Financial Data and Key Metrics Changes - The company reported an ROA of 1.46%, up from 1.32% a year ago, indicating continued profitability improvement [6] - Adjusted net income for the quarter was nearly $128 million, or $1.49 per share, compared to $118 million, or $1.37 per share in the previous quarter [10] - The efficiency ratio improved to 54.1% from 54.91% in the prior quarter, and year-to-date efficiency ratio is 54.73%, down from 55.67% last year [11] Business Line Data and Key Metrics Changes - Fee income grew to $106 million, an increase of 8% from the prior quarter, with investment, insurance, and annuity fees leading the increase [6] - Loans grew by $135 million, or 2% annualized, with production increasing 6% quarter-over-quarter and 46% year-over-year [7] - Deposits decreased by $387 million, primarily due to seasonal activity in public fund DDA and interest-bearing accounts [8] Market Data and Key Metrics Changes - Interest-bearing transaction balances increased, while retail time deposits and DDA balances decreased, reflecting promotional pricing changes [8] - The company ended the quarter with a TCE of 10.01% and a common equity tier one ratio of 14.08% [8] Company Strategy and Development Direction - The company plans to open five new locations in the Dallas market, aiming for growth and profitability [9] - The focus remains on organic growth, with a goal of achieving more favorable loan yields and relationship revenue [7] - The company is optimistic about closing out 2025 with continued growth despite a dynamic macroeconomic environment [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and supporting clients, highlighting a strong capital stack and solid allowance for credit losses [9] - The company anticipates low single-digit growth in 2025, with expectations of continued paydowns impacting loan growth [8] - Management noted that while paydowns may persist, they are focused on increasing loan production to offset this [21] Other Important Information - The company repurchased 662,000 shares of common stock during the quarter, continuing to return capital to investors [8] - The company expects to maintain a strong capital position while being proactive in deploying capital for organic growth [26] Q&A Session Summary Question: Loan growth expectations and paydowns - Management indicated that loan production was strong, with a healthy growth rate, but paydowns are expected to continue due to project completions [18][21] Question: Capital management and M&A opportunities - Management clarified that they are not focused on M&A currently but are open to opportunistic approaches in the future [25][26] Question: Deposit growth expectations for Q4 - Management expects strong seasonal growth in public fund deposits and DDAs, projecting a total deposit growth of $400 million to $500 million [90][91] Question: Future growth in the Dallas market - The company plans to double its offices in the Dallas MSA and anticipates significant growth driven by business purpose clients [95][96] Question: Credit quality and criticized loans - Management expressed confidence in the moderation of criticized loans, noting improvements in client performance and refinancing activity [78][79]

Financial Data and Key Metrics Changes - The company reported an adjusted net income of nearly $128 million, or $1.49 per share, compared to $118 million, or $1.37 per share in the previous quarter, reflecting a strong performance [10] - Return on Assets (ROA) improved to 1.46% from 1.32% a year ago, indicating continued profitability improvement [5] - The efficiency ratio improved to 54.1% from 54.91% in the prior quarter, and year-to-date efficiency ratio is 54.73%, down from 55.67% last year [10][11] Business Line Data and Key Metrics Changes - Net interest income (NII) increased by $3 million, or 1%, while fee income grew to $106 million, an increase of 8% from the prior quarter, driven by record highs in investment, insurance, and annuity fees [5][10] - Loans grew by $135 million, or 2% annualized, with production increasing 6% quarter over quarter and 46% year over year [6][10] - The yield on the loan portfolio increased by 1 basis point to 5.87%, while the yield on fixed-rate loans rose by 7 basis points to 5.24% [11][12] Market Data and Key Metrics Changes - Deposits decreased by $387 million, primarily due to seasonal activity in public fund DDA and interest-bearing accounts [7][13] - Interest-bearing transaction balances increased, while retail time deposits and DDA balances decreased, reflecting promotional pricing changes [7] - The company expects low single-digit growth in deposits for the fourth quarter, with anticipated seasonal growth in public fund deposits [72] Company Strategy and Development Direction - The company plans to open five new locations in the Dallas market, aiming for increased hiring to solidify growth targets [9][27] - The focus remains on organic growth, with a goal of achieving more favorable loan yields and relationship revenue [6][9] - The company aspires to become the best bank in the Southeast for privately owned businesses, emphasizing the importance of local service and efficiency [78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic macroeconomic environment, highlighting a strong capital position and solid allowance for credit losses [9] - The company anticipates continued growth and profitability, despite challenges from high paydowns and competitive pressures [9][23] - Management expects to maintain a proactive approach to managing capital, focusing on organic growth and potential share repurchases [27][29] Other Important Information - The company repurchased approximately $40 million of shares during the quarter and plans to continue at this level [14][29] - The capital ratios remain strong, with a tangible common equity (TCE) of 10.01% and a common equity tier one ratio of 14.08% [8] Q&A Session Summary Question: Loan growth expectations and paydowns - Management noted that loan production was strong, with a 6% increase quarter over quarter, but high paydowns are expected to persist, impacting net growth [18][19] Question: Capital management and M&A opportunities - Management clarified that while they are not focused on M&A currently, they remain opportunistic and will consider capital deployment for organic growth and share repurchases [25][27] Question: Guidance for NII and expenses - Management indicated that NII growth expectations are modest, with a bias toward the lower end of the range, and expenses are expected to grow slightly more in the fourth quarter [43][44] Question: Deposit competition and growth expectations - Management expects strong seasonal growth in deposits for the fourth quarter, with no significant changes in competitive pressures noted [72][74] Question: Credit quality and criticized loans - Management expressed confidence in the moderation of criticized loans, citing improvements in client performance and refinancing activity [57][59]