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CFO Ram Shankar stated that $17 million in quarterly run-rate savings were achieved in Q1, with the next major portion expected in Q4 2025 and Q1 2026 following system conversion and vendor consolidation. He confirmed they expect to realize the full amount. For deposits, he noted a typical mid-single-digit DDA decline in Q3. He also mentioned that excess cash has been deployed, and the bond portfolio is expected to reach approximately $17 billion.

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CFO Ram Shankar provided a bridge, highlighting a one-time $0.08 tax benefit in Q1, an upcoming increase in share count, and the partial-quarter impact of the Heartland acquisition. He noted future quarters will include a full period of Heartland's earnings, additional cost saves, and scheduled accretion. CEO J. Kemper added that the loan production pipeline remains strong, supporting future growth.

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Chairman and CEO J. Kemper stated the primary focus for the next year is rebuilding capital to pre-deal levels, dismissing the idea of a bond portfolio restructuring as unnecessary. CFO Ram Shankar added that with standalone UMB being liability-sensitive and HTLF being asset-sensitive, the combined pro forma bank will be 'pretty neutral' to interest rate movements, making the current rate environment favorable.

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CFO Ram Shankar stated there are no plans for balance sheet restructuring beyond swapping out some of Heartland's bonds, as mentioned at the deal's announcement, and confirmed the pro forma earning asset base would be around $60 billion. For deposit betas, Shankar clarified that the 25% of the deposit book that is neither DDA nor indexed currently has a prevailing rate of about 2%, and the bank assumes a 30% beta on this portion. He emphasized that the overall downward beta trajectory will be most influenced by the hard and soft indexed deposits.

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Senior Executive Vice President & CFO Lee Smith acknowledged the higher payoffs led to revised, lower asset forecasts for 2025-2027 but noted this was offset by expense reductions. Executive Chairman, President & CEO Joseph Otting confirmed the holding company elimination would save approximately $15 million annually, streamline regulatory supervision, and confirmed the bank would no longer be subject to CCAR.

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EVP & CFO Ronald Farnsworth confirmed that a mid-$60 billion earning asset base is a reasonable pro-forma estimate, noting a planned $500 million net sale of Pacific Premier's bonds at close. Regarding the margin, he stated that Columbia's own margin has improved and directed investors to the deal materials in the appendix for combined projections, conveying an overall improved outlook.

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EVP & CFO Ronald Farnsworth confirmed that after selling approximately $500 million of Pacific Premier's bonds at close to pay down wholesale funding, a mid-$60 billion earning asset base is a reasonable estimate. Regarding the margin, Farnsworth indicated that Columbia's standalone margin has improved and directed analysts to the deal materials in the appendix, implying an improved outlook compared to the initial merger model.

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President and CEO Clint Stein confirmed that the bank's strategy remains unchanged. The focus is on relationship banking, and a sale of the transactional portfolios is not currently viable due to the long earnback period required to offset the hard-coded loss. The preferred course of action is to let the portfolio amortize and reprice over time, particularly as significant repricing events are scheduled for 2027 through 2029.

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EVP & Chief Credit Officer Frank Namdar reported that FinPac's annualized loss rate improved by 20% to 4.7% and is expected to normalize further into a 3.5% to 4% range over time. He noted that Q4 improvement might be tempered by seasonal collection challenges but confirmed that delinquencies are trending correctly and there are no other systemic credit issues within the broader portfolio.

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EVP and CFO Ron Farnsworth advised that targeting the midpoint of the Q4 operating expense range would be the most sensible approach for analysts at this time.

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SEVP & CFO Travis Lan confirmed expectations for continued NIM expansion through 2025 and into 2026, driven by asset repricing and the opportunity to replace high-cost brokered deposits. He noted new deposits were added at a blended rate of 2.77%. EVP & Chief Credit Officer Mark Saeger addressed credit, pointing to stabilization in non-accrual and criticized assets, driven by the real estate market. He affirmed the guidance for charge-offs and provisions to moderate through the rest of the year.

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SEVP & CFO Travis Lan confirmed that the NIM is expected to continue expanding through 2025 and into 2026, supported by asset repricing and the opportunity to replace $1.2 billion in high-cost brokered deposits. He noted new deposits were added at a favorable 2.77% blended rate. EVP & Chief Credit Officer Mark Saeger added that credit trends are stabilizing, with flat criticized assets and an expectation for charge-offs and provisions to decline through year-end, consistent with guidance.

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SEVP & CFO Travis Lan confirmed expectations for continued margin expansion into 2026, driven by asset repricing and the opportunity to reprice $6.5 billion in brokered deposits. He noted that over $1 billion in new deposits were added at a blended rate of 2.77%. EVP & Chief Credit Officer Mark Saeger added that the stabilization of non-accrual and criticized assets, particularly in real estate, supports the guidance for lower charge-offs and provisions in the second half of the year.

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SEVP & CFO Travis Lan confirmed expectations for continued NIM expansion through 2025 and into 2026, driven by asset repricing and the opportunity to replace $1.2 billion in high-cost brokered deposits. He noted that over $1 billion in new deposits were added at a favorable blended rate of 2.77%. EVP & Chief Credit Officer Mark Saeger added that credit trends are stabilizing, with flat criticized assets after two years of migration, supporting the guidance for lower charge-offs and provisions in the second half of the year.

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SEVP & CFO Travis Lan confirmed expectations for continued NIM expansion through 2025 and into 2026, supported by asset repricing and the opportunity to reprice $6.5 billion in brokered deposits. He noted new deposits were added at a favorable 2.77% rate. EVP & Chief Credit Officer Mark Saeger stated that the credit outlook is supported by stabilization in non-accrual and criticized assets, consistent with guidance for higher charge-offs and provisions in the first half of the year, followed by a decline.

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Executive Travis Lan acknowledged the guidance is consistently conservative to allow for investment flexibility. He mentioned that normalizing payroll taxes would be offset by higher marketing and professional fees later in the year, but expects continued positive operating leverage. Regarding funding, he anticipates strong core deposit growth will continue, prioritizing the paydown of brokered deposits. The securities portfolio growth will be a toggle dependent on loan growth materializing.

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CEO Ira Robbins outlined a long-term target for ROE to be north of 15% with an ROA above 1.20%, driven by improving margins, fee income growth from strategic initiatives, and disciplined expense management. Executive Travis Lan clarified the C&I growth guidance is for high single-digits to low teens, noting that underlying organic growth in 2024 was strong and that the C&I pipeline was up over $600 million year-over-year.

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CEO Ira Robbins affirmed the company's confidence in achieving the newly outlined intermediate targets for 2025. Executive Travis Lan added that while private equity demand for assets has been consistent, the bid-ask spread has narrowed over time, making the 1% discount on the recent loan sale an extremely attractive, rate-driven transaction.

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EVP & CFO Christopher Del Moral-Niles responded that the bank is continuously working to optimize deposits, the investment portfolio, and grow the C&I book. He added that while the primary goal is delivering top-quartile returns, the bank is actively exploring hires and potential acquisitions to build out its fee income businesses.

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CFO Christopher Del Moral-Niles stated the bank primarily purchased Ginnie Mae floaters and some fixed-rate securities, maintaining a portfolio duration of around 3%. He clarified that customers with potential adverse impact from proposed tariffs account for approximately 1% of the total C&I outstanding loan balances.

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CFO Christopher Del Moral-Niles clarified the expense guide starts from the operating noninterest expense line, excluding future special FDIC assessments, and that tax amortization should be similar to 2024. CEO Dominic Ng addressed M&A, stating the bar for a deal is very high because the bank's organic growth model is highly successful and acquisitions can be a distraction from their core focus.

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CFO Christopher Del Moral-Niles explained that NII performance depends on the number and size of Fed rate cuts, as the bank is asset sensitive. Chairman and CEO Dominic Ng addressed the $100 billion threshold, confirming the bank is actively and rationally building the necessary infrastructure to be ready well before crossing that mark.

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EVP & CFO David Stoehr stated that with a stable margin and continued asset growth, NII growth should remain robust. He also noted the company retained premium finance loans it might have sold in prior years. President, CEO & Director Timothy Crane added that Wintrust is hopeful for regulatory tailoring and remains disciplined but opportunistic regarding potential acquisitions.

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CFO David Dykstra confirmed the mid-single-digit expense growth guidance is off the Q4 2024 run rate. Executive Timothy Crane noted that the company continually invests in its infrastructure to support a larger scale but does not break out specific costs for crossing asset thresholds. Executive Richard Murphy stated the decrease in office non-accruals was due to the successful exit of a specific loan.

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David Stoehr, CFO, stated that with current earnings, the CET1 ratio should build into the 10% range during 2025. He noted that the company will evaluate refinancing the preferred stock based on market conditions next year. He also confirmed the current quarter's tax rate is a clean run-rate and detailed the share count impact from the acquisition.

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CEO & Chairman James Ryan described the current regulatory tone as more constructive but noted that the same rules broadly apply. He stated the company is not actively looking to test the $100 billion asset threshold and is focused on organic growth and executing the Bremer integration, though a 'home run' deal would be considered.

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Executive Mark Sander cited a 30% year-over-year increase in the loan pipeline as the foundation for their confidence. Executive James Ryan added that the balance sheet flexibility from the Bremer deal, specifically the option to retain loans slated for sale, provides a unique offset to any potential weakness in organic growth. Regarding buybacks, James Ryan stated it was 'too early to tell,' prioritizing the right-sizing of the balance sheet and preferring a larger balance sheet over repurchases at present, though it remains an option for late 2025 or 2026.

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An executive, likely John Moran, attributed the expected Q2 NII increase to having two more days than in Q1, combined with ongoing back-book repricing and modest loan growth. Regarding the balance sheet, he clarified that the focus is on repositioning Bremer's portfolio and the planned CRE sale, but no other major restructuring is planned. Executive James Ryan added that they 'don't need' a large-scale balance sheet transformation.

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CEO James Ryan affirmed the strategy to continue managing expenses while investing for the long term, particularly in fee income areas like treasury and wealth management. He stated he does not see any material M&A on the horizon for fee businesses but will continue to build them organically, confident in managing the trade-offs between investment and near-term returns.

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Chairman & CEO Christopher M. Gorman responded that KeyCorp has already proactively invested to align with proposed regulations like Basel III endgame, meaning the major compliance-related spending is largely complete. He asserted that the company is already positioned to prioritize investments in frontline talent and technology, regardless of the pace of deregulation.

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President & COO Scott McLean reported that the capital markets business is growing nicely and is on pace to double in size as planned, highlighting strength in syndications, risk management, and new initiatives like M&A advisory. On buybacks, Chairman & CEO Harris Simmons and CFO Ryan Richards stated they will remain conservative for now, preferring to let AOCI accrete further and gain clarity on Basel III rules before resuming repurchases.

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Chairman and CEO Harris Simmons opined that sentiment could change, potentially driven by political pressures causing a pivot on trade policy. An executive then clarified that the bank's outlook for 1-2% positive operating leverage is on a Q1 2026 vs. Q1 2025 basis.

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CFO Ryan Richards indicated that the runoff in the securities portfolio might taper slightly as they begin reinvesting more cash flows, but with loan growth expected, they will have opportunities to deploy capital organically. Chairman and CEO Harris Simmons stated that while the bank is increasingly in a position to do strategic deals and is prepared for crossing the $100 billion threshold, M&A is not a front-and-center focus at the moment.

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Chairman and CEO Harris Simmons stated that 2 basis points is not sustainable and that a normalized level for a top-quartile performer might be closer to 15 basis points, though he stressed results can be lumpy. On capital returns, Simmons said there is no change in appetite for buybacks yet, as they are waiting for more clarity on final capital rules before managing capital more aggressively.

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CFO Dale Gibbons expressed his enthusiasm for his new role focusing on deposit initiatives, which he believes are at an inflection point. CEO Ken Vecchione affirmed the bank's strategic direction remains unchanged, focused on organic growth. Regarding deposits, Gibbons explained that reducing volatile mortgage warehouse funds will mute typical Q4 seasonality, keeping them on track for their $8 billion target. Vecchione added that growth in digital assets and technology banking supports this outlook.

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Chief Financial Officer Dale Gibbons confirmed the midpoint of guidance is appropriate. President and CEO Kenneth Vecchione stated that the primary lever to increase PPNR would be accelerating loan growth, not cutting expenses, and that the current expense guidance is firm.

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Interim CEO and CFO Dale Gibbons suggested that stronger-than-forecasted business performance, which would affect incentive compensation, could push expenses toward the high end of the range. He confirmed an expected rebound in the net interest margin in Q1. He also specified that less than one-third of the projected $8 billion in deposit growth is expected to come from ECR-related sources.

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CFO Dale Gibbons explained that Q4 noninterest income growth will be supported by continued revenue from a new BOLI transaction, consistent service charges, and some securities gains, though smaller than in Q3. He noted the Q3 MSR valuation was negatively impacted by a sharp increase in prepayment speeds, which is not expected to repeat. On the ROE question, Gibbons stated that potential is not highly rate-dependent and that by improving the adjusted efficiency ratio, the bank can achieve a Return on Common Equity (ROCE) in the upper teens.

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CFO Michael Santomassimo expressed strong confidence in their ability to continue driving efficiencies on the expense side, citing their track record of cost and headcount reductions. On the revenue side, he acknowledged that quarterly results can be fluid but emphasized that tremendous growth opportunities exist across all businesses, which should collectively drive long-term profitability and positive operating leverage.

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CFO Michael Santomassimo expressed high confidence in the ability to continue driving expense efficiencies, citing the $12 billion in costs already removed and 20 consecutive quarters of headcount reduction. On the revenue side, he reiterated that while quarterly performance can be fluid, there is a tremendous amount of opportunity to grow across every single business, which combined with expense discipline, should drive long-term profitability and returns.

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CEO William Rogers noted that regulatory benefits are gradual rather than a 'stair step' change. He confirmed that efficiency gains, including from AI, provide opportunities to reinvest in revenue-driving initiatives to grow the top line. CFO Mike Maguire added that many technology investments are self-funding by creating efficiencies, which directly supports the positive operating leverage goal.

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Chairman & CEO Bruce Van Saun clarified that growing the capital markets business is more of an operating expense question (hiring talent) than a capital allocation one, stating the bank is not capital constrained and it would be a mistake to raise risk limits. On credit, CFO John Woods confirmed that trends are playing out as expected and that the bank's macro outlook remains conservative. Bruce Van Saun added that the bank's strategic focus on more affluent customers and larger middle-market companies provides resilience, with no credit hotspots emerging.

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CFO Bryan Preston stated that credit spreads have been stable, with irrationality only seen occasionally when competitors defend existing accounts. Chief Credit Officer Greg Schroeck added that confidence in credit comes from making good progress on resolving existing non-performing assets (NPAs) and, importantly, a 77% sequential drop in new NPA inflows, indicating improved overall portfolio health.

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President & CEO Gunjan Kedia stated that the company's focus is firmly on organic growth and that its capital build is designed to support this growth as it transitions to CAT II status, not to pursue M&A. Vice Chair & CFO John Stern confirmed there is no change to the CAT II transition timeline, which is expected no earlier than 2027.

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CFO Daryl Bible clarified that the improved expense guidance was not related to the GL project but was a leadership decision to ensure positive operating leverage amid softer loan growth. On M&A, he noted that while culture and credit fit are paramount, the bank now has options like post-close credit sales or risk transfers to manage CRE concentration from an acquisition, making it not a primary concern.

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CFO Daryl Bible clarified that the lower expense guidance was a strategic decision by leadership to ensure positive operating leverage, not tied to any single project's completion. On M&A, he stated that a target's CRE concentration is not a deal-stopper, as the bank now has multiple tools like credit sales and risk transfers to manage portfolio risk post-acquisition, emphasizing that cultural and credit fit are the primary considerations.

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Chairman & CEO William Demchak responded that while a favorable regulatory environment provides a 'tailwind' by reducing compliance 'busy work,' PNC's success is fundamentally driven by its strong organic growth path. He emphasized that the company is succeeding in its new markets and growing its client base at a healthy clip, which is the core of its strategy regardless of the political climate.

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Chairman & CEO David Solomon affirmed the firm's confidence in its mid-teens ROE target, stating that recent regulatory developments have increased that confidence. He identified the drivers as continued growth in the Asset & Wealth Management business and the strong performance of Global Banking and Markets. CFO Denis Coleman added that having excess capital provides a 'dual sort of beneficial, source of tailwind' by enabling more client activity (numerator) and a potentially lower capital base (denominator).

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CEO Brian Moynihan stated the goal is always to grow faster than the economy and noted strong commercial loan growth, with further potential from increased line utilization. He said the focus remains on organic growth and resource deployment, such as expanding sales forces in new markets. While large deposit acquisitions are not possible, small technology tuck-ins could be considered.

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CFO Mark Mason attributed the confidence in the increased buyback to the firm's strong earnings momentum and capital generation, which allows them to act early while the stock trades below book value. He clarified that while regulatory tone is helpful, the buyback is primarily supported by performance. He also stated that the 10-11% ROTCE target has long been rooted in the franchise's underlying strength, not dependent on known changes in the capital regime.

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CFO Mark Mason attributed the confidence in buybacks primarily to the firm's strong earnings momentum and the opportunity to repurchase shares below book value, though a positive regulatory tone is also a factor. He clarified that the 10-11% ROTCE target is rooted in the underlying strength of the franchise and does not depend on any specific known changes to the capital regime.

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Executives stated that while everything is on the table for capital use, including acquisitions, the bar is high. They believe a holistic review of regulations (G-SIB, SLR, CCAR) is needed to simplify the system and make it safer, rather than focusing on single rules. They emphasized that organic growth is a priority and that any good franchise business that makes sense from a risk and return perspective will be funded.

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CEO James Reuter characterized the credit situation as a 'reset' and acknowledged there was 'a little more than I had anticipated' but expressed confidence after a thorough review. He highlighted positive surprises, stating the rest of the bank, particularly the low-cost granular deposit base and the banking team, is 'as good, if not better,' than he expected. On capital, Reuter reiterated that the dividend is a priority, followed by deploying capital for long-term organic growth, and the company remains focused on maintaining its dividend.

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CEO Jim Reuter stated there will be no significant departure in capital philosophy and the bank will remain well-capitalized. He noted that management is currently evaluating the best use of capital to drive shareholder returns and will provide a more detailed update on the next earnings call. He reiterated that M&A is not a near-term priority.

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CFO Derek Meyer stated that while the core performance is strong, the company is not adjusting its guidance upward due to macro uncertainty. He noted that the firm has good line of sight on expenses, pointing to the Q4 to Q1 drop in personnel costs as evidence of control, and feels confident in the existing expense guidance.

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An executive explained that while loan betas depend on mix, about 60% of the loan book (net of swaps) reprices or matures within a year, providing an opportunity to expand margin late next year. The executive confirmed the securities portfolio is almost entirely fixed-rate. They also stated that deposit seasonality is typically strong in the second half of the year, a trend they expect to continue, supported by strategic initiatives.

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CFO Joseph Kauder guided that after accounting for the $5 million negative day-count impact in Q1, NII growth in Q2 should be somewhat consistent with the bank's loan growth outlook. This implies a potential mid-single-digit percentage increase in dollar NII for the second quarter.

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CEO Jared Wolff confirmed expectations for continued NII expansion, driven by loan repricing and growth. CFO Joseph Kauder added that earning assets could grow faster than total assets by reducing cash balances. Regarding rate cuts, Wolff noted that ECR-related expenses have a high beta to Fed funds and would decrease, pointing to the Q4 decline as evidence.

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CEO Jared Wolff stated that capital deployment options include preferred buybacks, dividends, and common stock buybacks. He emphasized that if the stock remains at its current low price-to-tangible book value, share repurchases would be a 'very high priority.' CFO Joe Kauder reaffirmed that a core noninterest income run rate of approximately $11 million per quarter remains a solid assumption, despite recent quarterly noise from fair value adjustments.

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CEO Jared Wolff stated that expected rate cuts would accelerate the bank's path to its profitability targets, which he believes are reasonably achievable by the end of 2025. He reiterated the goal of reaching a sustainable 11% CET1 ratio before considering capital returns like buybacks. CFO Joe Kauder added that capital from the CIVIC sale is being evaluated for uses like securities repositioning and confirmed the effective tax rate should normalize to the 27%-28% range going forward.

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Executive Bradley Adams expressed skepticism about the likelihood of three rate cuts, citing sticky inflation and political factors. He revised his outlook, stating that each potential cut would now impact the margin by only 4 basis points, down from a previously estimated 7 basis points, due to strong deposit flows and the pending Evergreen merger. Executive James Eccher added that the bank plans to exit another $200 million from its purchase participation portfolio over the next 24 months to continue repositioning the loan book.

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Executive Bradley Adams confirmed the recent quarterly NII of $60-62 million is a reasonable run rate, absent any large asset purchases. He identified life equity loans and certain consumer assets as potential interests. Regarding M&A, Executive James Eccher noted discussions are active. Adams added that their criteria are rational, focusing on accretion and low credit risk, and confirmed they would "absolutely" use cash in a potential transaction.

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Executive Bradley Adams expressed confidence that the bank's terminal net interest margin could exceed 4%, even with rate cuts, and noted the forward curve has been wrong before. Executive James Eccher confirmed that capital deployment is a key initiative for 2025, with all options, including inorganic growth, share buybacks, and dividend increases, remaining on the table.

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CFO Craig Nix explained that reaching the CET1 target assumes the completion of the current share repurchase plan and the implementation of a new plan in the latter half of 2025. He and Executive Tom Eklund affirmed their commitment to a methodical capital plan, noting that while the current valuation makes buybacks more effective, they are hesitant to deviate from their established pace.

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CFO Craig Nix identified higher-for-longer rates as the primary upside risk and a potential economic slowdown negatively impacting loan and deposit growth as the main downside risk. Regarding expenses, Nix confirmed that the costs associated with preparing for Category 3 status are already reflected in the company's current expense run rate and forward guidance.

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CFO Craig Nix stated the SVB loan decline was due to payoffs, not structural issues, and that average balances were up. Executive Marc Cadieux added that the capital call lending portfolio fluctuates with investment activity, making average balances a better indicator. Nix also detailed high and low rate scenarios for NII guidance, projecting accretion income would continue to decline from $101 million in Q3 to approximately $90 million in Q4.

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CFO James Herzog explained they want the securities portfolio's size relative to the balance sheet to decrease slightly before reinvesting, likely in Q4, and prefer share repurchases as a use of capital. Chief Credit Officer Melinda Chausse identified manufacturing (steel/aluminum inputs), wholesale/retail trade, and consumer discretionary as other areas under close watch.

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Chief Financial Officer Jim Herzog responded that the bank favors share repurchases over securities repositioning for capital return, viewing buybacks as providing a 'real return to shareholders.' He also confirmed that all 2025 guidance for NII, fees, and expenses is relative to 2024 GAAP reported results.

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CFO Jim Herzog confirmed the 6% Q4 NII growth guidance is based on the reported Q3 NII of $534 million, implying a target in the mid-$560 to $570 million range. On ECRs, Herzog acknowledged an opportunity for service charges to benefit as rates decline, but he characterized the potential impact as 'noticeable, but not huge,' and a fraction of the benefit from lower deposit pay rates.

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Chairman, President and CEO Bryan Jordan stated that their model, using Moody's Analytics, increased its weighting on downside scenarios, which assumes an increase in unemployment to around the 5% mark over the next couple of years. CFO Hope Dmuchowski explained that earning asset growth would be supported by seasonal strength in the match-funded mortgage warehouse business and reinvestment of securities runoff at higher yields. Both executives affirmed that these factors, combined with low single-digit loan growth, support the potential for NII growth and positive PPNR for the year.

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CFO Hope Dmuchowski explained that reaching the high end of the revenue guide would require a combination of fewer rate cuts, a steepened yield curve, and increased economic certainty, which would benefit both net interest income and countercyclical fee businesses. She confirmed the securities restructuring was completed at the end of Q4 but did not provide a spot yield for the portfolio.

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CEO Bryan Jordan explained that PPNR growth will be driven by all levers: revenue growth, expense control, and leveraging catalysts from post-merger integration work. He stated the near-term CET1 target remains 11%. He also confirmed the bank is making investments to prepare for eventually crossing the $100 billion threshold, viewing it as a matter of "when, not if."

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CFO Julianna Balicka clarified that the $15 million in accretion is specific to loans, with securities income included in the overall net interest income guidance. She noted that discussing broader balance sheet restructuring is premature while the transaction is pending. Chairman, President and CEO Kevin Kim reiterated that it is premature to comment on buybacks before the merger closes, but the board will continue to evaluate all capital deployment options.

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CFO Julianna Balicka stated that the full-cycle interest-bearing deposit beta assumption is in the high 60% range. Regarding a new nonaccrual loan, COO Peter Koh explained it's a manageable situation involving well-secured properties with minimal expected loss. Balicka also addressed the investment portfolio, noting a spot yield of 2.96% and confirming that while the bank is incrementally repositioning securities, no major restructuring is currently planned.

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President and CEO Archie Brown confirmed that a 25-30 basis point range for charge-offs is a fair long-term expectation. Regarding M&A, he expressed increased optimism for opportunities in 2025, noting more active discussions with banks in the $1 billion to $5 billion asset range, aided by a potentially more favorable deal approval climate.

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CEO Steven Gardner attributed the increased business optimism to a combination of factors, including the Federal Reserve's rate cuts, resolution of election uncertainty, and expectations for a more business-friendly environment. On M&A, he confirmed that conversations have picked up, driven by optimism that regulators are becoming more open to transactions, and stated the bank is actively pursuing opportunities.

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CEO Steven Gardner attributed the increased optimism among business owners to a combination of factors, including the Federal Reserve's rate cuts, the resolution of election uncertainty, and broad expectations for a more business-friendly environment. He also confirmed that M&A conversations have picked up, driven by optimism that regulatory approvals for transactions could proceed more smoothly.

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CEO Steven Gardner responded that a wide variety of portfolios are available from sellers including traditional banks, consumer banks, and fintechs. He noted asset classes range from consumer HELOCs to C&I and commercial real estate, but reiterated that the bank is not looking to expand its multifamily segment. Gardner emphasized that any potential purchase would undergo thorough diligence to meet the bank's risk-adjusted return criteria.

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CEO Steven Gardner and CFO Ronald Nicolas confirmed that achieving future NII growth would be the primary objective of any balance sheet repositioning. Gardner acknowledged a clear "tone shift" from regulators concerning CRE concentration risk across the industry, which the bank takes seriously. He also affirmed that any potential restructuring would involve a thorough analysis of all factors, including technical considerations like dividend capacity.

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Executive Steven Gardner stated that while new loan opportunities are emerging, the bank will maintain its underwriting discipline, expecting to reverse the recent decline in the loan portfolio. CFO Ronald Nicolas detailed the swap portfolio's impact, projecting a stable contribution to net interest margin in Q2, followed by a decline in Q3 and Q4 due to modeled rate cuts and a reduction in notional principal. Nicolas also guided the full-year tax rate to be in the 26% to 27% range.

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EVP & CFO Heng Chen attributed the expense growth to the full-year impact of 2024 staff additions and higher bonus accruals. President & CEO Chang Liu added that headcount increases were concentrated in risk management to meet heightened regulatory expectations. Regarding the special mention loans, Mr. Chen explained the increase was primarily due to a single credit with lower profitability, which was downgraded out of an abundance of caution.

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CEO John Ciulla acknowledged the conservative loan growth forecast but expressed cautious optimism for the sponsor finance business, citing a stronger pipeline. He reiterated that after funding loan growth and potential tuck-in acquisitions, Webster is in a strong position to materially return capital to shareholders in 2025 and will consider lowering its CET1 target to 10.5% as credit and the regulatory environment normalize.

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CFO William Holland stated that while the Q4 Net Interest Margin (NIM) is expected to be around 3.32%, he views it as a stable level heading into 2025, with potential fluctuations of only a few basis points. CEO John Ciulla reiterated that organic growth and acquisitions are priorities, but noted that given strong capital levels, share repurchases are "more likely" in the next one or two quarters.

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Chairman and CEO Curt Myers confirmed that full bank M&A is a potential use of capital, with a primary focus on community banks from $1 billion to $5 billion, but noted no deals would occur before 2025. CFO Designee Rick Kraemer provided the September spot deposit cost of 2.20% and detailed the brokered deposit amounts maturing in the next two quarters.

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Management is currently evaluating goodwill for impairment, but confirmed that any impairment would not affect regulatory capital ratios and thus would not require other actions. Regarding ROE, they stated that 2024 is a transitional year with depressed returns due to balance sheet repositioning. The long-term goal is to achieve an ROE in line with the median of their Category IV peer group, but this will take time.

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The bank expects earning assets to stabilize around current levels and is strategically aiming for a loan-to-deposit ratio below 100%. Management confirmed the FDIC special assessment is included in the expense guide and provided end-of-period deposit cost and beta figures.

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Chief Accounting Officer and Deputy CFO Olga Tsokova explained that the fourth-quarter BOLI income was elevated due to a one-time benefit from a life insurance policy and a positive mark-to-market adjustment on certain insurance contracts. She advised that after removing these two items, a quarterly run rate in the $20-22 million range would be a reasonable expectation.

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Acting CFO Olga Tsokova stated that the full-cycle deposit beta is expected to be in the high 20s, higher than the previous cycle's 19-20%, due to the velocity of Fed rate hikes. CEO and President Mike Roffler clarified their beta calculation includes noninterest-bearing accounts, resulting in a current beta of 12%. Chief Banking Officer Mike Selfridge noted that while asset yields are rising, the market remains competitive. Roffler concluded that the checking balance mix might decline slightly but not significantly due to clients' working capital needs.

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CEO Mike Roffler confirmed the bank is very comfortable with the loan-to-deposit ratio operating in the high 90s to 100% range, as it has in the past. President of Private Wealth Management Bob Thornton attributed the higher brokerage fees to increased client trading activity amid market volatility. Acting CFO Olga Tsokova explained the BOLI line was negatively impacted by a $12 million mark-to-market adjustment and the underlying run rate is consistent with 2021 levels.

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