Financial Data and Key Metrics Changes - Earnings per share increased by 30% year-over-year, with a return on tangible equity of 20% [3] - Net interest income rose to $600 million, up $22 million from the previous quarter, driven by a tax equivalent margin of 4.06% [6][8] - Charge-offs were reported at 27 basis points for the quarter, with year-to-date charge-offs at 12 basis points [4][8] Business Line Data and Key Metrics Changes - Loan production reached nearly $3.4 billion, with a 67% increase in loan production in Texas and Colorado since the first quarter [3] - Commercial and industrial lending saw a 9% linked quarter annualized growth, while residential growth was about 6% [19][20] - Non-interest income increased to $99 million from $87 million, with capital markets contributing significantly [36] Market Data and Key Metrics Changes - The company identified approximately $90 billion in overlapping deposits in the Southeast, Texas, and Colorado, indicating potential growth opportunities [5] - The loan pipeline in Texas grew from $800 million to $1.2 billion, with Florida and Atlanta also showing significant pipeline growth [20] Company Strategy and Development Direction - The company is focused on organic growth and recruiting efforts in response to market disruptions, rather than pursuing M&A opportunities [63] - Strategic planning is underway, considering deregulation and market opportunities, with a focus on enhancing the sales force [4][5] Management's Comments on Operating Environment and Future Outlook - Management anticipates mid-single-digit loan growth for the remainder of 2025, with potential acceleration into 2026 [19] - The company is optimistic about capitalizing on market disruptions and is focused on recruiting talented bankers [5][22] Other Important Information - The company redeemed $405 million in subordinated debt late in the quarter, which is expected to positively impact net interest margin [6][7] - The tangible book value per share increased to $54.48, reflecting strong capital levels despite the merger's dilutive impact [8] Q&A Session Summary Question: Margin dynamics and future rate cuts - Management discussed the impact of higher accretion and the expectations for future rate cuts, indicating a potential deposit beta of around 27% [11][12][43] Question: Loan growth environment - Management guided for mid-single-digit growth, with a focus on commercial and industrial lending as the primary growth driver [19][20] Question: Credit quality and charge-offs - A significant charge-off was attributed to a specific credit, with management expressing confidence in the overall portfolio quality [27][28] Question: Capital management and buyback strategy - The company is maintaining a CET1 ratio of 11.5% and is considering share repurchases as part of its capital management strategy [29] Question: Non-interest income outlook - Management provided insights into the strong performance of correspondent banking services and projected a more stable run rate for non-interest income [36][37] Question: Future expense guidance - The company expects expenses to remain in the $345 million-$350 million range for the fourth quarter, with a focus on cost control [71]

Financial Performance - The company achieved a 5-year Compound Annual Growth Rate (CAGR) of 11.3% in shareholder equity[19] - The company achieved a 5-year CAGR of 11.7% in loan growth[22] - The company achieved a 5-year CAGR of 6.5% in deposits[25] - The company's 2024 Efficiency Ratio was 63.79%[20] - The company's 2024 Operating Expenses/Total Average Assets was 67 bps[20] Business Strategy - The company focuses on Commercial and Personal Deposit Banking, Commercial Real Estate Lending, and Residential Real Estate Lending[6] - The company does not engage in Commercial and Industrial Lending, Consumer Lending, Investments, Insurance Brokerage or Underwriting, Secondary Market Residential Mortgage, Tax Credits, Solar Lending, Cannabis Banking, Cryptocurrency, or Commercial Mortgage Participations[8] - The company prioritizes organic growth, minority equity investments, dividends, and opportunistic share repurchases for capital allocation[10] Deposit Growth - The company focuses on personalized service, digital excellence, and low/no fees for deposit growth[29] - The company utilizes a Specialized Deposit Group (Private Client) and a Retail Banking Group for deposit growth[29] - The company is increasing its focus on commercial deposits through the Specialized Deposit Group[30] Challenges and Outlook - Key challenges include credit quality (Multifamily Outlook, Washington, D C , San Francisco), funding conditions (Stabilization of Margin, Growth in NIB Deposits, Liability Sensitivity), scaling the Specialized Deposit Group, and process improvement[33]

Financial Data and Key Metrics Changes - The company met consensus earnings estimates of $0.35 per share in Q4 2024, with a pre-tax pre-provision ROA of 1.77% and ROE of 1.23% [6] - The net interest margin (NIM) was reported at 3.54%, with a core efficiency ratio of 56.1% [6] - Average deposits grew by 8.7% in Q4, with a year-over-year increase of approximately $451.1 million or 5% [8][15] - Non-performing loans (NPLs) decreased from 0.83% to 0.68%, indicating improved credit quality [11] Business Line Data and Key Metrics Changes - Loans grew by $23.5 million in Q4, reflecting an annualized growth rate of 1.04% [17] - Equipment finance was highlighted as a growth area, with a notable increase of $61 million in Q4 alone [7] - Fee income improved by $800,000 quarter-over-quarter, driven by increases in swap income and mortgage gain on sale income [19][20] Market Data and Key Metrics Changes - The company experienced balanced deposit growth across most regions, with a focus on growing core deposits and transaction accounts [8] - The commercial real estate (CRE) sector showed good activity in Q4 after a period of selectivity due to credit and liquidity concerns [9] Company Strategy and Development Direction - The company aims for mid-single digit loan growth in 2025, with a focus on commercial and industrial (C&I) lending and commercial real estate [10][30] - A strategic acquisition of Center Bank in Cincinnati was announced, expected to enhance market presence and growth potential [12][48] - The management emphasized the importance of maintaining top quartile profitability while pursuing growth opportunities [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth in 2025, supported by a strong regional accountability and new leadership in key markets [9] - The evolving interest rate environment is expected to favor NIM, with projections for gradual improvement in fee income [10][18] - Management acknowledged challenges from higher credit costs and deposit pricing pressures but remains focused on growth and profitability [6][10] Other Important Information - The company repurchased 477,000 shares in the quarter but paused buybacks following the acquisition announcement [22] - Customer experience metrics improved, with historic highs in Net Promoter Score and branch customer satisfaction [12] Q&A Session Summary Question: Can you discuss the fee income, particularly in mortgage banking and card income? - Management noted that card income has stabilized post-Durbin impact, with mortgage banking performing well despite market conditions [25][26] Question: What are the expectations for loan growth in 2025? - Management anticipates mid-single digit growth, with contributions from both CRE and C&I lending [30][31] Question: How does the company plan to manage NIM expansion? - The company expects NIM expansion to come primarily from loan growth and positive replacement yields, with conservative deposit cost forecasts [42][46] Question: Can you provide insights on the Center Bank acquisition? - The acquisition is seen as a strategic move to enhance market presence in Cincinnati, with expectations for significant growth potential [48][49] Question: How is the credit quality holding up? - Management reported improvements in asset migration trends and a reduction in non-performing loans, indicating a positive trajectory [60][62]