Financial Data and Key Metrics Changes - Loans held for investment increased by $83 million, or 0.6% linked quarter, and $448 million, or 3.4% year-over-year [5] - Deposit base grew by $550 million, or 3.4% linked quarter, with non-interest-bearing deposits increasing by 5.9% linked quarter [5] - Net income for the third quarter was $56.8 million, representing fully diluted EPS of $0.94, up 2.2% from the prior quarter and 11.9% from the prior year [5] - Return on average assets was 1.21% and return on average tangible equity was 12.84% [6] - Net interest income expanded by 2.4% to $165.2 million, with a net interest margin of 3.83%, an increase of two basis points from the prior quarter [6][7] - Non-interest income totaled $39.9 million, up 0.1% linked quarter and 6.3% year-over-year [7] - Non-interest expense increased by $5.8 million, or 4.7% linked quarter, including approximately $2.3 million in non-routine items [7] Business Line Data and Key Metrics Changes - The growth in loans was diversified, led by commercial and industrial loans, other loans and leases, municipal loans, and other real estate secured loans [5] - Salaries and employee benefits increased by $3.2 million linked quarter due to annual salary merit increases and the cost of additional customer relationship managers [8] Market Data and Key Metrics Changes - Credit quality remained solid with net charge-offs of $4.4 million, representing 13 basis points of average loans in the third quarter [8] - The allowance for credit losses represents 1.22% of loans held for investment [8] Company Strategy and Development Direction - The company is focused on organic growth initiatives and has added customer relationship managers in key markets [4] - The company plans to continue its disciplined approach to capital deployment, with a preference for organic loan growth and potential market expansion [11] - The company is optimistic about maintaining momentum in financial performance and is focused on key growth markets [11][30] Management's Comments on Operating Environment and Future Outlook - Management expects loans held for investment to increase mid-single digits for the full year 2025 and low single-digit growth in deposits [10] - The provision for credit losses is expected to trend lower compared to the full year 2024 [10] - Management is optimistic about maintaining net interest margin in the range of 3.80% to 3.83% [37][52] Other Important Information - The company repurchased $11 million of common stock during the quarter and has $63 million in repurchase authority for the remainder of the year [9] - The board declared a quarterly cash dividend of $0.24 per share, payable December 15 [9] Q&A Session Summary Question: Can you provide details on hiring and future plans? - The company hired approximately 29 new associates in the third quarter, with a focus on key markets like Houston and Atlanta [14] Question: Will there be an increase in expenses due to hiring? - The company expects a slight increase in expenses due to new hires, with about $400,000 attributed to the additional new hires in the third quarter [16] Question: What are the opportunities from recent M&A activity? - Management sees M&A activity as creating opportunities for hiring and customer acquisition, particularly in competitive markets [25] Question: Can you discuss trends in classified and criticized loans? - There was a decrease of about $49 million in criticized loans this quarter, indicating a positive trend [42] Question: What are the expectations for deposit costs and loan yields? - The company anticipates deposit costs to decrease as the Fed cuts rates, with a beta of about 40% expected [52] Question: How does the company plan to fund its balance sheet? - The company aims to maintain a loan-to-deposit ratio in the mid-80s and is confident in its ability to fund loan growth cost-effectively [66]

Financial Data and Key Metrics Changes - The company reported earnings per common share of $0.41, with an adjusted EPS of $0.40, reflecting an 18% year-over-year increase [14] - Revenue grew by 14% year-over-year, adjusted PPNR increased by 16%, and tangible book value rose by 10% [10][25] - Average loan balances grew by $2.8 billion or 2% from the prior quarter, while average deposits increased by $1.4 billion or 1% [14] Business Line Data and Key Metrics Changes - Loan growth accelerated to 9.2% year-over-year, driven by strength in commercial lending and new initiatives contributing $1.2 billion, approximately 40% of total loan growth [15] - Key contributors to loan growth included Corporate and Specialty Banking ($700 million), Auto ($600 million), Regional Banking ($400 million), Middle Market ($200 million), and Asset Finance ($200 million) [15] - Noninterest income increased by 14% year-over-year, with notable growth in payments (10%), wealth management (12%), and capital markets (21%) [18][20][21] Market Data and Key Metrics Changes - The company expects full-year average deposit growth of approximately 6.5% to 7% inclusive of the Veritex acquisition, with standalone performance at the high end of prior guidance at approximately 5.5% [27] - The company anticipates achieving a net interest income growth of 10% to 11% for the full year, up from the previous range of 8% to 9% [27] Company Strategy and Development Direction - The company is focused on executing its organic growth strategy, leveraging local market relationships to drive revenue growth [6][8] - The acquisition of Veritex is expected to enhance growth in Texas, positioning the company as the 14th largest depository in the state [11][12] - The company plans to expand its branch network in Texas and deepen its commercial banking activities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit quality, with net charge-offs at 22 basis points and a stable outlook for credit metrics [25][26] - The company raised its financial guidance for revenue and earnings growth, expecting strong loan growth and improved net interest margin [26][27] - Management remains optimistic about organic growth and the potential for further expansion in competitive markets like Texas and the Carolinas [67][72] Other Important Information - The company completed a preferred issuance in the third quarter, which will result in higher preferred dividends in the fourth quarter [32] - The company is focused on maintaining a disciplined capital management strategy, aiming to increase common equity Tier 1 and support strong dividend yields [23] Q&A Session Summary Question: Loan growth outlook and pipelines - Management indicated strong momentum in loan growth, expecting approximately 1.5% sequential growth in Q4, with confidence in core business trends [37][38] Question: Credit quality perspective - Management reported exceptional credit performance and expressed confidence in their risk management practices, indicating no current concerns [41][42] Question: Safeguards against credit issues - Management highlighted their disciplined client selection and active portfolio management as key safeguards against potential credit issues [45][46] Question: Deposit pricing competition - Management noted strong execution in deposit pricing and volume, with expectations of continued solid performance in deposit growth [85][88] Question: NIM expansion drivers - Management identified fixed asset repricing as the primary driver of NIM expansion, estimating a sustainable increase in NIM over the next few years [90][92]