Financial Data and Key Metrics Changes - For Q3 2025, diluted earnings per share increased to $0.96 from $0.86 in the linked quarter, primarily due to a reduction in provision for credit losses and an increase in net interest income [19][22] - Net interest income rose to $43 million from $42.5 million in the linked quarter, with a net interest margin of 4.05%, slightly down from 4.07% [19][20] - The allowance for credit losses to total loans held for investment ratio remained at 1.45%, with a provision for credit losses of $500,000 compared to $2.5 million in the linked quarter [22] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $45.5 million to $3.05 billion, primarily due to a $46.5 million decrease in multifamily property loans [10] - The indirect auto loan portfolio remained relatively unchanged at $239 million, with a focus on maintaining credit quality [13][14] - Non-interest income for Q3 was $11.2 million, down from $12.2 million in the linked quarter, mainly due to a decrease in mortgage banking revenues [17] Market Data and Key Metrics Changes - Deposits increased by $142.2 million to $3.88 billion, driven by organic growth in both retail and commercial deposits, particularly in the Lubbock market [20] - Non-interest bearing deposits increased to 27% of total deposits, up from 26.7% in the linked quarter [20] Company Strategy and Development Direction - The company aims to grow its lending team by up to 20% to accelerate loan growth, with a focus on recruiting experienced lenders in key markets such as the Permian, Houston, and Dallas [6][12] - The company is exploring further acquisitions while maintaining a conservative approach, focusing on cultural fit and successful banks with loyal customer bases [7][49] - The management emphasizes organic growth initiatives, stating that they are in the early stages and expect significant growth in the coming year [8][99] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth reaccelerating in 2026 as the level of payoffs is expected to diminish [16] - The company remains cautious about economic conditions but believes it is well-positioned to manage varying economic environments [22] - Management highlighted the importance of maintaining credit quality and monitoring potential credit stress in the indirect auto portfolio [72][78] Other Important Information - The company redeemed $50 million in subordinated debt, which was expected to result in a lower interest expense moving forward [23] - The tangible common equity to tangible assets ratio was 10.25%, indicating a strong capital position [24] Q&A Session Summary Question: Plans for increasing the lending team - Management confirmed plans to increase the lending team by up to 20%, with current numbers indicating over 10% growth achieved so far this year [27][28] Question: Concerns about subprime and deep subprime loans - Management clarified that the increase in subprime and deep subprime concentrations is due to updated data, not an actual increase in risk [34][35] Question: Impact of redeemed subordinated debt - Management stated there were no expenses incurred from redeeming the subordinated debt, as it was done within the call period [36][38] Question: Previous hiring initiatives and their success - Management reflected on past hiring initiatives, emphasizing a rigorous process to ensure cultural fit and successful integration [42][43] Question: M&A target criteria - Management reiterated that cultural fit is crucial for any acquisition, alongside the need for successful banks with loyal customer bases [47][49] Question: Credit score migration concerns - Management acknowledged some downward migration in credit scores but noted that delinquencies have not risen, indicating a stable credit profile [72][78]