Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with adjusted return on assets at 1.13% for the quarter [7] - Tangible book value per share declined only $0.12 to $22.82, largely offset by strong operating earnings and improvement in accumulated other comprehensive income (AOCI) [6] - Adjusted pre-tax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue of $517 million increased by $41 million or 9% in the quarter, with net interest revenue up $46 million or 12% [10] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [7] - Loans rose by $1.3 billion, with $1 billion attributed to the Industry acquisition and over $300 million in organic growth across mortgage and multiple verticals [7] - Adjusted non-interest revenue of $93.5 million decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The company experienced an uptick in commercial real estate (CRE) paydowns during the quarter, but new origination activity remained strong across its footprint [8] - Non-performing asset levels and criticized and classified asset levels continued to reflect stability [8] Company Strategy and Development Direction - The company completed the acquisition of Industry Bankshares and integrated it into its systems, aiming to grow in Central Texas and Georgia markets [4] - The management expressed confidence in leveraging deposit products and services more fully now that integration is complete [7] - The company plans to continue focusing on organic growth while also considering additional acquisitions in a consolidating industry [60] Management's Comments on Operating Environment and Future Outlook - Management noted that the pipeline for loan growth remains strong, with expectations for continued modest improvement in net interest margin through the end of the year and into next year [11] - The company anticipates that the expense expectations will align with revenue expectations, driving operating leverage as they approach year-end [23] Other Important Information - The company reported a $4.3 million securities gain offset by a $4.3 million hedge loss, resulting in a net impact of zero on the P&L [9][12] - The adjusted efficiency ratio improved to 56.5% [7] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter timeline for the remaining months of the year provides better clarity, and they expect good growth in the fourth quarter [20][21] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50%, with total deposits between 30% and 40% [25][26] Question: What's the expectation for DDA specifically as we go through the rest of the year? - Management noted that non-interest-bearing deposits finished Q3 at 20.6%, with expectations to stabilize around 21% [32][33] Question: What should we think of as a good capital level or a base capital level that you're trying to manage to? - Management aims to continue being good stewards of capital, with plans to execute on organic growth and consider additional deals [39] Question: What was driving the increase in deposits this quarter? - Management clarified that the increase was largely due to the Industry acquisition, with stable core organic deposits [46] Question: Can you provide insight into the fee income businesses this quarter? - Management highlighted a typical seasonal dip in mortgage production but noted a year-over-year increase of 13% [124]

Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with adjusted return on assets at 1.13% for the quarter [6][10] - Adjusted pre-tax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue of $517 million increased by $41 million or 9% in the quarter [10] - Net interest revenue was up $46 million or 12%, driven by a larger balance sheet and improved net interest margin [10] - Adjusted efficiency ratio improved to 56.5% [6] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [6] - Loans increased by $1.3 billion, with $1 billion from the Industry acquisition and over $300 million in organic growth [6] - Adjusted non-interest revenue of $93.5 million decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The securities portfolio grew by $780 million in the quarter, reflecting an improved mix and interest rate profile compared to the prior quarter [10] - Net interest margin improved by six basis points to 3.46%, driven by improved securities yields and a decline in overall funding costs [10] Company Strategy and Development Direction - The company completed the acquisition of Industry Bankshares and integrated it into its systems, aiming for growth in Central Texas and Georgia markets [4][5] - The company plans to leverage its deposit products and services more fully now that integration is complete [6] - The management expressed confidence in the performance and outlook for the markets, projecting growth in financial results through the end of the year [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains stable, with credit results in line with expectations and net charge-offs at 26 basis points annualized [7] - The company anticipates continued modest improvement in net interest margin through the end of the year and into next year [11] - Management highlighted strong pipelines and diverse growth opportunities across all business lines [75] Other Important Information - The company reported a decline in tangible book value per share by only $0.12 to $22.82, largely offset by strong operating earnings [5] - The company expects to continue building capital after the Industry transaction and is back in the buyback game sooner than anticipated [34] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter timeline for the year provides better clarity, and they expect good growth in the fourth quarter [19][20] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50% and total deposits between 30% and 40% [22] Question: What is the expectation for DDA specifically as we go through the rest of the year? - Management noted that non-interest-bearing deposits finished Q3 at 20.6%, down from 21.2% at year-end 2024, with fluctuations due to customer behavior [28][30] Question: What should we think of as a good capital level or a base capital level that you're trying to manage to? - Management aims to be good stewards of capital, focusing on core organic growth and potential inorganic opportunities [34] Question: Can you provide insight into loan pricing and competition in recent weeks? - Management acknowledged competitive pressures but noted that yields have been holding steady, particularly in the Community Bank segment [80][81]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per diluted share of $0.72, representing an adjusted return on assets of 1.41% [4] - Net interest income increased by 4.6% over the prior quarter, while fee income rose by 15% [11] - The net interest margin improved by 10 basis points to 3.51% [12] - Adjusted pre-provision net revenue grew by 23.2% over the prior quarter [27] Business Line Data and Key Metrics Changes - The retirement services business generated stable revenue of over $16 million, with assets under administration and management increasing by 6.3% [17][18] - The wealth management business saw revenues increase by 6.6% on a linked quarter basis, with assets under management rising by 2.5% [18] - Noninterest income from banking was $8.4 million for the second quarter, with a $2.1 million gain related to the sale of hospitality loans [16] Market Data and Key Metrics Changes - Deposits shrank by 3.3% due to expected seasonal outflows from public funds [15] - The company expects continued seasonal volatility in deposits, with average deposit account sizes growing over 20% since 2019 [15] Company Strategy and Development Direction - The company is focused on maximizing profitability through disciplined pricing and enhancing its diversified business model [4][5] - Strategic initiatives include optimizing the balance sheet and investing in talent and technology to deepen client relationships [8][9] - The company aims to achieve consistent performance levels and is targeting mid-single-digit loan growth for 2025 [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainty and competitive pressures but emphasized a disciplined approach to growth and credit risk management [87] - The guidance for the year remains consistent, with expectations for low single-digit deposit growth and continued focus on core business lines [22][26] Other Important Information - The company recorded no provision for the quarter due to a net gain from the sale of hospitality loans [6] - The adjusted efficiency ratio improved to 52.4% from 66.9% in the prior quarter [19] - The company remains well-capitalized with a common equity Tier one capital ratio of 10.5% [21] Q&A Session Summary Question: What are the expectations for third and fourth quarter accretion? - The company expects 27 basis points of purchase accounting accretion in the third quarter and 22 basis points in the fourth quarter, with no early payoffs included [29][34] Question: What is the status of the larger construction credit? - The final certificate of occupancy was issued, and the property is currently at 57% leased, with expectations for a sale in early 2026 [37][65] Question: How does the company view the capital deployment for the rest of the year? - The company prioritizes organic balance sheet growth, maintaining dividend history, and pursuing M&A opportunities in the retirement sector [45] Question: What is the outlook for noninterest income? - The company expects noninterest income to be up low single digits for the year, factoring in seasonal downturns in the mortgage business [25][80] Question: How is the company addressing nonperforming assets? - Nonperforming assets are primarily driven by two large relationships, with resolutions expected in early 2026 [65][66] Question: What is the outlook for deposit costs? - The company anticipates an increase of 8 to 10 basis points in deposit costs due to competition and a shift from non-interest bearing to interest-bearing deposits [73][76]