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CFO Nicole Stokes emphasized the stability and granularity of the deposit base, attributing it to a 50-year franchise history, and noted the focus remains on growing core deposits. CEO H. Palmer Proctor confirmed a qualitative factor was added to the reserve specifically for investor office exposure, bringing that sector's reserve to 3.8%. He added that the overall robust reserve provides both offensive flexibility to grow into it and a defensive position in a potential credit downturn.

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EVP & CFO Nicole Stokes responded that the bank is focused on 'profitable growth' and its strong 3.73% margin provides flexibility to compete on deposit pricing if necessary. Chief Credit Officer Doug Strange confirmed that growing commitments impacts the reserve. Stokes added that as unfunded construction lines are rebuilt, the associated reserve will also increase, shifting from the funded loan portion.

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Chief Credit Officer Doug Strange clarified that the reserve level is driven by the bank's CECL model and economic forecasts, not an expectation of imminent credit deterioration. On M&A, CEO Palmer Proctor stated that acquiring non-bank entities is a lower priority than traditional bank M&A, given the strategic importance of securing core deposit funding, which non-banks typically lack.

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Chief Credit Officer Douglas Strange explained the reserve is model-driven and the current 1.60% level is considered healthy. He noted the C&I portfolio is diversified with minimal stress. Executive Nicole Stokes added that loan betas are expected to be symmetrical, with the loan book behaving like a 50/50 fixed/variable split due to short-duration assets.

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Chairman & CEO Christopher Maher stated it was premature to revise the deposit guidance despite a strong start. He affirmed that the allowance for credit losses is expected to build as the C&I loan mix increases. Regarding credit, Maher noted that while some positive resolutions are possible, the overall criticized asset level is already quite low, and the portfolio is well-structured to avoid problem areas.

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President Joseph Lebel stated the expectation is to capture the majority share of a client's wallet over time, given the teams' long-standing and loyal relationships, and confirmed the bank is selective in pursuing teams. CEO Christopher Maher added that the goal is building durable franchise value. Regarding credit, Maher said that while new financials are reviewed, no concerning trends have emerged, but the recent reserve build reflects broader macroeconomic uncertainty.

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CEO Christopher Maher clarified that the reserve build was primarily driven by a non-recurring Day 1 CECL provision for the Spring Garden acquisition and macroeconomic model factors, not a deterioration in credit quality. He stated that the shift towards C&I lending will be gradual, with investor CRE trending down to create a more balanced and valuable company over time.

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CEO Christopher Maher responded that the loan portfolio is not highly sensitive to rates and does not expect significant credit upgrades, as rent growth has largely offset rate stress. He confirmed the D.C. market could become larger over time, but growth will be measured as the focus is on building out the C&I business there.

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EVP Kevin Geoghegan described the multifamily issues as idiosyncratic and not systemic, noting strong market fundamentals. Senior EVP & Chief Real Estate Lending Officer Ryan Riel added that multifamily valuations have not seen the same risk as office and that while the D.C. eviction process is strenuous, loan structures provide support. Senior EVP & CFO Eric Newell explained that current FDIC insurance expenses are more than double a normalized level and will decrease as problem assets are resolved. Ryan Riel confirmed that a significant portion of C&I commitments are funded and that additional deposit flows from these new relationships are expected.

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CFO Eric Newell confirmed that all aggressive resolution strategies are being considered, guided by a cost-benefit analysis for each asset. He and Chief Credit Officer Kevin Geoghegan clarified that appraisals are updated 90-120 days before maturity and that the investor deck now shows which loans have recent appraisals. CEO Susan Riel and her team affirmed that the C&I portfolio is expected to continue growing as a percentage of total loans, driven by new team members and a strong pipeline.

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CFO Eric Newell confirmed the 2025 expense outlook includes flat FDIC costs and is not expected to be materially altered by new team build-outs. He and CEO Susan Riel noted that while C&I deposit growth is a long-term strategic priority supported by treasury management investments, it will take time to materialize. Retiring CCO Jan Williams clarified that 2025 is a light year for maturities and the focus is on 2026, for which the bank employs early intervention strategies like cash flow sweeps.

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Founder, Chairman & CEO Charles Williams clarified that their MPP success is driven by internal strengths—a superior sales team, technology stack, and intense focus—rather than competitor consolidation. He emphasized intangible factors like client responsiveness and the platform's ease of use. EVP & CFO Brad Howes advised that while the 10-year Treasury is relevant, a mortgage rate index, such as a conventional 30-year index, would be a more accurate indicator for predicting quarterly fair value movements.

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Executive VP & CFO, Jefferson Harralson, explained that Navitas gain-on-sale margins are tied to Treasury yields, with lower rates likely leading to wider margins. Chief Risk Officer, Robert Edwards, stated that while it's possible for the CECL model to provide future relief, it depends on economic forecasts and loan growth. He also characterized the pipeline for criticized assets as stable.

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President & CEO Duane Dewey affirmed that while Texas is an attractive market, the company's M&A focus remains broad across its entire Southeastern footprint. EVP Robert Harvey explained the lower credit provision was driven by a significant $71 million reduction in criticized loans and a $40 million drop in classified loans. EVP & Chief Accounting Officer George Chambers projected a full-year effective tax rate between 18.3% and 18.5%.

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Chief Credit and Operations Officer Robert Harvey affirmed that the bank is always selective on credit structure, though pricing has become more competitive. He also noted that C&I line utilization was stable at 36%. CFO Thomas Owens added that the bank has significant flexibility on the deposit side, having grown core deposits and developed digital capabilities, which allows them to support loan growth cost-effectively without heavily relying on promotional pricing.

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Chief Credit and Operations Officer Robert Harvey stated that the bank's credit risk appetite is aligned with peers and growth depends more on market opportunities than on taking additional risk. He affirmed the bank is aggressive in rating credits to maintain quality. CFO Thomas Owens addressed the deposit question, clarifying that while promotional time deposits have increased account numbers, the core operating account base has experienced steady, natural churn without significant shifts in new account opening trends.

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Chief Credit and Operations Officer Robert Harvey responded that while the 50 basis point cut is helpful, a more significant reduction of 100-125 basis points would be more impactful for improving credit performance, particularly for CRE projects. He also noted the potential downside of stabilized loans refinancing away in a lower rate environment. Regarding C&I inflows, he stated there was nothing to report.

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EVP & CFO Jamie Gregory confirmed the expected public funds growth is purely seasonal. CEO Kevin Blair explained that frontline commercial banker incentives are based on total revenue growth to encourage holistic client service, while leadership incentives are tied to EPS growth and ROA.

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Chief Credit Officer Bob Derrick reported that most of the maturing Q4 office loans were renewed without material negative credit impacts, viewing it as a positive sign for the 23% of the portfolio maturing in 2025. CEO Kevin Blair added that the 2025 expansion plan includes hiring approximately 70 resources, with 35-40 being production personnel, and that these hires are expected in the first and second quarters.

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An executive, Bob Derrick, clarified that while the multifamily portfolio has seen some special mention migration due to oversupply, it has minimal loss content and zero nonaccruals. He confirmed the quarter's NPL increase was driven by a single, previously rated office credit relationship. CEO Kevin Blair added that NPLs are concentrated in a few loans, supporting the company's loss guidance.

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Head of IR Tyler Craft explained that the 'other financial intermediaries' category primarily consists of high-yielding ABL opportunities with minimal associated treasury management business. CEO Bryan Jordan acknowledged that industry M&A creates opportunities, but stressed that First Horizon's main focus is on capitalizing on its own significant internal opportunities by standardizing its go-to-market strategy.

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Chairman, President and CEO Bryan Jordan responded that while there are echoes of a supply shock, the current situation is 'nowhere near the severity' of March 2020. Chief Credit Officer Thomas Hung added that the bank has navigated numerous uncertainties over the last five years—including COVID, inflation, and a pending merger—while delivering consistent, strong credit performance, which he attributes to their relationship-focused model.

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CFO Hope Dmuchowski highlighted the successful completion of a new general ledger system and a treasury management platform conversion as major 2024 projects. She noted this completes key 'run the bank' work, allowing the focus to shift to client-facing technology in 2025. CEO Bryan Jordan added he was proud of the team's work. Hope Dmuchowski confirmed that ongoing technology investments are fully embedded in the 2025 expense guidance.

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Chief Credit Officer Thomas Hung stated he does not expect any significant fallout from the SNC exam, as the performance of the SNC book is in line with the overall C&I portfolio. CFO Hope Dmuchowski confirmed there were no significant fraud changes or large one-time operational losses in the quarter.

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President and CEO John Hairston stated that market disruption is generally positive, positioning Hancock Whitney as a 'safe haven' for talent and clients. Regarding non-depository borrowers, Chief Credit Officer Chris Ziluca and CEO John Hairston both characterized the approach as 'opportunistic' rather than a primary strategic focus.

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Chief Credit Officer Chris Ziluca explained the unfunded commitment reserve growth was due to an updated outlook for a higher conversion rate of unfunded lines to funded loans. He noted it was too early to comment on future reserve builds. CFO Michael Achary confirmed their model uses a blend of Moody's baseline and a 'slower growth' scenario, which does include a recession. Mr. Ziluca added that the economic scenarios have generally become more pessimistic compared to the prior quarter, embedding more risk.

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CEO John Hairston explained that overall line utilization should naturally rise as new CRE construction projects, booked with zero utilization, begin to draw down funds in mid-2025. He noted that while stable C&I utilization reflects strong client liquidity, it remains below pre-pandemic levels. CFO Michael Achary agreed that new loan rates would likely stabilize if demand strengthens.

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Chief Credit Officer Christopher Ziluca stated that as the market normalizes, he expects risk and returns to become better aligned, and the bank remains focused on getting paid appropriately for risk. President and CEO John Hairston addressed fraud, noting that while it's a persistent industry challenge, HWC's fraud losses were down year-over-year due to investments in detection tools. CFO Michael Achary added that there was nothing unusual to call out in Q3.

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CEO Chris Holmes and CFO Michael Mettee acknowledged that potential C&I line utilization increases represent a tailwind for growth, noting utilization is in the mid-30s versus pre-COVID levels in the upper-40s. Holmes explained that the systems conversion, scheduled for completion in Q3, is a critical but not limiting factor for future M&A, emphasizing the efficiency of their integration teams and playbook.

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CFO Michael Mettee explained that while they use a Moody's baseline model, they make qualitative adjustments for known risks and rely on their close customer relationships to understand potential impacts. Executive Christopher Holmes emphasized that the bank is built for stability and will intentionally maintain high capital and reserve levels through the uncertainty. Mettee added that while increased line utilization is possible, it has remained very stable year-to-date.

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CEO John Corbett responded that while SouthState is actively recruiting, the immediate priority is to successfully complete the system conversion. After the conversion is in the 'rearview mirror,' the company will look to layer on additional middle-market bankers in Texas and Colorado. He noted the company had a strong recruiting quarter overall, including hiring a new Market President for a new LPO in Nashville and adding bankers in several other key markets.

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CFO Craig Nix clarified that the FDIC note is not expected to be paid down in 2025 and would only be paid down if the arbitrage opportunity diminishes, which could potentially occur in 2026 based on the forward curve. He also confirmed that the bank remains asset-sensitive.

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CFO Craig Nix stated the capital benefit from the loss share agreement is expected to shrink to a negligible level by the end of 2025. Nix and executive Tom Eklund explained the plan is to complete the current buyback and contemplate a new one in the second half of the year to manage the CET1 ratio down to its target range. Executive Andrew Giangrave confirmed there were no material or concerning credit trends in the General Bank's criticized and classified portfolios.

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CFO Craig Nix confirmed the plan to use the full $3.5 billion authorization and would consider another repurchase plan in late 2025 if earnings growth outpaces RWA growth. Executive Tom Eklund added that the bank holds approximately $7 billion to $10 billion in excess liquidity that could be redeployed, but they continue to manage liquidity conservatively.

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CFO Craig Nix stated that executing the current plan would result in a CET1 ratio in the mid-11% range, and a subsequent plan would be intended to reach the 10.5% target by the end of 2025. Executive Tom Eklund confirmed the buyback would be spaced over the next 4 to 5 quarters with a slight front-loading. Executive Marc Cadieux addressed the venture capital question, noting the outlook remains mixed; while Q2 investment volume saw an uptick, it was skewed by two very large deals, making the underlying trend look similar to previous quarters.

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Executive John Bordelon stated that the office portfolio is performing 'extremely well' with no criticized assets and that maturing loans have been successfully renewed. He clarified that CD pricing will likely remain somewhat elevated but should see incremental cost reductions. Regarding the loan-to-deposit ratio, Bordelon noted it will likely remain tight due to persistent loan demand, but the bank is actively working to attract more core deposits, particularly through its Houston expansion.

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An executive responded that C&I utilization, which rose to 36%, is expected to remain stable. Chief Credit Officer Greg Schroeck added that criticized assets declined by $435 million in Q4, with 90% of the portfolio remaining current, indicating a positive trend and strong overall asset quality.

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CEO Tim Spence acknowledged that competitor regulatory issues can create opportunities at the margins for well-positioned banks with the capacity to grow. CFO Bryan Preston explained that lower interest rates, if accompanied by a normalization of the yield curve, would be very beneficial for returns. However, he cautioned that a low, flat-rate environment remains challenging for the entire banking industry.

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Management confirmed that charge-offs do reduce the criticized asset pool. Chief Credit Officer Greg Schroeck stated that criticized levels were stable quarter-over-quarter and are leveling off. He expects these levels to remain stable for the rest of the year, noting that recent growth in the category was concentrated in well-secured ABL facilities.

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