Financial Data and Key Metrics Changes - The company reported net income of approximately $163 million or $0.28 per diluted share, up from $133 million or $0.22 last quarter, marking the highest quarterly profitability since 2022 [4] - The annualized return on average assets is above 1%, achieving many profitability goals ahead of schedule [5] Business Line Data and Key Metrics Changes - Core deposits grew by nearly 10% over the past year, with approximately 110,000 new deposit accounts added [7] - Non-interest income has grown at an annual rate of 15% since 2017, three times faster than publicly traded peers [8] - Average loans increased by 0.5% during the quarter, with new origination yields stable at around 6.8% [15] Market Data and Key Metrics Changes - The company gathered about $1 billion of core deposits during the quarter, allowing for the payoff of approximately $700 million of maturing brokered deposits [13] - Brokered deposits now comprise 11% of the total deposit base, the lowest level since 2022 [13] Company Strategy and Development Direction - The company is focused on enhancing its commercial and consumer banking sectors, with new leaders introduced to accelerate growth [5][6] - There is a strategic emphasis on targeted investments in products, technology, and talent, particularly in commercial and specialty lines [7] - The company aims to diversify its balance sheet and reduce its commercial real estate concentration, targeting a ratio of 300% by 2026 [48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future prospects, citing strong customer growth, talent acquisition, and profitability [11] - The company anticipates continued stability in credit performance and expects to sustain low charge-off levels [19] - There is confidence in achieving a 15% return on tangible equity by late 2027 or early 2028, with a focus on net income expansion and margin improvement [99] Other Important Information - The company has repurchased $12 million of capital to buy back 1.3 million common shares during the quarter [20] - Non-accrual loans increased primarily due to a construction loan migration, but management does not anticipate any losses from this [44] Q&A Session Summary Question: Can you discuss the competitive backdrop regarding the decline in C&I loans? - Management noted that while there is a competitive environment for new deposit relationships, they have successfully managed deposit pricing and expect costs to decrease [24][26] Question: What are the growth expectations for CRE and C&I? - Management indicated a target of low single-digit growth for CRE and a strong pipeline for C&I, with a focus on traditional small business and middle market opportunities [48][90] Question: How do you view the potential for M&A? - The company remains focused on organic growth but is open to considering M&A if it aligns with shareholder interests [77][110] Question: What is the outlook for non-accrual loans? - Management expects stability in non-accrual loans, with positive trends in the real estate market supporting this outlook [125] Question: How do you plan to manage expenses going into 2026? - The company anticipates low single-digit expense growth while investing in revenue-generating talent [64][66]