Financial Data and Key Metrics Changes - Core earnings per share increased to $0.38, surpassing consensus estimates by $0.03 and improving from $0.32 in the first quarter [6] - Core return on assets reached 1.31%, with a core pretax pre-provision ROA of 1.95% and a core efficiency ratio of 54.1% [6] - Net interest margin expanded from 3.62% in the first quarter to 3.83% in the second quarter, a 21 basis point increase [7] - Net interest income increased by $10,700,000 to $106,200,000, driven by improved loan yields and lower deposit costs [7][8] Business Line Data and Key Metrics Changes - Loan growth was 8.1% annualized, with significant contributions from Equipment Finance, small business, commercial, indirect, and branch lending [7][8] - Noninterest income increased by $2,100,000 to $24,700,000, with strong contributions from mortgage, SBA, interchange, wealth, and other service charges [8] - Total deposits grew by 9% year to date, reaching $10,100,000,000, with the Community Pennsylvania region performing exceptionally well [9] Market Data and Key Metrics Changes - The integration of Centre Bank added $295,000,000 in loans and $278,000,000 in deposits, enhancing the company's presence in Cincinnati [10] - The company experienced loan and deposit growth in four of its six geographic markets [8] Company Strategy and Development Direction - The company aims to be the leading community bank in its markets, focusing on improving financial lives of customers and communities [12] - Strategic acquisitions and a regional business model are key components of the company's growth strategy [12] - The company is exploring smaller acquisition opportunities while maintaining a disciplined approach to M&A [44][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, citing disciplined execution and strategic acquisitions as drivers of growth [12] - The company anticipates continued loan growth and margin expansion, with a revised forecast of two Fed cuts by year-end [16][72] - Management highlighted the importance of maintaining low-cost deposits to support loan growth [121] Other Important Information - The company reported a second quarter provision expense of $12,600,000, with $3,800,000 related to the Centre Bank acquisition [11] - Nonperforming loans increased by $40,100,000 due to the Centre Bank acquisition and a single commercial loan [12] Q&A Session Summary Question: Guidance for expenses in the third quarter or back half of the year - Management indicated that expenses are on track, with consensus estimates for the third quarter at $72,800,000 and fourth quarter at $73,100,000 [23][24] Question: Appetite for stock repurchases - Management plans to resume stock repurchases after a blackout period, with a focus on buying back shares at a set price [28][30] Question: Outlook for charge-offs - Charge-offs have been low, and management expects them to normalize in the mid-20 basis point range [32] Question: Loan yield trends and guidance - Management indicated that loan yields have been consistent, with expectations for continued positive trends if the Fed does not cut rates [38][40] Question: Market share opportunities - Management believes there is significant room for growth in existing markets, particularly in Ohio and Western Pennsylvania [92][95] Question: Impact of recent investments in Pennsylvania - Management noted significant investments in the area, particularly in infrastructure and energy, which could benefit the company [100] Question: Credit quality of the portfolio - Management confirmed that the majority of the nonaccruals are from a legacy loan, with the overall portfolio performing well [106][112]

Financial Performance - Diluted Earnings Per Share (EPS) decreased to $0.13 in 1Q25 [6], compared to $0.39 in 2Q24 [6] - Net income decreased to $2290 thousand in 1Q25 [6], compared to $7245 thousand in 2Q24 [6] - The efficiency ratio increased to 6509% in 1Q25 [6], compared to 6238% in 2Q24 [6] - Return on Average Assets decreased to 024% in 1Q25 [6], compared to 076% in 2Q24 [6] Balance Sheet & Capital - Gross Loans Held for Investment (HFI) increased to $3143063 thousand in 1Q25 [6], compared to $3047712 thousand in 2Q24 [6] - Total Deposits increased to $3142628 thousand in 1Q25 [6], compared to $3023605 thousand in 2Q24 [6] - Common Equity Tier 1 (CET1) Ratio decreased to 1787% in 1Q25 [6], compared to 1889% in 2Q24 [6] Asset Quality - Non-Performing Loans (NPLs) decreased to $60380 thousand in 1Q25 [6], compared to $81038 thousand in 4Q24 [6] - NPLs/Total Loans decreased to 192% in 1Q25 [6], compared to 264% in 4Q24 [6] - NPAs decreased by $165 million, or 20% [7, 31]

Financial Data and Key Metrics Changes - FMB reported net income available to common shareholders of $116.5 million, or $0.32 per share, with tangible book value per share growth of 12% to $10.83 [7][36] - Total revenue for the quarter was $411.2 million, driven by net interest income growth and solid non-interest income [8] - The CET1 ratio reached 10.7%, and tangible common equity to tangible assets was 8.4% [7][36] Business Line Data and Key Metrics Changes - Total loans and leases ended the quarter at $34.2 billion, a 3.5% annualized linked quarter increase, driven by growth in consumer loans and commercial loans [27] - Non-interest income totaled $87.8 million, consistent with the year-ago quarter, with wealth management revenues increasing 8.4% year-over-year [32][33] - Capital markets income was impacted by lower commercial customer activity due to the macroeconomic environment [33] Market Data and Key Metrics Changes - The first quarter annualized loan and deposit growth was 3.5% and 1.4% respectively, indicating success in growing client relationships and market share [10] - Non-interest-bearing demand deposits increased 1.1% and comprised 26.5% of total deposits, up 19 basis points from the fourth quarter [29] Company Strategy and Development Direction - The company is focused on diversifying revenue streams, active balance sheet management, and maintaining a balanced loan portfolio [7] - Recent acquisition of a critique investment banking firm aims to enhance financial advisory services [9] - The company is prioritizing high-touch services and superior digital delivery channels to become clients' primary operating bank [11] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of maintaining a diversified deposit base and sound risk management practices amid economic uncertainty [12][25] - The company expects mid-single-digit loan and deposit growth for the full year, despite current economic challenges [38] - Management remains confident in the ability to manage through the current economic environment, with strong asset quality metrics [25][88] Other Important Information - The efficiency ratio for the first quarter was solid at 58.5%, with expectations for improved performance in the second half of 2025 [35] - The company repurchased 741,000 shares during the quarter and plans to pursue opportunistic share repurchase activity [37] Q&A Session Summary Question: NII outlook and swap maturities - Management discussed the impact of swap maturities on NII, indicating a gradual decline in benefits from swaps over the quarters [46][54] Question: Loan growth risks - Management acknowledged a softer pipeline year-over-year but expressed confidence in achieving mid-single-digit loan growth, citing diverse geographic coverage [64][77] Question: Impact of tariffs on credit - Management reported that less than 5% of exposures were at risk from tariffs and emphasized proactive communication with clients to manage potential impacts [82][87] Question: Expense guidance and flexibility - Management explained that the second quarter expense guidance reflects seasonal expenses and that there is flexibility to reduce expenses if revenues fall short [93][96] Question: Fee income guidance and capital markets activity - Management highlighted expectations for increased fee income driven by derivatives and potential acceleration in middle market M&A activity [102][106]