Financial Data and Key Metrics Changes - The company reported net income of $35.3 million or $0.92 of earnings per diluted share for the third quarter, with adjusted net income increasing 30% annualized over the prior quarter to $36.6 million or $0.96 per diluted share [8][9] - The return on tangible common equity was 14.72%, and the adjusted return on average tangible common equity was 14.7% [5][9] - The fully taxable equivalent net interest margin expanded three basis points during the third quarter to 3.98%, with an annualized growth of 11 basis points compared to the same quarter last year [10] Business Line Data and Key Metrics Changes - Loan fundings for the quarter totaled $421 million, bringing total year-to-date loan fundings to $1 billion, with quarterly loan fundings increasing each quarter of 2023 [9][19] - Non-interest income for the third quarter totaled $20.7 million, which is 21% higher than the second quarter and 13% higher than the third quarter of last year [11] - Non-interest expense totaled $67.2 million, including $1.7 million of acquisition expenses and $6.2 million of 2Unify expenses [12] Market Data and Key Metrics Changes - Total deposits increased by $202 million compared to the prior quarter, with average deposits holding steady at $8.2 billion [11] - The cost of deposits was 2.08%, and the total cost of funds was 2.1% [11] - Credit quality improved with a 20% reduction in non-performing loans, now standing at $27 million, and the non-performing loan ratio improved to 36 basis points [10][11] Company Strategy and Development Direction - The company announced a merger with Vista Bankshares, expected to close in the first quarter, which is anticipated to enhance the company's market position and capabilities [6][8] - The company is focused on maintaining pricing discipline and managing loan and deposit pricing to achieve solid margin expansion [9][10] - The launch of 2Unify is seen as a strategic initiative, with plans to provide revenue guidance in the next quarterly earnings call [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about new loan production and the quality of new relationships, despite headwinds from payoffs in the commercial real estate portfolio [5][6] - The company expects to maintain a mid-three nines net interest margin for the remainder of 2023, not accounting for future Fed interest rate changes [10] - Management highlighted the importance of proactive measures to resolve problem loans, resulting in net recoveries during the quarter [10] Other Important Information - The company repurchased 240,000 shares during the quarter, totaling $8.9 million, with a total of 359,000 shares repurchased year-to-date [13] - The tangible book value per share grew 12% annualized to $27.45 [13] - The company continues to hold $18 million of marks against its acquired loan portfolio, providing additional loan loss coverage [10] Q&A Session Summary Question: Can you elaborate on the margin and expected impacts of rate cuts? - Management indicated that the third quarter's margin was positively impacted by interest and fees recovered, and they are prepared to adjust deposit rates in line with potential Fed rate cuts [23][25] Question: What are the expectations for 2Unify expenses moving forward? - Management expects 2Unify expenses to be in the range of $7 million to $9 million for Q4, accounting for increased marketing and variable costs [41] Question: How is the company positioned regarding loan growth and paydowns? - Management clarified that the reduction in loan volume was due to heavy payoffs rather than directive paydowns, and they are optimistic about the loan pipeline for Q4 [35][37] Question: What are the company's thoughts on private credit competition? - Management noted that competition from private credit is primarily seen in the commercial real estate sector, with pricing and credit terms being challenging [55] Question: What opportunities does the Vista acquisition present? - Management expressed excitement about the caliber of leadership from Vista Bankshares and the potential for growth in treasury management and wealth services [64][68]

Financial Data and Key Metrics Changes - The company reported net income of $35.3 million or $0.92 of earnings per diluted share for the third quarter, with adjusted net income increasing 30% annualized over the prior quarter to $36.6 million or $0.96 per diluted share [6][7] - The return on tangible common equity was 14.72%, achieved while maintaining a high level of capital [4] - The fully taxable equivalent net interest margin expanded three basis points during the third quarter to 3.98%, with an annualized growth of 11 basis points compared to the same quarter last year [9] Business Line Data and Key Metrics Changes - Loan fundings for the quarter totaled $421 million, bringing total year-to-date loan fundings to $1 billion, with quarterly loan fundings increasing each quarter of 2023 [7][8] - Non-interest income for the third quarter totaled $20.7 million, which is 21% higher than the second quarter and 13% higher than the third quarter of last year [10] - Non-interest expense totaled $67.2 million, including $1.7 million of acquisition expenses and $6.2 million of 2Unify expenses [11] Market Data and Key Metrics Changes - Total deposits ended the quarter $202 million higher than the prior quarter, with average deposits holding steady at $8.2 billion [10] - The cost of deposits totaled 2.08%, while the total cost of funds was 2.1% [10] Company Strategy and Development Direction - The company announced a merger with Vista Bankshares, which is expected to close in the first quarter, and management is optimistic about the strategic value of this transaction [5][13] - The company is focused on maintaining pricing discipline, which has resulted in solid margin expansion [8] - The launch of 2Unify is seen as a significant step forward, with plans to provide revenue guidance in the next quarterly earnings call [11][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of new loan production and the strength of new relationships, despite headwinds from loan payoffs in the commercial real estate (CRE) portfolio [4][5] - Credit quality improved during the quarter, with a 20% reduction in non-performing loans [9] - Management is prepared to adjust deposit rates in response to potential Fed rate cuts, indicating a proactive approach to managing interest margins [22][23] Other Important Information - The company ended the quarter with a strong tangible common equity (TCE) ratio of 10.6% and a common equity Tier 1 ratio of 14.7% [12] - The tangible book value per share grew 12% annualized to $27.45 [12] Q&A Session Summary Question: Can you elaborate on the margin and expected impacts of rate cuts? - Management indicated that the third quarter's margin was positively impacted by recoveries and that they are prepared to adjust deposit rates in line with Fed actions [21][22] Question: What are the expectations for loan growth in Q4? - Management noted that the reduction in loan volume was not driven by directive paydowns and expressed optimism about the loan pipeline for Q4 [32][34] Question: How much are 2Unify expenses expected to be in Q4? - Expected 2Unify expenses for Q4 are in the range of $7 million to $9 million, accounting for increased marketing and variable costs [37] Question: What are the opportunities from the Vista acquisition? - Management highlighted the potential for growth in treasury management and wealth management services, leveraging the strengths of both organizations [55][56]

Financial Data and Key Metrics Changes - The company reported net income of $35.3 million or $0.92 earnings per diluted share, with an adjusted net income of $36.6 million or $0.96 earnings per diluted share, reflecting a 30% annualized increase over the prior quarter [8][9] - Return on tangible common equity was 14.72%, achieved while maintaining a high level of capital [6][9] - Fully taxable equivalent net interest margin expanded three basis points to 3.98%, with an 11 basis points increase year-over-year [10][11] - Non-interest income totaled $20.7 million, a 21% increase from the previous quarter and a 13% increase year-over-year [12] Business Line Data and Key Metrics Changes - Loan fundings for the quarter reached $421 million, bringing year-to-date total loan fundings to $1 billion [9][20] - Commercial Banking, particularly in the C&I portfolio, saw an annualized growth rate of 8.7% [15] - Non-performing loans decreased by 20%, now standing at $27 million, with a non-performing loan ratio improving to 36 basis points [10][11] Market Data and Key Metrics Changes - Total deposits increased by $2 million from the prior quarter, with average deposits steady at $8.2 billion [11] - The cost of deposits was 2.08%, and the total cost of funds was 2.1% [11] Company Strategy and Development Direction - The company announced a merger with Vista Bancshares, expected to close in the first quarter, which is anticipated to enhance market share and operational capabilities [7][15] - The company is focused on maintaining pricing discipline and managing loan and deposit pricing effectively [10][20] - Plans to leverage the strengths of Vista in treasury management and wealth management to enhance service offerings [64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the loan pipeline and credit quality trends, indicating a strong outlook for the fourth quarter [7][15] - The company is prepared to adjust deposit rates in response to potential Fed rate cuts, aiming to maintain net interest margins [26][27] - Management highlighted the competitive landscape, particularly from private credit in the commercial real estate sector, but remains confident in their positioning [38][54] Other Important Information - The company incurred approximately $1.7 million in acquisition-related expenses during the quarter [8][12] - Non-interest expense totaled $67.2 million, including $6.2 million related to the launch of 2Unify [12][13] - The tangible book value per share grew 12% annualized to $27.45 [14] Q&A Session Summary Question: Can you elaborate on the margin guidance and expected impacts from rate cuts? - Management indicated that the third quarter's margin was positively impacted by recoveries and expressed confidence in maintaining a mid-3.9% margin despite potential rate cuts [25][26] Question: What are the expectations for expenses related to 2Unify? - Management confirmed that the increase in 2Unify expenses was expected and will continue to invest in marketing and variable costs as client onboarding progresses [28][29] Question: How is the company positioned regarding loan growth and paydowns? - Management clarified that the reduction in loan volume was primarily due to heavy payoffs rather than directive paydowns, and expressed optimism about returning to growth in the fourth quarter [37][39] Question: What are the company's thoughts on private credit competition? - Management noted that competition from private credit is primarily seen in the commercial real estate sector, but they are confident in their ability to compete effectively [54] Question: What are the plans for capital deployment and buybacks? - Management confirmed that they have $35-36 million remaining in buyback authorization and will be opportunistic in capital deployment while considering potential M&A opportunities [56]

Financial Data and Key Metrics Changes - The company reported earnings of $0.88 per diluted share with a return on tangible equity of 14.2% and a return on assets of 1.5% [4][6] - The net interest margin was strong at 3.95%, reflecting disciplined deposit and loan pricing [4][8] - Net income for the second quarter was $34 million, representing a 19.9% increase in fully taxable equivalent pre-provision net revenue compared to the same quarter last year [6][7] Business Line Data and Key Metrics Changes - Loan fundings amounted to $323 million during the quarter, with a decline in loan balances due to elevated loan paydowns and strategic portfolio reductions in higher-risk industries [5][8] - Noninterest income totaled $17.1 million, which was 11% higher than the first quarter and 22% higher than the second quarter of the previous year [11] - Noninterest expense increased to $62.9 million, but decreased by $1 million on a linked quarter basis when excluding payroll tax credits from the first quarter [12][11] Market Data and Key Metrics Changes - Average deposit balances declined by $58.8 million due to seasonal tax outflows, with a cost of deposits at 2.05% [10] - Nonperforming loans decreased to $33.3 million, with a nonperforming loan ratio of 45 basis points, which is below peer averages [10][11] - The company maintained a strong liquidity position with a tangible common equity ratio of 10.5% and a Tier one leverage ratio of 11.2% [13] Company Strategy and Development Direction - The company is focused on reducing exposure in higher-risk industries, particularly in trucking, agriculture, and commercial real estate [17][19] - The launch of the UNIFY platform is seen as a significant step towards creating a comprehensive ecosystem for small and medium-sized businesses [39][40] - The company aims to maintain pricing discipline and is not focused on aggressive growth strategies that compromise credit quality [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan pipelines for the second half of the year, projecting mid-single-digit loan growth [14][26] - The company is taking proactive measures to manage expenses in light of economic uncertainty, with a projected reduction in annual core bank personnel expenses by approximately $15 million [12][56] - Management emphasized the importance of maintaining strong credit metrics and a cautious approach to growth [22][72] Other Important Information - The company successfully launched the first release of the UNIFY app, with positive user feedback and plans for further marketing campaigns [5][39] - The company is not focused on reaching the $10 billion asset mark as a growth constraint, as it has been operating under similar regulatory conditions for years [23][24] Q&A Session Summary Question: Concerns about higher-risk trucking and commercial real estate loans - Management confirmed that they have taken action to clean up higher-risk loans and are monitoring other relationships closely [22][24] Question: Margin expansion opportunities - Management indicated that deposit growth, particularly in zero-cost deposits, would be crucial for margin improvement [29][30] Question: Feedback on the UNIFY launch and partnership - Management described the launch as successful, with positive user feedback and plans for future enhancements and marketing [36][39] Question: M&A environment and partner characteristics - Management reiterated their focus on cultural fit and strong growth markets for potential M&A opportunities [47][48] Question: Deposit decline and its relation to loan portfolio derisking - Management confirmed that the decline in deposits was tied to the movement of entire relationships as part of their derisking strategy [51][52] Question: Expense reduction details - Management explained that the expense reduction was a bank-wide effort, focusing on streamlining processes and eliminating positions [57][58]