Financial Data and Key Metrics Changes - The company surpassed $5 billion in total assets for the first time, achieving a compound annual growth rate of 19.3% since its IPO in November 2021 [5] - Net income for the third quarter was $16.9 million, an increase of 8.3% compared to the second quarter of 2025, resulting in a return on average assets (ROAA) of 1.41% and a return on equity (ROE) of 15.1% [8][9] - The efficiency ratio improved to 53.05% for the third quarter, indicating better operational efficiency [6][7] Business Line Data and Key Metrics Changes - Net interest income increased by $1.5 million, or 3%, primarily due to a better-than-expected net interest margin and growth in average earning assets of $229 million [9] - Average loans rose by $158 million compared to the second quarter, while period-end loans increased by $85.4 million [9] - Non-interest expenses remained stable, with salary and employee benefits rising but legal and professional expenses declining [9] Market Data and Key Metrics Changes - Deposits increased by $92 million for the quarter, resulting in a loan-to-deposit ratio of 95% [9] - The yield on the investment securities portfolio was 6.07%, with total investment securities rising to $583 million [9] Company Strategy and Development Direction - The company announced a definitive merger agreement with Keystone Bancshares, expected to close in the first quarter of 2026, which will create a combined entity with total assets exceeding $6 billion [14] - The merger aims to enhance market presence and leverage shared commitment to relationship banking and customer service [15] - The company remains focused on organic growth, targeting loan growth of $50 to $100 million in the fourth quarter [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting loan growth targets, citing strong demand and a robust loan pipeline [15][21] - The company anticipates that the remainder of 2025 will be consistent with prior quarters, with a disciplined approach to underwriting and portfolio management [15] - Management highlighted the importance of maintaining strong credit quality and risk management practices [11] Other Important Information - The company received international recognition for its securitization transactions, winning the SCI Risk Sharing Award for North American Transaction of the Year [5] - The company is positioned as a strong performer in the market, with a commitment to delivering sustained value for shareholders [8] Q&A Session Summary Question: Integration process timeline for the merger with Keystone - Management expects a straightforward integration process, targeting an early second quarter core conversion [18] Question: Loan growth expectations for Q4 - Management remains comfortable with the $50 million to $100 million loan growth target, despite potential volatility in paydowns [19][20] Question: EPS accretion expectations from the merger - EPS accretion is based on consensus estimates, with management believing the actual number may be more favorable due to potential synergies not included in initial projections [26][28] Question: Near-term securitization strategy - A third securitization is being considered, likely in the first quarter of the following year [30] Question: Future M&A opportunities - The company is open to future deals but emphasizes the need for financial rewards and cultural fit, maintaining a disciplined approach [45][47] Question: Fee income and growth initiatives - Fee income has shown strong momentum, with expectations for continued growth, although a slight step down is anticipated in the fourth quarter due to seasonal factors [36][38] Question: Hiring efforts to support loan growth - The company is selectively hiring top talent to support growth, focusing on high productivity and cultural fit [41][43] Question: Geographic expansion plans - The company aims to continue building around the Texas Triangle and is open to opportunities that enhance shareholder value [61][63]

Financial Data and Key Metrics Changes - The company reported a second quarter net income of $15.6 million, up 25% compared to the first quarter of 2025, resulting in a return on assets of 1.38% and a return on equity of 14.7% [8][9] - Net interest income increased by $6.6 million or 15.4% from the first quarter, partially due to two securitization transactions that generated approximately $2 million in fee income [9][10] - Non-interest expenses rose by 2.6% or $738,000 in the second quarter, with about $500,000 attributed to the securitizations [9][10] - The net interest margin improved to 4.22%, with a forecasted margin of between 3.90% and 3.95% for the third and fourth quarters [10][17] Business Line Data and Key Metrics Changes - The company achieved loan growth of $91.7 million in the second quarter, with a compound annual growth rate of 21.1% since its IPO, increasing total loans from $2.07 billion in December 2021 to $4.08 billion in June 2025 [7][10] - Average loans increased by $40.9 million compared to the first quarter, with strong loan demand continuing into July, already up $50 million [10] Market Data and Key Metrics Changes - The company maintained high credit standards while expanding its loan portfolio, demonstrating a disciplined management approach [7][12] - Non-accrual loans improved significantly, declining by $3.7 million during the quarter, while nonperforming loans increased by $1.5 million from the previous quarter but were down $4.3 million year-over-year [12] Company Strategy and Development Direction - The company is focused on enhancing operational efficiency, with an improved efficiency ratio of 55.45% in the second quarter, down from 61.39% a year ago [15][16] - The company aims for strong loan growth, projecting $50 million to $100 million of new loans each quarter, maintaining an annualized growth rate near 8% [16] - The company plans to preserve and optimize net interest margins, anticipating two rate cuts by the Federal Reserve before year-end [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the changing financial services landscape, emphasizing the importance of maintaining a strong capital position to seize growth opportunities [15][19] - The company remains committed to maintaining superior credit quality through disciplined underwriting and proactive portfolio management [17][18] Other Important Information - The company has been nominated for North American Transaction of the Year and North American Issuer of the Year at the 2025 SCI Risk Sharing Awards [5] - The company has successfully executed its original business model since its IPO in 2021, demonstrating remarkable progress [5][6] Q&A Session Summary Question: Can you provide more details on the securitizations and expectations for future transactions? - Management indicated that while there are no new securitizations expected in the third quarter, there is potential for one in the first quarter of next year [21][23] Question: What are the expectations for return on assets for the remainder of the year? - Management suggested that return on assets could be in the range of 125 to 130 basis points [24] Question: How does the core net interest margin look excluding the impact of securitizations? - The core net interest margin is expected to be in the range of 3.90% to 3.95%, including other capitalized fees [39][40] Question: What is the outlook for loan growth, particularly in the commercial and industrial segment? - Management noted that the commercial and industrial segment has a robust pipeline, although there may be substantial payoffs affecting growth [62] Question: How will capital deployment be prioritized moving forward? - Management indicated that loan growth will likely be prioritized over share buybacks, depending on market conditions [54][56]