Financial Data and Key Metrics Changes - Net income for Q2 2025 was $21.8 million, or $0.48 per diluted share, reflecting strong profitability despite merger-related expenses and MSR mark-to-market losses [3][4] - Return on assets was 1.53%, and return on average tangible common equity was approximately 15.29% [4] - Common equity Tier one increased to 13.77% from 13.47% in the previous quarter [5] - Tangible equity ratio improved by 49 basis points from the last quarter and by 144 basis points year-over-year [4][5] - Net interest income increased by $1.3 million or 2.1% from the previous quarter, and by $4.5 million or almost 8% year-over-year [11] Business Line Data and Key Metrics Changes - Total loans increased by $58.4 million from the previous quarter, driven by growth in construction and lease portfolios [6] - Noninterest income performed well, with wealth management fees increasing by $324,000 or 11.7% and service charges on deposits rising by $280,000 or 11.2% [8] - Noninterest expense was $1.1 million lower than the prior linked quarter, reflecting strong expense discipline [9] Market Data and Key Metrics Changes - The loan-to-deposit ratio was 83.3% as of June 30, compared to 81.2% in the previous quarter [6] - Total cost of deposits was 84 basis points for Q2 2025, up from 82 basis points in both the prior linked quarter and the same quarter last year [6] Company Strategy and Development Direction - The company is focused on the effective integration of Evergreen Bank and optimizing the balance sheet for its impacts [9] - Management expressed confidence in the profitability and positioning of the company post-acquisition, with expectations of continued strong performance [10][17] - The company aims to maintain a disciplined approach to expenses, targeting core expense growth around 4% excluding acquisitions [14] Management's Comments on Operating Environment and Future Outlook - Management noted that commercial clients are weathering economic challenges well, although appetite for capital expenditures has been muted [28] - The company is optimistic about loan growth, projecting low to mid-single-digit growth for 2025 [29] - Management expressed confidence in maintaining strong margins despite potential interest rate cuts, indicating a stable and durable margin outlook [66][68] Other Important Information - The company repurchased approximately 327,000 shares at a modest discount to market following the Evergreen acquisition [13][60] - The integration of Evergreen Bank is expected to enhance the company's capital position and operational efficiency [12][58] Q&A Session Summary Question: What is the expected timing for the Evergreen conversion and expense run rate? - Management expects the conversion to occur in early to mid-fourth quarter, with a clearer run rate on operating expenses by the time of the fourth quarter report [20] Question: What is the loan-to-deposit balance brought over from Evergreen? - The loan-to-deposit ratio for Evergreen was just north of 90% [21] Question: Can you provide more detail on the classified assets related to owner-occupied CRE? - The classified assets stem from a large healthcare transaction in Oregon, with management confident in the collateral position and expected cash flow improvements [23] Question: How is commercial client sentiment currently? - Commercial clients are managing well, but there is muted appetite for capital expenditures, with some growth observed in leasing and commercial real estate [28] Question: What are the expectations for charge-offs going forward? - Charge-offs are expected to be around 30 basis points, with higher loss rates in powersport lending balanced by strong contribution margins [39] Question: How will the margin respond to potential interest rate cuts? - Management believes the margin will be less sensitive to rate cuts than previously expected, with a potential decrease of around four basis points for a 25 basis point cut [44] Question: What is the long-term outlook for ROA? - Management is confident that ROA will trend above 1.50% [72]