Financial Data and Key Metrics Changes - The company reported net income of $71.4 million, or $0.69 per diluted share, compared to $71.7 million or $0.69 per diluted share in the previous quarter [13] - Net interest income decreased by $0.4 million, or 0.2%, to $206.8 million compared to the prior quarter, but increased by $1.3 million, or 0.6%, compared to the third quarter of 2024 [13] - The fully taxable equivalent net interest margin was 3.36% for the third quarter, up from 3.32% in the second quarter [14] - Total deposits decreased by $25.6 million to $22.6 billion as of September 30, 2025 [17] Business Line Data and Key Metrics Changes - Loan balances decreased by $519 million in the third quarter, including $66.8 million from the indirect portfolio and larger loan paydowns [16] - Non-interest income was $43.7 million, an increase of $2.6 million from the prior quarter [14] - Non-interest expense increased by $2.8 million to $157.9 million, including costs related to branch divestitures [15] Market Data and Key Metrics Changes - The ratio of loans held for investment to deposits was 70.1% at the end of the quarter, down from 72.3% in the prior quarter [17] - Credit quality stabilized, with non-performing assets decreasing by $11.9 million, or 6%, to $185.6 million [10] Company Strategy and Development Direction - The company is focused on organic growth, optimizing its branch network, and improving core profitability [5] - Recent divestitures of branches in Arizona, Kansas, and Nebraska are aimed at enhancing market density and operational efficiency [6][7] - The company plans to continue investing in areas with strong market share and growth potential, including opening new locations [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in loan growth due to muted demand for real estate lending and increased competition [9] - The company anticipates a decline in loan balances in the fourth quarter but remains optimistic about growth opportunities in 2026 [32] - Management emphasized a disciplined approach to growth, focusing on credit quality and risk management [10][26] Other Important Information - The company declared a dividend of $0.47 per common share, equating to a 6% annualized yield based on the average closing price [17] - The CET1 capital ratio increased to 13.9%, driven by lower risk-weighted assets [17] Q&A Session Summary Question: Loan growth outlook for 2026 - Management indicated that loan growth is a primary focus and expressed optimism about returning to net loan growth in 2026, despite recent challenges [32][33] Question: Capital management and buyback strategy - Management confirmed that the current buyback program is a priority, but they are also considering other options for capital allocation as they assess market conditions [34][39] Question: Expectations for net interest income growth - Management provided guidance for mid-single-digit net interest income growth in 2026, with expectations for sequential improvement throughout the year [42][44] Question: Credit quality and charge-off expectations - Management reiterated a long-term charge-off guidance of 20 to 30 basis points, emphasizing that quarterly results may fluctuate based on specific credit resolutions [60][62] Question: Margin outlook and loan repricing - Management discussed the impact of loan repricing and anticipated that the margin could improve as the loan portfolio adjusts to market conditions [64][66]

Financial Data and Key Metrics Changes - The company reported strong quarterly earnings of $534 million, resulting in earnings per share of $0.59, with adjusted earnings of $538 million or $0.60 per share [3] - Pretax pre-provision income increased by 14% year over year to $832 million, with a return on tangible common equity of 19% [3] - Average deposits grew organically by over 30% over the last five years, among the highest in its peer set [4] Business Line Data and Key Metrics Changes - Ending loans grew by 1%, while average loans remained stable; growth in ending business loans was driven by commercial and industrial (C&I) and real estate sectors [12] - Wealth management revenue has grown at more than an 8% compounded annual growth rate since 2018, contributing to record fee income [6] - Treasury management revenue increased by 8% year to date, with a 10% increase in total clients served [6] Market Data and Key Metrics Changes - Consumer deposits in priority markets grew by 20% more than in core markets during the quarter [14] - Average deposit balances in the Corporate Banking Group grew over 1% sequentially, while ending balances remained stable [15] - Net interest income rebounded, increasing by 5% linked quarter, with expectations for full year 2025 net interest income to grow between 3% to 5% [18] Company Strategy and Development Direction - The company is focused on modernizing its core technology platforms, including a new cloud-based commercial loan system and deposit system [8] - The company is not interested in depository M&A, preferring to execute its existing strategic plan and focus on organic growth [37] - The company aims to continue delivering top quartile results and has increased its dividend at a compounded annual growth rate of over 10% over the last six years [9] Management's Comments on Operating Environment and Future Outlook - Management noted that both business and consumer customers are in good shape, maintaining liquidity and managing debt levels well [31] - There is some uncertainty regarding interest rates and inflation, but overall sentiment among business customers has improved [30] - The company expects to maintain positive operating leverage over time, despite the need for ongoing investments [120] Other Important Information - The company executed $144 million in share repurchases and paid $224 million in common dividends during the quarter [23] - The estimated common equity Tier one ratio increased from 9.1% to 9.2% due to strong capital generation [23] Q&A Session Summary Question: Implications of the tax bill on loan growth and consumer spending - Management indicated that the tax package creates certainty for businesses and consumers, which is expected to lead to positive momentum in 2025 and 2026 [30][34] Question: Perspective on bank M&A activity - Management stated they are not interested in depository M&A, focusing instead on executing their current plan and exploring non-bank opportunities [37][39] Question: Details on net interest margin and deposit cost leverage - Management discussed the recent improvements in net interest margin and the expectation for stable to modest growth in the third quarter [18][52] Question: Loan growth dynamics and competitive backdrop - Management highlighted a 17% year-over-year increase in pipelines and emphasized their disciplined approach to portfolio management [59][61] Question: Credit quality and specific portfolios under scrutiny - Management noted that overall credit quality remains strong, with some challenges in specific portfolios, but they are manageable [106][108] Question: Approach to stablecoin solutions - Management expressed intent to participate in a consortium of banks for stablecoin solutions, similar to their involvement with Zelle [111][112]