Manuel Navas • D.A. Davidson & Co.

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CEO Thomas Michael Price confirmed the mid-single-digit loan growth guidance, citing the imperative to fund growth with deposits, and a desire to rotate the mix toward C&I. CFO James Reske elaborated on the NIM guidance, explaining he tempers the model's higher projections to account for competitive pressures on loan spreads and the need to price up deposits. He noted that macro swap maturities in 2026 should provide a future tailwind to the NIM, even with potential Fed cuts.

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President and CEO Thomas Michael Price and Chief Credit Officer Brian Sohocki expect the reserve level to remain relatively stable, with provisioning moving in line with loan growth and the macroeconomic outlook. On M&A, Price highlighted that the CenterBank deal brought unexpected talent, is highly accretive, and strengthens their Cincinnati presence. Bank President Jane Grebenc added that CenterBank's mortgage operation was a 'nice surprise.' Price noted their M&A appetite remains disciplined and strategic, with an increase in conversations recently.

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CFO James Reske responded that fewer rate cuts would be beneficial to the NIM, with a stable rate environment being a 'great environment'. He noted that deposit rotation has slowed, providing an opportunity to manage deposit costs down, though this is not heavily factored into their conservative forecast. Reske clarified that the bank prioritizes long-term, steady growth in earnings and shareholder value over defending a specific NIM level in the short term. President and CEO Thomas Michael Price added that a steeper yield curve would also boost demand in fee-generating businesses like mortgage.

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President and CEO Mike Price and CFO Jim Reske pointed to SBA, wealth management, and a potential mortgage rebound as key fee drivers. Mr. Reske noted the swap benefit might be slightly lower under the new rate forecast and confirmed a steeper yield curve is a long-term positive. He and Bank President Jane Grebenc emphasized a strategy of steady deposit growth to fund future lending and improve the loan-to-deposit ratio.

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President and CEO Jeffrey Jackson expressed confidence in funding loan growth with deposits, citing a robust pipeline, a new deposit campaign, and growth from commercial treasury management. For future expansion, he mentioned Richmond as a potential LPO market and a focus on adding bankers in Indiana and Nashville. He noted that legacy Premier teams contributed about $400 million to the current $1.4 billion commercial pipeline and expects their contribution to grow in Q3.

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Daniel Weiss, Senior Executive Vice President and CFO, clarified that the 3-5 basis points of organic NIM improvement is additive to the merger accretion. He identified a $140 million loan sale and the MSR business exit as key remaining restructuring items. Jeffrey Jackson, President and CEO, highlighted a strong $1.4 billion loan pipeline with solid pull-through rates, particularly from LPOs and Ohio markets. He added that deposit growth is expected to be strong, largely driven by commercial banking relationships.

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CFO Daniel Weiss confirmed the improved capital position lessens the day-one CRE concentration and that the bank is considering restructuring Premier's securities portfolio for additional yield. CEO Jeffrey Jackson identified Nashville, Knoxville, and Indianapolis as key markets for expansion. Weiss also clarified Q1 margin guidance is based off the full Q4 NIM, not the December spot rate.

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CEO Jeffrey Jackson and CFO Daniel Weiss confirmed that a lower rate environment relieves pressure on the 300% CRE concentration ratio. Jackson added that the strong deposit growth was broad-based across the footprint, driven by both commercial banker incentives and a new consumer account. He also stated that despite the focus on the Premier deal, WesBanco is still actively recruiting in markets like Nashville and Knoxville.

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EVP & CFO Annette Burns did not provide a spot rate but confirmed the full impact of Evans' accretion in Q3 would add a couple of basis points to the 3.59% NIM. She clarified that the expected 'few basis points' of improvement was for the overall NIM, driven by asset yield repricing and stabilized funding costs. President & CEO Scott Kingsley added that relief from the yield curve inversion could provide further upside. Regarding fee income, Kingsley affirmed that growing these businesses organically and via M&A is a strategic priority, as their diversified, capital-light nature remains highly attractive despite the mix change from the Evans deal.

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Executive Scott Kingsley indicated that the pace of deposit cost declines would likely slow without further Fed rate cuts, especially as the bank ensures ample liquidity for the Evans closing. CFO Annette Burns provided updated guidance for the Evans deal, now expecting around 4% tangible book value dilution and $0.30 of earnings accretion, down from previous estimates due to purchase accounting mark changes. Burns also confirmed the Q1 operating expense of $98.7 million is a good run rate for the legacy business.

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Executive Scott Kingsley noted that market optimism remains consistently high, supporting loan growth, and cited specific progress at Micron and GlobalFoundries as positive developments. CFO Annette Burns confirmed there is more room for deposit costs to decline. Management stated they feel positive about the combined entity's NIM but will provide updated metrics after Evans' full-year results are released.

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CFO Nicole Stokes explained that the NIM could be pushed higher by strong performance in deposit gathering, a Federal Reserve rate cut that allows for rapid deposit repricing, and continued growth in noninterest-bearing deposits. CEO H. Palmer Proctor added that the pipeline for noninterest-bearing deposits is accelerating, mirroring loan production trends. Stokes clarified that the securities yield increased because the company added approximately $200 million in securities at a 4.88% yield while about $260 million matured at a 2.77% yield.

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Chief Credit Officer Doug Strange stated the reserve model was updated due to a Moody's forecast addendum on tariffs, but it's too soon to see direct customer impact. EVP & CFO Nicole Stokes explained they are rebuilding the bond portfolio; Q1 purchases of $285 million yielded 4.62%, which will replace $283 million in securities maturing in Q2 at a much lower 2.83% yield, providing a positive lift.

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CFO Nicole Stokes detailed that new loan production yields were around 7%, well above new interest-bearing deposit costs of ~3.25%, creating margin accretion. She noted the bank acted quickly to lower deposit costs post-Fed cut, while loans have a natural lag in repricing down. She confirmed the seasonal outflow of ~$550 million in municipal deposits in Q1 would likely be replaced with short-term brokered funding.

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CEO H. Proctor stated there are no capacity constraints in mortgage due to technology and infrastructure. Executive Nicole Stokes projected that a steeper curve could create a tailwind for mortgage income and that margin expansion would be driven by accretive new loan growth. Both executives attributed strong deposit growth to core relationship banking strategies and new account generation.

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EVP & CFO David Burg explained the softer NIM outlook is primarily driven by two anticipated rate cuts and the sale of the Upstart portfolio. He noted that the immediate 2-3 bps impact per cut should mitigate to 1 bp over time as deposit betas adjust. Offsetting tailwinds include ongoing deposit repricing opportunities and securities portfolio rollover. Regarding buybacks, Burg confirmed WSFS accelerated repurchases to capitalize on lower stock prices but will maintain a gradual glide path toward its 12% CET1 target, with organic investment remaining the top priority for capital deployment.

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Executive David Burg confirmed that WSFS has already achieved its deposit beta goal but will continue to optimize. He outlined a 2-3 year glide path to the 12% CET1 target, signaling a clear intention to lean into share repurchases. Burg noted that while the macro environment is a consideration, the bank is very well-capitalized. He also described AOCI as a secondary metric to the primary CET1 target, with its influence diminishing over time.

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Executive David Burg detailed the loan outlook, stating that growth in WSFS-originated residential mortgages and HELOCs will offset the runoff from the Upstart and Spring EQ portfolios, keeping consumer loans flat while commercial grows mid-single digits. He and COO Arthur Bacci confirmed new originations serve as both an entry point for new clients and a cross-sell opportunity for existing ones. Regarding capital, CEO Rodger Levenson and David Burg reiterated that excess capital and liquidity will be managed through their established return philosophy, noting they recently used cash to pay off the BTFP facility. Levenson described the new strategic plan as a continuation of optimizing their unique market position and investments, with a high bar for any M&A.

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President & COO Joseph Lebel expressed high confidence in the loan growth outlook, citing a record pipeline. Chairman & CEO Christopher Maher added that the pace of net balance sheet additions moderates NIM expansion. Maher also confirmed that hiring is largely complete for 2025, with no plans for geographic expansion, though the company remains opportunistic for top talent.

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CEO Christopher Maher stated the new hires' prior book of business was around $2.5 billion, which serves as a target. He stressed that while Premier Bank is a long-term growth driver, the entire bank will grow to maintain diversification. He also noted that lower-cost deposits enable more competitive loan pricing. With the preferred stock redemption resolved, Maher said the bank has more capital flexibility and expects to be active with share repurchases if market conditions remain favorable.

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CEO Christopher Maher attributed strong deposit growth primarily to regaining wallet share from existing consumer households. He noted the new businesses add valuable talent and a focus on speed. CFO Patrick Barrett stated the forecast assumes Fed cuts in line with the Street and that the bank remains close to neutral on asset sensitivity, with faster cuts providing a modest near-term NII benefit.

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EVP & Chief Lending Officer Charles Parcher stated that the loan runoff rate was consistent. President & CEO Dennis Shaffer noted the Mantle platform had only just launched in July and it was too early for significant results. CFO Ian Whinnem confirmed that a leasing recovery would increase on-balance sheet leases and explained that some deposit cost shifts were due to pricing adjustments for larger public fund balances.

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CEO Dennis Shaffer stated the current $231 million pipeline is not yet impacted by CapEx slowdowns but future activity might be. COO Rich Dutton added that the key governor for loan growth is the ability to attract low-cost deposits; success here, especially with the upcoming digital account opening platform, would push growth toward the higher end of the guided range. Regarding the leasing business, management projected about $115 million in total originations for the year, with about half expected to be sold, and noted that the first quarter is seasonally the slowest.

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CEO Dennis Shaffer detailed several initiatives, including new banker dashboards and a significant investment in the MANTL platform for digital account opening. CFO Ian Whinnem projected the NIM could expand to the 'low to mid-3.40s' by Q2 2025 before leveling out. Management described the competitive environment as stable and noted the securities portfolio will be maintained at a similar size relative to deposits to serve as a key source of liquidity.

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SVP and CFO Ian Whinnem projected the NIM could reach the low 3.20s in Q4 with continued expansion into 2025, supported by their ability to aggressively reprice deposits downward. SVP & COO Rich Dutton explained the $800,000 reserve is a conservative measure against a reconciling item found during a system conversion and they do not expect it to increase. On fees, SVP and Chief Lending Officer Chuck Parcher noted that leasing pipelines are growing for Q4 and gain on sale will likely exceed portfolio growth. Ian Whinnem specified that of the Q3 gain on sale, 45% was from leasing and 55% from mortgage. Parcher added that a significant mortgage refi boom is unlikely until rates fall further, given how many homeowners have low legacy rates.

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Senior EVP and CFO Thomas M. Lyons emphasized that asset repricing is the main driver for NIM expansion, with about $6 billion in loans repricing in the next year, supplemented by accretive new loan production. President and CEO Anthony Labozzetta added that management's focus is on growing Net Interest Income (NII) dollars, even if it means sacrificing a few basis points of NIM. Labozzetta identified the consumer deposit space, particularly CDs, as the most competitive area, while noting that business deposits remain stable and growing.

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CFO Tom Lyons identified the shape of the yield curve as the biggest driver of NIM, with accretion volatility and balance sheet growth also being factors. He confirmed that deposit rate cuts effective in January were well-communicated and met with no pushback. CEO Tony Labozzetta added that strong consumer deposit inflows were a positive sign. Labozzetta then detailed the geographic expansion, noting the addition of a four-person team in Pennsylvania and more lenders in both Pennsylvania and Westchester to build out a focused, full-service commercial and treasury presence.

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CEO Anthony Labozzetta confirmed the bank successfully repriced deposits down by about 38 basis points with minimal pushback due to proactive customer communication and expects similar betas going forward. CFO Tom Lyons added that their 2025 model assumes a ~31% beta on interest-bearing deposits. Labozzetta highlighted significant early revenue synergies, with strong cross-sell activity in insurance and wealth from the legacy Lakeland side and the ability to handle larger transactions due to the combined scale.

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CFO Wally Wallace confirmed there will be a valuation write-up of the Argent investment of approximately $7 million in Q3. He and President and CEO of Origin Bank, Lance Hall, also projected an annualized income contribution of about $6 million starting in 2026 from the investment, while noting they are limited in what they can share about the private company. Lance Hall then provided a regional update, stating that the Southeast markets have strong pipelines despite some project delays. He added that Louisiana and Mississippi have seen growth of 8% and 5% respectively, exceeding budget, and that C&I production in Texas remains strong.

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President and CEO of Origin Bank, Lance Hall, reported that new loan yields are holding strong in the 7.3% to 7.5% range with rational competition. He also provided updates on 'Optimize Origin,' detailing the mortgage business restructuring and the expectation that a new valuation could allow Origin to increase its stake in its wealth firm partner above 20%. CFO Wally Wallace confirmed that potential benefits from increasing this stake are not yet included in financial guidance.

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CFO Wally Wallace clarified the Argent investment would 'partially' offset the Durbin impact and noted its history of extraordinary growth. President and CEO of Origin Bank, Lance Hall, expressed high excitement for the Southeast, projecting both loans and deposits to reach nearly $115 million by year-end 2025, viewing it as a key driver beyond the 1% ROA target. Wally Wallace identified liquidity mix, loan growth, and deposit betas as the three biggest wildcards for the NIM.

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CFO Katie Bailey projected that accretion's benefit to NIM would remain in the low-to-mid teens in basis points and reiterated that deposit costs are being actively managed down. President & CEO Tyler Wilcox added that loan pricing discipline has been consistent. Bailey explained that the OpEx range is influenced by variable items like medical expenses and performance-based compensation.

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Kathryn Bailey, CFO, confirmed the provision is expected to remain elevated in Q2 before normalizing in the second half of the year, assuming stable economic forecasts. Tyler Wilcox, President, explained that holding more mortgages is a strategic choice to deploy capital, which is continuously evaluated against the fee income trade-off. Both executives affirmed they have flexibility and levers to control operating expenses, as a large portion is variable incentive compensation tied to production and performance.

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Executive Tyler Wilcox cited outsized loan growth as a potential positive factor and external economic conditions as the main risk to operating leverage. CFO Kathryn Bailey attributed strong DDA growth to a focused sales effort across retail and commercial lines. She anticipates annual deposit growth of around 3%, which may necessitate borrowings to support the 4-6% loan growth target.

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CFO Kathryn Bailey confirmed the potential for stability and upside in NIM/NII later in 2025 and noted current retail CD offerings are around 4.5% for a 5-month term. Executive Tyler Wilcox highlighted that accelerated paydowns in investment commercial real estate (10x higher than last year) are tempering the loan growth outlook, despite good demand. He added that new commercial loan yields are stable around 7.5%.

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CEO Curtis Myers confirmed that Q2 consumer loan growth was solid and reflected typical seasonality, not an anomaly. He stated that while Fulton First initiatives contribute to long-term growth, the Q2 fee performance was due to broad-based business execution. CFO Richard Kraemer noted Fulton First has realized about $8.5M in net benefits. Myers explained the NPL increase was mainly one identified mixed-use project for which a reserve is already established, and that overall credit metrics remain stable despite a cautious outlook.

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Chief Financial Officer Rick Kraemer noted some flexibility in OpEx timing but expressed comfort with the current guidance. Chairman and Executive Officer Curtis Myers acknowledged potential fee income headwinds from market volatility in wealth and mortgage, aligning with guidance for the lower half of the range. For NIM, Kraemer highlighted pressure from slowing deposit cost declines and the repricing of subordinated debt in March, which will increase interest expense.

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CEO Curtis Myers highlighted that revenue initiatives are focused on core strengths, with a significant emphasis on growing the small business segment. CFO Rick Kraemer provided details on the remaining indirect auto runoff. Mr. Myers added that while Republic loan repositioning headwinds will moderate, the commercial loan pipeline is currently flat, with growth dependent on improved borrower confidence rather than pipeline size.

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Chairman and CEO Curt Myers stated that NII timing depends on future rate movements and that the capital strategy remains focused on organic growth first, followed by corporate initiatives and potential buybacks in 2025. CFO Designee Rick Kraemer provided details on upcoming CD maturities, noting a significant downward repricing opportunity.

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CFO Douglas Schosser described the commercial loan pipeline as 'cautiously optimistic,' noting it is slightly stronger than the prior year due to new verticals, though tariff impacts remain a watch item. Regarding credit provisions, Schosser stated that significant economic volatility makes it difficult to predict future levels and the bank will continue to follow CECL methodology based on macroeconomic conditions at the end of each quarter.

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CEO Louis Torchio stated the M&A focus is on accretive, in-market deals of $1B-$3B within their four-state footprint, particularly in growth markets like Columbus and Indianapolis. CFO Douglas Schosser added that commercial loan growth is broad-based across new verticals like sponsor and franchise finance, and that late-quarter deposit rate cuts in Q3 will benefit the Q4 NIM.

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