Financial Data and Key Metrics Changes - The company reported net income of $52.8 million for the second quarter, representing a 3% decline from the prior quarter but an 18% increase year-over-year [3][4] - Earnings per share increased by 15% compared to the same quarter last year [4] - Net interest income rose to $208 million, up 9% from the prior quarter and up 25% year-over-year [5] - The net interest margin expanded to 3.21%, up 17 basis points from the first quarter and up 53 basis points year-over-year [5][6] - Non-performing assets remained low at 0.17% of total assets, with net charge-offs at $1.6 million for the quarter [8] Business Line Data and Key Metrics Changes - The loan portfolio grew by $1.3 billion to $18.5 billion, an 8% increase from the prior quarter, with commercial real estate being a key driver [4] - Deposits increased to $21.6 billion, up 5% quarter-over-quarter, with non-interest bearing deposits rising by 8% [4][5] - Non-interest income totaled $32.9 million, up slightly from the first quarter and up 2% year-over-year [7] Market Data and Key Metrics Changes - The company successfully completed the acquisition of the Bank of Idaho, adding $1.4 billion in assets and expanding its presence in Idaho and Eastern Washington [2][3] - A definitive agreement was announced to acquire Guaranty Bancshares, a $3.1 billion bank, marking the company's first entry into Texas [3] Company Strategy and Development Direction - The company is focused on strategic expansion, particularly in the Southwest, with the acquisition of Guaranty Bancshares [3] - The integration of the Bank of Idaho is progressing smoothly, indicating a commitment to growth through acquisitions [3] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in net interest margin and loan yields, expecting to maintain a pace of increase for the next couple of quarters [12][13] - The company remains cautious in spending due to economic uncertainty and market volatility, but is optimistic about organic growth and customer sentiment [18][40] Other Important Information - The tangible book value per share increased to $19.79, up 8% year-over-year, and the company declared its 161st consecutive quarterly dividend of $0.33 per share [9] - The efficiency ratio improved to 62.08%, reflecting positive operating leverage [7] Q&A Session Summary Question: Margin tracking and future expectations - Management indicated continued growth in margin, expecting 15 to 17 basis points increase per quarter [12][13] Question: Expense guidance and efficiency - Management provided insights on expense management, indicating a reduction in core non-interest expense guidance for the upcoming quarters [19][20] Question: Organic growth and competitive landscape - Management noted solid organic loan growth and a positive outlook on client sentiment, with some competitive pressures on pricing but not on structure [39][42] Question: Hiring and operational opportunities - The company is looking to fill operational positions to support growth, with potential opportunities arising from market changes in Texas [45][46] Question: Loan growth and payoff pressure - Management acknowledged ongoing payoff pressure but expects it to abate towards the end of the year, maintaining a low to mid single-digit growth outlook [53][54]

Financial Data and Key Metrics Changes - The company reported net income of $87.9 million or $1.27 per diluted share, a 17% increase compared to the first quarter of the previous year [11] - The return on assets (ROA) remained strong at 1.36%, with a PPNR ROA of 2.08% and an adjusted return on tangible common equity of 13.16% [12] - The efficiency ratio improved to 52.83% from 55.64% in the same quarter last year [12] - Tangible book value per share increased by $1.19 to $39.78, and the tangible common equity ratio rose to $10.78 [12] Business Line Data and Key Metrics Changes - Net interest income increased by $20 million compared to the first quarter of last year, while non-interest expense remained relatively flat [11] - Loan balances were stable during the quarter, with total loan production at $1.5 billion, slightly down from the previous quarter but higher than the year-ago level [18] - Non-interest bearing deposits grew at a 15% annualized rate, representing 30.8% of total deposits [18] Market Data and Key Metrics Changes - The company experienced a 4% annualized growth in deposits, with an increase of $190 million during the quarter [17] - Interest-bearing deposits fell slightly, but non-interest bearing deposits grew significantly [18] - The company anticipates mid-single-digit loan and deposit growth for 2025 [19] Company Strategy and Development Direction - The company aims to maintain top-tier profitability, enhance revenue generation, and sustain a strong capital position to prepare for changing macroeconomic conditions [5][8] - The focus is on optimizing margins rather than aggressive growth, with a disciplined approach to balance sheet management [6][9] - The company is well-positioned to leverage growth opportunities within its Southeastern footprint [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, expecting more growth opportunities despite macroeconomic uncertainty [9] - The company is prepared to capitalize on opportunities with a well-capitalized balance sheet and a proven culture of expense control [10] - Management noted that the current economic environment creates opportunities, but they will remain measured in their approach [34] Other Important Information - The company repurchased approximately $15 million of common stock during the first quarter, with $85 million remaining available for buybacks [13] - The reserve for credit losses increased to 1.67% of loans, influenced by economic forecasts and not due to asset quality deterioration [15][40] Q&A Session Summary Question: What is driving the resilience in loan yields? - Loan production for the quarter averaged around 6.86%, with the core bank performing well at about 8% [24] Question: Do you expect loan yields to improve without rate cuts? - Loan yields are expected to remain consistent, with margin compression likely coming from the deposit side as loan growth picks up [27] Question: How does the company balance economic uncertainty with growth desires? - The company will be measured in its approach, leveraging its strong capital and liquidity positions while being prepared to capitalize on opportunities [34] Question: What influenced the reserve build despite strong underlying metrics? - The reserve build was model-driven, influenced by economic forecasts, and not related to asset quality [40] Question: What is the expectation for loan growth and Balboa's contribution? - Loan growth is expected to be in the mid-single digits, with Balboa tracking in line with the company [45] Question: How does the company view capital deployment moving forward? - The company prefers organic growth and will evaluate sub-debt options as they come due, while also considering buybacks [50]