Financial Data and Key Metrics Changes - Quarterly revenue was $9.7 billion, up 4.9% year over year, and adjusted diluted EPS was $9.5, up 17% [5][6] - Same store revenues for the quarter increased 7.7%, driven by growth in every business line [7] - Total gross profit increased 3.2%, with total vehicle GPU at $4,109, down $216 year over year [8][6] Business Line Data and Key Metrics Changes - New retail revenue grew 5.5% with units up 2.5%, while used retail revenue increased 11.8% driven by a 6.3% increase in unit growth [9][10] - Aftersales revenue increased 3.9%, with gross profit rising 9.1% and margins expanding to 58.4%, up 280 basis points year over year [13] - F and I revenue was up 5.7%, with F and I per retail unit reaching $18.47, up $20 year over year [12] Market Data and Key Metrics Changes - Domestic brand performance improved, while luxury brands performed the weakest year over year [9] - The UK market faced challenges with increased labor costs and regulatory pressures, but the company is improving productivity [14][37] Company Strategy and Development Direction - The company is focused on capturing market share and increasing customer loyalty, with a strategic emphasis on used vehicles and aftersales [6][11] - The acquisition strategy remains disciplined, targeting $2 billion in acquisition revenue for 2025, with a focus on high ROI opportunities [18][19] - The company aims to leverage its omnichannel platform to enhance customer experience and operational efficiency [14][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of cost control and productivity gains in navigating a mixed customer backdrop [6][22] - The company expects to finish strong in 2025 and continue building value through its ecosystem [6][21] - Management expressed confidence in the long-term growth potential, emphasizing the flexibility of their cash engine and acquisition strategy [18][28] Other Important Information - The company repurchased 5.1% of its outstanding shares this quarter, prioritizing share buybacks due to stock trading at a discount [16][27] - Driveway Finance Corporation reported $19 million in financing operations income for the quarter, with a net interest margin of 4.6% [25][26] Q&A Session Summary Question: EV sales and inventory management - Management noted that electrified vehicles made up 43% of total new car mix, with significant sales driven by manufacturer incentives [30][31] Question: UK market conditions and labor costs - Management discussed the impact of increased labor costs and regulatory changes, emphasizing self-help initiatives to improve productivity [36][37] Question: Used car market dynamics - Management highlighted opportunities in the used car market, particularly in the value auto segment, with a focus on sourcing directly from consumers [44][46] Question: M&A strategy and targets - Management reiterated the $2 billion acquisition target for the year, emphasizing a disciplined approach to acquisitions [81][82]

Financial Data and Key Metrics Changes - Old National Bancorp reported GAAP earnings per share of $0.46 for Q3 2025, with adjusted earnings per share of $0.59, reflecting an 11% increase over the prior quarter and a 28% increase year over year [8][12] - The company achieved a 20% return on average tangible common equity and a 1.3% return on assets, with an efficiency ratio below 50% [3][8] - The CET1 ratio increased by 28 basis points to over 11%, and tangible book value per share grew by 4% from Q2 and 10% year over year [5][17] Business Line Data and Key Metrics Changes - Total loans grew 3.1% annualized from the previous quarter, with production up 20% from the prior quarter [9][10] - Adjusted non-interest income was $130 million for the quarter, exceeding guidance, driven by strong performance in capital markets [13][83] - Adjusted non-interest expenses were $376 million, reflecting a full quarter impact of Bremer operations, with a low efficiency ratio of 48% [15][88] Market Data and Key Metrics Changes - Total deposits increased by 4.8% annualized, with core deposits (excluding brokered) increasing by 5.8% annualized [11][12] - Non-interest bearing deposits remained at 24% of core deposits, and brokered deposits decreased modestly [11][12] - The cost of total deposits increased by four basis points, resulting in a spot rate of 1.86% on total deposits as of September 30 [12][18] Company Strategy and Development Direction - The company is focused on organic growth and returning capital to shareholders, emphasizing that the best acquisition is itself [5][25] - Old National Bancorp is leveraging its market position and investing in talent to enhance efficiency and effectiveness [4][5] - The company aims to maintain a strong capital position while pursuing growth opportunities, particularly in the wake of the Bremer Bank partnership [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit outlook, noting a decline in criticized and classified loans and stable credit metrics [17][91] - The company anticipates continued success in deposit strategy and expects to meet or exceed industry growth in 2025 [19][20] - Management highlighted that the current economic environment presents opportunities for growth, particularly through talent acquisition [25][40] Other Important Information - The systems conversion and branding for the Bremer Bank partnership were successfully completed, with positive client sentiment reported [6][30] - The company repurchased 1.1 million shares late in the quarter, reflecting confidence in capital levels and future growth [5][96] - Management expects to realize cost savings from the Bremer integration in Q1 2026, with a full run-rate of approximately $115 million in annualized savings [88][89] Q&A Session Summary Question: Expectations for fourth quarter NII - Management noted a slight reduction in NII expectations for the fourth quarter, attributing it to stable dynamics and minor adjustments in the balance sheet [22][23] Question: Capital return strategy - Management emphasized that organic growth is the priority, but they remain opportunistic regarding share buybacks, with plans to assess capital return strategies post-Q4 [24][25] Question: Bremer loan dynamics - Management clarified that the loan sales and strategic portfolio management are normal, with no significant swings expected [28][29] Question: Systems conversion feedback - Management reported that the systems conversion was the best they have experienced, with high client engagement and satisfaction [30][31] Question: Loan growth guidance - Management confirmed that consolidated loan growth should align with overall growth expectations, with Bremer contributing positively [60][63] Question: Fee income trends - Management indicated that while fee income was strong this quarter, it is expected to normalize in the upcoming quarters [83][84]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $8 million or $0.12 per share for Q3 2025, with a book value of $13.78 per share as of September 30, 2025 [3][4] - A distributable loss of $2 million was reported, primarily due to taking ownership of a multifamily property, with distributable earnings before net realized losses at $12 million or $0.18 per share [4][9] - The company paid a cash dividend of $0.25 for the third quarter [4] Business Line Data and Key Metrics Changes - The company expects over $400 million in originations for Q4 2025, having already closed $110 million across the U.S. and Europe [6] - The portfolio managed by KSTAR is over $37 billion in loans, with the company acting as special servicer on $45 billion of CMBS [8] - The company downgraded the risk rating of the Cambridge Life Science loan from risk rated three to four, leading to increased CECL provisions [10] Market Data and Key Metrics Changes - The commercial real estate lending market remains robust, with a $1.5 trillion wall of maturities expected over the next 18 months [5] - The company received repayments of $480 million in Q3 2025, with year-to-date repayments totaling $1.1 billion [10][11] - The company anticipates over $1.5 billion in repayments for 2026, aiming to match repayments with originations [11] Company Strategy and Development Direction - The company is focused on optimizing its REO portfolio and redeploying capital efficiently for growth [17] - The company is strategically building its European real estate credit platform, having originated over $2.5 billion to date [7] - The company aims to maintain a disciplined approach to lending, targeting institutional sponsors and high-quality real estate [7] Management's Comments on Operating Environment and Future Outlook - Management noted a positive sentiment in the real estate market as investors recognize lagging values and strengthening fundamentals [5] - The company is encouraged by the market backdrop and momentum, with a focus on safety and lending on reset values below replacement costs [5][14] - Management expressed optimism about the origination pipeline and the potential for significant opportunities ahead [17] Other Important Information - The company ended the quarter with near-record liquidity levels of $933 million, including over $200 million in cash [13] - The overall financing availability is $7.7 billion, with 77% of financing being non-mark-to-market [13][14] - The company has repurchased $34 million of common stock year-to-date, totaling over $140 million since inception [13] Q&A Session Summary Question: Clarification on lower leverage and higher liquidity - Management indicated that the lower leverage and higher liquidity were primarily due to timing issues related to repayments and originations, rather than a defensive positioning [20][25] Question: Impact of repayment lag on earnings - Management stated that while there may be some lag in earnings due to timing, they do not expect to always be behind in capital deployment [30][32] Question: Update on life science loan portfolio - Management noted early signs of recovery in tenant demand within the life science sector, although most assets are leased to larger pharma companies [34] Question: State of dialogue with life science sponsors - Management confirmed ongoing negotiations with the sponsor of the downgraded Cambridge loan, with no significant discussions on other loans at this time [38][39] Question: NPV analysis on sub-performing deals - Management regularly evaluates the trade-offs between holding and liquidating assets, focusing on maximizing outcomes for quality real estate [41][42] Question: Current ROE and timeline for improvement - Management outlined a timeline for improving ROE, with expectations for near-term recovery from specific assets [56][58] Question: Comparison of EU loans to U.S. loans - Management highlighted similarities in quality and sponsorship between EU and U.S. loans, with some differences in loan sizes and market dynamics [66][68]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $8 million or $0.12 per share, with a book value of $13.78 per share, reflecting a decrease of 0.4% quarter over quarter [3][7] - The company reported a distributable loss of $2 million, primarily due to taking ownership of the Raleigh Multifamily property, with distributable earnings (DE) of negative $0.03 per share, or $0.18 per share excluding losses [3][6] - A cash dividend of $0.25 was paid for the third quarter [3] Business Line Data and Key Metrics Changes - The company expects over $400 million in originations for Q4 2025, having already closed $110 million across the U.S. and Europe [5][8] - The company has a current portfolio of $5.9 billion, with repayments of $480 million received in the quarter, totaling $1.1 billion year to date [7][8] - The weighted average risk rating of the current portfolio is 3.1 on a 5-point scale, with 85% of the loan portfolio rated 3 or better [10][11] Market Data and Key Metrics Changes - The commercial real estate lending market remains robust, with a $1.5 trillion wall of maturities expected over the next 18 months [4] - The debt markets are liquid, with banks returning to the market and increasing back leverage lending [4] - The company has strategically built its European real estate credit platform, originating over $2.5 billion to date [5] Company Strategy and Development Direction - The company is focused on optimizing its REO portfolio and redeploying capital efficiently for growth [12] - The company has built a dedicated asset management platform called K-Star, managing over $37 billion in loans [6] - The company aims to match repayments with originations, maintaining a disciplined approach to capital deployment [9][40] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive sentiment towards the real estate market, noting strengthening fundamentals and lagging values [4] - The company anticipates greater than $1.5 billion in repayments in 2026, with a strong origination pipeline [8] - Management is optimistic about the recovery in the life sciences sector, seeing early signs of demand from tenants [26] Other Important Information - The company has no final facility maturities until 2027 and no corporate debt due until 2030, with near-record liquidity levels of $933 million [9][10] - The total CECL reserve at quarter end is $160 million, representing around 3% of the loan portfolio [11] Q&A Session Summary Question: Clarification on lower leverage and higher liquidity - Management indicated that the lower leverage and higher liquidity were primarily due to timing issues related to repayments and originations, rather than a defensive positioning [15][20] Question: Impact of repayments on future earnings - Management stated that while there may be a lag in earnings due to the timing of repayments and originations, they do not expect to be consistently behind in earnings [22][24] Question: Update on life science loan portfolio - Management noted a mix of tenant demand, with some early signs of recovery in the life sciences sector, particularly from larger pharma companies [25][26] Question: State of dialogue with life science sponsors - Management confirmed ongoing negotiations with sponsors, particularly regarding the Cambridge loan downgrade, but no significant discussions outside normal updates [30][31] Question: NPV analysis on sub-performing deals - Management regularly evaluates the trade-offs between holding and selling sub-performing assets, emphasizing the importance of quality real estate and potential future value [32][34] Question: Current ROE and timeline for improvement - Management outlined a timeline for improving ROE, with expectations to recover a significant portion of REO in the near term, particularly from specific assets [44][46] Question: Comparison of EU loans versus U.S. loans - Management highlighted similarities in quality and sponsorship between EU and U.S. loans, but noted differences in market structure and loan sizes [51][53]

Financial Data and Key Metrics Changes - Operating earnings for Q3 2025 were $101.3 million, or $0.55 per share, reflecting strong profitability and a diversified balance sheet [7][14] - Total revenue reached an all-time high, driven by increased net interest income and fee income, with an efficiency ratio of 56.5% and an operating ROA of 1.29% [7][11] - Tangible book value per share grew 18% on a linked quarter annualized basis despite share repurchases [8][23] Business Line Data and Key Metrics Changes - Deposit growth outpaced loan growth, increasing by $194 million, primarily from demand and savings accounts, while total loan balances grew by $29 million [9][16] - Non-interest income for the quarter was $70.4 million, accounting for 21% of total revenue, with significant contributions from the wealth management business [21] - Non-interest expense increased to $191.4 million, mainly due to higher salaries and benefits [22] Market Data and Key Metrics Changes - The loan-to-deposit ratio ended the quarter at 91%, with non-interest bearing balances declining to 19.5% of total deposits [17] - The average cost of total deposits decreased to 1.96%, while the total cost of funds declined by four basis points [20] Company Strategy and Development Direction - The company continues to focus on organic growth and maintaining positive operating leverage, with a strategy to manage expenses and revenue effectively [33][34] - The company is actively seeking acquisition opportunities in the $1 billion to $5 billion asset bank segment to enhance market penetration [42] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding credit quality due to economic uncertainties but noted steady performance in the loan portfolio [12][22] - The company updated its 2025 operating guidance, increasing net interest income expectations while tightening provisions and operating expenses [24] Other Important Information - The company repurchased 1.65 million shares at an average cost of $18.67, with remaining buyback authorization of $86 million [8][23] - The allowance for credit losses to total loans ratio remained stable at 1.57%, with non-performing assets improving to 0.63% [22] Q&A Session Summary Question: Impact of net interest income guidance revision - Management acknowledged that the revised guidance implies some margin pressure in Q4 due to rate cuts, estimating a $2 million annualized NII headwind for every 25 basis points cut [28][30] Question: Positive operating leverage in 2026 - Management aims to generate positive operating leverage consistently, focusing on organic growth and managing expense levels [32][34] Question: Cumulative interest-bearing deposit beta - Management targets maintaining the cumulative interest-bearing deposit beta around 30% as loan growth normalizes [38] Question: Organic growth opportunities - Management highlighted opportunities for organic growth in Virginia, Maryland, and Philadelphia, focusing on customer acquisition and talent recruitment [44] Question: Current exposure levels to NDFIs - Management reported very low exposure to NDFIs, primarily involving loans to community bank holding companies [70] Question: Deposit costs and brokered CDs - Management indicated that deposit costs decreased due to the runoff of brokered CDs and will manage the loan-deposit ratio effectively in Q4 [76]

Financial Data and Key Metrics Changes - The company reported operating earnings of $14.5 million or $0.86 per diluted share, achieving a quarterly revenue target of $50 million ahead of schedule [6][12] - Tangible book value increased to $26 per share, representing over 26% annualized growth quarter over quarter [5] - Total operating revenue was $50.8 million, with net interest income expanding and non-interest income remaining solid [7][12] Business Line Data and Key Metrics Changes - Loans grew at an annualized rate of 10%, while deposits increased by 15% annualized, amounting to $179 million for the quarter [6][10] - Non-brokered deposit growth was strong, with an increase of $283 million, representing over 24% growth on an annualized basis [12] - Operating non-interest income was $8.4 million, slightly lower than the previous quarter due to the sale of insurance operations [16] Market Data and Key Metrics Changes - The loan-to-deposit ratio was at 84%, down quarter over quarter despite loan growth [11] - The average portfolio yield, including fees, rose to 6.14%, with new loan production contributing positively to overall yield levels [10] Company Strategy and Development Direction - The company aims to deepen its market presence and continue organic growth, with a focus on recruiting talented bankers [21][22] - Strategic initiatives include technology enhancements and a focus on operational efficiency, with an improved operating efficiency ratio of 64% [17][19] - The company is positioned as one of the Southeast's strongest regional community banks, with a commitment to maintaining a strong credit quality [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued revenue growth and operating leverage, projecting a margin of 3.3% to 3.35% for Q4 [15][19] - The company anticipates a stable credit environment with low non-performing assets at 0.22% of total assets [16] - Future margin expansion is expected to be in the range of 5 to 7 basis points per quarter in 2026 [51][86] Other Important Information - The company was named to Fortune's list of best workplaces, highlighting its strong internal culture [22] - The total consolidated risk-based capital ratio rose to 13.3%, indicating a strong capital position [17] Q&A Session Summary Question: Update on Alabama franchise growth outlook - Management noted that hiring has been evenly spread across regions, with positive momentum in Alabama and other markets [28][30] Question: Margin guidance for Q4 and balance sheet size - The company plans to deploy cash on hand to fund loan production, expecting no significant change in asset size [34] Question: Technology initiatives and expense impact - New technology initiatives are expected to enhance efficiency without significantly increasing expenses [36][39] Question: Future of positive operating leverage - Management is confident in maintaining positive operating leverage through revenue growth outpacing expense increases [46][49] Question: Deposit beta expectations with rate cuts - The company aims for a deposit beta of around 40% with future rate cuts, having already seen some success in reducing deposit costs [58][60] Question: Fee revenue outlook for next year - Management expects fee revenues to trend upward, with several initiatives in place to drive growth [61][65] Question: Loan pipeline and growth into 2026 - The company anticipates maintaining loan growth around the 10% mark, supported by a strong pipeline [70][72] Question: M&A strategy - The focus remains on organic growth, but management is open to evaluating strategic M&A opportunities that align with their goals [92][94]

Financial Data and Key Metrics Changes - Operating earnings for Q3 2025 were $101.3 million, or $0.55 per share, reflecting strong profitability and positive operating leverage [4][10] - Total revenue reached an all-time high, driven by growth in net interest income and fee income, with an efficiency ratio of 56.5% and an operating ROA of 1.29% [5][10] - The company repurchased 1.65 million shares at a weighted average cost of $18.67, while tangible book value per share grew 18% on a linked quarter annualized basis [5][10] Business Line Data and Key Metrics Changes - Total loan balances increased by $29 million, with residential and commercial mortgages driving growth, despite declines in commercial and industrial loans [10][11] - Deposits grew by $194 million, primarily from demand and savings products, while timed deposits declined [11][12] - Non-interest income for the quarter was $70.4 million, representing 21% of total revenue, with growth driven by wealth and consumer businesses [15] Market Data and Key Metrics Changes - The loan-to-deposit ratio ended the quarter at 91%, with non-interest-bearing balances declining to 19.5% of total deposits [12] - The net interest margin increased by 10 basis points to 3.57%, with net interest income on a non-FTE basis at $264.2 million [12][13] - The provision for loan losses remained stable, with net charge-offs declining to 18 basis points and non-performing assets improving to 0.63% of total assets [16] Company Strategy and Development Direction - The company continues to focus on organic growth and maintaining a diversified balance sheet to drive positive operating leverage [24][44] - Strategic actions taken throughout the year have created headwinds to loan growth, but the company expects these to moderate, allowing for a return to long-term growth trends [7][11] - The company is actively seeking acquisition opportunities within the $1 billion to $5 billion asset bank segment to enhance market penetration [29] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding credit quality due to economic uncertainties but noted steady performance in the loan portfolio [8][9] - The company updated its 2025 operating guidance, increasing net interest income expectations while tightening provisions and operating expenses [17][18] - Management remains focused on generating organic growth and managing expenses to achieve positive operating leverage [24][44] Other Important Information - The company maintains a healthy capital position, with a tangible common equity to tangible asset ratio of 8.3% and a CET1 ratio of 11.5% [16][17] - The company anticipates seasonal outflows in municipal balances in Q4, which could impact deposit levels [12][56] Q&A Session Summary Question: Impact of net interest income guidance revision - Management acknowledged that the revised guidance implies some margin compression in Q4 due to rate cuts, estimating a $2 million annualized NII headwind for every 25 basis points [20][21] Question: Positive operating leverage in 2026 - Management emphasized the goal of generating positive operating leverage consistently, focusing on organic growth and managing expense levels [23][24] Question: Cumulative interest-bearing deposit beta expectations - Management aims to maintain the cumulative interest-bearing deposit beta around 30% as loan growth normalizes [26] Question: Organic growth opportunities in specific markets - Management highlighted opportunities for organic growth in Virginia, Maryland, and Philadelphia, driven by customer acquisition and talent recruitment [31][32] Question: Current exposure levels to NDFIs - Management reported very low exposure to NDFIs, primarily involving loans to community bank holding companies [50][51] Question: Deposit costs and management strategies - Management indicated that they will manage deposit costs effectively, considering seasonal trends and customer deposits [54][56]

Financial Data and Key Metrics Changes - The company generated $484 million in free cash flow for the third quarter, net of $21 million in one-time costs related to the Olympus transaction [5] - Cumulative free cash flow attributable to the company exceeded $2.3 billion over the past four quarters, with natural gas prices averaging $3.25 per million Btu [5] - The net debt balance at the end of the quarter was just under $8 billion, with a target maximum of $5 billion total debt [12] Business Line Data and Key Metrics Changes - Production was near the high end of guidance despite price-related curtailments, benefiting from robust well productivity and compression project outperformance [5] - Operating costs were lower than expected, resulting in record low total cash cost per unit [6] - Capital spending was approximately $70 million below the midpoint of guidance, supported by upstream efficiency gains and midstream optimization [6] Market Data and Key Metrics Changes - Demand for Appalachian natural gas remains strong, with the MVP Boost project oversubscribed by 20%, increasing capacity to over 600,000 dekatherms per day [9] - The futures market is tightening, with M2 basis futures in 2029 and 2030 tightening by more than $0.20 over the past few months [10] - The U.S. is expected to exit 2025 with over 4 Bcf per day of incremental LNG demand compared to year-end 2024 [19] Company Strategy and Development Direction - The company is focused on integrating the Olympus Energy acquisition and has achieved significant operational improvements [7] - There is a strong emphasis on expanding the growth project pipeline, particularly in in-basin power projects and infrastructure to service new load growth in Appalachia [8] - The company aims to maintain a low-cost structure and is committed to returning cost structure improvements to shareholders through increased dividends and share buybacks [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of the business and the quality of the company's low-cost structure [11] - The company anticipates a tightening supply picture emerging into 2026 and 2027, supporting a more durable recovery in U.S. gas prices [21] - There is a cautious outlook regarding potential oversupply in the LNG market later this decade, which could temporarily back up gas supply into U.S. storage [22] Other Important Information - The company increased its base dividend by 5% to $0.66 per share on an annualized basis [12] - The company has signed offtake agreements with Sempra's Port Arthur, Next Decade's Rio Grande, and Commonwealth LNG, beginning in the 2030 and 2031 timeframe [13][14] Q&A Session Summary Question: Key demand takeaways from the MVP Boost open season - The MVP Boost project saw 100% of shipping capacity taken by utilities, indicating a strong demand pull environment [28] Question: Strategic midstream capital spending outlook for 2026 - The company is still evaluating midstream capital spending and will be disciplined based on project quality [29][30] Question: Trends in commercial opportunities and pricing structure - The company is seeing a robust opportunity pipeline and anticipates entering into more fixed pricing structures in the future [36][37] Question: LNG strategy and direct customer sales evolution - The company has been laying groundwork for LNG and is focused on building out systems and long-term sales agreements with international customers [41] Question: Marketing optimization and its sustainability - The company is optimistic about the marketing team's potential and expects consistent performance, especially during periods of market volatility [52] Question: Balance sheet priorities versus share buybacks - The company prioritizes reducing net debt while remaining open to share buybacks when capacity allows [55] Question: Maintenance production outlook for 2026 - The company expects maintenance production to be approximately flat compared to the exit rate of 2025 [88] Question: Updates on smaller projects and pipeline expansions - The company plans to advance projects like the Clarington Connector in the 2026 budget [92]

Financial Data and Key Metrics Changes - The company reported consolidated net revenues of $777.3 million for Q4, with adjusted diluted EPS of $0.71, reflecting a significant increase of 150% year-over-year [6][14] - Consolidated adjusted EBITDA increased by 33.1% year-over-year, while operating income improved significantly from the previous year, which had been impacted by an impairment charge [13][14] - The net leverage ratio improved to 3.1 at the end of the year, down from 4.8 at the end of the previous quarter [17] Business Line Data and Key Metrics Changes - The motorhome RV segment experienced double-digit top-line growth driven by higher unit volume and favorable product mix, particularly from Grand Design's motorized Lineage lineup and Newmar [15][16] - The towable RV segment saw a slight revenue decline year-over-year, attributed to a shift towards more value-oriented consumers, although operating income margin increased by 210 basis points [15] - The marine segment reported double-digit revenue growth, with both Chris-Craft and Barletta managing production effectively despite industry headwinds [16][17] Market Data and Key Metrics Changes - Retail RV registrations declined in August, but dealer inventories improved, contributing to a healthier channel [7][8] - The company expects wholesale RV shipments for calendar 2025 to be between 320,000 and 340,000 units, with a forecast of 315,000 to 345,000 units for calendar 2026 [8][19] - The inventory turn rate was 1.9 times at the end of Q4, with a target of achieving higher turns over time [9] Company Strategy and Development Direction - The company is focused on revitalizing the Winnebago motorhome and towables lineup, aligning operations with market demand, and streamlining cost structures [24][25] - Strategic initiatives include new product introductions, improved dealer partnerships, and operational efficiencies to drive growth in the Winnebago-branded motorhomes and travel trailers [12][19] - The company aims for a net leverage ratio of approximately 2x by the end of fiscal 2026, prioritizing improvements in growth and net leverage [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for fiscal 2026, emphasizing execution over assumptions about market recovery, with expectations for consolidated net revenues between $2.75 billion and $2.95 billion [19][20] - The company anticipates flat to modest low single-digit growth in the towable RV segment, while the marine segment is expected to see a decline in sales due to soft retail trends [22] - Management highlighted the importance of controlling internal factors to drive profitability, regardless of market conditions [51] Other Important Information - The company returned $88.9 million to shareholders in fiscal 2025, including $50 million in share repurchases and $38.9 million in dividends, marking the 45th consecutive quarterly dividend payment [17][18] - The company is actively addressing tariff challenges through supplier engagement and sourcing strategies [19] Q&A Session Summary Question: Can you discuss the impact of tariffs on EPS guidance? - Management indicated that the guidance includes the anticipated full impact of tariffs, which remains dynamic, and they are actively finding ways to mitigate tariff exposure [27][28] Question: What are the assumptions for retail and wholesale shipments in 2025 and 2026? - Management confirmed expectations for a significant inventory reduction in 2025 and a flat retail environment for 2026, with no significant dealer destocking anticipated [33][34] Question: How does the company view market share trends, especially with a shift towards low-end units? - Management acknowledged pressure on market share in the Class B and fifth wheel categories but expressed confidence in stabilizing and growing share through strategic initiatives [43][47] Question: What are the expectations for warranty expenses in FY2026? - Management expects warranty expenses to remain consistent with FY2025, with no major drivers anticipated to change the trend [75][76]

Financial Data and Key Metrics Changes - Earnings per share diluted increased to $1.16, up 16% year over year, with total core revenue rising by 5.6% [4] - Total interest income reached $200 million, an increase of $6 million, primarily due to higher loan and investment balances [11] - Total interest expense rose to $45 million, up $3 million, reflecting higher average balances of core deposits and wholesale funding [12] - Tangible book value was reported at $28.92 per share, with an efficiency ratio of 52% [13] - Return on average assets was 1.69%, and return on tangible common equity was 16.39% [13] Business Line Data and Key Metrics Changes - Loans and core deposit balances increased year over year, with a particular focus on commercial loans [4] - Average loan balances were $8 billion, up nearly 2% from the second quarter, while end-of-period loans held for investment totaled $8.1 billion [14] - Core deposits increased by $287 million or 3% year over year, with average core deposits at $9.9 billion [16] Market Data and Key Metrics Changes - The Puerto Rico economy is performing well, with high levels of wages and employment, and solid consumer and business liquidity [25] - The company is experiencing growth in digital banking, with digital enrollment up 8% and net new customer growth at 4.6% [6] Company Strategy and Development Direction - The company is focusing on a digital-first strategy, enhancing customer engagement through innovative product offerings and AI-driven insights [6][8] - The introduction of the Liberty and Elite accounts has successfully attracted deposits from new and existing customers [7] - The company aims to continue growing its market share in retail deposits and commercial lending [9][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the commercial pipeline and credit trends, anticipating annual loan growth of 5% to 6% [22] - The company remains watchful of global macroeconomic and geopolitical uncertainties but is optimistic about the Puerto Rican economy [26] - The anticipated effective tax rate for the year has been adjusted to 23.06% from a previous estimate of 24.99% [23] Other Important Information - The company repurchased $20.4 million of common shares during the quarter [5] - Credit quality remains stable, with a provision for credit losses of $28.3 million [19] - The company is actively investing in technology and AI to improve operational efficiency [61] Q&A Session Summary Question: Dynamics impacting deposit costs - Management indicated that higher deposit costs are driven by strategic positioning to attract mass affluent clients through the Elite account, which offers higher rates [31][32] Question: Outlook for commercial loan growth - Management noted that while there were paydowns on lines of credit, the commercial pipeline remains solid, with confidence in future growth [33][34] Question: Credit quality concerns - Management reassured that the recent charge-offs are idiosyncratic and not indicative of broader market issues, with a focus on managing risk within the portfolio [45][46] Question: Auto loan trends - Management acknowledged a seasonal increase in charge-offs but expressed optimism about the overall credit quality and growth in auto lending [50][49] Question: Margin guidance and Fed funds assumptions - Management discussed expectations for margin guidance in the fourth quarter, factoring in potential Fed rate cuts [58][60] Question: Investments in AI and operational efficiencies - Management highlighted ongoing investments in AI to enhance customer service and operational efficiencies, with a focus on delivering unique insights to customers [62][63] Question: Capital management priorities - Management outlined capital priorities, emphasizing loan growth, share buybacks, and dividends as key focuses moving forward [66]