Financial Data and Key Metrics Changes - The company reported second quarter net earnings of $243 million, reflecting a 28% improvement over the prior year period and a 44% increase compared to the first quarter [5][7] - The efficiency ratio improved to 62.2%, and the net interest margin increased for the sixth consecutive quarter to 3.17% due to lower funding costs and an improved earning asset mix [8][12] - Average customer deposits increased by 0.5% year-over-year but decreased by 1.4% on a linked quarter basis [9] - Average loans grew by 5.6% on an annualized linked quarter basis and 3.7% year-over-year [10][17] Business Line Data and Key Metrics Changes - The company experienced a 91% increase in the number of deals booked through the SBA seven program in the first nine months of the fiscal year compared to the same period last year [6] - Customer-related non-interest income was $164 million for the quarter, a 4% increase on a linked quarter basis and a 7% increase year-over-year [13] - Adjusted non-interest expenses decreased by $12 million compared to the prior year, reflecting lower technology costs [14][15] Market Data and Key Metrics Changes - The company noted stability in non-interest bearing deposits at 34% of total deposits [9] - Average non-interest bearing deposits grew approximately $480 million or 2% compared to the prior quarter [18] Company Strategy and Development Direction - The company is focusing on growing customer relationships, particularly in small business banking, and has launched a consumer gold account offering in the Nevada market [6][7] - The management is optimistic about the potential for growth in the outlook, citing reduced tariff-related risks and a more favorable economic environment [5][31] Management's Comments on Operating Environment and Future Outlook - Management expressed a more positive outlook compared to the previous quarter, noting that the economy is weathering challenges better than anticipated [32] - The company expects continued growth in net interest income and customer-related fee income for 2026, supported by increased customer activity and new client acquisition [12][14] Other Important Information - The allowance for credit losses as a percentage of loans and leases declined to 1.2%, with non-performing assets remaining low at 0.51% [21][24] - The common equity Tier one ratio was reported at 11%, indicating strong capital levels [24] Q&A Session Summary Question: What are you hearing from clients in the small business and middle market side? - Management noted a more positive sentiment among clients due to reduced uncertainty in the macro environment and some businesses seeing opportunities despite challenges [30][31] Question: Are you seeing any elevated competition on the deposit side? - Management acknowledged a competitive market for deposits but emphasized a focus on maintaining margin while growing the deposit base [33][34] Question: Can you provide color on the increase in loan growth? - Loan growth was solid, primarily driven by commercial and industrial loans, with increased utilization and new originations contributing significantly [41][42] Question: Can you discuss the potential benefits of deregulation for the company? - Management highlighted the potential benefits of tiering in regulatory requirements and expressed a strategic approach to M&A, focusing on organic growth [46][49] Question: What is the outlook for capital markets business? - The capital markets business is growing nicely, with expectations to double in size over a four to five-year period, driven by various segments including loan syndications and M&A advisory work [110][111]