence reserving? - Management stated that they maintain a firm risk appetite and focus on their portfolio's performance, without seeing systemic impacts from competitors [41] Question: What are the capital deployment priorities? - The company prioritizes organic growth and is open to M&A opportunities that enhance their franchise, particularly in Florida [44]

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 [9] - 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 [15] 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][34] Question: Margin and deposit cost adjustments 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 [38][39] 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 capital deployment through buybacks depending on market conditions [43][44]