Financial Data and Key Metrics Changes - Earnings for the quarter increased to $71.9 million, or $0.95 per share, exceeding the consensus estimate of $0.88 [6][19] - Return on Assets (ROA) improved to 0.82%, and Return on Equity (ROE) rose to 9.5% [6][19] - Net Interest Margin (NIM) reached 3%, achieved a quarter earlier than expected [6][19] - Capital levels continued to grow, with Common Equity Tier 1 (CET1) at 12.5% and tangible book value per share at $39.27 [6][7] Business Line Data and Key Metrics Changes - Total deposits were flat, declining by $28 million, with a $1.2 billion increase in non-broker deposit growth over the last 12 months [11][12] - Commercial Real Estate (CRE) loans increased by $61 million, while Commercial and Industrial (C&I) loans decreased by $130 million due to ongoing payoffs [12][13] - Mortgage warehouse loans grew by $83 million during the quarter [13] Market Data and Key Metrics Changes - The CRE exposure totaled $6.5 billion, representing 28% of loans, with a well-balanced portfolio across various asset classes [15][16] - The weighted average loan-to-value ratio of the CRE portfolio was 55%, and the debt service coverage ratio was 1.77 [16] - 49% of the CRE portfolio is in Florida, and 22% in the New York tri-state area, with diversification into other markets like Atlanta and Texas [17] Company Strategy and Development Direction - The company aims to continue margin expansion driven by a change in mix on both sides of the balance sheet rather than solely relying on Federal Reserve rate actions [19][20] - There is a focus on building core relationships and maintaining a disciplined approach to pricing in competitive markets [43][44] - The company is optimistic about long-term prospects for fee income, with a 20% growth in core fee income celebrated [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, noting strong pipelines in commercial and real estate teams [10][11] - The sentiment among clients is positive, particularly in the CRE markets, with expectations for strong core commercial loan growth in the fourth quarter [11][50] - The company anticipates flat margin for the fourth quarter but expects to achieve double-digit growth in net interest-bearing deposits for the year [27] Other Important Information - The company has adopted a more opportunistic buyback strategy due to market volatility, rather than a consistent daily buyback approach [7][19] - Non-interest income increased by 24% year-over-year, excluding lease financing, as commercial fee businesses gained traction [25][66] - The CFO, Leslie N. Lunak, is retiring after 13 years, with Jim Mackey transitioning into the role [29][33] Q&A Session Summary Question: Will there be additional charge-offs in Q4 related to specific loans? - Yes, an additional charge-off of a few million dollars is expected in Q4 related to one C&I credit, but it has been fully reserved for [41] Question: Is the loan opportunity set improving in competitive markets? - The opportunity set is larger in growing markets, and while competition is high, the company is focused on maintaining pricing discipline [43][44] Question: What is the outlook for expenses next year? - Specific guidance for 2026 will be provided in January, but no major investments are anticipated that would significantly accelerate expense growth [54] Question: What is the growth potential of fee income businesses? - Fee income growth is expected to be strong, particularly in lending fees, syndication fees, and capital markets, which are closely tied to core commercial activities [63][70] Question: What is the company's appetite for incremental CRE? - The company sees opportunities in retail, industrial, and multifamily sectors, with a focus on grocery-anchored urban markets and construction lending [85]