Question · Q3 2025
David Jason Bishop asked about the factors contributing to higher non-interest expenses, specifically the incentive accruals, and the outlook for compensation costs. He also inquired about opportunities arising from recent M&A activity in the bank's operating regions and the expected effective tax rate following the solar tax credit investment.
Answer
EVP and CFO David Sparacio clarified that the incentive accrual true-up occurred in the second quarter, making Q3 expenses appear higher, and projected Q4 non-interest expenses to be similar to Q3, emphasizing the bank's best-in-class efficiency ratio. President and CEO Tom Broughton noted that opportunities stem from various mergers, not just one, and that 80% of new business comes from existing client referrals. David Sparacio stated the 18.9% effective tax rate is expected to hold for 2025 and aims to keep it below 20% in the foreseeable future, exploring similar tax improvement opportunities.