Financial Data and Key Metrics Changes - The company reported normalized FFO of $10.8 million or $0.07 per share, down from $0.13 per share in the prior year quarter [21] - Adjusted EBITDAre increased slightly year over year to $115.8 million [21] - Interest expense increased by $10.1 million compared to the prior year [21] Business Line Data and Key Metrics Changes - Comparable hotel RevPAR grew by 2.6% year over year, with GOP and adjusted hotel EBITDA declining due to renovations and increased costs [5][9] - Full service hotels reported a 1.9% increase in RevPAR, while select service portfolio saw a 10.6% increase [9][10] - Extended stay portfolio's RevPAR was flat, impacted by renovations [10] Market Data and Key Metrics Changes - The lodging portfolio experienced a slowdown in RevPAR growth as the quarter progressed, influenced by reduced government and international travel [6][30] - Group revenue pace increased by 6.5% year over year, indicating strong demand despite overall market challenges [33] Company Strategy and Development Direction - The company plans to sell 123 hotels in 2025, with estimated proceeds of $1.1 billion to strengthen the balance sheet and reinvest in growth opportunities [7][13] - A strategic shift towards increasing net lease exposure is anticipated, with a target of 54% net lease and 46% lodging assets post-disposition [14] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainties but expressed confidence in portfolio optimization initiatives and durable cash flows from net lease assets [14] - The company expects RevPAR for Q2 to be between $99 and $102, with adjusted hotel EBITDA projected at $69 million to $74 million [25] Other Important Information - The company is focused on capital expenditures of approximately $250 million for the year, with $120 million to $140 million allocated for maintenance capital [27] - The company has recognized an impairment on 16 hotels, with expectations of a gain on sale for the remaining hotels in the portfolio [68][70] Q&A Session Summary Question: Can you walk us through the RevPAR trends in the quarter? - Management indicated that RevPAR started strong in January but showed deceleration by March, with preliminary April numbers showing a decrease of 1% year over year [30][31] Question: What is the impact of international and government business on demand? - Approximately 30% of the portfolio is in top markets, with a modest decrease in government contracts noted [32][33] Question: How confident is the company in completing hotel sales at the expected price? - Management expressed confidence due to a robust selection process and active diligence with buyers [34][36] Question: Will the company continue to have hotel exposure in the future? - The company plans to maintain hotel exposure while increasing net lease properties, expecting performance progress on both sides [40][41] Question: What caused the shift in timing for hotel dispositions? - The shift was attributed to the diligence process associated with larger portfolios rather than broader market concerns [59][60] Question: How is the CapEx program being managed in light of potential tariff impacts? - The company is monitoring tariffs and has locked in pricing for many projects, with contingencies in place to manage costs [62][63] Question: What types of properties were acquired in the net lease segment? - The company acquired a car wash and a casual dining concept, with plans for further acquisitions in QSR and casual dining [76][78] Question: What is the outlook for the Sonesta brand in relation to the hotel portfolio? - The plan is for the hotels being sold to retain the Sonesta franchise agreements [84]

Financial Data and Key Metrics Changes - The company reported a net income of $145 million for the first quarter, with a return on equity of 12.6% and an 11% year-over-year increase in book value per share to $32.48 [6][13] - Total revenues for the quarter were $318 million, a slight increase from the previous quarter, with net premiums earned remaining consistent at $234 million [14][15] - The persistency rate for insurance in force increased to 86%, the second highest rate observed in over ten years [15][17] Business Line Data and Key Metrics Changes - The primary mortgage insurance in force portfolio grew to $274 billion, with $9.5 billion of new insurance written in the first quarter, lower than the previous quarter due to a smaller origination market [7][15] - The in-force premium yield remained stable at 38 basis points, expected to remain stable for the remainder of the year [17] Market Data and Key Metrics Changes - The private mortgage insurance market has been relatively flat at approximately $300 billion over the past two years, with expectations for 2025 to align with recent years [10] - The company noted a continuing positive impact from the current interest rate environment, supporting investment portfolio income and a higher persistency rate for insurance in force [11] Company Strategy and Development Direction - The company is focused on capital and expense management, with a strategic emphasis on share repurchases as an attractive use of capital [6][7] - Radian Guaranty entered into a multi-year quota share reinsurance arrangement to mitigate risk and provide PMIERs capital relief [27] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the housing market and mortgage insurance business, despite uncertainties from global trade policies [11][28] - The company continues to monitor macroeconomic factors that may impact credit performance, including unemployment trends [11][35] Other Important Information - The company repurchased $27 million of shares during the quarter, representing over 4% of shares outstanding, and returned a total of $244 million to stockholders, including dividends [7][26] - The holding company liquidity was $834 million at the end of the quarter, with a credit facility providing additional financial flexibility [26][52] Q&A Session Summary Question: Update on credit loss expectations and pricing strategies - Management indicated strong performance in cure trends, with a default rate decrease from 2.44% to 2.33%, and maintained a conservative view on through-the-cycle default rates [33][35] Question: Drivers behind the claims rate reduction - The claims rate was reduced from 8% to 7.5% based on positive trends in home price appreciation and cure rates, with no immediate changes expected unless macroeconomic conditions shift significantly [37][39] Question: Insights on buybacks and capital return philosophy - The company accelerated share buybacks significantly this quarter, utilizing excess liquidity and plans to continue at a similar pace in the second quarter [41][43] Question: Level of embedded equity in new delinquencies - Approximately 75% of new defaults have more than 20% equity, contributing to strong cure performance [46] Question: Right level of holding company liquidity - The company maintains a strong liquidity position, significantly above operational needs, and plans to continue returning capital to shareholders as opportunities arise [50][52]

Financial Data and Key Metrics Changes - The company reported net income of $186 million for Q1 2025, with an annualized return on equity of 14.3% [5] - Adjusted net operating income was $0.75 per diluted share, compared to $0.64 per diluted share in the previous year [14] - The in-force insurance ended the quarter at $294 billion, with annual persistency at 85%, remaining relatively flat over the past several quarters [6][11] Business Line Data and Key Metrics Changes - The company wrote $10 billion of new insurance during the quarter, maintaining strong underwriting standards [6] - The in-force premium yield was 38.4 basis points, remaining flat sequentially and year-over-year [18] Market Data and Key Metrics Changes - The delinquency rate decreased by 10 basis points to 2.3%, consistent with seasonal trends [16] - The number of new delinquency notices received was 13,000, down from 14,200 in the previous quarter [16] Company Strategy and Development Direction - The company focuses on maintaining financial strength and flexibility, with a capital management strategy that includes share repurchases and dividends [7][10] - An additional $750 million share repurchase program was approved, reflecting the company's commitment to returning capital to shareholders [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the housing market, citing demographic trends and increasing housing inventory as positive factors [11] - The company anticipates that uncertainties in the economic environment may persist, but remains optimistic about its ability to navigate these challenges [11] Other Important Information - The company returned $828 million of capital to shareholders through share repurchases and dividends over the past year [19] - The unrealized loss position on the investment portfolio decreased by $66 million, primarily due to a decrease in interest rates [20] Q&A Session Summary Question: Adjustments to pricing or underwriting due to macro uncertainties - Management indicated that they consider a wide range of economic scenarios in their pricing strategy, but no specific changes were made due to tariffs [26][27] Question: Claim rate assumptions and unemployment considerations - The 7.5% new notice claim rate is used for various economic outcomes, and reserves are set to be sufficient across a wide range of scenarios without targeting specific unemployment rates [29][30] Question: Market share volatility and volume - Management acknowledged some volatility in market share but emphasized that it is a competitive industry and fluctuations are expected [35][36]

Financial Performance - Non-GAAP operating earnings per share were $1.30, or $1.35 after adjusting for notable items[8] - Non-GAAP operating earnings were $421 million, or $434 million adjusted for notable items, a decrease of 3% year-over-year on a per share basis[16] - The company returned $335 million to shareholders, representing an 80% payout ratio[8] Business Segment Highlights - Asset Management operating earnings increased by 19% year-over-year[8] - Retirement saw net inflows of $1.6 billion, driven by strong RILA and Institutional sales[8] - Wealth Management advisory net inflows reached $2.0 billion, supported by 8% year-over-year growth in advisor productivity[8] - AB active net inflows were $2.7 billion, with Private Markets AUM up 20% year-over-year to $75 billion[8] - Protection Solutions experienced an operating loss of $17 million due to excess Individual Life mortality[8] Capital Management and Transactions - The company purchased approximately $760 million of AB Holding units through a tender offer, increasing ownership to approximately 69% effective April 1[8] - The Individual Life transaction with RGA is on track to close mid-2025, freeing over $2 billion of capital[8] - Post-close of the Individual Life transaction, the company plans to execute $500 million of additional share repurchases, above the 60-70% payout ratio target[14] Balance Sheet and Liquidity - The company had $1.1 billion in cash at Holdings after AB and Series B preferred equity tender offers, with a combined NAIC RBC ratio of approximately 425% as of year-end 2024[8]

Financial Data and Key Metrics Changes - The company reported record first quarter net revenue of $643 million and adjusted EBITDA of $245 million, reflecting strong performance despite various challenges [11][12] - The live and historical racing segment increased revenue by nearly $28 million or 11% compared to the prior year quarter [40] - The company generated $234 million or $3.15 per share of free cash flow in the first quarter [47] Business Line Data and Key Metrics Changes - The live and historical racing segment delivered record first quarter revenue and adjusted EBITDA, primarily due to the opening of new venues [39][40] - The Kentucky HRM properties increased adjusted EBITDA by $3.1 million or 6% compared to the prior year quarter [41] - The Virginia HRM properties saw a decrease in adjusted EBITDA by $2.2 million or 3% compared to the prior year quarter, impacted by weather and competition [41][43] Market Data and Key Metrics Changes - The Northern Virginia HRM venues collectively contributed nearly $10 million of adjusted EBITDA during the first quarter, up nearly $4 million from the prior year quarter [41] - The company experienced meaningful sequential growth in gross gaming revenues each month of the first quarter [26] - The Terre Haute Casino Resort in Indiana delivered nearly $12 million of adjusted EBITDA in the first quarter, performing well compared to regional gaming properties [46] Company Strategy and Development Direction - The company is committed to growing the Kentucky Derby through prudent timing of capital investments, pausing a $900 million multiyear project to reassess economic conditions [16][17] - Smaller projects at Churchill Downs Racetrack, costing approximately $25 to $30 million, are expected to deliver strong shareholder returns [19][20] - The company plans to implement electronic table games in existing HRM locations by the end of 2025, focusing on regulatory and taxation challenges [34][78] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased economic uncertainty and inflation risks due to tariffs, impacting cost assessments for projects [16][17] - The leadership team expressed confidence in navigating economic cycles and maintaining growth through strategic investments [37][51] - Management remains optimistic about the upcoming Kentucky Derby, expecting results comparable to last year's record performance [35][131] Other Important Information - The company has reduced its 2025 maintenance capital projection by $10 million to $90 to $100 million [48] - A new common stock repurchase program of up to $500 million was approved, with nearly 800,000 shares repurchased in the first quarter [49][50] - The bank covenant net leverage was 4.0 times at the end of the first quarter, expected to remain stable throughout the year [50] Q&A Session Summary Question: About softness in the quarter and its acceleration - Management noted hesitancy in the lower-tiered play due to macroeconomic volatility, but consistent performance in higher-tiered segments [56][58] Question: Impact on international visitation for Derby 151 - No material change in international visitation was observed, with expectations for strong attendance [62][64] Question: Long-term growth for the Derby and capital plans - Management indicated that the NBC contract will enhance growth, with expectations for pricing power in new areas introduced [70][72] Question: Implementation of electronic table games and tax rates - The rollout will be cautious due to regulatory and taxation challenges, with a focus on gradual acceptance [78] Question: Growth opportunities at existing properties amid macro uncertainty - Management emphasized organic growth in Kentucky properties and ongoing projects in Virginia, with a focus on managing costs [91][92] Question: Trends in Virginia for existing assets - Management expressed optimism about Virginia's market potential, despite recent challenges [100][101] Question: Consumer segment trends and performance - Management highlighted the importance of customer data for managing performance, particularly in less mature properties [106][108] Question: Capital allocation and buybacks - Management indicated that capital allocation decisions will be based on where the best returns can be achieved, including potential buybacks [112][114] Question: Changes for the Derby next year - Management plans to evaluate customer feedback and adjust offerings based on data collected post-Derby [120][122] Question: Comparability of Derby performance this year versus last year - Management acknowledged macroeconomic uncertainties but remains confident in strong demand for the event [130][131]

Financial Data and Key Metrics Changes - Total loan balances decreased by $37 million in Q1 due to elevated payoffs and prepayments, with loan yields at 5.45%, down two basis points from the previous quarter [4][5] - Total deposits increased by $160.7 million, with 95% of this growth in non-maturity deposits, primarily in money market accounts [5][6] - Net interest margin increased to 3.44% from 3.36% in the prior quarter, driven by decreases in the cost of deposits and borrowings [8][10] - Noninterest expense increased by $1.8 million, primarily due to higher benefit costs and payroll taxes, with guidance for quarterly noninterest expenses in the range of $41 million to $42 million [9][10] - The tangible common equity (TCE) ratio improved to 9.3%, up from 9% in the prior quarter, indicating strong capital ratios [10] Business Line Data and Key Metrics Changes - Commercial lending closed $183 million in new loan commitments, down from $316 million in the previous quarter, with a commercial loan pipeline of $460 million [18][19] - The average interest rate for new commercial loans was 6.83%, up 20 basis points from the previous quarter [19][20] - The bank experienced total charge-offs of $376,000, with net charge-offs of $299,000, representing 0.03% of total loans on an annualized basis [15] Market Data and Key Metrics Changes - The bank's credit quality remained strong, with non-accrual loans totaling just over $4.4 million, representing 0.09% of total loans [12][13] - Criticized loans declined by $1 million during the quarter, with substandard loans consistent with prior year-end levels [13][14] Company Strategy and Development Direction - The company is focused on maintaining a solid balance sheet and is open to potential mergers and acquisitions, particularly with attractive banks in their footprint [25][27] - The bank aims for annualized loan growth of 5% to 8% in the second quarter, with a strong pipeline and ongoing monitoring of economic uncertainties [57][61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about core profitability due to strong deposit growth and prudent risk management, despite emerging economic risks [3][20] - The company is closely monitoring developments around tariffs and federal funding, which could impact credit quality [15][53] Other Important Information - The bank did not repurchase any shares in Q1 but may consider it in the future depending on market conditions [10][32] - The Spokane team was acquired from a larger regional bank, reflecting the bank's strategy to expand its talent pool while managing expenses [28][30] Q&A Session Summary Question: Perspective on Heritage's position among independent banks - Management believes the bank is well-positioned with specific goals for 2025 and is ready for potential M&A opportunities [25][27] Question: Details on the Spokane team acquisition - The team was sought out due to a good fit with Heritage's customer base and market presence [28][30] Question: Comments on stock buyback activity - The decision on stock buybacks is made quarterly, with no repurchases in Q1 due to stock price increases [32] Question: Spot cost on total deposits and NIM in March - The NIM in March was 3.45%, with the cost of interest-bearing deposits at 1.92% [37][38] Question: Loan growth opportunities - Management sees balanced growth opportunities in commercial real estate and C&I, with a focus on deposit-rich clients [48][49] Question: Anticipated loan growth and economic uncertainty - The bank expects annualized loan growth of 5% to 8% in Q2, with ongoing monitoring of the economic environment [57][61]

Financial Data and Key Metrics Changes - The company reported first quarter net income of $12.4 million, essentially flat compared to the fourth quarter of 2024, resulting in a return on assets (ROA) of 1.17% and a return on equity (ROE) of 12.4% [11] - Net interest income grew by 12.4% year-over-year but declined slightly from the fourth quarter due to a decrease in Fed funds sold and other interest-earning assets [12] - Non-interest expenses increased by 3.2% or $878,000 in the first quarter, and were up 8.5% or $2.2 million from the same quarter last year [12] - The net interest margin improved by nine basis points to 3.8% [9][12] Business Line Data and Key Metrics Changes - The company successfully executed a significant commercial real estate loan securitization, enhancing balance sheet management and generating fee income that will positively impact the net interest margin in the second quarter [6][7] - Loan growth in April was reported at over $50 million, indicating a positive trend following a modest growth in the first quarter [13][20] Market Data and Key Metrics Changes - Deposits declined by $62 million for the quarter, resulting in a loan-to-deposit ratio of 93.9% [12] - The company anticipates some seasonal roll-off in deposits, which typically occurs in the first quarter [20] Company Strategy and Development Direction - The company is focused on disciplined loan growth, robust credit management practices, and improving operational efficiencies to enhance shareholder value [5][6] - The management is evaluating additional securitizations as a tool to manage concentrations and support sustainable profitable growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit risk strategies and the overall economic outlook, noting that borrowers remain cautious but optimistic [28][29] - The company aims for $325 million in loan growth for the year, translating to an 8% annual run rate compared to the prior year [20] Other Important Information - The company achieved growth in book value and tangible book value of 4.4% and 4.7% respectively over the prior quarter, and 14.3% and 15.2% compared to the same period last year [9] - The management is considering a share buyback program due to capital accretion and the current stock price being attractive [13][55] Q&A Session Summary Question: Impact of securitization on net interest margin - Management confirmed that the securitization will primarily flow through the margin, providing a five basis point benefit for the next quarter [24] Question: Loan growth confidence amid macro uncertainty - Management indicated that the loan growth in April was primarily due to fundings on revolving lines rather than new deals, and expressed optimism about the pipeline [26][28] Question: Fee income increase drivers - The increase in fee income was attributed to the treasury management division, which has seen significant growth in recent years [34] Question: Expectations for non-interest expenses - Management expects non-interest expenses to remain flat in the second quarter, around $28 million [37] Question: Future loan growth expectations - Management remains confident in achieving the loan growth target of $325 million, despite potential fluctuations due to economic conditions [51]

Financial Data and Key Metrics Changes - The company reported net earnings of $51.1 million or $0.36 per share for Q1 2025, marking the 190th consecutive quarter of profitability [4] - Return on average tangible common equity was 14.51% and return on average assets was 1.37% for Q1 2025 [5] - Net interest margin expanded by 13 basis points to 3.31% compared to 3.18% in Q4 2024 [6] - Net interest income was $110.4 million in Q1 2025, unchanged from Q4 2024 but down from $112.5 million in Q1 2024 [17][18] Business Line Data and Key Metrics Changes - Total loans decreased to $8.36 billion, a decline of $173 million from Q4 2024 and a 4.6% decrease year-over-year [10] - Non-interest income increased to $16.2 million in Q1 2025 from $13.1 million in Q4 2024 [21] - Non-interest expense was $59.1 million, slightly up from $58.5 million in Q4 2024 [22] Market Data and Key Metrics Changes - Total deposits and customer repurchase agreements totaled $12.3 billion, an increase of $56 million from Q4 2024 [8] - Non-interest bearing deposits grew by $147 million or 2% compared to Q4 2024 [9] - The cost of deposits decreased to 87 basis points in Q1 2025 from 97 basis points in Q4 2024 [9] Company Strategy and Development Direction - The company continues to focus on maintaining profitability and returning capital to shareholders through dividends and share repurchases [5][16] - The management emphasized a disciplined approach to credit underwriting despite economic uncertainties [50][52] - The company is exploring opportunities for mergers and acquisitions while balancing share repurchases [61][63] Management Comments on Operating Environment and Future Outlook - Management noted that the economic forecast indicates slower GDP growth and a potential rise in unemployment [15] - Customers are generally optimistic despite some concerns about tariffs and economic volatility [84] - The company expects to see loan growth in the coming quarters, particularly in commercial real estate [34][56] Other Important Information - The company has authorized a new share repurchase program and has repurchased 2.05 million shares at an average price of $18.13 [5][16] - The allowance for credit loss was $78.2 million, or 0.94% of gross loans, with a recapture of $2 million in Q1 2025 [14] Q&A Session Summary Question: Impact of tariff policies on the agricultural portfolio - Management indicated it is too early to assess the impact, but customers feel relatively okay, and milk prices remain steady [29][30] Question: Pace of commercial real estate payoff activity - Management noted elevated prepayment penalties and strong loan activity, with more loans closed in April than in any month over the last 14 months [31][32] Question: Loan prepayment penalties impact on interest income - The impact was approximately $300,000 quarter-over-quarter [40] Question: Expectations around deposit cost reduction - Management believes there is some room for deposit cost reduction, particularly with new money market accounts [42][44] Question: Focus areas in credit management amid market uncertainty - Management stated that their disciplined approach to underwriting has not changed, despite increased scrutiny due to economic conditions [50][52] Question: Competitive landscape for deposits - Management reported strong core deposit growth, primarily from new relationships, and anticipates continued growth in the second and third quarters [55][56] Question: Appetite for increasing the multifamily portfolio - Management expressed a consistent appetite for multifamily loans, focusing on strong borrowers [88][89]

Financial Performance and Key Metrics - Trustmark reported net income of $53.6 million for the first quarter, translating to fully diluted EPS of $0.88 per share, with a return on average assets of 1.19% and a return on average tangible equity of 13.13% [10] - Loans held for investment increased by $151 million or 1.2% linked quarter, with growth seen in commercial real estate (CRE), other commercial loans, and one to four family mortgage loans [8][9] - The cost of total deposits decreased by 15 basis points to 1.83% during the quarter [9] - Non-interest income totaled approximately $43 million, up 4% linked quarter, driven by growth in mortgage banking and wealth management [11] - Non-interest expense declined by $419,000 linked quarter, continuing a trend of expense management [11] Business Line Performance - The growth in loans was diversified, with notable increases in CRE and other commercial loans [8] - Non-interest income growth was partially offset by seasonal declines in bank card and service charges on deposit accounts [11] - Credit quality remained stable, with net charge-offs totaling $1.4 million, representing 4 basis points of average loans [12] Market Data and Key Metrics - The capital management perspective showed an increase in all capital ratios, with the CET1 ratio expanding to 11.63% [13] - Tangible book value per share increased by 4.1% during the quarter and 26.1% year-over-year, reaching $27.78 [14] Company Strategy and Industry Competition - The company is affirming its full-year 2025 expectations, anticipating low single-digit increases in loans and deposits [15][16] - Trustmark plans to maintain a disciplined approach to capital deployment, focusing on organic loan growth and potential market expansion [17] - The company is monitoring the impact of tariffs and other administrative policies on its customer base, but has not yet seen immediate effects [15] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the stability of credit quality and the potential for loan growth despite market uncertainties [15][30] - There is an expectation of continued solid pipelines across various business lines, although some clients may exhibit caution due to market volatility [30][31] - The company anticipates net interest margin to remain in the range of 3.75% to 3.85% for the full year [16][37] Other Important Information - The Board declared a quarterly cash dividend of $0.24 per share, payable on June 15 to shareholders of record on June 1 [14] - The company repurchased $15 million of common stock during the quarter, with a remaining repurchase authority of $85 million [13] Q&A Session Summary Question: Loan growth trends and client behavior regarding tariffs - Management noted that while there are expectations of meaningful maturing CRE loans, many clients are opting to extend their loans due to uncertainty in interest rates [22][24] - The company has seen solid pipelines and plans from clients, although some may pause due to market conditions [30][31] Question: Credit quality and reserve build - The increase in the allowance for credit losses was driven by loan growth and qualitative adjustments, with the provision aligning with expectations [44][45] Question: Expense management and future growth outlook - The decline in expenses was attributed to lower salaries and benefits, with a focus on controlling costs moving forward [48][50] - Management anticipates mid-single-digit growth in expenses for the year, with merit increases scheduled for the third quarter [51] Question: Share buybacks and capital deployment - The pace of share repurchases will be dictated by market conditions, with management expressing a desire to maintain a consistent buyback trend [54][58] - The company is focused on strategic growth initiatives in key markets to drive organic growth [55]

Financial Performance - Net income available to common shareholders was $465 million, or $0.51 per diluted share[4] - Adjusted net income available to common shareholders was $487 million, or $0.54 per diluted share[4] - Total revenue was $1.784 billion, and adjusted total revenue was $1.809 billion[4] - Pre-tax pre-provision income was $745 million, and adjusted pre-tax pre-provision income was $774 million[4] - The efficiency ratio was 57.9%, and the adjusted efficiency ratio was 56.8%[4] - Return on average tangible common equity was 17.72%, and the adjusted return was 18.58%[4] Balance Sheet and Lending - Average loans and leases were approximately $96.1 billion in 1Q25[23] - Ending loans and leases decreased by 1% QoQ[26] - Average deposits increased by 1% QoQ to $131 billion, and ending deposits increased by 3%[28, 30] Net Interest Income and Margin - Net interest income (NII) was $1.194 billion, or $1.206 billion on a taxable-equivalent basis[32] - Net interest margin (NIM) was 3.52%[32] - The company expects NII to grow between 1% and 4% in 2025, with NIM increasing to 3.60% by 4Q25[40] Non-Interest Income and Expense - Non-interest income was $590 million, and adjusted non-interest income was $615 million[42] - Adjusted non-interest expense was $1.035 billion[47] - The company expects adjusted non-interest income to grow between 1% and 3% in FY25, and adjusted non-interest expense to be flat to up approximately 2%[45, 49] Asset Quality - Net charge-offs (NCOs) were $123 million, representing 0.52% of average loans[51] - Non-performing loans (NPLs) were $843 million, or 0.88% of total loans[56] - The allowance for credit losses (ACL) was $1.730 billion, representing 1.81% of total loans[54]