Core Insights - SB Financial Group, Inc. reported strong earnings for the third quarter of 2025, with net income of $4.0 million, a 71.9% increase year-over-year, and diluted earnings per share (DEPS) of $0.64, up 82.9% from the prior year [4][6][17] Financial Performance - Operating revenue for Q3 2025 was $16.6 million, a 15.9% increase from $14.3 million in Q3 2024 [4][7] - Net interest income rose to $12.3 million, reflecting a 21.1% increase from $10.2 million in the prior-year quarter, driven by sustained loan growth [5][6] - Noninterest income increased by 2.9% year-over-year to $4.2 million, primarily due to higher mortgage loan servicing fees and other noninterest income [10][11] - Total loans increased by $80.6 million, or 7.8%, compared to the prior year, with organic loan growth of $62.7 million [5][14] - Total deposits grew to $1.26 billion, an increase of $103.0 million or 8.9% year-over-year [15][19] Balance Sheet Highlights - As of September 30, 2025, total assets were reported at $1.50 billion, with a loan portfolio of $1.11 billion, marking a 7.8% increase year-over-year [14][29] - Shareholders' equity increased to $137.0 million, reflecting a $4.1 million rise from the prior year [15][29] Asset Quality - Nonperforming assets totaled $4.9 million, representing 0.32% of total assets, a decrease from 0.40% in the prior year [20][21] - The allowance for credit losses was strong at 1.44% of total loans, providing 345.4% coverage of non-performing loans [21][22] Mortgage Banking - Net mortgage banking revenue for Q3 2025 reached $1.5 million, up $136,000 from the prior-year quarter [8][9] - Mortgage originations totaled $67.6 million, while mortgage sales were $66.4 million [9] Management Commentary - The CEO highlighted the company's commitment to disciplined expense management and balanced revenue growth, emphasizing the strength of client relationships and the resiliency of the business model [7][17]

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 [18] - Net interest income rose to $43 million from $42.5 million in the linked quarter, while the net interest margin (NIM) was 4.05%, slightly down from 4.07% [18][19] - The consolidated common equity Tier 1 risk-based capital ratio was 14.41%, and the Tier 1 leverage ratio was 12.37% as of September 30, 2025 [8] 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 [9] - The indirect auto loan portfolio remained relatively unchanged at $239 million, down from $296 million a year ago, with a focus on maintaining credit quality [13][15] - 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 [16][17] Market Data and Key Metrics Changes - Deposits increased by $142.2 million to $3.88 billion, with significant growth in non-interest-bearing deposits, which rose to 27% of total deposits [19] - The major metro loan portfolio represented 33.2% of the total loan portfolio, with steady performance in Dallas, Houston, and El Paso [12] Company Strategy and Development Direction - The company aims to grow its lending team by up to 20% to enhance loan growth, with a focus on organic growth and potential M&A opportunities [5][7] - The management is optimistic about accelerating loan growth in 2026, despite current headwinds from higher-than-normal loan paydowns [5][16] - The company is actively engaging in discussions with potential acquisition targets that align with its conservative nature and culture [6][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's strong financial position and ability to capitalize on growth opportunities, both organically and through acquisitions [4][94] - The management noted that while there are challenges in the current economic environment, they remain optimistic about the resilience of economic growth in Texas markets [16][71] Other Important Information - The company redeemed $50 million in subordinated debt, which was previously at a fixed rate of 4.5% and would have increased to 8% [22] - The tangible common equity to tangible assets ratio was 10.25%, reflecting a strong capital position [22] Q&A Session Summary Question: Plans for increasing the lending team - The company plans to increase its lending team by up to 20%, with about 40% of the base being true lenders, and has already achieved over 10% growth this year [27][28] Question: Specific markets for growth - Growth is expected in the Permian, Houston, and Dallas MSA markets [30] Question: Concerns about subprime loan concentration - Management clarified that there has not been a significant increase in subprime loans, and any changes in credit scores are being monitored closely [33][34] Question: Impact of redeemed subordinated debt - The redemption of subordinated debt incurred no additional expenses, as it was done within the call period [38][39] Question: Vulnerability of commercial real estate loans - Management acknowledged some scheduled payoffs in the commercial real estate book but emphasized that they will not lower credit standards to retain loans [88]

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 [18] - Net interest income rose to $43 million from $42.5 million in the linked quarter, while the net interest margin (NIM) was 4.05%, slightly down from 4.07% [18][19] - The consolidated common equity Tier 1 risk-based capital ratio was 14.41%, and the Tier 1 leverage ratio was 12.37% as of September 30, 2025 [8] 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 [9] - The indirect auto loan portfolio remained relatively unchanged at $239 million, down from $296 million a year ago, with a focus on maintaining credit quality [13][15] - 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 [16][17] Market Data and Key Metrics Changes - Deposits increased by $142.2 million to $3.88 billion, with significant growth in non-interest-bearing deposits, which rose to $50.7 million [19] - The non-interest-bearing deposit-to-total deposit ratio increased to 27% from 26.7% in the linked quarter [19] Company Strategy and Development Direction - The company aims to grow its lending team by up to 20% to enhance loan growth, with a focus on organic growth and potential M&A opportunities [5][7] - The management is optimistic about accelerating loan growth in 2026, despite current headwinds from higher-than-normal loan paydowns [5][16] - The company is actively engaging in discussions with potential acquisition targets that align with its conservative nature and culture [6][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's strong financial position and the potential for organic growth, while also being cautious about economic conditions [4][21] - The management noted that while there have been challenges, such as increased loan paydowns, they expect these to moderate in the coming year [9][16] - The company remains focused on maintaining asset quality and is prepared for varying economic conditions [21] Other Important Information - The company redeemed $50 million in subordinated debt, which was done to avoid higher interest rates as the debt was transitioning to a floating rate [22] - The tangible common equity to tangible assets ratio was 10.25%, an increase of 27 basis points from the previous quarter [22] Q&A Session Summary Question: Plans for increasing the lending team - The company plans to increase its lending team by up to 20%, with a current base of about 40 lenders, focusing solely on production staff [27][30] Question: Growth in specific markets - Growth is expected in the Permian, Houston, and Dallas MSA markets [30] Question: Concerns about subprime loan concentration - Management clarified that there has not been a significant increase in subprime loans, and any changes in credit scores are being monitored closely [33][34] Question: Impact of redeemed subordinated debt - The $50 million subordinated debt was redeemed to avoid an increase in interest payments, with no additional expenses incurred from the redemption [36][38] Question: Vulnerability of the commercial real estate book - Management acknowledged that while there are scheduled payoffs, they are not lowering credit standards and are focused on finding new business [88]

Financial Data and Key Metrics Changes - Western Alliance Bancorporation reported record net revenue of $938 million and pre-provision net revenue of $394 million for Q3 2025, reflecting a healthy business momentum [4][5] - The company generated EPS of $2.28, with a return on average assets of 1.13% and return on average tangible common equity of 15.6% [5][16] - The CET1 capital ratio increased to 11.3%, while the loan loss reserve moved to 78 basis points from 71 basis points in the previous quarter [5][22] Business Line Data and Key Metrics Changes - Net interest income grew to $750 million, an increase of $53 million or 8% quarter-over-quarter, driven by solid organic loan growth [11][13] - Non-interest income rose nearly 27% from Q2 to $188 million, primarily due to improved mortgage banking results [11][12] - Non-interest expenses increased by $30 million to $544 million, mainly due to seasonal factors and elevated ECR-related deposits [13][14] Market Data and Key Metrics Changes - Total assets increased by $4.2 billion from Q2 to $91 billion, supported by $6.1 billion in deposit growth [16][18] - Deposits grew significantly, with regional banking deposits increasing by $1.1 billion and specialty escrow deposits growing by $1.8 billion [18][20] - The allowance for loan losses rose to $440 million, with the total loan ACL to funded loans ratio increasing to 0.85% [20][22] Company Strategy and Development Direction - The company aims for loan growth of $5 billion and has raised year-end deposit growth expectations to $8.5 billion [26] - Western Alliance is focused on maintaining a strong capital position with a CET1 ratio comfortably above 11% and plans to issue subordinated debt to support its share repurchase program [23][41] - The bank's strategy includes leveraging its underwriting expertise and strong collateral management to mitigate risks in its private credit and mortgage warehouse lending [9][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality, noting a decline in criticized assets and stable loan performance [6][33] - The economic backdrop is viewed positively, with GDP growth and low unemployment supporting the bank's outlook [67][68] - The company anticipates continued growth in mortgage-related income due to favorable interest rate trends, despite seasonal declines expected in Q4 [38][39] Other Important Information - The company has initiated a $300 million share buyback program, with $25 million already executed [23][41] - Management highlighted the importance of maintaining strong operational leverage, with net revenue growth outpacing non-interest expenses [13][15] - The bank's focus on corporate trust services has led to significant market share gains, positioning it as a leading player in the CLO trust depository space [56][57] Q&A Session Summary Question: Credit picture and loss potential on exposures - Management feels comfortable with asset quality and does not foresee significant losses from Canter Group 5 or First Brands [33][34] Question: Guidance on interest expense and mortgage revenue - The expected beta for ECR-related deposits is around 70%, with mortgage-related income rising significantly due to lower mortgage rates [35][38] Question: Buybacks and capital management - The company plans to maintain its $300 million stock buyback program and may accelerate buybacks depending on stock performance [41][42] Question: Seasonal deposit flows and expectations - The company anticipates a seasonal decline in ECR balances but expects strong performance in Q4 due to ongoing loan closings [49][81] Question: Trends in classified loans and asset quality - The reduction in classified loans was driven by improved borrower performance and resolution of certain credits, with no significant losses expected from Canter Group 5 [54][55]

Financial Data and Key Metrics Changes - Western Alliance Bancorporation reported record net revenue of $938 million and pre-provision net revenue of $394 million for Q3 2025, supported by a 30% linked quarter annualized expansion in net interest income [3][4] - Earnings per share (EPS) reached $2.28, with a return on average assets of 1.13% and return on average tangible common equity of 15.6% [4][15] - The Common Equity Tier 1 (CET1) capital ratio increased to 11.3%, while the allowance for loan losses (ALL) to funded loans ratio rose to 0.85% [4][21] Business Line Data and Key Metrics Changes - Net interest income grew by $53 million, or 8% quarter over quarter, driven by solid organic loan growth and higher average earning asset balances [11][12] - Non-interest income rose nearly 27% from Q2 to $188 million, primarily due to improved mortgage banking results [11][12] - Commercial and industrial loans led loan growth momentum, while construction loans decreased by $460 million as they converted to term financing [16][17] Market Data and Key Metrics Changes - Total assets increased by $4.2 billion from Q2 to $91 billion, with deposits growing by $6.1 billion in Q3 [15][16] - Regional banking deposits grew by $1.1 billion, with significant contributions from in-market commercial banking and innovation banking [17] - Specialty escrow deposits increased by $1.8 billion, indicating strong growth across various banking segments [17] Company Strategy and Development Direction - The company aims for loan growth of $5 billion and raised year-end deposit growth expectations to $8.5 billion, indicating a positive outlook for the remainder of 2025 [25] - The management emphasized the importance of maintaining asset quality and has implemented strategies to mitigate potential credit risks [5][10] - The company plans to issue subordinated debt to support its share repurchase program, which is expected to be accretive to EPS [22][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality, stating that criticized assets have declined and are expected to continue to do so [31][32] - The economic backdrop is viewed positively, with GDP growth and low unemployment rates supporting the banking environment [60] - The company anticipates continued growth in mortgage-related income due to favorable interest rate conditions [35][36] Other Important Information - The company has initiated a $300 million stock buyback program, with $25 million already executed [22][39] - The allowance for loan losses increased to $440 million, reflecting proactive measures in response to credit exposures [18][21] - The company has maintained a strong focus on operational efficiency, achieving an adjusted efficiency ratio below 50% [12][14] Q&A Session Summary Question: Comfort level with current reserves and potential need for increases - Management feels comfortable with asset quality and does not foresee a significant increase in reserves unless new information arises [31][32] Question: Expectations for ECR deposit beta and mortgage revenue - The expected beta for ECR-related deposits is around 70%, with mortgage-related income showing strong growth due to declining mortgage rates [34][35] Question: Insights on buybacks and capital management - The company plans to maintain its $300 million buyback authorization and may accelerate purchases depending on stock performance [38][39] Question: Seasonal deposit flows and expectations for runoff - Management anticipates some seasonal runoff in deposits but expects to manage it effectively through pricing strategies [44][74] Question: Trends in classified loans and underlying fundamentals - The reduction in classified loans was driven by improved borrower performance and successful resolutions, with no significant losses expected from recent credit exposures [48][49]

Financial Performance Highlights - Net income available to common shareholders was $97.9 million in 3Q25[9], compared to $96.6 million in 2Q25[9] - Operating net income available to common shareholders reached a record of $101.3 million, or $0.55 per diluted share in 3Q25[9, 11] - The return on average assets (ROAA) was 1.25% in 3Q25, consistent with 2Q25[9, 12] - The operating return on average tangible common equity was 15.79% in 3Q25, compared to 16.26% in 2Q25[9, 12] - The efficiency ratio was 56.5% in 3Q25, improving from 57.1% in 2Q25[9, 12] Income Statement Summary - Net interest income was $264.2 million in 3Q25, an increase of $9.3 million compared to 2Q25[12] - Non-interest income before investment securities gains (losses) was $70.4 million in 3Q25, up $1.3 million from 2Q25[12] - Total non-interest expense was $196.6 million in 3Q25, an increase of $3.8 million compared to 2Q25[12] Net Interest Income and Margin - Net interest margin (NIM) was 3.57% in 3Q25, increasing by 10 basis points compared to 2Q25[21] - Loan yield was 5.93% in 3Q25, an increase of 7 basis points compared to 2Q25[21] - Total cost of deposits was 1.96% in 3Q25, a decrease of 2 basis points compared to 2Q25[21] Balance Sheet and Capital - Tangible capital increased by $90 million linked quarter, net of share repurchases[40] - Accumulated other comprehensive income (AOCI) ended the quarter at ($228) million[40] - $85.6 million remaining share repurchase authorization in place through December 31, 2025[40] 2025 Operating Guidance - Non-FTE Net Interest Income (NII) is expected to be in the range of $1.025 - $1.035 billion[41] - Provision for Credit Losses is expected to be in the range of $45 - $55 million[41] - Non-Interest Income is expected to be in the range of $270 - $280 million[41] - Operating Non-Interest Expense is expected to be in the range of $750 - $760 million[41]

Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with adjusted return on assets at 1.13% for the quarter [6][10] - Adjusted pre-tax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue of $517 million increased by $41 million or 9% in the quarter [10] - Net interest revenue was up $46 million or 12%, driven by a larger balance sheet and improved net interest margin [10] - Adjusted efficiency ratio improved to 56.5% [6] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [6] - Loans increased by $1.3 billion, with $1 billion from the Industry acquisition and over $300 million in organic growth [6] - Adjusted non-interest revenue of $93.5 million decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The securities portfolio grew by $780 million in the quarter, reflecting an improved mix and interest rate profile compared to the prior quarter [10] - Net interest margin improved by six basis points to 3.46%, driven by improved securities yields and a decline in overall funding costs [10] Company Strategy and Development Direction - The company completed the acquisition of Industry Bankshares and integrated it into its systems, aiming for growth in Central Texas and Georgia markets [4][5] - The company plans to leverage its deposit products and services more fully now that integration is complete [6] - The management expressed confidence in the performance and outlook for the markets, projecting growth in financial results through the end of the year [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains stable, with credit results in line with expectations and net charge-offs at 26 basis points annualized [7] - The company anticipates continued modest improvement in net interest margin through the end of the year and into next year [11] - Management highlighted strong pipelines and diverse growth opportunities across all business lines [75] Other Important Information - The company reported a decline in tangible book value per share by only $0.12 to $22.82, largely offset by strong operating earnings [5] - The company expects to continue building capital after the Industry transaction and is back in the buyback game sooner than anticipated [34] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter timeline for the year provides better clarity, and they expect good growth in the fourth quarter [19][20] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50% and total deposits between 30% and 40% [22] Question: What is the expectation for DDA specifically as we go through the rest of the year? - Management noted that non-interest-bearing deposits finished Q3 at 20.6%, down from 21.2% at year-end 2024, with fluctuations due to customer behavior [28][30] Question: What should we think of as a good capital level or a base capital level that you're trying to manage to? - Management aims to be good stewards of capital, focusing on core organic growth and potential inorganic opportunities [34] Question: Can you provide insight into loan pricing and competition in recent weeks? - Management acknowledged competitive pressures but noted that yields have been holding steady, particularly in the Community Bank segment [80][81]

Financial Data and Key Metrics Changes - The company reported a net income of $10.8 million or $0.56 per share for Q3 2025, down from $13.2 million or $0.68 per share in the previous quarter [4][6] - Pre-provision pre-tax revenue (PP&R) increased by 17% from Q2 and 48% year-over-year [6] - Net interest income for Q3 was $38.8 million, up by $1.6 million or 4% from the previous quarter and by $6.6 million or 20% year-over-year [6][7] - Non-interest income accounted for 31% of total revenue in Q3, up 3% from Q2 and 8% year-over-year [6][7] - Non-interest expenses totaled $35.7 million in Q3, down by $804,000 or 2% [7] Business Line Data and Key Metrics Changes - Wealth management revenues increased by 3%, with a 6% rise in asset-based revenues due to market appreciation and the acquisition of $195 million in managed assets [6][7] - Mortgage banking revenues reached $3.5 million, up 15% for the quarter and 22% year-over-year [7] Market Data and Key Metrics Changes - End-of-period assets under administration (AUA) totaled $7.7 billion, an increase of $501 million or 7% [7] - In-market deposits rose by $179 million or 4% from the end of Q2 and by $431 million or 9% year-over-year [7][8] Company Strategy and Development Direction - The company is focused on long-term value creation and has made key investments to drive growth, including the acquisition of Lighthouse Financial Management [5][6] - The hiring of Jim Brown as Senior Executive Vice President and Chief Commercial Banking Officer aims to enhance commercial relationships and integrate services with the wealth division [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current portfolio quality despite elevated provisions for credit losses due to resolved credit exposures [4][6] - The company anticipates low single-digit loan growth for the year, with a healthy pipeline of approximately $180 million [6][37] - Management expects margin expansion of about 5 basis points in Q4 [27] Other Important Information - The company repurchased 237,000 shares at an average price of $27.18 per share, totaling $6.4 million, and an additional 21,000 shares in October [8] - The effective tax rate for the full year is expected to be 22.5% [7] Q&A Session Summary Question: Remaining shared national credits size - The remaining shared national credits amount to about $173 million, split between CNI and commercial real estate [16][48] Question: Change in specific reserves on a credit - The company had to take an additional $6 million charge-off due to reduced recovery expectations from a Chapter 11 situation [17] Question: Confidence in appraisals of office properties - Confidence in appraisals is based on different properties in various markets, with some properties showing leasing momentum [19][20] Question: Client flows in wealth management - The company is no longer disclosing client flows, aligning disclosures with peers [25][26] Question: Loan growth and pipeline outlook - The company expects low single-digit growth for the year, with a healthy pipeline of $180 million [36][38] Question: Future buyback plans - The company has paused buybacks to evaluate capital deployment for growth, with no immediate plans for additional repurchases [40][47]

Financial Data and Key Metrics Changes - The company's earnings per share grew 14% to a record $0.41, with net income available to common shareholders increasing to $150 million [4] - Operating pre-provision net revenue increased 18% year-over-year, contributing to a peer-leading efficiency ratio of 52% [4] - Total revenue reached a record $457 million, with non-interest income hitting a record $98.2 million [4][18] - The return on average tangible common equity was 15%, and tangible book value per share grew 11% to $11.48 [5][21] Business Line Data and Key Metrics Changes - Period-end loans increased 3% on an annualized linked quarter basis, driven by equipment finance, consumer lending, and seasonal residential mortgage production [5] - Equipment finance saw a strong quarter with 21% annualized loan growth, while commercial and industrial loans grew 2% [5][11] - Non-interest income from capital markets grew 27%, with wealth management revenues increasing 8% year-over-year [19][21] Market Data and Key Metrics Changes - The company experienced annualized linked quarter deposit growth of 7%, outpacing the industry [6] - Non-interest-bearing deposits comprised 26% of total deposits, stable from the prior quarter, with total deposit costs at 1.93% [7] - The company ranked in the top five in nearly 50% of its markets and in the top three in nearly 30% [6][37] Company Strategy and Development Direction - The company plans to add 30 new branches by 2030, focusing on high-growth markets in the Carolinas and Mid-Atlantic [24] - The strategy emphasizes growing low-cost deposits and reducing commercial real estate concentration [6] - The company is leveraging AI and data analytics to enhance customer engagement and operational efficiency [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by fiscal policies and a more robust business environment [14] - The company remains focused on core commercial and industrial lending, with a disciplined approach to credit risk management [11][82] - Management highlighted the importance of maintaining a strong capital position to support balance sheet growth and optimize shareholder returns [21][45] Other Important Information - The company has a CET1 ratio of 11% and a TCE ratio of 8.7%, both record levels [21] - The company is actively managing its capital position and remains opportunistic regarding share buybacks [23][45] Q&A Session Summary Question: Concerns about refinancing risk in the mortgage book - Management indicated that they have strategically shifted pricing in the conforming space and are not overly concerned about prepayment speeds impacting margins [29][30] Question: Insights on deposit growth and market performance - Management noted strong deposit growth across various markets, particularly in the Carolinas, driven by competitive technology offerings and effective execution [32][34] Question: Future capital management strategy - Management confirmed a focus on optimizing shareholder value through disciplined capital management, including potential buybacks and dividend discussions [42][45] Question: Updates on fee income growth opportunities - Management highlighted recent investments in investment banking and treasury management as key areas for future fee income growth, with expectations for continued expansion [84][88]

Financial Data and Key Metrics Changes - FMB's third quarter earnings per share increased by 14% linked quarter to a record $0.41, with net income available to common shareholders rising to $150 million [4] - Operating pre-provision net revenue grew 18% year-over-year, contributing to a peer-leading efficiency ratio of 52% [4][15] - Total revenue reached a record $457 million, with non-interest income hitting a record $98.2 million [4][15] - Return on average tangible common equity was 15%, and tangible book value per share grew 11% to $11.48 [5][21] Business Line Data and Key Metrics Changes - Period-end loans increased by 3% on an annualized linked quarter basis, driven by equipment finance, consumer lending, and seasonal residential mortgage production [5] - Commercial and industrial loans grew by 2% annualized linked quarter, affected by lower line utilization and higher attrition due to customer M&A activity [5] - Equipment finance saw a strong annualized loan growth of 21%, reflecting activity across the company's footprint [5] Market Data and Key Metrics Changes - Annualized linked quarter deposit growth was 7%, outpacing the industry, with non-interest bearing deposits comprising 26% of total deposits [6][7] - The loan-to-deposit ratio ended the quarter at 90.9%, with the company's CRE concentration improving to 214% [6] - FNB ranked in the top five in nearly 50% of its MSAs and in the top three in nearly 30% [7] Company Strategy and Development Direction - The company is focused on growing low-cost deposits and reducing CRE concentration, with a strategy to price deposits competitively while protecting net interest margins [6][9] - FNB plans to expand its branch network by adding 30 new branches, primarily in high-growth markets [25] - The company is leveraging AI and data analytics to enhance customer engagement and operational efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by fiscal policies and a potentially more robust business environment [14] - The company remains committed to strong risk management frameworks while exploring AI's transformative potential [10] - Management noted that they have not seen material impacts on the loan portfolio from tariffs or the government shutdown, maintaining a stable credit quality [12][80] Other Important Information - The CET1 ratio reached a record 11%, and tangible common equity ratio was at 8.7% [21] - The company is actively managing its capital position to support balance sheet growth and optimize shareholder returns [21] - The efficiency ratio improved to 52.4%, with expectations for continued strength in operating leverage performance [20] Q&A Session Summary Question: Concerns about loan growth and refinancing risks - Management indicated that they have strategically shifted pricing in the mortgage book and are not overly concerned about prepayment speeds impacting margins, as they can redeploy capital effectively [30][34] Question: Insights on deposit growth and market share - Management highlighted strong deposit growth across various markets, particularly in the Carolinas, driven by technology and competitive pricing strategies [40][42] Question: Capital management strategy with a strong CET1 ratio - Management confirmed a focus on internal execution and opportunistic buybacks, while maintaining a flexible dividend strategy [56][58] Question: Expectations for Investor Day - Management emphasized showcasing technological advancements and team depth at the upcoming Investor Day, aiming to energize investors [60][62] Question: Efficiency ratio and expense management - Management confirmed ongoing efforts to optimize expenses and improve the efficiency ratio, with a focus on leveraging technology and operational improvements [70][74]