Financial Data and Key Metrics Changes - The company reported a net income of $16.3 million for Q3 2025, with earnings per share of $0.77, a return on average assets of 1.44%, and a return on average equity of 15.35% [4] - The net interest margin expanded by three basis points to 3.56%, while the cost of total deposits declined by two basis points to 2.44% [4][5] - The efficiency ratio was reported at 40.13% for the third quarter [4] Business Line Data and Key Metrics Changes - Loans held for investment grew by $129.2 million, or 14% on an annualized basis, while total deposits increased by approximately $208.8 million, or 21% on an annualized basis [5] - Non-wholesale deposits increased by $359 million, or 11%, while wholesale deposits decreased by $150.2 million, or 23% [5] - Non-performing loans represented only five basis points of total loans held for investment, indicating strong asset quality [5][6] Market Data and Key Metrics Changes - Total assets increased by $228.3 million, primarily driven by loan growth within the commercial real estate portfolio, which grew by $77.7 million [6] - Non-interest-bearing deposits remained consistent at 26% of total deposits as of September 30, 2025, with approximately 60% of deposit relationships totaling more than $5 million [7] Company Strategy and Development Direction - The company is focused on organic growth and maintaining a differentiated client experience, with a commitment to community partners throughout Northern California [4] - The opening of a new full-service office in Walnut Creek is part of the company's strategy to expand its presence in the San Francisco Bay Area [9] - The company aims to eliminate brokered deposits over the long term while continuing to grow core deposits [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to changing economic conditions while focusing on long-term strategy execution [10] - The company anticipates deposit growth in the fourth quarter to be between 1% to 2% on an absolute basis, acknowledging that replicating the strong growth seen in Q3 may be challenging [15][16] - Management highlighted the importance of maintaining a stable funding base through a strong deposit portfolio [7] Other Important Information - The company declared a cash dividend of $0.20 per share, expected to be paid in November [5] - A provision for credit losses of $2.5 million was recorded during the quarter, primarily due to loan growth [6] Q&A Session Summary Question: Core deposit growth and optimization - Management noted exceptional core deposit growth in Q3, driven by new clients across all platforms, but anticipates more modest growth of 1% to 2% in Q4 due to efforts to eliminate brokered deposits [15][16] Question: Loan payoffs and paydowns - Management explained that payoffs and paydowns are influenced by the business model, particularly in MHC and RV park lending, and expect this trend to continue [21][22] Question: Growth opportunities and team expansion - Management highlighted growth in the ag team and other segments like MHC and RV business, with a strong loan pipeline in the Bay Area [25][28] Question: Net interest margin outlook - Management expressed optimism about margin expansion in a down rate environment, estimating a potential increase of one to three basis points in Q4 [34][39] Question: M&A landscape - Management indicated a preference for organic growth but remains open to opportunistic M&A if a compelling opportunity arises [68][70]