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CEO Thomas Shafer attributed the turnover to the significant changes in the company's operating model, stating that the skills required for the next phase are different and that the changes create opportunities. On deposits, Mr. Shafer confirmed the focus is on replacing high-cost funds. CFO James Britton added that they aim to reduce concentration in the remaining $500M ECR portfolio, potentially by another couple hundred million by year-end, and noted the full benefit of recent MSR deposit exits will appear in Q3.

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Executive Scott Kavanaugh stated that proceeds from loan sales will be used to reduce wholesale funding, such as brokered deposits and FHLB advances. Executive Jamie Britton confirmed the brokered deposit figures and noted that about 20% of the loan book is adjustable, with repricing periods typically between 3 to 6 months. Britton also shared that the interest-bearing deposit cost for the month of September was 4.15%. Kavanaugh provided the September NIM at approximately 1.32% and confirmed the peer reserve ratio target is between 65 and 70 basis points.

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CEO Steven van Rijswijk confirmed that some deposit outflow from the German campaign is still expected in Q3, consistent with past trends where about one-third of promotional funds leave. CFO Tanate Phutrakul explained the flat Q3 NII guidance is because the full negative impact of the Q2 foreign exchange movement will be felt in Q3, offsetting other positive drivers.

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EVP & CFO David Della Camera clarified that the additional loans moved to held for sale were all identified as being tied to the Arizona and Kansas branch transaction. President & CEO James Reuter stated that most of the deliberate runoff of non-strategic loans has already occurred, though some stabilized multifamily construction loans may still exit to the secondary market. He explained the deposit market share slide is meant to illustrate existing density and growth opportunities, not to signal an intention to exit any markets.

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CEO James Reuter explained that the credit issues are part of a deliberate 'credit reset' to ensure consistency across the footprint, noting that while some downgrades were in specific industrial warehouse and multifamily properties, there were no systemic trends. He stated the company is action-oriented, as shown by exiting indirect lending and repositioning the branch network. Deputy CFO David Della Camera affirmed that the current reserve level of 1.24% is appropriate based on their robust quarterly analysis. Regarding capital, Reuter emphasized that the dividend remains a key priority and while all options are considered, there are no imminent plans for a stock buyback.

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CEO Jim Reuter clarified that a third-party review affirmed the bank's internal credit ratings and that the criticized loans originated from the Great Western Bank footprint without any purchase accounting marks. CFO Marcy Mutch added that the four loans totaled $160 million and are all current on payments. Regarding strategy, Mr. Reuter expressed continued confidence in the bank's fundamentals and team, noting that specific long-term targets will be shared next quarter, while pointing to the exit from indirect lending as an immediate strategic action.

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CEO Kevin Riley stated that while the specific reserve on the C&I credit is not disclosed, it is considered adequate. CFO Marcy Mutch added that while no specific reserves were on the two metro office loans, their characteristics were included in the overall allowance calculation. Mutch also provided the September spot rate on deposits as 2% and the core net interest margin for September as 3.03%.

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Senior EVP & CFO Robert Cafera indicated that incremental deposit costs are higher than the portfolio average and that the spot rate at June's end was slightly below the quarterly average. He confirmed they still expect net growth in non-interest-bearing deposits for the year. Mr. Cafera reported that the Southern California initiative is now effectively self-funded, with both loans and deposits at approximately $200 million each. CEO Neal Arnold commented that the M&A focus is on the Southwest and that selectivity is key as price expectations remain challenging.

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Chief Financial Officer Robert Cafera reported a stable March margin around 4.07-4.08% (non-FTE) and noted the MSR impact was primarily from net capitalization changes due to higher CPR, not fair value adjustments. He guided for a Q2 expense pickup to meet full-year targets. Chief Executive Officer Neal Arnold reiterated that M&A priorities are focused opportunistically within the existing company footprint.

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EVP & CFO Dayna Matsumoto provided a June 30th spot deposit cost of 0.98% and a June margin of 3.49%. She detailed that $430M in CDs are maturing in Q3 at a 3.6% rate, with new promotional rates at 3.4%, and expects deposit betas to remain similar on the way down. Vice Chairman & COO David Morimoto stated new loan yields averaged 7.2% in Q2. Senior EVP & Chief Risk Officer Ralph Mesick quantified the single charge-off at 21 basis points and confirmed the SNC portfolio is approximately $403 million, but declined to provide specific details on the two downgraded credits, noting they are performing and resolution is expected in coming quarters.

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EVP & CFO Ronald Farnsworth clarified that the credit mark accretion was 3 basis points and confirmed that recent securities purchases were a strategic move to reduce the pro forma company's asset sensitivity post-acquisition, funded temporarily with wholesale borrowings. Senior EVP Christopher Merrywell noted deposit pricing has stabilized. President & CEO Clint Stein affirmed his desire for a clean capital stack, stating that accelerated capital generation from the Pacific Premier deal will provide flexibility for future optimization.

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Executive Christopher Merrywell and CFO Ron Farnsworth confirmed that maturing CDs and debt are expected to reprice lower into the 3.75% and mid-4% ranges, respectively. Farnsworth affirmed the bank can continue reducing deposit costs and feels good about a 55% down-rate beta. CEO Clint Stein reiterated that the transactional loan portfolio will be amortized rather than sold, as the economics of a sale are unfavorable. Farnsworth clarified the 2025 operating expense guide is a tight range of $1 billion to $1.01 billion.

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CFO Ron Farnsworth stated that while there are tailwinds for the NIM from repricing CDs, the ultimate driver will be deposit flows, which are seasonally variable. He affirmed confidence in hitting the low end of the expense guidance range. CEO Clint Stein indicated that 2025 is the likely window to consider capital returns like buybacks, as the bank is above its regulatory capital targets, but noted it's too early to specify timing.

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President of Consumer Banking Christopher Merrywell confirmed that deposit rates have been lowered since late February with strong retention of 80-85% on CDs. EVP and CFO Ron Farnsworth explained that wholesale funding levels depend on loan and deposit flows, with the bank targeting $1.5 billion in cash at the Fed. Chief Credit Officer Frank Namdar reported that FinPac charge-offs were on track with expectations and that significant improvement is anticipated for the rest of the year, citing a 12% decline in key delinquency buckets.

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CEO David Brager stated that line utilization has not yet increased but expects a seasonal rise in Q4, particularly in dairy and livestock. CFO E. Allen Nicholson clarified that elevated loan payoffs impacted volume more than yield, with the primary yield pressure coming from lower utilization of higher-yielding loans. He noted that without these factors, loan yields would have increased by five basis points. Nicholson also specified that customer repurchase agreements, viewed as sweep deposits, had a cost of approximately 1.70% during the quarter.

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CEO David Brager and Executive E. Nicholson explained that the book yield on the securities sold to repay the BTFP was under 3%, with cash from deposit growth also contributing. Regarding deposit costs, David Brager noted a ~50% beta on the first rate cut but anticipates a beta closer to 100% on future cuts, suggesting costs have stabilized. He confirmed that M&A remains the primary focus for capital deployment, but share buybacks are being actively evaluated, with a potential announcement coming shortly.

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CFO James von Moltke advised modeling zero revenue for the Corporate Center in Q3 and Q4, meaning the bank would retain the upside generated in H1. For RWA growth, he suggested an increase of around €10 billion by year-end is a good assumption, with further growth expected in the coming years to support business and client activity, offset by capital generation and efficiency measures.

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CFO James von Moltke confirmed that the RWA impact from April's volatility has been managed and is not a current concern. He also stated the CRE outlook is unchanged, with provisions expected to steadily improve. CEO Christian Sewing added that concrete long-term targets will be provided in the second half of 2025, ensuring a smooth transition with the incoming CFO.

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EVP & CFO Christopher Del Moral-Niles and EVP & Chief Risk Officer Irene Oh explained the reserve change was macro-driven by degradation in the Moody's model outlook, not a change in weighting. For CRE, Irene Oh noted the downgrades were broad-based, some related to cash flow shortfalls, but she does not currently see them moving to non-accrual status.

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CFO Christopher Del Moral-Niles specified that $10 billion in CDs mature in Q2 and $8 billion in Q3, with repricing offering a potential 18 basis point benefit in a flat rate environment. Chief Risk Officer Irene Oh noted the increase in criticized CRE was broad-based across industrial and retail properties, without a specific concentration.

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CFO Christopher Del Moral-Niles confirmed the bank has assumed a 50% or better deposit beta through the cycle. Regarding expenses, he indicated that he expects the bank to continue making necessary investments, likely resulting in a spend rate "slightly faster than longer-term historical averages" as it prepares for future growth.

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EVP & CFO Heng Chen explained the increase in classifieds was due to a single commercial relationship in the high-$40 million range that experienced payment delays but is now catching up. He also confirmed that prepayment fees contributed 3 basis points to the margin, down from 6 basis points in Q1, and projected tax credit amortization to be approximately $11 million per quarter for Q3 and Q4.

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EVP & CFO Heng Chen provided specific figures, stating the December NIM was 3.11%, the year-end deposit spot rate was 3.52%, and $4.2 billion in CDs are maturing at 4.6% with renewal rates around 4.0-4.1%. He also noted the SNC portfolio is about 4% of total loans and has been shrinking. President & CEO Chang Liu explained the CRO's departure was a planned retirement and that a new CRO was hired to elevate the bank's risk management maturity.

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President & CEO Johnny Lee noted a focus on quality loan growth and organic deposit generation, with potential loan sales to manage the loan-to-deposit ratio. EVP & CFO Lynn Hopkins added that while deposit competition will persist, she expects costs to decrease with Fed cuts, similar to past cycles. She also clarified that noninterest expenses are expected to normalize to an $18 million quarterly run rate due to the timing of executive transition and legal costs.

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Lynn Hopkins confirmed there were no interest recaptures from Q1 loan sales. CEO David Morris and Lynn Hopkins explained that while they remain open to opportunistic sales, they believe they are well-reserved for the remaining problem assets. Johnny Lee noted that the trade finance portfolio is small (4% of total loans) and initial checks show no financial impact from tariffs. Lynn Hopkins and David Morris attributed the lower gain on sale to a strategic decision to hold some loans, but expect a rebound driven by a growing SBA pipeline and a new hire.

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EVP & CFO Lynn Hopkins projected continued NIM expansion in Q1, driven by repricing CDs, but noted it may flatten in Q2. President & CEO Johnny Lee stated the loan pipeline is healthy at $200-$225 million and that low to mid-single-digit growth is a reasonable target. Lynn Hopkins added that the 2025 expense run rate would likely be slightly above $17.5 million per quarter, with legal fees remaining elevated due to credit workouts.

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Executive Lynn Hopkins provided detailed responses, estimating the September NIM was around 2.75% when normalized for nonaccrual placements. She stated new CD offer rates are 50-70 basis points lower than maturing ones. The decline in securities yield was attributed to maturing commercial paper being reinvested at lower rates. On capital management, she confirmed the company is 'seriously looking at' a new buyback program. Regarding debt, she noted a $150 million FHLB advance is due in March and discussed refinancing strategies, including a recent putable advance.

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EVP & CFO Julianna Balicka explained that fee income growth is driven by customer swap fees and loan-related fees. She provided the June deposit spot rate as 2.93% and noted that 42% of loans are floating. Balicka also stated that most upfront M&A cost savings have been realized and projected a 20-21% tax rate for 2026. SEVP & COO Peter Koh added that recent net charge-offs were manageable and part of routine portfolio cleanup.

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CFO Julianna Balicka confirmed that the variable-rate loan figure represents 'truly variable' loans, distinct from the hybrid loan category. She also disclosed that the adjusted net interest margin for September was 2.51% and was trending upward in October.

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An unnamed executive provided the June margin (3.83%) and cost of deposits (3.41%), noting their stability. He detailed the $1.4 billion in CDs maturing in Q3 at 4.21% with new rates around 4%. He also projected an expense run rate of 21.8% to 22.6% for future quarters, excluding one-time OREO costs. Regarding the buyback, he confirmed the $56 million purchase was at ~$80.81/share and mentioned a new $125 million authorization, which is being approached cautiously due to the higher current stock price, a point echoed by Chairman & CEO Li Yu.

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CFO Edward Czajka reported the December spot rate on deposits was 3.63%. He projected Q1 noninterest expense at approximately $23 million, influenced by wildfire relief donations, seasonal payroll taxes, and elevated legal fees. Executive Nick Pi explained that the charge-offs were related to previously identified and fully reserved impaired loans. He anticipates the criticized loan balance will decline in Q1 through payoffs, resolutions, and upgrades.

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Executive Edward Czajka reported that the net interest margin for September, excluding interest recovery, was 4.03%, with a spot cost of deposits at 3.96%. He detailed that 99% of floating-rate loans have floors, with about 22-23% being close to their current rate. Czajka also noted that a steady pace of rate cuts would be ideal for margin stability. He and Chairman & CEO Li Yu confirmed the repurchase of 110,000 shares, adding that buybacks have paused due to the current stock price.

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Executive Edward Czajka provided a normalized Q1 NIM of 3.94% and a March spot rate of 3.84%, noting the margin was holding up better than expected. Executive Nick Pi detailed the two nonperforming loans, stating one ($20.5M) is under contract to be sold at par and the other ($37M) is in bankruptcy court with resolution expected in 1-2 quarters. Czajka projected a normalized quarterly expense run rate of $21.5M to $22M. Chairman and CEO Li Yu clarified that share repurchases occurred in April, with $23 million remaining under the buyback program.

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President and CEO Jared Wolff stated he could not handicap the probability of a preferred tender, as it depends on market conditions. He explained the more disciplined risk-rating approach was an internal decision to be more proactive, not due to external influence. He noted the HOA deposit business, which drives ECR balances, has been stable and is a target for growth.

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CFO Joseph Kauder stated the December margin was close to the quarterly average and that Q1 comp expense would likely increase around 10% from Q4's seasonally low base. CEO Jared Wolff and Kauder confirmed the average ECR deposit balance was about $3.65 billion. Regarding capital, Wolff mentioned the bank is actively considering all options, including buybacks.

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CEO Jared Wolff confirmed the bank's intent to grow its HOA deposit business, noting the all-in cost is slightly above 3% and will decline with interest rates. CFO Joe Kauder stated that the Q4 NIM guidance of 3.0% to 3.10% already incorporates the expected reduction in funding costs. Jared Wolff added that the initial deposit beta on the recent rate cut is around 50%, though it is still early.

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CEO Jared Wolff and CFO Joe Kauder explained that FDIC costs are expected to decrease to a $10-$12 million quarterly run-rate by Q4, a figure included in their expense guidance. Wolff noted the CIVIC sale provides about $2-$3 million in expense relief, materializing late in the year. Kauder added that over half of the sale proceeds will pay down brokered CDs. Regarding credit, Wolff stated the increase in classified loans was a proactive measure on rate-sensitive real estate, and recent office-related charge-offs were on previously identified and largely reserved-for loans.

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CEO Bonita Lee attributed strong SBA performance to underwriting based on past performance rather than projections and focusing on direct lending over broker channels. CFO Romolo Santarosa explained that loan yield stability comes from a small portion of floating-rate loans (under 10%) and a blend of fixed and adjustable products. He guided for expenses to generally move with inflation, noting seasonal patterns. CBO Anthony Kim specified that $685 million in CDs will mature in Q2 at a rate of 4.42%.

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CFO John Michel provided the December 31 spot deposit rate (2.39% excluding brokered CDs) and confirmed plans to pay down the rest. CEO Mark K. Mason estimated syndicated loan exposure at just under $200 million. Both executives confirmed the DTA is portable and included in the tangible book value calculation, subject to Section 382 limitations. Regarding M&A, Mason stated the Board is continuously reviewing all strategic alternatives.

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Executive Mark K. Mason explained that the current merger agreement restricts soliciting other offers, but they could consider a superior proposal. He declined to detail alternative regulatory structures but confirmed any new plan must be 'meaningfully different.' Mason clarified that HomeStreet's standalone CRE concentration was not a regulatory issue. He stated the current CRE concentration is ~600%, which would fall to ~500% after a potential $800 million loan sale. He estimated the multifamily portfolio's duration at ~2.5 years with a yield around 4%. Management did not have the spot deposit rate available.

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CFO Ronald Nicolas stated the December net interest margin was 3.03% and expects the Q1 margin to be at a similar level before improving throughout 2025. He explained that lower Q4 compensation expense was due to lower overall staffing, which reduced incentive and benefit costs, and anticipates a ~$2 million increase in Q1 from merit increases and payroll taxes. CEO Steven Gardner added that loan purchases are a tactical tool to supplement organic production, focusing on non-CRE assets within their areas of expertise.

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CFO Ronald Nicolas reported Q3 swap revenue was just under $7 million, with Q4 guidance of $3-4 million, and noted new swaps are unlikely given the rate outlook. CEO Steven Gardner explained that decisions on loss trades are dynamic, weighing book value impact against payback periods. Gardner also expressed confidence in maintaining the dividend, even with a temporary payout ratio over 100%, due to strong capital. He attributed the C&I decline primarily to clients using excess liquidity to pay down debt, not market share loss.

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CFO Ronald Nicolas quantified the swap revenue's impact (16 basis points to NIM) and stated it would be consistent in Q3. CEO Steven Gardner and CFO Ronald Nicolas addressed deposit costs, suggesting stability in Q4 as competitive pressures and deposit mix shifts might offset the impact of a small rate cut. Gardner confirmed plans to pay off the remaining $200 million in FHLB borrowings in Q4 and stated that all options, including restructuring the AFS, HTM, and low-yielding loan portfolios, are being considered. Both executives confirmed that nearly all of the $10.3 million in net charge-offs were related to the sale of two substandard loans.

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Executive Steven Gardner noted the March NIM was slightly down from the quarterly average and confirmed the board is assessing various tactics, including securities trades and share buybacks, given the bank's very high capital levels. CFO Ronald Nicolas provided the end-of-March spot rate on total deposits at 1.66% and stated the dollar value of swap income for the quarter was $6.7 million. Gardner added that borrowing costs should remain stable as the remaining FHLB advance is fixed-rate.

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Chief Credit Officer Derek Steward explained the charge-off was related to a longtime retail client that was acquired by a private equity firm and faced challenges from rapid growth and management issues. President and COO Scott McLean noted that the capital markets business saw strong results from loan syndications, interest rate products, and real estate capital markets. He expressed optimism for continued progress due to investments in infrastructure and people. CEO Harris Simmons added that the year is starting with a solid pipeline.

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President and COO Scott McLean clarified that the change was not due to upgrades out of special mention, but rather that loans already in special mention were downgraded further into the classified category. Regarding borrowings, an executive explained that their level is managed in concert with core deposit trends, brokered deposit levels, and asset growth, using cash flows from the maturing securities portfolio to either pay down wholesale funding or invest in new loans.

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CFO Donald Hinson disclosed the maturing borrowings have a 5.40% weighted average rate and that costs will decline significantly, though repayment plans depend on deposit growth and other factors. He suggested the deposit beta in the easing cycle could be similar to the 30% seen during tightening but with a lag. Hinson expects a near-term dip in loan yields in Q4 due to rate cuts but anticipates expansion in 2025 as new, higher-rate loans replace maturing ones.

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