Financial Data and Key Metrics Changes - The company's net income for Q3 was $59.8 million, or $0.63 per diluted share, with adjusted earnings of $72.9 million, or $0.77 per diluted share, excluding merger charges [6] - Loans increased by $462 million on a linked quarter basis, representing a 9.9% annualized growth [6] - Deposits decreased by $158 million from the second quarter, primarily due to a seasonal decline in public funds of $169 million [6] - The reported net interest margin remained flat at 3.85%, while the adjusted margin increased by four basis points to 3.62% [7] - Adjusted return on average assets improved by 12 basis points to 1.09%, and adjusted return on tangible common equity rose by 296 basis points to 14.22% [8] Business Line Data and Key Metrics Changes - Non-interest income for Q3 was $46 million, showing a linked quarter decrease of $0.841 million, excluding the gain on sale of MSR assets in Q2 [9] - Non-interest expense for Q3 was $183.8 million, excluding merger and conversion expenses of $17.5 million, with a linked quarter increase of $3.6 million [9] Market Data and Key Metrics Changes - The company experienced loan growth across all geographic areas and credit channels, including small business lending and commercial lending units [15][17] - The Gulf Coast market showed good growth, benefiting from the merger with The First Bancshares, which expanded lending capabilities [17] Company Strategy and Development Direction - The integration with The First Bancshares is progressing well, with systems conversion completed in early August, aiming to create a high-performing Southeast bank [4] - The company is focused on achieving profitability goals related to return on assets, return on tangible common equity, and efficiency ratio [4] - Future growth is expected to come from improved operating leverage and disciplined expense management [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the third quarter results and the positive momentum heading into Q4, with expectations for continued loan growth [10] - The company is monitoring the interest rate environment closely, particularly the 10-year Treasury yield, which could impact prepayment speeds and loan payoffs [50][76] - Management indicated that they are well-positioned to capitalize on opportunities in the market, especially in light of ongoing M&A activity in the region [53] Other Important Information - The company recorded a credit loss provision on loans of $10.5 million, with net charge-offs of $4.3 million [8] - The adjusted efficiency ratio improved by about 0.4 percentage points, with expectations for further improvements in upcoming quarters [9] Q&A Session Summary Question: Can you provide insights on loan growth and the pipeline, particularly in legacy markets like the Gulf Coast? - Management noted that loan growth was strong across all areas, with good performance in the Gulf Coast due to expanded lending capabilities from the merger [15][17] Question: What is the expected pace of expense savings moving forward? - Management anticipates a decrease in core non-interest expenses by $2 million to $3 million in Q4 and Q1 of 2026, with a focus on maintaining efficiency [19] Question: Can you elaborate on the drivers of core margin expansion in Q3? - Management indicated that while there was expansion in Q3, modest contraction is expected in Q4, with a general outlook of modest expansion for 2026 [25] Question: What are the plans for deposit growth in the current rate environment? - Management emphasized the goal of growing core deposits in line with loan growth, despite seasonal fluctuations affecting public funds [37] Question: How does the company plan to manage capital moving forward? - Management is considering various capital levers, including stock buybacks, to support organic growth and maintain a strong capital base [35] Question: What are the expectations for loan and deposit growth moving forward? - Management is targeting mid-single-digit growth for loans and deposits, with a focus on identifying opportunities in the current market [76]