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EVP & Chief Credit Officer Jennifer Norris clarified that the "market price deterioration" comment referred to a lower-than-expected final valuation on collateral for a specific credit within the telecom industry. Senior EVP & CFO Robert Cafera confirmed that the strong mortgage results were driven purely by origination gain-on-sale activity, with no MSR sales or other unusual items during the quarter.

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Chief Executive Officer Neal Arnold stated they reviewed the Texas deal but would not risk shareholder capital on a transaction with such a large, volatile asset mark. Chief Financial Officer Robert Cafera explained the NII guide was lowered primarily due to Q1's back-end loaded loan growth impacting average balances. He described the bank as 'relatively neutral' on rate sensitivity and confirmed the $13 million nonaccrual loan was in the manufacturing space with a cross-border component.

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CFO Dan Geddes confirmed that the guidance assumes similar deposit betas on future rate cuts. For the upwardly revised non-interest income guidance, he cited several factors: a healthier stock market benefiting trust fees, strong customer growth driving volume-related fees like interchange, and the removal of a previously anticipated negative regulatory impact on interchange fees for 2025.

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CFO Wally Wallace detailed the NIM forecast, attributing the expansion to tailwinds from loan repricing, which offset modeled Fed rate cuts. He noted competitive pricing pressures could influence the outcome within the guided range. President and CEO of Origin Bank, Lance Hall, explained that loan growth was impacted by client uncertainty and decisions to use cash for projects, reducing line utilization. Chairman, President & CEO Drake Mills added that line utilization dropped from 53% to 50%, representing an $83 million reduction. For the long term, Lance Hall expressed optimism, citing a strategy focused on hiring talented bankers and capitalizing on market disruption, while maintaining pricing discipline.

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President and CEO of Origin Bank, Lance Hall, confirmed building pipelines and energized bankers provide confidence in loan growth despite macro uncertainty. Chief Risk Officer Jim Crotwell noted the client selection process is in the 'seventh inning stretch' after exiting approximately $200 million in relationships. CFO Wally Wallace explained that a significant portion of the incremental 'Optimize Origin' savings are expected to benefit the bottom line, as reflected in improved expense guidance. Lance Hall also addressed deposit competition, noting some aggressive CD specials from competitors, while Wally Wallace discussed deposit beta assumptions in their rate cut models.

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Chairman, President and CEO, Drake Mills, explained that 2024's slow growth was a deliberate strategy to stay under the $10 billion asset threshold, which involved exiting $149 million in non-strategic loans. President and CEO of Origin Bank, Lance Hall, added that this positions the bank with ample liquidity to "take the shackles off" bankers in 2025. CFO Wally Wallace detailed the timing of the optimization benefits, noting some will phase in during Q1 and Q2 2025, and confirmed the bank remains asset-sensitive, meaning fewer rate cuts would be beneficial to the NII outlook.

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Chief Financial Officer Wally Wallace explained that strong, unexpected growth in interest-bearing deposits pressured costs, but noted that deposit betas are performing better than modeled. He clarified that the NIM requires a measured pace of Fed cuts to expand, as large cuts create immediate pressure. Chairman, President and CEO Drake Mills added that the profitability initiative targets a peer-like ROA of around 1.05-1.06% by focusing on broad revenue and expense opportunities, with a goal of accelerating to upper-quartile performance once growth resumes.

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Chairman and CEO Greg Steffens confirmed that loan growth was steady throughout the quarter and noted that expected prepayments are concentrated in larger non-owner-occupied commercial real estate credits. EVP & CFO Stefan Chkautovich added that while the bank is currently neutral to rate movements, he anticipates margin expansion from loan repricing. Regarding the CRE charge-off, Mr. Steffens explained it was due to a special-purpose tenant vacating, leading to lower market rents, and confirmed a 42% specific reserve is held against the remaining loan balance.

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An executive noted that deposit competition is a mixed bag and not distinctly different between rural and metro markets, though some competitors with high loan-to-deposit ratios are driving pricing. CEO Greg Steffens added that this is not a consistent rural versus metro trend. CFO Stefan Chkautovich explained the opportunistic purchase of approximately $50 million in CMOs and mortgage-backed securities, funded with brokered CDs, to capitalize on higher market rates. President and CAO Matthew Funke addressed expenses, noting seasonal compensation adjustments in the March quarter but no other significant changes expected.

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CFO Stefan Chkautovich noted that deposit rate competition eased following the FOMC cuts, making their pricing more competitive. President and CAO Matthew Funke added that on the loan side, the market is moving back towards their pricing, and strong demand reduces the need to be more aggressive. Mr. Funke confirmed expectations for continued NII growth, with the net interest margin potentially flat in the December quarter due to seasonality before improving. He described the performance project as a comprehensive operational review aiming to pay for itself within a year, with potential long-term savings in the low single-digits of noninterest expense.

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President and Chief Administrative Officer Matthew Funke and CFO Stefan Chkautovich explained that approximately $1 billion in CDs are repricing over the next 12 months at an average rate of 4.79%, while 12.5% of the fixed-rate loan book is renewing at higher rates around 8.15-8.17%. They projected expense growth to be in the mid-single digits, in line with the bank's overall growth. Regarding the credit allowance, Funke noted their conservative stance and expressed hope to avoid provisioning increases but did not commit to reducing the ratio.

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Executive VP & CFO James Mabry stated that merger-related cost efficiencies were not reflected in Q2 but will begin to appear in Q3 and ramp up in Q4, with the full run-rate expected by Q1 2026. President & CEO Kevin Chapman confirmed that the company is tracking in line with its long-term strategic goals for ROA and efficiency ratio, noting the efficiency ratio is already below 60% before most cost savings have been realized.

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Executive James Mabry confirmed that a lower loan mark would result in higher capital, projecting the CET1 ratio to be slightly above 11% at closing, with slightly lower EPS accretion and tangible book value dilution. He added that calling sub-debt is an option being considered, supported by a strong cash position at the parent company. Regarding competition, Mabry noted that funding pricing has been better than anticipated, with more competitive pressure on the asset side.

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James Mabry detailed that the ~$6 billion variable-rate book reprices quickly, while ~$700 million in fixed-rate loans at a blended rate of ~5.5% will reprice over the next 12 months. David Meredith clarified that the uptick in classified loans was not due to new problem assets but rather a migration of existing special mention loans to a substandard classification as part of ongoing portfolio management.

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EVP and CFO James Mabry provided specifics on asset repricing, noting roughly $5.5 billion in variable-rate loans and $750 million in fixed-rate loans are set to reprice over the next year. He reiterated expectations for 'modest' NIM compression in Q4. EVP and Chief Credit Officer David Meredith clarified that the loan downgrades were primarily concentrated in the senior housing sector (three loans) and one non-medical office loan, describing the stress as isolated to these asset classes.

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EVP & CFO Martin Grunst clarified that loan growth boosts NII dollars and can improve margin by shifting the asset mix from lower-yielding securities, with new loans expected at spreads similar to the existing book. Grunst, along with EVP Scott Grauer and CEO Stacy Kymes, explained the trading portfolio balance fluctuates based on tactical market opportunities and risk management, with balances rising as market uncertainty eased, all while remaining within internal risk limits.

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CEO Stacy Kymes agreed that lower commodity prices would likely lead to less hedging activity in the near term, as customers are opportunistic. CFO Martin Grunst confirmed that the company's full-year guidance assumes the trading spread will improve from Q1 levels as rate cuts materialize later in the year.

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CFO Martin Grunst detailed that while core NII will benefit from asset repricing, the main driver is the trading portfolio. He projected the spread on the trading portfolio could expand from 36 bps to over 100 bps as funding costs fall with anticipated Fed cuts, significantly boosting trading NII. He clarified the guidance assumes two Fed cuts with long-term rates remaining stable, leading to a steeper curve. EVP Scott Grauer added that client demand to invest further out on the curve has increased, supporting this outlook.

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CFO Marty Grunst detailed that the securities portfolio had ~$760 million in cash flow in Q3, repricing up 115 bps, and guided for a ~$650 million quarterly run rate going forward. Purchases continue to be in shorter-duration mortgage securities. Regarding borrowings, Grunst explained the quarter-end decline was driven by durable deposit growth and typical MBS settlement cycles, suggesting the lower level is a reasonable starting point for Q4, though subject to future loan growth.

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CEO of Centennial Bank, Stephen Tipton, described the deposit pricing environment as stable compared to Q1, noting the bank is competing effectively. Chairman & CEO John Allison indicated that while a special dividend has been considered, the company's capital deployment strategy, including buybacks, will depend on potential M&A activity in the near term. He noted the company has significant cash at the holding company but will be paying off subordinated debt soon.

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Executive John Allison responded that faster approvals are exciting and that he would not be adverse to pursuing a couple of smaller deals simultaneously. He explained that the bank is ready for new assets to enhance its high-performing platform. Regarding size, Allison stated that while deals below $300 million are generally too small, an exception could be made for a strategic in-market acquisition in a key geography like Florida, with the ultimate decision depending on the potential accretion to EPS.

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Chief Lending Officer Kevin Hester reported that criticized loans were flat quarter-over-quarter, while classified loans decreased by approximately $22 million. CEO Stephen Tipton noted that deposit competition is intense across all markets, but Home Bancshares has been successful in renewing CDs at rates below maturing tranches, helping to manage funding costs.

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CEO Stephen Tipton credited disciplined headcount management for the cost control and noted potential future savings from renegotiating large IT contracts in 2025. On credit, Chief Lending Officer Kevin Hester and Chairman John Allison confirmed that the focus remains on the same legacy Texas credits, with no significant new problem inflows. They expect resolution on some of these within the next one to two quarters.

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CFO Kelly Harris clarified the Q3 fee projection is $2 million, split evenly between core and oil & gas. President & Chief Credit Officer Jason Estes detailed that growth was driven by hedged production loans and C&I, while CEO Thomas Travis noted that overall energy exposure as a percentage of the portfolio has declined over the long term. Kelly Harris added that the bank anticipates loan and deposit betas to remain one-for-one for the next few rate cuts, with loan floors providing support.

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Jason Estes (Executive) stated that the loan mix will remain within historical ranges, noting there is room to backfill in energy and hospitality, which are at the low end of their typical concentration. He said low single-digit loan growth for 2025 is a reasonable but disappointing expectation, with any upside likely occurring in the second half of the year. Thomas Travis (Executive) specified the elevated nonaccrual interest in Q4 was approximately $600,000 and commented on heightened regulatory scrutiny of CRE. Kelly Harris (Executive) forecasted Q1 fee income to be $2.4 million.

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Executive Thomas Travis detailed the bank's M&A criteria, emphasizing a preference for partners with strong core deposits and cultural alignment, potentially including a merger of equals (MOE). He explained that their evaluation is based on a holistic view of financial metrics over a 3-to-5-year strategic period, not a single metric. Regarding interest rates, Travis expressed confidence in managing the net interest margin regardless of the pace of Fed cuts, citing the bank's historical resilience and internal modeling.

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Executive Jason Estes and Executive Thomas Travis detailed the bank's energy underwriting, which includes stress testing at low commodity prices (e.g., $45 oil) and confirming that large borrowers actively use hedging to de-risk operations. Regarding credit, Estes confirmed the loan book is 'very clean' with low past dues and no alarming migration trends. Executive Kelly Harris addressed the NIM, stating that it bottomed out around 4.60% in Q1, benefiting from a lower cost of funds, and is expected to 'hold up and perform well' in Q2 and Q3.

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CEO Aaron Graft and President of Intelligence Dawn Salvucci-Favier detailed the GreenScreens integration, highlighting a pipeline ACV increase to $80k and expectations for the Intelligence segment to grow fastest. President of Payments & Banking Todd Ritterbusch stated a long-term goal of over 40% EBITDA margin for the Payments segment. President of Factoring Kim Fisk explained that invoice size is influenced by customer mix. Ritterbusch also clarified that recent NIB deposit growth was driven by mortgage warehouse deposits and TPAY float.

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CEO Aaron Graft explained that the initial target clients are the 560 existing TriumphPay customers. The strategy is a direct response to client requests for data, leveraging Triumph's position as a neutral, high-volume, and precise data source. Graft noted the segment's gross margin is over 90% as it uses existing data. He stated that while revenue will grow in 2025, it will not be meaningful until potentially the latter half of 2026, as the company is focused on delivering a product of excellence rather than rushing it to market.

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Executive Aaron Graft explained that they will add a second FaaS client in the back half of the year and more in 2026, reiterating his belief that the Factoring segment's revenue will 'at least double' over time, driven largely by FaaS. Regarding 'green screens,' an unnamed executive stated they could not share financials for the private company but expect the deal to close in Q2. Graft added the strategic rationale is to capture a portion of a $600M+ addressable market for broker intelligence, an investment the board believes will create more value than share buybacks.

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Chief Credit Officer Chris Ziluca explained that Q2 charge-offs were elevated due to the resolution of a few specific, reserved-for credits. He expressed confidence in the full-year guidance, citing no systemic portfolio issues and noting that outflows from the criticized loan category are currently outpacing inflows, signaling an improving trend.

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CFO Michael Achary quantified that new hires are expected to contribute about 15% of the year's total loan growth. CEO John Hairston added that the contribution could be higher if they can accelerate hiring in faster-producing areas like equipment finance. For the hiring mix, Mr. Hairston detailed plans for a couple of hires in each specialty line (CRE, equipment finance), about half in business/commercial banking, and four in wealth management, noting they would opportunistically hire more if talent became available.

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CEO John Hairston explained that the Sabal acquisition accelerates a decade-long strategy to grow wealth management, which is crucial for serving their target client base of privately-owned businesses. CFO Michael Achary added that the deal complements their existing infrastructure and signals an openness to further inorganic growth, including depository institutions. Hairston detailed the Texas plan, which includes hiring bankers and opening five new financial centers in North Dallas.

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CFO Michael Achary provided expectations for deposit betas through the cycle, projecting a total deposit beta of 37-38% and an interest-bearing deposit beta of 57-58%. Chief Credit Officer Christopher Ziluca explained that the Q3 charge-offs were elevated due to a couple of specific C&I credits that the bank decided to charge down, with the remainder being smaller, run-rate items.

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CFO Terry Earley clarified that 'moderate expense growth' is expected to be in the 'low to mid-single digits.' CEO Malcolm Holland projected that net loan growth would likely begin in the second quarter of 2025, with full-year growth forecasted in the low to mid-single-digit range. He noted that while payoffs are hard to predict, current forecasts show them being heaviest in the back half of the year.

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CFO Terry Earley stated that carrying high excess liquidity is not the goal and the plan is to deploy it through a combination of paying down wholesale deposits, purchasing securities, funding loan growth, and shedding other high-cost deposits. He noted that approximately 75% of the loan portfolio is floating-rate. On the liability side, about $2.5 billion in deposits are contractually or functionally indexed to the Fed funds rate and reprice "immediately" with any changes.

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Senior Chairman and CEO David Zalman confirmed the bank's strategy remains focused on 15-year fully amortized mortgage-backed securities. CFO Asylbek Osmonov added that the $150 million in securities purchased in Q4 yielded about 5.05%. For expenses, Osmonov projected a 1% to 2% increase in the second half of the year over the Q1 baseline of $141-$143 million, driven by annual merit increases and technology investments.

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CFO Asylbek Osmonov and CEO David Zalman explained the plan is to pay down borrowings, which will be accretive to the Net Interest Margin (NIM). They confirmed a recent $500 million paydown and projected reducing borrowings by another $1 billion to $1.5 billion over time. They also stated the overnight cash position would be maintained in a comfortable range of $1.5 billion to $2.0 billion.

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