Financial Data and Key Metrics Changes - The company achieved record quarterly adjusted net income of $37 million, or $2.17 per diluted share, reflecting strong performance across core businesses [19] - Earnings per share grew by 26% compared to the second quarter [4] - Net interest income increased by $3 million, or 18% annualized, supported by net interest margin expansion and exceptional loan growth [19] - Non-interest income totaled $37 million for the third quarter, driven primarily by $24 million in capital markets revenue [22] - The efficiency ratio improved to 55.8%, the lowest in four years [23] Business Line Data and Key Metrics Changes - Capital markets revenue rebounded to $24 million, up $14 million from the prior quarter [19] - Wealth management revenue surpassed $5 million, an 8% increase over the prior quarter, with year-over-year growth of 15% annualized [22][8] - Total loans grew by $254 million, or 15% annualized, with a planned runoff from M2 Equipment Finance loans and leases factored in [24] - LIHTC lending business showed exceptional performance, with strong demand for affordable housing and new relationships established with 10 experienced developers [9][10] Market Data and Key Metrics Changes - Core deposits increased by $410 million, or 8% annualized year-to-date [25] - Total criticized loans decreased by 9% year-to-date, reflecting improved asset quality [16] - The company reported a decline in net charge-offs and total NPAs to total asset ratio, which decreased to 0.45% [26] Company Strategy and Development Direction - The company is focused on a digital transformation strategy, aiming to enhance efficiency and reduce long-term operating costs [7] - The multi-charter community banking model is designed to capture market share from competitors [6] - The company anticipates continued progress in LIHTC lending and capital markets revenue, with guidance for capital markets revenue increased to a range of $55 million-$65 million over the next four quarters [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustaining loan growth momentum, guiding for gross annualized loan growth in a range of 10%-15% for the fourth quarter [6] - The company remains well-positioned to benefit from future rate reductions, with expectations of NIM accretion for every 25 basis point cut in rates [20] - Management highlighted the importance of maintaining strong regulatory capital while being opportunistic with share repurchases [17] Other Important Information - The company returned $10 million of capital to shareholders through share repurchases [16] - A new share repurchase program was approved, authorizing the repurchase of up to 1.7 million shares [17] - The effective tax rate for the quarter was 9.5%, up from 5% in the prior quarter, primarily due to higher pre-tax income [30] Q&A Session Summary Question: Margin guidance and rate cuts - Management confirmed that the margin guidance of 3-7 basis points of expansion does not include any rate cuts, and each 25 basis point cut could lead to an additional 2-3 basis point increase in margin [36][37] Question: Future buybacks - Management indicated that they will remain active in share repurchases due to higher earnings per share and reduced need to retain capital for organic growth [38][39] Question: Securitization appetite and timing - Management anticipates a large permanent loan securitization in the first half of next year, aiming for a larger inventory to enhance profitability [46] Question: Loan growth expectations for next year - Management expects loan growth to remain in the double digits, with a more accurate forecast to be provided in January [56] Question: One-time costs related to conversions - Management indicated that one-time costs related to conversions are included in the fourth quarter expense guidance, with expectations for savings from these conversions in the future [63][70] Question: Reserves trend - Management does not expect the allowance for credit losses to drop significantly, as recent reductions have been due to resolving NPAs and charge-offs from the M2 Equipment Finance portfolio [72] Question: Capital capacity for buybacks - Management stated that they have capacity for buybacks while balancing other capital needs, emphasizing opportunistic repurchases at attractive valuations [94]