Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Financials - **Date**: August 13, 2025 - **Analysts**: Richard Xu, CFA; Chiyao Huang; Beryl Yang; Chenqian Liu Core Insights 1. **Loan Growth Trends**: RMB loan growth moderated to **6.8% year-on-year (yoy)** in July, with a decline of **Rmb50 billion** in the month. This was supported by an increase in bills amounting to **Rmb871 billion**. Year-to-date (YTD) new corporate loans added **Rmb10.66 trillion**, down **1% yoy**. The slowdown is attributed to rationalization in industrial capital expenditure and local government financing vehicle (LGFV) swaps [2][9][10] 2. **Household Loans**: Household loans remained weak, particularly consumption loans, with YTD short-term household loans declining by **Rmb383 billion** compared to an increase of **Rmb61 billion** last year. This decline is partly due to banks adopting a more conservative risk appetite following higher retail loan non-performing loans (NPLs) in the previous year [2][9] 3. **Deposit Growth**: Household deposit growth decreased to **10.3% yoy** in July, with a monthly decline of **Rmb500 billion**. This decline is attributed to seasonal deposit flows to wealth management products (WMPs) and early signs of capital flow to equity markets. In contrast, corporate deposit growth accelerated to **4.1% yoy**, likely due to increased bond issuance and improved corporate cash flow [3][9] 4. **M1 and Corporate Deposits**: M1 growth rebounded to **5.6% yoy**, indicating a positive trend alongside the acceleration in corporate deposit growth. This combination is expected to help reduce corporate credit risks [4][9] 5. **Total Social Financing (TSF)**: Headline TSF increased by **9.0% yoy** in July, up from **8.9% in June**, supported by government bond issuance despite slower loan growth. Government bonds added **Rmb1.2 trillion** in July, with corporate bond growth recovering from a low base in 2024 [9][10] Additional Insights - **Market Dynamics**: The report indicates a shift towards more rational loan growth and a rebound in M1 and corporate deposit growth, which are seen as positive indicators for the financial stability of the sector [4][9] - **Investment Outlook**: The overall view of the China Financials sector is deemed attractive, suggesting potential investment opportunities amidst the current market conditions [5][63] Important Data Points - **RMB Loan Growth**: 6.8% yoy [2] - **Household Loan Decline**: Rmb383 billion YTD [2] - **Corporate Deposit Growth**: 4.1% yoy [3] - **M1 Growth**: 5.6% yoy [4] - **TSF Growth**: 9.0% yoy [9] This summary encapsulates the key points discussed in the conference call, highlighting the current trends and outlook for the China Financials sector.

Coop Pank’s financial results in July 2025: In July, number of the bank's clients increased by 1,700 and number of active clients increased by 600. By the end of the month number of clients reached 219,300 and number of active clients reached 104,100. Over the year, customer base has grown by 11%. Volume of the bank's customer deposits increased by 111 million euros and reached 1.93 billion euros by the end of month. Deposits of corporate customers increased by 50 million euros and deposits of private custo ...

Financial Data and Key Metrics Changes - Earnings per share (EPS) for the second quarter was $0.91, excluding merger-related charges, representing an 86% increase year over year [5][14] - Net interest margin improved to 3.59%, a 64 basis point increase year over year [6][17] - Net income excluding merger and restructuring expenses was $87.3 million, compared to $29.4 million in the prior year [5][14] - Total assets increased by 52% year over year to $27.6 billion, driven by the Premier acquisition and organic growth [15] Business Line Data and Key Metrics Changes - Fee income grew by 40% year over year, totaling $44 million in the second quarter [8][18] - Organic loan growth was 6% year over year, with total commercial loans increasing by 7% [10][14] - The trust and securities brokerage business grew to $10 billion in assets under management [8] Market Data and Key Metrics Changes - Total deposits increased by 58% year over year to $21.2 billion, with organic growth of $849 million [17] - Organic deposit growth excluding certificates of deposit was more than 5% year over year [9] Company Strategy and Development Direction - The company aims to grow fee income as a percentage of total revenue and expand its presence in new markets, including Knoxville and Northern Virginia [9][11] - Strategic investments are being made in the healthcare sector to meet unique client needs [11][32] - The focus remains on executing the Premier acquisition and enhancing operational efficiency [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth despite potential headwinds from commercial real estate payoffs [71] - The company anticipates mid to upper single-digit loan growth for the remainder of 2025 [37][39] - Management expects to fund loan growth with deposit growth for the full year [9][17] Other Important Information - The efficiency ratio improved by 10 percentage points year over year to 55.5% [6] - The company has begun to see a rebound in deposits in July after a seasonal decline [17] - Regulatory capital ratios remain above well-capitalized standards [19] Q&A Session Summary Question: Increase in criticized loans and maintaining credit culture - Management noted that the increase in criticized loans is primarily due to regrading of acquired clients, but they expect improvements in the third quarter [28][30] Question: Capital deployment priorities - The company prioritizes dividends and organic growth, with M&A and buybacks being lower on the list [31][33] Question: Loan growth expectations - Management targets mid to upper single-digit growth, contingent on commercial real estate payoffs [37][39] Question: Branch rationalization - The company will evaluate branch profitability and may close some branches in the second half of the year [40][41] Question: Margin accretion assumptions - Management anticipates a drop in margin accretion in the third quarter but expects a rebound in the fourth quarter [46][63] Question: Deposit pipelines and growth - The company plans to launch a new deposit campaign and expects robust growth in the commercial space [78][80] Question: Preferred stock and subordinated debt refinancing - Management is evaluating options for calling preferred stock and refinancing subordinated debt that will reset soon [90][91]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.36 for Q2 2025, an increase from $1.31 in the previous quarter and $1.19 year-over-year [4][23] - Adjusted return on assets was 1.31% and pre-provision ROAA was 1.72% [5] - Net interest income increased by $5.2 million to $153 million, with net interest margin expanding by six basis points to 4.21% [5][27] - Tangible common equity to tangible assets ratio was 9.42%, with a return on tangible common equity of 13.96% [9][34] - Non-interest income increased by $2.1 million to $21 million, driven by bank-owned life insurance and community development income [31] Business Line Data and Key Metrics Changes - Loan growth for the quarter was $110 million, with a year-over-year increase of approximately 4% [6][13] - The largest portion of loan growth came from commercial and industrial (C&I) loans, with new loan originations up 23% year-over-year [13][14] - Life insurance premium finance balances increased by $160 million or 16% year-over-year [17] - Specialty deposit verticals grew by $63 million for the quarter and $552 million or 18% year-over-year [20][21] Market Data and Key Metrics Changes - All geographic markets showed loan growth, with notable contributions from the Midwest and Southwest regions [18][19] - Client deposits grew by $73 million in the quarter and $778 million or roughly 7% year-over-year [19][20] - The company maintained a total loan to deposit ratio of 86% [7] Company Strategy and Development Direction - The company focuses on a diversified business model that capitalizes on higher growth markets while maintaining pricing discipline [4][5] - The strategic acquisition of a branch from First Interstate Bank is expected to enhance growth opportunities [10][35] - The management anticipates that ongoing economic improvements and M&A disruptions will lead to strong financial performance in the coming quarters [12] Management's Comments on Operating Environment and Future Outlook - Management noted that most clients are performing well, with sales and profits in line with 2024 expectations [11] - There is optimism for loan growth to exceed 4% in the latter half of 2025 due to pent-up demand and improved economic clarity [12][60] - The company is prepared to guide clients through economic uncertainties while taking advantage of M&A opportunities [12] Other Important Information - The company increased its dividend by $0.01 to $0.31 per share for 2025 [10][35] - Non-performing assets remained stable at 71 basis points of total assets, with a focus on managing credit quality [30] Q&A Session Summary Question: Expectations for fee income in the second half of the year - Management expects fee income to be similar to the first quarter, with potential contributions from SBA sales and other line items [39][40] Question: Outlook on expense levels - Management indicated that the current expense levels are expected to grow, influenced by merit increases and legal expenses related to non-performing loans [42][43] Question: Capital levels and branch acquisition impact - The branch acquisition is expected to normalize capital levels, with a focus on supporting growth and evaluating dividend policies [49][50] Question: Margin outlook for the next quarters - Management is optimistic about maintaining stable margins, with potential growth in net interest income dollars [54][56] Question: Loan growth expectations for the back half of the year - Management anticipates loan growth to increase to 5-7% in the latter half of the year due to improved economic conditions [60] Question: Team integration in Texas and growth strategy - A new team in Texas has begun operations without non-compete restrictions, focusing on low to mid-sized C&I businesses [75] Question: SBA loan sales strategy - The company is exploring SBA loan sales as a strategy to solidify fee income, with expectations for some level of gain in the third quarter [80]

Financial Data and Key Metrics Changes - The company reported net income of $21,800,000 for Q2 2025, resulting in diluted earnings per share of $0.72, an increase of 1.4% compared to the previous quarter [5][14] - The annualized return on average assets was 1.07%, and the annualized return on average tangible common equity was 14.38% [5] - The net interest margin increased by nine basis points to 2.95%, while net interest income rose by $414,000 to $54,300,000 [5][20] - Total loans increased by $34,700,000 or 0.8% linked quarter, primarily driven by commercial real estate loans [14][18] Business Line Data and Key Metrics Changes - New loan production for Q2 totaled approximately $293,000,000, significantly higher than the $142,000,000 produced in Q1 [8] - Commercial real estate loans were the largest source of payoffs, totaling approximately $150,000,000 in Q2 [9] - The average rate of loans funded during Q2 was approximately 6.9% [15] - Nonperforming assets remained low at 0.39% of total assets, unchanged from the previous quarter [12][15] Market Data and Key Metrics Changes - The Texas markets served by the company continue to report job and population growth, reflecting a positive economic outlook [6][7] - The loan pipeline increased to $2,100,000,000, up from $1,900,000,000 at the end of Q1, indicating strong future loan production potential [10][30] Company Strategy and Development Direction - The company is optimistic about potential hiring and client acquisition opportunities due to recent M&A activity in Texas [24] - The company is focusing on expanding its Commercial and Industrial (C&I) initiative, which now represents approximately 30% of the total pipeline, up from 25% [10][11] - The company is facing increased competition from debt funds, which are pricing deals aggressively, impacting the competitive landscape [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the economic conditions and growth prospects, despite uncertainties related to tariff negotiations [6][7] - The company anticipates moderated payoffs and new loan production consistent with the first half of 2025, slightly lowering loan growth guidance to 3% to 4% year over year [10][14] - Management believes that net loan growth will positively impact the net interest margin for the latter half of the year [36] Other Important Information - The company repurchased 424,435 shares of common stock at an average price of $28.13 during Q2 [19] - The allowance for credit losses decreased slightly to $48,300,000, and the allowance for loan losses as a percentage of total loans decreased to 0.97% [15][18] - Noninterest income, excluding net loss on the sales of AFS securities, increased by $1,400,000 or 12.7% linked quarter [20] Q&A Session Summary Question: Potential dislocation opportunities from recent deals in Texas - Management acknowledged the potential to acquire talent from recent acquisitions and expressed interest in participating in future strategic opportunities [24] Question: Update on multifamily credit restructuring - The loan continues to perform well with positive leasing activity, and management anticipates it will move out of the bank by year-end [26] Question: Confirmation on lowered loan growth outlook - Management confirmed the outlook was adjusted due to softer growth but noted a solid pipeline and increased loan production momentum [27][30] Question: Insights on net interest margin direction - Management indicated that the margin has some tailwinds regardless of loan growth, with expectations for continued improvement [36] Question: Deposit competition and pricing outlook - Management reported not seeing significant pressure on deposit pricing and anticipates some relief in the second half of the year [40]

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 [4][5] - Earnings per share increased by 15% compared to the same quarter last year [5] - Net interest income rose to $208 million, up 9% from the prior quarter and 25% year-over-year [6] - The net interest margin expanded to 3.21%, up 17 basis points from the first quarter and 53 basis points year-over-year [6][7] - Non-performing assets remained low at 0.17% of total assets, with net charge-offs at $1.6 million for the quarter [9] 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 [5] - Deposits increased to $21.6 billion, up 5% quarter-over-quarter, with non-interest bearing deposits rising by 8% [5][6] - Non-interest income totaled $32.9 million, slightly up from the first quarter and up 2% year-over-year [8] 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 [3][4] - A definitive agreement was announced to acquire Guaranty Bancshares, a $3.1 billion bank, marking the company's first entry into Texas [4] Company Strategy and Development Direction - The company is focused on strategic expansion in the Southwest, with the acquisition of Guaranty Bancshares being a significant step [4] - The management emphasized disciplined expense management and maintaining a strong capital position as foundations for future growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued margin growth, expecting to see an increase of 15 to 17 basis points per quarter for the next couple of quarters [15] - The company noted strong organic loan growth and positive client sentiment, with fewer customers delaying decisions due to economic uncertainty [42] - Management indicated that they are looking to strengthen technology and operational efficiency to support growth [71][72] Other Important Information - The company declared its 161st consecutive quarterly dividend of $0.33 per share, reflecting its commitment to shareholder returns [10] - The efficiency ratio improved to 62.08%, down from 65.49% in the prior quarter, indicating positive operating leverage [8] Q&A Session Summary Question: Margin tracking and future expectations - Management indicated that they expect continued growth in margin, with a potential increase of 15 to 17 basis points per quarter [15][16] Question: Expense guidance and efficiency - Management provided insights on expense management, noting a reduction in core non-interest expense guidance for the upcoming quarters [20][23] Question: Loan yield expansion and core trends - Management quantified the impact of purchase accounting accretion on interest income, noting it contributed around four basis points this quarter [30][32] Question: Organic growth and competitive landscape - Management reported solid organic loan growth and optimistic client sentiment, with a strong production yield of 7.35% for the quarter [45][58] Question: Hiring opportunities and market conditions - Management discussed plans for hiring, focusing on operational support and potential talent acquisition in Texas due to market changes [47][49]

Financial Data and Key Metrics Changes - The bank's earnings accelerated as forecasted, with a significant increase in loan production from approximately $2 billion in Q1 to over $3 billion in Q2, representing a 57% increase [6][11] - Adjusted for merger costs, the return on assets was 1.45% and return on tangible common equity was nearly 20% [9][11] - Net interest income grew by $33 million over Q1, with a cost of deposits at 1.84%, a five basis point improvement from Q1 [12][13] - Non-interest income remained stable at $87 million, with an efficiency ratio of 49.1% [14][15] - Tangible book value per share increased by 8.5% year-over-year to $51.96 [16] Business Line Data and Key Metrics Changes - Loan production in Texas and Colorado increased by 35%, with non-PCD loans growing by about $200 million [6][9] - The bank's retail bank ranks in the top quartile of J.D. Power's Net Promoter Score, indicating a superior customer experience [10] Market Data and Key Metrics Changes - The bank is now established in the fastest-growing markets in the country, specifically Texas and Colorado [8][9] - The loan pipeline increased significantly, with a 45% increase in Q1 and an additional 31% in Q2 [30] Company Strategy and Development Direction - The company aims to build a strong presence in the best geographical areas with a focus on organic growth and shareholder value [7][8] - The management is focused on leveraging the successful integration of Independent Financial to enhance growth opportunities [11][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving yield curve and its potential to accelerate organic growth [11] - The bank's capital position is strong, allowing for an 11% increase in dividends and potential share repurchases [16][85] Other Important Information - The bank's asset quality remains stable, with low credit costs and strong loss absorption capacity [15][16] - The management highlighted the importance of recruiting talent, having added 47 revenue producers in Q2 [50][66] Q&A Session Summary Question: Outlook for margin and deposit costs - Management indicated strong net interest margin performance and expects deposit costs to remain manageable despite growth [20][34] Question: Loan growth and paydowns - Paydowns returned to normal levels in Q2, and management expects continued loan origination funding [36] Question: Interest rate sensitivity - The bank expects a one to two basis point improvement in overall margin for every 25 basis point cut in rates [40] Question: Regulatory environment and growth - Management believes they have time to build infrastructure before facing regulatory changes, with a focus on organic growth [54] Question: Expense outlook and revenue synergies - Management confirmed no change to prior expense guidance and noted positive retention of key talent post-merger [58][65]

Financial Data and Key Metrics Changes - Operating earnings for Q2 2025 were $81.7 million, a 21% increase from Q1 2025 [7] - Net income was $100.2 million or $0.50 per diluted share, with operating earnings of $0.41 per diluted share, reflecting a 21% increase linked quarter and a 78% increase year-over-year [12][28] - Total assets reached $25.5 billion, up 2% from March 31 [8] - Tangible book value per share increased 4% to $12.53 [8] - Operating return on average assets rose 21 basis points to 1.3%, and return on average tangible equity increased from 11.7% to 13.6% [8][13] Business Line Data and Key Metrics Changes - Robust loan growth of 8% annualized this quarter, with commercial loan pipelines steady at approximately $500 million [8][9] - Noninterest income was $42.9 million, compared to a noninterest loss of $236.1 million in Q1 2025 [15] - Wealth management assets under management reached a record high of $8.7 billion, with fees of $17.3 million, up $800,000 linked quarter [16] Market Data and Key Metrics Changes - Deposits totaled $21.2 billion, an increase of $424 million from the prior quarter, with 8% annualized growth [20] - Nonperforming loans decreased to $54.7 million or 30 basis points of total loans, improving from the previous quarter [23][24] Company Strategy and Development Direction - The company is focused on organic growth and strategic investments in talent, particularly in commercial lending [8][44] - Plans to consolidate 13 branch locations following the merger with Harbor One, with integration planning well underway [30][31] - The company raised its full-year loan growth outlook to 3% to 5%, reflecting strong results through the first half of the year [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of customers despite economic uncertainties and highlighted the importance of proactive risk management [10][11] - The company remains cautious in its outlook but is optimistic about the ongoing positive trends in credit quality and profitability metrics [11][23] - The competitive market for deposits has heated up, impacting margin expectations for the second half of the year [50] Other Important Information - The company repurchased $3 million worth of shares at an average price of $16.36 prior to the merger announcement [22] - A dividend of $0.13 is set to be paid in September [22] Q&A Session Summary Question: Will there be more securities portfolio restructurings in the coming quarters? - Management indicated that while there is potential for another restructuring, it is currently on the back burner due to the merger [35] Question: What drove the significant drop in nonperforming loans this quarter? - The drop was attributed to the resolution of five credits rather than loan sales [37] Question: Are there plans to expand into new markets following the Harbor One deal? - Management is open to expanding in Rhode Island but has no current plans to enter Connecticut or New York [39][40] Question: What drove the strong growth in commercial and industrial loans? - Growth was driven by increased customer confidence and the addition of talent in the commercial lending division [44] Question: What is the outlook for the margin in the second half of the year? - Management expects the margin to be relatively flat, influenced by core deposit growth and competitive market conditions [50] Question: Can you provide guidance on Rabbi Trust income? - Rabbi Trust income is influenced by equity market performance, and while it can have an impact, it is not expected to be a significant factor moving forward [54]

Financial Data and Key Metrics Changes - GAAP earnings were strong with core earnings continuing to increase, return on average assets was 1.51% and return on average equity was 15.12% for Q2 2025 compared to 1.45% and 14.97% respectively for Q1 2025 [5][6] - Net interest margin (NIM) increased to 4.07% in Q2 2025 from 4% in Q1 2025, with expectations for further upside [6][14] - Noninterest income increased by $1.3 million quarter-over-quarter, with fee income as a percentage of operating revenue improving to 21% [6][15] Business Line Data and Key Metrics Changes - Total loan growth was 6% on an annualized basis for the quarter, with commercial loan growth at 2% [9][10] - Wealth management fees remained the largest component of fee income, with assets under management reaching $3 billion [7][15] - Noninterest expense declined by approximately $600,000 in the quarter, indicating improved cost management [18][19] Market Data and Key Metrics Changes - The loan pipeline is reported to be the strongest since the merger, reflecting a resilient regional economy [10][11] - Credit quality remains sound with net charge-offs being nominal and classified loans decreasing by 14% [11][21] - The average yield on loans was 6.5%, impacted by lower purchase accounting accretion [23] Company Strategy and Development Direction - The company aims to enhance its wealth management business and is focused on talent acquisition to support growth [7][48] - A share repurchase program of up to 500,000 shares was authorized, indicating confidence in the company's valuation [11][12] - The company is considering strategic opportunities, including potential acquisitions, while maintaining a focus on shareholder value [26][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future earnings growth as loan growth accelerates and expenses are expected to decline [5][8] - The competitive lending environment is acknowledged, but management remains confident in their ability to grow loans prudently [10][15] - The company is asset sensitive, and potential rate cuts could negatively impact net interest income, but management is focused on managing deposit costs [42][44] Other Important Information - The efficiency ratio improved to 58.7% in Q2 2025 from 60.5% in Q1 2025, with expectations for further improvement [8][19] - The board voted to increase the quarterly dividend by $0.01 per share, marking the third increase in the past year [12] Q&A Session Summary Question: Are there still other credits in the Codorus Valley deal that you are looking to move off of or sell? - Management indicated that while there may be a couple of loans to consider selling, they have been successful in working them out with minimal charge-offs [31] Question: Is there a capital level you would like to reach before considering another acquisition? - Management stated they are at premerger capital levels and feel confident about their position for potential acquisitions [36] Question: Can you provide commentary on the potential for NIM expansion in Q3 with possible rate cuts? - Management acknowledged that rate cuts could negatively impact net interest income but emphasized the importance of properly pricing loans [42][44] Question: What initiatives are in place for growth in the wealth management business? - Management highlighted opportunities for growth through talent acquisition and expanding in markets like Maryland and Lancaster [48] Question: How has the sentiment of commercial clients changed recently? - Management reported that the loan pipeline is the largest since the merger, indicating positive sentiment among commercial clients [52] Question: What is the current line utilization rate in the commercial portfolio? - Management noted that line utilization rates have remained stable and modest [61] Question: Are you ready for another transaction a year after the Codorus Valley deal? - Management expressed that they are looking for opportunities that add value and are focused on best practices for future acquisitions [70]

Financial Data and Key Metrics Changes - Operating earnings per share for the quarter was $0.66, an increase of 14% year over year [3] - Net interest margin expanded to 3.50%, an improvement of 14 basis points over the last quarter [3] - Customer deposits, excluding merger activity, grew by 1.3% annualized [4] - Loan growth was 4.2% annualized, with strong pipelines heading into the third quarter [4] - Efficiency ratio improved to 54.8%, an improvement of 222 basis points compared to last year [5] Business Line Data and Key Metrics Changes - Deposits increased by $205 million, benefiting from the American National deal [7] - Excluding public fund seasonality, deposits grew by $64 million or 1.2% annualized [8] - Loan portfolio growth continued at a 4.2% annualized pace, excluding American National [9] - Spread income grew at a 21% annualized pace, excluding American National [11] - Operating expenses increased by $2.1 million, primarily driven by merit increases [12] Market Data and Key Metrics Changes - The CET1 ratio remained stable at 13.3%, indicating strong capital position [10] - The loan to deposit ratio increased slightly to 79% due to the acquisition and solid loan growth [9] - The total deposit beta was 34% so far, with expectations for a high 30% range through the cycle [8] Company Strategy and Development Direction - The company continues to seek small, high-performing institutions for potential acquisitions [22] - Focus remains on organic growth, M&A, dividends, and buybacks, with a cautious approach to capital management [48] - The company is actively recruiting top talent to enhance its footprint and market presence [62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the outlook for the rest of the year despite uncertainties related to tariffs and yield curve direction [15] - There is a positive sentiment among clients regarding economic conditions and potential tax benefits [43] Other Important Information - The company redeemed $100 million in senior notes to manage interest costs effectively [9] - The allowance for credit losses remained flat at 1.21%, with a provision of $11.8 million for the quarter [14] Q&A Session Summary Question: Inquiry about loan growth and hiring initiatives - Management confirmed there were some pay downs but remains optimistic about loan growth in Q3, expecting it to be around 6% [19] - The company is focused on recruiting top talent and has made recent hires to strengthen its team [20] Question: Update on M&A strategy - The company continues to look for small, high-performing institutions for acquisition, with a more favorable outlook compared to previous months [22] Question: Core margin and deposit beta expectations - Management anticipates continued core margin expansion, targeting about five basis points in the third quarter [25] Question: Openness to share buybacks - Currently, the company is not active in buybacks but retains authorization for future opportunities at lower prices [34] Question: Outlook on Navitas growth - Navitas had a strong quarter, and the company plans to maintain or increase loan sales for the rest of the year [38] Question: Capital management and securities restructuring - The company has significant excess capital and is evaluating options for securities restructuring but prioritizes organic growth and M&A [48][47]