Financial Data and Key Metrics Changes - The company reported net earnings of $4.85 million, or $0.37 per share for the quarter, with core earnings of $6.29 million, or $0.48 per share excluding merger-related charges [4][11] - The annualized adjusted return on average assets was 1.05%, and the adjusted return on average tangible equity was 15.39% [5][11] - The tangible book value per share grew by $0.34 to $14.71, and the tangible common equity ratio remained at 7.67% [5][11] - The average cost of total deposits decreased by 11 basis points to 2.25%, while the total cost of funds decreased by 14 basis points to 2.48% [6][14] Business Line Data and Key Metrics Changes - The commercial lending team closed approximately $7.13 million in new commercial loans, with a modest growth in the portfolio due to $3.28 million in loan payoffs [7][9] - The production consisted of 53% commercial real estate and 47% commercial and industrial loans, with half of the C&I production from the specialty lending group [7] - Non-interest income decreased to $24 million, primarily due to fewer BOLI benefit claims and seasonal reductions in insurance agency income [15] Market Data and Key Metrics Changes - Deposits grew by $148 million, or an annualized 5.4%, driven by municipal and consumer non-interest bearing and money market balances [13][14] - The non-performing loan ratio decreased by 8 basis points to 39 basis points, which is favorable compared to peers [8][14] - The total loan pipeline decreased to approximately $180 million from $2 billion in the preceding quarter, with a weighted average interest rate of 6.91% [9] Company Strategy and Development Direction - The company aims to build on its culture and team dynamics post-merger, focusing on growth across all sectors, particularly in commercial banking and treasury management [27][28] - The addition of Bill Fink as Chief Lending Officer is expected to enhance the commercial lending growth strategy [7][43] - The company is optimistic about its operating environment and plans to deepen market share across various channels [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to build on solid core performance and profitability, citing excellent asset quality and good deposit growth [4][11] - The company anticipates a net interest margin (NIM) in the range of 3.35% to 3.45% for 2025, factoring in two additional 25 basis point rate reductions [12] - Management noted that all merger-related charges have been recognized, with no further expenses expected in 2025 [11] Other Important Information - The effective tax rate for the quarter fell to 22.6% due to a benefit from the revaluation of deferred tax assets, with an expected effective tax rate of approximately 29.5% for 2025 [16] - The company reclassified $15.13 million of non-relationship equipment lease loans to held for sale, impacting total loans [13] Q&A Session Summary Question: How will the company achieve the $26 million fee projection despite seasonal declines in insurance revenues? - Management indicated that the fee projection is an average over the year, with expected seasonal improvements and contributions from volatile items like loan sales and swap fee income [20][21] Question: What are the key drivers for the expense outlook? - Management noted that typical seasonality and additional investments in core operating expenses would drive the expense outlook, with a range of $112 million to $115 million projected for 2025 [49][50] Question: What is the company's strategy for loan growth? - Management acknowledged elevated payoff activity but expressed confidence in the foundation for growth, citing strong leadership and market strategies [36][41] Question: Can the company provide clarity on the NIM range? - Management stated that the shape of the yield curve is a significant driver for NIM, with expectations for continued efficiency and growth impacting overall returns [76]