Michael Rose

Michael Rose inquired about Hilltop Holdings' capital priorities, including the recent dividend increase and share buyback authorization, and provided an update on M&A opportunities in Texas. He also asked about the potential for Hilltop Holdings to partner with a larger institution and the NII guidance, specifically regarding core margin compression expectations for Q1.

Answer

Jeremy B. Ford (CEO, Hilltop Holdings Inc.) expressed satisfaction with 2025 capital deployment, highlighting an 11% dividend increase and a standard $125 million share repurchase authorization. He confirmed ongoing evaluation of M&A opportunities while focusing on organic growth. Regarding a potential partnership with a larger institution, Jeremy B. Ford stated they remain open to shareholder best interests but noted their unique business model limits the universe of interested larger banks. William B. Furr (CFO, Hilltop Holdings Inc.) added that solid deposit cost management and loan growth are constructive for NII, and no Fed action in January is positive for Q1.

Michael Rose asked about Hilltop Holdings' capital priorities, including the recent dividend increase and share buyback authorization, and sought an update on M&A opportunities in Texas. He also inquired about the potential for Hilltop to partner with a larger institution and the NII guidance implying core margin compression, specifically for Q1 2026.

Answer

Jeremy B. Ford, CEO, highlighted the 11% dividend increase and the $125 million share repurchase authorization as standard. He confirmed the ongoing evaluation of M&A opportunities while emphasizing organic growth and noted that Hilltop's unique business model limits the universe of potential larger bank partners. William B. Furr, CFO, discussed solid deposit cost management and loan growth supporting NII, viewing the Fed's inaction in January as constructive for Q1 NII, despite overall asset sensitivity.

Michael Rose inquired about the auto portfolio, which is in rundown mode, specifically addressing recent sector issues and Hilltop Holdings' exposure to a recently publicized credit.

Answer

William Furr, CFO, stated that the auto financing commitments have reduced significantly from $290 million in 2021 to $77 million. He confirmed that two auto clients were moved to non-accrual 18 months prior, and aggressive workout efforts are ongoing. He clarified that Hilltop has no direct lending exposure to the recently publicized entity.

Michael Rose inquired about Hilltop Holdings' NII guidance, questioning the implied margin step-down and earning asset contraction for the fourth quarter. He also asked about the company's increased stock buyback activity and the M&A outlook in Texas, and later followed up on the auto portfolio's rundown mode and any specific credit issues.

Answer

CFO William Furr clarified Hilltop Holdings' asset-sensitive balance sheet, anticipating an additional rate cut and its immediate impact on cash and adjustable-rate loans, while deposit data activity blends over time. He detailed the confluence of inputs influencing the NII outlook, including new commercial loan yields. CEO Jeremy Ford confirmed a consistent approach to share repurchases given current trading levels and excess capital, and discussed the M&A landscape in Texas as an opportunity for growth amidst market dislocation. Furr later provided an update on the auto portfolio, noting the significant reduction in commitments and ongoing aggressive workout efforts for two non-accrual clients, while confirming no direct lending exposure to a recently publicized entity.

Michael Rose inquired about Hilltop's capital allocation priorities, specifically regarding share buybacks following the announced merchant banking gain. He also asked for clarity on the wide loan growth outlook for 2025 and the sensitivity of the net interest income (NII) guidance to potential Fed rate cuts.

Answer

Executive Jeremy Ford confirmed that capital priorities remain unchanged, with a $100 million share repurchase authorization planned for open windows, noting last year's activity was tempered by looming debt maturities. Executive William Furr addressed the loan growth outlook, attributing the 2-5% range to uncertainty around the Fed's actions, the lag between booking commitments and funding loans, and the variable retention of $10-$30 million per month in PrimeLending mortgages. Furr also clarified that the NII guidance already incorporates two rate cuts and that fewer cuts would actually be beneficial due to the company's asset-sensitive position.

Michael Rose of Raymond James asked for a detailed breakdown of the pressures on net interest margin (NIM), including the drivers for the quarterly decline in loan yields and whether deposit costs have peaked. He also questioned if Hilltop would consider retaining more mortgage loans to stimulate loan and balance sheet growth.

Answer

EVP and CFO William Furr attributed the loan yield decline to lower purchase accounting accretion, customer negotiations ahead of expected rate cuts, and the rapid reset of variable-rate loans. He confirmed that interest-bearing deposit costs have likely peaked and will decline with a target beta of 50-55% in a falling rate environment. Mr. Furr acknowledged that modest NIM pressure will likely continue for a few quarters. He also confirmed Hilltop will retain more mortgage loans, likely operating at the middle-to-high end of its guidance to redeploy excess cash.

Michael Rose asked for expectations on the first quarter net interest margin, considering the securities restructuring, sub-debt redemption, and loan pricing competition.

Answer

President and CEO Keith Donahoe stated the margin would be positive but muted in Q1, with a bigger pickup later in the year, noting a one-time charge in Q1. CFO Julie Shamburger clarified that the sub-debt's impact in Q1 would be similar to Q4, with improvement expected in Q2 once funding sources are replaced. Michael Rose also inquired about loan growth expectations for the year, given investments in people and new locations. Keith Donahoe anticipates exceeding 2025 production but noted headwinds from high payoffs of maturing construction projects. He expressed optimism due to a strong rebound in the loan pipeline to over $2 billion. Lastly, Michael Rose asked about the pace of share buybacks. Keith Donahoe indicated the company would continue to be opportunistic, with sub-debt retirement, stock buybacks, and M&A being the top capital strategy priorities, acknowledging that M&A could influence buyback activity.

Michael Rose from Raymond James asked for expectations on the first quarter net interest margin, considering the securities restructuring and subordinated debt redemption. He also inquired about the outlook for loan production in the coming year, given recent investments, and the company's updated thoughts on the pace of stock buybacks.

Answer

President and CEO Keith Donoho and CFO Julie Shamburger indicated that the Q1 margin would be positive but muted, with a larger pickup expected later in the year, clarifying that the sub-debt impact would be similar in Q1 to Q4, but Q2 would see improvement when funding sources are replaced. Keith Donoho anticipates loan production to exceed 2025 levels, despite headwinds from construction project payoffs, noting a strong rebound in the loan pipeline to over $2 billion. Regarding buybacks, Keith Donoho stated the company would remain opportunistic, with potential M&A impacting the pace, prioritizing sub-debt retirement, then buybacks, then M&A in capital strategy.

Michael Rose asked about the impact of the securities portfolio restructuring and late-quarter loan growth on the fourth-quarter net interest margin, seeking a normalized starting point and rate expectations. He also inquired about potential M&A activity in Texas and opportunities for hiring or market share gains following recent deals.

Answer

CEO Lee Gibson explained that the net interest margin is expected to be up slightly in Q4, with net interest income improving nicely, driven by the full impact of security sales, increased average loans, and CD repricing savings, partially offset by subordinated notes costs. Regarding M&A, Mr. Gibson stated that the criteria remain unchanged, with interest in a few institutions, and confirmed active pursuit of hires to capitalize on market disruption from larger bank acquisitions.

Michael Rose asked for an update on Southside Bancshares' interest in potential M&A deals in Texas and opportunities for hiring or market share gains following recent regional bank disruptions.

Answer

CEO Lee Gibson confirmed continued interest in specific institutions for potential acquisition and highlighted active pursuit of additional hires to capitalize on market disruption from larger out-of-state banks acquiring smaller Texas banks.

Michael Rose of Raymond James Financial inquired about potential hiring and client acquisition opportunities from recent M&A in Texas, Southside's own M&A strategy, the status of a restructured multifamily credit, and clarification on the revised loan growth outlook given the solid pipeline.

Answer

CEO Lee Gibson confirmed that recent M&A presents hiring opportunities and that Southside is open to strategic acquisitions. President Keith Donahoe reported that the restructured multifamily loan is performing well and expected to move off the books at maturity. He clarified that the lowered loan growth guidance is due to unpredictable payoffs, like a recent $50 million oil and gas loan, despite strong new loan production and a growing pipeline of $2.1 billion.

Michael Rose of Raymond James Financial inquired about the Texas M&A landscape, seeking insights on potential client and talent acquisition opportunities from recent deals and Southside's own strategic M&A posture. He also requested an update on a previously restructured multifamily loan and clarification on the revised loan growth guidance, particularly concerning the pipeline's strength and the progress of the C&I lending initiative.

Answer

CEO Lee Gibson acknowledged the potential to hire talent from recent M&A activity and expressed interest in strategic acquisitions as more sellers emerge in Texas. President Keith Donahoe confirmed that the restructured multifamily loan is performing well with positive leasing activity and is expected to move off the books at maturity. Donahoe also explained that while new loan production is strong, unpredictable payoffs, like a recent $50 million oil and gas loan, led to the revised 3-4% growth guidance. He noted the pipeline increased to $2.1 billion, with C&I now comprising 30% of that total.

Michael Rose asked about a potential bond book restructuring post-Stellar acquisition, given Prosperity's held-to-maturity (HTM) and Stellar's available-for-sale (AFS) books, and its impact on asset liability sensitivity. He also inquired why Stellar chose to merge now, despite its robust net interest income forecasts.

Answer

David Zalman (Senior Chairman and CEO, Prosperity Bancshares) stated that Prosperity does not engage in 'financial engineering' by selling its bond portfolio for short-term gains, preferring a consistent 3.8-year duration strategy. He confirmed Stellar's AFS portfolio would be marked to market, and the combined entity would aim for neutral asset sensitivity. Bob Franklin (CEO, Stellar Bancorp) explained the merger was opportune due to finding a partner with similar values, a focus on quality deposits, and a shared conservative credit culture, which allows for continued momentum and an expanded balance sheet without drastic changes.

Michael Rose asked about potential bond book restructuring opportunities, given Prosperity's HTM book and Stellar's AFS book, and if such a restructuring was included in the pro formas. He also asked about the impact of the Stellar deal on asset-liability sensitivity and why Stellar chose to merge with Prosperity now, given its robust NII forecasts.

Answer

David Zalman (Senior Chairman and CEO, Prosperity Bancshares) stated that Prosperity does not engage in 'financial engineering' by selling its bond portfolio for short-term gains, preferring a consistent 3.8-year duration strategy. He confirmed that Stellar's AFS portfolio would be marked to market. Asylbek Osmonov (CFO, Prosperity Bancshares) indicated that the combined entity would likely remain slightly asset-sensitive, with some securities being sold and reinvested to maintain a neutral position. Bob Franklin (CEO, Stellar Bancorp) explained that the merger was opportune due to finding a partner with similar credit culture and deposit-gathering philosophy, the expanded balance sheet, and the ability to continue Stellar's growth momentum, which they believe will drive future success.

Michael Rose inquired about loan growth expectations excluding the warehouse business, noting a sense of optimism from management, and asked for an update on the mortgage warehouse portfolio's performance. He also requested a detailed outlook on the net interest margin (NIM), including key drivers such as bond portfolio repricing and deposit cost trends.

Answer

President and COO Kevin Hanigan addressed loan growth, stating that low single-digit growth for the year is achievable, with Q3 starting stronger and core deposit growth stabilizing. He projected the mortgage warehouse to average around $1.25 billion in Q3. Senior Chairman & CEO David Zalman added that the model still shows significant NIM expansion, projecting 3.35% in six months with no rate changes. CFO Asylbek Osmanov confirmed this, attributing future NIM growth to the repricing of the bond portfolio and loan cash flows.

Michael Rose of Raymond James Financial inquired about loan growth expectations excluding the warehouse portfolio, noting a sense of optimism from management, and also requested an update on the mortgage warehouse business. Additionally, he asked for a detailed breakdown of the net interest margin (NIM) outlook for the next few quarters, including key drivers and repricing dynamics.

Answer

Kevin Hanigan, President and COO, projected low single-digit loan growth for the remainder of the year and noted the mortgage warehouse averaged $1.25 billion, slightly ahead of expectations. David Zalman, Senior Chairman & CEO, provided detailed NIM model projections, forecasting expansion to 3.35% in six months and 3.48% in twelve months on the existing balance sheet, even with potential rate cuts. Asylbek Osmonov, CFO, added that this expansion is driven by the repricing of a $1.9 billion annual cash flow from the bond portfolio and $5 billion from the loan portfolio, rather than further decreases in deposit costs.

Michael Rose of Raymond James Financial inquired about loan growth expectations excluding the warehouse business, noting management's optimism. He also asked for an update on the mortgage warehouse segment and a detailed breakdown of the net interest margin (NIM) outlook, including factors like bond portfolio repricing and deposit cost trends.

Answer

President and COO Kevin Hanigan projected low single-digit loan growth for the rest of the year and noted the mortgage warehouse averaged $1.307 billion quarter-to-date, expecting Q3 to be stronger than Q2. Senior Chairman and CEO David Zalman provided detailed NIM expansion models, projecting a rise to 3.35% in six months and 3.48% in twelve months with no rate changes. CFO Asylbek Osmanov confirmed the drivers are bond and loan repricing, which will help the bank achieve its full-year NIM target of 3.25% to 3.30%.

Michael Rose of Raymond James Financial inquired about loan growth expectations excluding the warehouse portfolio, the impact of paydowns on the quarter, and an update on the mortgage warehouse business.

Answer

President and COO Kevin Hanigan projected low single-digit loan growth for the remainder of the year, noting Q3 had started well. He reported Q2 average warehouse balances were $1.179 billion and forecasted Q3 to average around $1.25 billion. Senior Chairman & CEO David Zalman highlighted a $73 million increase in core commercial loans, and Chairman Tim Timanus concurred with the outlook.

Michael Rose of Raymond James questioned if the full-year net interest margin (NIM) outlook of 3.25% to 3.30% had changed, asked for an update on the mortgage warehouse business, and inquired about the step-down in NSF and debit card income.

Answer

Senior Chairman and CEO David Zalman stated the NIM forecast remains unchanged, as it's driven by asset repricing, not growth assumptions. President and COO Kevin Hanigan provided an update on the warehouse business, noting Q1 performance was slightly better than guided. He projected Q2 average balances between $1.05 billion and $1.1 billion, supported by two new clients, but expressed some concern if high rates persist. CFO Asylbek Osmonov explained that the decline in NSF and debit card income was due to normal first-quarter seasonality.

Michael Rose from Raymond James followed up on Renasant's loan growth, specifically after adjusting for loan sales, and asked about the factors influencing growth and potential changes to the mid-single-digit outlook given market dislocations and hiring opportunities.

Answer

COO Kevin Chapman reaffirmed the mid-single-digit loan growth guidance for the year, acknowledging potential quarterly lumpiness due to elevated payoffs experienced in late Q4 2025. He noted strong production across all markets and channels, indicating upside potential from market disruption.

Michael Rose asked about the outlook for expenses, including remaining cost savings from The First merger, opportunistic hiring plans, and the expected expense levels for the next one to two quarters.

Answer

Jim Mabry (CFO) indicated an expected core expense reduction of $2-$3 million in Q1, primarily from salaries. Kevin Chapman (COO) added that 400 positions have been eliminated since Q2 2024, emphasizing continued efficiency efforts alongside strategic investments in talent for future growth. Michael Rose also clarified the expense reduction base and asked about loan growth, to which Kevin Chapman reiterated a mid-single-digit growth guidance for the year, noting elevated Q4 payoffs as a wild card.

Michael Rose questioned Renasant's capital allocation strategy, specifically regarding the new share buyback authorization, considering the recent merger and potential future deals. He also asked about the company's deposit growth strategy given the loan-to-deposit ratio approaching 90% and the current rate environment. Lastly, he sought insight into additional levers for generating positive operating leverage beyond immediate expense savings.

Answer

CFO Jim Mabry stated that Q3's strong performance provides good visibility for capital growth, projecting a 60-70 basis point increase in capital ratios by year-end 2026. He noted recent actions like redeeming $60 million in sub debt and increasing the common dividend, indicating that buybacks are now a high-priority capital lever, though supporting organic growth remains the primary goal. Mr. Mabry acknowledged Q3's deposit decline was seasonal, emphasizing the company's focus on growing core deposits in line with loan growth. President and CEO Kevin Chapman added that positive operating leverage would come from both expense discipline and increased revenue scale, driven by higher accountability and above-average loan growth, which also elevated the provision this quarter.

Michael Rose inquired about the rationale behind the new buyback program, the broader capital allocation strategy post-merger, Renasant's deposit growth strategy given the rising loan-to-deposit ratio, and future opportunities for positive operating leverage.

Answer

Jim Mabry (CFO) explained that strong Q3 results and capital growth prospects (60-70 bps by year-end 2026) make capital levers, including buybacks, more in focus, alongside organic growth and recent sub debt redemption. He emphasized the goal to grow core deposits in line with loan growth. Kevin Chapman (President and CEO) highlighted that operating leverage will come from both expense discipline and increased revenue scale, driven by above-average loan growth and enhanced accountability across the company.

Michael Rose of Raymond James Financial inquired about the drivers of Renasant's net interest margin (NIM), seeking guidance on the core margin and the expected schedule for purchase accounting accretion following the merger.

Answer

Executive VP & CFO James Mabry explained that Renasant anticipates modest expansion in its core NIM in the near term, noting the spot margin was 3.60% in June. He advised using the Q2 normal accretion of approximately $13 million as a proxy for future quarters, while cautioning that the accelerated portion is difficult to project. President & CEO Kevin Chapman added that loan and deposit growth pipelines remain strong, guiding for mid-single-digit growth for the remainder of the year.

Michael Rose from Raymond James asked for an update on loan pipeline trends, guidance on a pro forma expense base for Q2 including the First Bancshares acquisition, and the company's current appetite for share repurchases.

Answer

Executive Vice Chairman and CEO Mitch Waycaster detailed a strong starting loan pipeline of $189 million for Renasant and $83 million for the legacy First, but noted higher payoffs could lead to low single-digit net growth in Q2. Executive James Mabry suggested a Q2 expense base could be estimated by combining both companies' Q1 expenses plus merit increases, with cost efficiencies expected post-conversion. Mabry also confirmed that while share buybacks are an option due to increased capital flexibility, the primary goal is supporting organic growth, and any buyback decision would be weighed against other capital uses.

Michael Rose asked for an update on the loan pipeline, expectations for net loan growth considering recent paydown activity, and trends in the mortgage business. He also sought a more refined timeline for the closing of The First acquisition.

Answer

Executive Vice Chairman and CEO Mitch Waycaster detailed a strong loan pipeline of $176 million and robust quarterly production of $507 million, but noted payoffs increased to $551 million. He anticipates low to mid-single-digit net loan growth going forward. EVP and Chief Operating Officer Kevin Chapman described the mortgage environment as 'tough' due to the long end of the yield curve remaining elevated, which pressures activity. Waycaster confirmed the acquisition of The First is still expected to close in the first half of 2025, pending regulatory approvals.

Michael Rose inquired about the trajectory of FirstSun Capital Bancorp's net interest margin (excluding the First Foundation deal), including the puts and takes, assuming two rate cuts, and in a scenario with no cuts.

Answer

Rob Cafera, Chief Financial Officer, expects the net interest margin to remain relatively stable, despite tightening deposit pricing, and confirmed that two rate cuts are baked into their expectations, aligning with consensus. Rose also asked Neal Arnold, CEO and President, about the perceived opportunity in Southern California versus Texas and the breakdown of the expense guide between inflationary aspects and incremental hiring. Neal Arnold clarified that Southern California build-out was a priority, with minor gaps to fill post-merger, while Texas presents more opportunistic hiring due to M&A activity. Finally, Rose asked if the post-merger loan-to-deposit ratio would change the deposit narrative and potentially support NIM expansion. Rob Cafera confirmed a focus on liquidity and balance sheet repositioning post-close, targeting higher-cost term funding. Neal Arnold added that the retail strategy in Southern California branches and robust treasury management opportunities within the multifamily portfolio would be additive.

Michael Rose asked about the standalone trajectory of FirstSun Capital Bancorp's net interest margin, considering expected loan growth, floating-rate loans, and assumed rate cuts. He also sought Neal Arnold's perspective on hiring opportunities in Texas versus Southern California and the composition of the expense guide between inflationary factors and incremental hiring. Finally, he inquired if the lower loan-to-deposit ratio post-First Foundation merger would alter deposit strategy, potentially supporting NIM expansion.

Answer

Rob Cafera (CFO, FirstSun Capital Bancorp) expects the net interest margin to remain relatively stable, despite tightening deposit pricing, due to flexibility on the asset side and two assumed rate cuts. Neal Arnold (CEO and President, FirstSun Capital Bancorp) explained that while Southern California build-out was a priority, M&A activity in Texas has created more opportunities for opportunistic hiring of bankers in Houston and Dallas. Rob Cafera clarified that the expense guide includes normal inflationary aspects, bonuses, and raises, alongside incremental hiring efforts. Rob Cafera and Neal Arnold confirmed that the lower loan-to-deposit ratio post-merger will allow for balance sheet repositioning, focusing on reducing higher-cost term funding and emphasizing relationship-based deposit growth, particularly in Southern California retail and treasury management for the multifamily portfolio, which is expected to be additive to NIM.

Michael Rose of Raymond James inquired about FirstSun Capital Bancorp's near-term and long-term revenue synergy focus, including a target fee versus spread revenue mix, and the strategy for achieving $3 billion+ deposit growth. He also asked for management's perspective on the purchase price relative to First Foundation's adjusted tangible equity.

Answer

Neal Arnold, President and CEO, and Rob Cafera, Senior EVP and CFO, outlined revenue synergies, prioritizing wealth management, treasury management, and residential mortgage, with retail branch transformation being a longer-term play. Tom Shafer, President and CEO of First Foundation, highlighted the robust Southern California market. Mr. Arnold addressed the purchase price, emphasizing the value of the unique franchise and the strategic decision to reduce risk for stronger organic growth rather than simply carrying a larger balance sheet.

Michael Rose asked about the near-term versus longer-term focus for significant revenue synergies, the target fee versus spread revenue mix, and the strategy to achieve the $3 billion+ deposit growth opportunity. He also questioned the price paid for First Foundation, referencing the adjusted tangible equity on slide 47.

Answer

Neal Arnold, President and CEO of FirstSun Capital Bancorp, Rob Cafera, Senior EVP and CFO of FirstSun Capital Bancorp, and Tom Shafer, President and CEO of First Foundation, discussed that the retail branch playbook would be an 18-24 month transition, while asset remixing would continue. They highlighted the advantage of an existing Southern California team for accelerated transformation. Rob Cafera noted the underutilized branch footprint, FirstSun's higher margin flexibility, and product offerings. Tom Shafer praised the depth and diversification of the Southern California economy. Neal Arnold added that market disruption and focus on middle-market clients create opportunities. Rob Cafera identified wealth management, treasury management, residential mortgage, and multifamily strategy enhancements as key revenue synergies. Regarding the price paid, Neal Arnold acknowledged the fair question, explaining that the shrinking opportunity set and the unique value of the franchise in a large middle-market client base justified the decision, along with a conscious choice to reduce risk for solid organic growth.

Inquired about the outlook for deposit mix and pricing, the trajectory of the net interest margin, drivers of loan growth including new markets and M&A disruption, and the company's capital allocation priorities.

Answer

The company expects a continued favorable deposit mix shift but limited pricing leverage without rate cuts. The net interest margin is projected to remain stable, slightly above 4%. Loan growth is strong in new markets like Southern California, and they view market disruption from M&A as an opportunity. The primary focus for capital remains on funding organic growth, with buybacks being a lower priority.

Michael Rose of Raymond James Financial asked about the potential for deposit mix shifts and pricing leverage, the outlook for the net interest margin (NIM), sources of loan growth, and the company's capital allocation priorities, including M&A and buybacks.

Answer

CFO Robert Cafera projected the NIM would remain strong and north of 4%, albeit with some potential for slight pressure. He expects a continued favorable deposit mix shift away from CDs but sees limited pricing leverage without Fed rate cuts. Cafera noted that newer markets like Southern California are making outsized contributions to loan growth. CEO Neal Arnold affirmed that organic growth is the top capital priority, with a focus on expansion opportunities over share buybacks.

Michael Rose of Raymond James Financial asked about the outlook for deposit mix and pricing, the trajectory of the net interest margin (NIM), drivers of loan growth from new markets, and the company's capital allocation priorities, including M&A and buybacks.

Answer

CFO Robert Cafera expects the favorable deposit mix shift from CDs to transaction accounts to continue but anticipates little pricing change absent Fed cuts. He projects the NIM will remain relatively consistent, with slight pressure but staying above 4%. Mr. Cafera noted that new markets like Southern California are making outsized contributions to loan growth. CEO Neal Arnold affirmed that organic growth is the top priority for capital, and while buybacks are considered, the focus remains on expansion opportunities. Mr. Arnold also highlighted the pleasant surprise of strong deposit growth relative to loans in new markets.

Michael Rose inquired about the key metrics and indicators investors should monitor to assess the success and progress of Amerant Bancorp's three-year strategic plan, particularly given past turnaround efforts.

Answer

Interim CEO Carlos Iafigliola and CFO Sharymar Calderón emphasized credit quality improvements (reducing criticized buckets, avoiding migration, strengthening risk-rating, selective onboarding) and operational efficiencies (efficiency ratio, ROI) as critical immediate measures. They also outlined aspirational financial targets for 2026, aiming for a Return on Assets near 1% and an efficiency ratio close to 60%, with further improvements targeted for 2027 and 2028.

Michael Rose from Raymond James inquired about the key metrics and milestones investors should monitor to assess the success of Amerant Bancorp's three-year strategic plan, particularly regarding credit quality improvements and financial targets like Return on Assets (ROA) and efficiency ratio.

Answer

Carlos Iafigliola, Senior EVP and Interim CEO, emphasized that critical measures for success include improvements in credit quality metrics, regaining confidence in re-rating accuracy, and a disciplined approach to loan origination. Sharymar Calderón, Senior EVP and CFO, added that immediate-term initiatives focus on reducing criticized buckets, preventing migration, strengthening portfolio management, and selective onboarding. She also highlighted efficiency ratio and ROI as key operational efficiency metrics. Carlos Iafigliola further outlined aspirational goals for 2026: achieving an ROA close to 1% and an efficiency ratio near 60%, with long-term targets for 2027-2028 aiming for even better than 1% ROA and an efficiency ratio in the 55%-58% range.

Michael Rose asked for an update on the evolution of asset quality, inquiring if the peak in criticized loans has passed. He also questioned what material changes have been made to underwriting since recent key hires and asked about the future pace of hiring and the intermediate-term efficiency ratio target.

Answer

CEO Jerry Plush stated that while NPLs are declining, the focus remains on proactively strengthening the bank's risk culture as part of its transition to a regional bank. He noted the allowance for NPLs is back over 100%. He projected that the bank could achieve a 60% efficiency ratio as it grows to an asset size of '$11 billion plus,' and signaled a slowdown in physical branch expansion to manage costs while leveraging recent hires and technology for growth.

Michael Rose of Raymond James asked about the company's appetite for share buybacks, given the stock's valuation. He also sought details on the net interest margin outlook, including new loan yields and deposit cost flexibility. Finally, he asked for a holistic view on the credit cleanup progress relative to expectations set during the prior capital raise.

Answer

CEO Gerald Plush and CFO Sharymar Yepez explained that recent buybacks were executed under a 10b5-1 plan primarily to offset dilution from stock grants and that the authorization is now largely utilized. On the margin, Yepez projected new loan yields between 6.25% and 6.50% and noted the bank is actively managing liability costs by keeping new time deposits short-term. Regarding credit, Plush acknowledged that asset resolution is taking more time than desired but emphasized the bank is being proactive, transparent, and is adding more resources to its special assets team to accelerate the process.

Michael Rose inquired about the bank's strategic focus on "daily execution" over major projects, specifically asking if this implies a pause in M&A. He also sought clarification on capital allocation, including the future of share buybacks, and the bank's approach to hiring in a disruptive market, referencing the recent hire of John Heine in Houston.

Answer

Chairman and CEO Jude Melville explained that "daily execution" means optimizing recent substantial technology implementations and deepening existing relationships to drive profitability, rather than embarking on new major projects. He confirmed a pause in prioritizing new M&A to demonstrate the value of past investments and achieve a 1.2% ROA by year-end 2026. Regarding capital, Jude Melville stated the bank bought back 150,000 shares in Q4 at attractive prices and will continue to look for opportunistic buybacks, especially below 1.2x tangible book value. CFO Greg Robertson noted that Q1 tangible book value per share would see a slight step back due to the Progressive Bank closing. On hiring, Jude Melville indicated a selective, opportunistic approach, expecting to add 2-3 bankers in Houston, leveraging market disruption and the bank's enhanced capabilities as an employer.

Michael Rose inquired about the company's strategic shift towards daily execution over major projects, specifically asking if this implies a pause in M&A activities and requesting clarification on recently completed projects and the meaning of "daily execution." He also asked about the future approach to capital allocation, particularly regarding share buybacks given current valuations, and the strategy for hiring new talent, especially in the Houston market.

Answer

CEO Jude Melville explained that "daily execution" means optimizing recently implemented core technology platforms and processes (including a new core platform and other tech implementations) to enhance efficiency, client service, and employee satisfaction, rather than embarking on new substantial projects. He confirmed a pause in M&A to demonstrate the profitability of past investments and achieve a 1.2% ROA by end of 2026. Regarding capital, Jude Melville stated they bought back 150,000 shares in Q4 at attractive prices and will continue to look for opportunistic buybacks, especially below 1.2x tangible book value. CFO Greg Robertson noted a slight step back in tangible book value per share in Q1 due to the Progressive closing. Jude Melville added that hiring will be opportunistic, focusing on the "right people" rather than aggressive expansion, particularly in Houston.

Michael Rose asked for clarification on Business First Bancshares' core expense management, noting the flat expenses in Q3 against previous guidance, and inquired about hiring plans, particularly for lenders, and their potential impact on 2026 expenses. He also sought more color on the competitive dynamics, if any, that contributed to loan paydowns in Dallas and Houston during the quarter.

Answer

CFO Greg Robertson attributed flat Q3 expenses to a concerted effort in evaluating the expense base and mindful personnel decisions, with a slight increase expected in Q4 due to timing of investments and Oakwood cost saves. CEO Jude Melville emphasized disciplined expense management to enable strategic hiring in disrupted markets like Texas. SVP Matt Sealy added that lower-than-expected balance sheet growth and timing of IT investments also contributed to flat Q3 expenses. Regarding paydowns, Jude Melville clarified they were primarily due to a large past-due relationship resolving and successful CNI relationships being sold, rather than competitive pressures.

Michael Rose questioned the drivers behind the flat core expenses in Q3, contrasting it with previous expectations, and asked about hiring plans and their potential impact on 2026 expenses. He also inquired about competitive dynamics influencing loan paydowns in Dallas and Houston.

Answer

Greg Robertson (CFO, Business First Bancshares) and Jude Melville (CEO and Chairman, Business First Bancshares) attributed flat expenses to a concerted effort in evaluating the expense base, mindful personnel decisions, and Oakwood cost savings. They anticipate a slight increase in Q4 due to investment timing but are open to hiring good bankers in disrupted Texas markets. Matt Sealy (SVP, Director of Corporate Strategy, and FP&A, Business First Bancshares) added that lower balance sheet growth and timing of IT investments also contributed. Greg Robertson and Jude Melville clarified that paydowns were primarily due to a large past-due relationship resolution and successful CNI relationships being sold, rather than competitive pressures.

Michael Rose of Raymond James Financial asked for an outlook on operating expenses for the upcoming quarters, the trajectory of the core net interest margin, and an update on the loan growth forecast given recent performance.

Answer

EVP & CFO Gregory Robertson projected core expenses would rise to the low $50 million range in Q3, with partial cost savings from the Oakwood conversion impacting Q4. He anticipates a 4-6 basis point margin improvement for the remainder of the year, likely weighted towards Q4. On loan growth, Robertson and CEO Jude Melville reiterated a mid-single-digit growth outlook for the rest of the year, possibly at the higher end of the range, emphasizing a balanced approach focused on capital accretion and concentration risk management.

Michael Rose asked for clarification on deposit growth dynamics excluding the recent branch sale, the drivers behind the increase in special mention commercial real estate loans, and the company's current stance on capital returns like share buybacks.

Answer

CEO Jude Melville clarified that the branch sale occurred in early Q2 and did not impact Q1 deposit figures, but will likely result in flattish deposit growth for Q2. CFO Gregory Robertson explained the increase in special mention CRE loans was primarily due to risk rating downgrades reflecting interest rate stress on debt service coverage, rather than fundamental credit deterioration. Regarding capital, Melville stated that while buybacks are a consideration, the immediate priority is to continue building capital levels before actively pursuing such actions.

Michael Rose asked for details on the strong C&I loan growth, the company's hiring plans for 2025, the outlook for overall loan growth, and the status of cost savings from the Oakwood acquisition.

Answer

CEO David Melville and CFO Gregory Robertson explained that the strong C&I growth reflects a strategic de-emphasis on CRE and construction lending, which has lowered concentration risk significantly. Melville stated there are no major hiring initiatives planned for 2025, as the bank has capacity to grow with its current team. He reaffirmed the mid-single-digit loan growth forecast for 2025. Robertson confirmed that no material cost savings from the Oakwood deal are expected in 2025, with synergies anticipated to be realized in 2026 following a late 2025 system conversion.

Michael Rose inquired about the potential tailwind from maturing CDs, the updated timeline for achieving the 3.50% core NIM target, the expected purchase accounting accretion from the Oakwood acquisition, and the drivers behind the quarterly increase in special mention loans and NPLs.

Answer

CFO Gregory Robertson and CEO David Melville responded. Robertson confirmed a strong retention rate on maturing CDs, which supports the 3.50% core NIM target by Q2 2025. Melville added that they are ahead of schedule, though a few basis points are tied to a variable factoring product. Regarding Oakwood, they confirmed the go-forward accretion estimate of $700k-$800k per quarter is inclusive of the deal, but final marks are pending. On credit, Robertson attributed the NPL increase to a single, soon-to-be-resolved SBA loan and the watch list growth to the interest rate environment, characterizing it as a normalization of credit.

Michael Rose asked for color on the strong C&I loan growth and whether the raised loan growth expectations of $75 million-$100 million per quarter were a conservative or base case given market dislocations and a better loan environment. He also inquired about the factors contributing to the flat net interest margin (NIM) and the company's appetite for additional M&A post-Keystone.

Answer

Bart Caraway, Founder, Chairman, President, and CEO, stated that the $75 million-$100 million loan growth target is considered the base case, influenced by Texas demographics and borrower sentiment. He clarified that the flat NIM was due to approximately $1.5 million in 'excess loan fees' from big originations and arrangement fees, expecting the core margin to return to the 3.90% range without these one-time events. John McWhorter, Chief Financial Officer, added that the core net interest margin was up about 10 basis points from the prior quarter. Bart noted that M&A remains an ongoing part of strategic planning, with a focus on selective, relationship-driven partnerships, but the immediate priority is integrating Keystone.

Michael Rose asked for color on the strong C&I loan growth observed in the quarter and sought clarification on the updated loan growth expectations of $75-$100 million, considering market dislocations and the Keystone deal. He also questioned the factors contributing to the stable net interest margin (NIM) and the outlook for the starting margin in Q1, and inquired about the company's appetite for additional M&A post-Keystone.

Answer

John McWhorter, CFO, stated that the $75-$100 million loan growth target represents the base case, influenced by Texas demographics and borrower sentiment. He attributed the stable NIM to approximately $1.5 million in 'excess loan fees' from large originations and arrangement fees, which are difficult to predict. He expects the core NIM to return to the 3.90% range in Q1 without these one-time fees, noting that the core margin was up 10 basis points from the prior quarter and the company is well-positioned for rate declines. Regarding M&A, John McWhorter indicated that the focus is on integrating Keystone, with M&A remaining an ongoing, selective part of strategic planning, emphasizing relationships over market dynamics.

Michael Rose inquired about the strong fee income performance, particularly the service charge lineup, and ongoing initiatives. He also asked about the bank's hiring strategy to support high single-digit loan growth and the associated expense build, as well as the future M&A strategy post-Keystone, including target characteristics and size.

Answer

John McWhorter, CFO, attributed strong fee income to the FIS conversion and enhanced treasury/loan products, expecting a slight seasonal step down in Q4. Bart Caraway, CEO, described hiring as 'surgical,' focusing on highly productive, best-in-class bankers who are talent magnets, with quick returns and thorough vetting. For M&A, Mr. Caraway stated the bar is set high by Keystone, prioritizing financial reward and cultural fit, with a focus on organic growth and opportunistic, disciplined deals within or adjacent to the Texas Triangle.

Michael Rose asked about the significant increase in fee income, particularly service charges, and the ongoing fee income initiatives, then questioned the hiring efforts to support high single-digit loan growth and the related expense build, and finally sought a schematic for future M&A strategy post-Keystone.

Answer

John McWhorter, Chief Financial Officer, attributed the strong fee income to the FIS conversion and enhanced treasury management and loan products, expecting continued success but a slight seasonal step down in Q4. Bart Caraway, Founder, Chairman, President and Chief Executive Officer, described hiring as 'surgical,' focusing on highly productive, best-in-class bankers who generate quick returns, with Audrey Spaulding, Chief Credit Officer, emphasizing quality credits. Bart Caraway outlined the M&A strategy, stating the bar for future deals is 'very high,' requiring strong financial reward and cultural fit, while emphasizing continued organic growth and an opportunistic approach.

Michael Rose of Raymond James sought a comprehensive outlook on the net interest margin (NIM), factoring in the securitization benefit, deposit costs, and loan yields. He also questioned if the loan growth forecast accounts for potential rate cuts and asked about the rationale for considering a share buyback.

Answer

Executive John McWhorter projected a core NIM of 3.75%-3.80%, with a one-time 5 basis point lift in Q2 from the securitization. He noted the bank is well-positioned for the two expected rate cuts this year. CEO Bart Caraway added that the $325 million loan growth target is achievable, as lower rates could also spur new lending. Regarding the buyback, both executives confirmed it is being seriously considered due to the company's capital accretion and the stock trading below tangible book value.

Michael Rose asked about deposit-gathering initiatives, the proportion of deposits indexed to market rates, the potential for non-interest-bearing deposit mix growth, new loan pricing yields, and the future trajectory of the efficiency ratio, including hiring plans.

Answer

Executive Bart Caraway detailed broad-based deposit initiatives across commercial and retail lines, plus a partnership with Ameriprise. Executive John McWhorter noted that approximately 75% of deposits are in variable-rate money market accounts, offering pricing flexibility as rates fall. On loan pricing, new production yields are averaging over 8%. Regarding efficiency, Caraway affirmed the goal is to lower the ratio further, and while selective hiring will occur, revenue is expected to outpace expense growth.

Michael Rose asked about the 2026 expense outlook, focusing on areas for incremental hiring and the breakdown of mid-single-digit expense growth, and later inquired about loan growth opportunities, C&I momentum, and the impact of market dynamics.

Answer

CFO Matt Scurlock explained that the 2026 expense guide heavily features growth in salaries and benefits with select technology increases, anticipating Q1 non-interest expense between $210-$215 million due to seasonal and incentive compensation resets. Chairman, President, and CEO Rob Holmes added that the shift to a higher mix of front office investment yields greater returns per hire. On loan growth, Matt Scurlock projected continued strong C&I and mortgage finance growth offsetting contracting commercial real estate, with a 15% increase in average mortgage finance balances. Rob Holmes emphasized client selection and providing the right solutions over maximizing loan growth, noting the firm's strong credit discipline.

Michael Rose from Raymond James asked about the expense outlook, focusing on areas for incremental additions like lending or capital markets, and a breakdown of the mid-single-digit expense growth. He also inquired about the continuation of high single-digit commercial loan growth and LHI momentum given market conditions and hiring.

Answer

CFO Matt Scurlock explained that 2026 expense growth heavily features salaries and benefits with select technology increases, leveraging previous investments. He detailed Q1 seasonality with non-interest expense between $210 million and $215 million due to accrual resets, merit increases, and late-year hires. Chairman, President, and CEO Rob Holmes added that the shift to a higher mix of front-office investment leads to dramatically greater revenue synergy per hire. Matt Scurlock further noted that 2025 second-half trends, including strong C&I and mortgage finance growth offsetting CRE contraction, should continue into 2026, supporting mid to high single-digit growth in gross LHI.

Michael Rose asked about the apparent slowdown in loan growth, specifically the period-end versus average loan balances, and the implications of strong commitment growth for the fourth quarter. He also inquired about the investment banking and trading line item, the $50 million quarterly run rate target, and potential near-term headwinds like a government shutdown affecting IPOs.

Answer

CFO Matt Scurlock explained that the firm's focus is on providing the right capital solutions for clients, not just balance sheet growth. He highlighted strong client acquisition, an 11% annualized increase in CNI commitments, and leadership in syndicated bank debt. He also provided a narrowed full-year fee income guide of $230-$235 million, with Q4 non-interest income expected to be $60-$65 million, including $35-$40 million from investment banking. CEO Rob Holmes added that the investment bank's earnings are now healthier, broader, more granular, and repeatable, with the entire platform working in unison.

Michael Rose inquired about the pipeline for investment banking and trading, the associated investments needed for growth, and whether the 1.1% ROA target could be surpassed given the current momentum.

Answer

MD & CFO Matt Scurlock provided guidance for non-interest income to reach $60-65 million in Q3, supported by investment banking, and noted expenses would rise to support this build-out. Chairman, President & CEO Rob Holmes added that the investment banking platform also improves Net Interest Margin by enhancing client relationships. Regarding the ROA target, Holmes described the 1.1% goal as a 'mere stop along the way,' indicating aspirations for higher returns in the future.

Michael Rose from Raymond James Financial, Inc. requested color on the increase in special mention loans, sectors of concern related to tariffs, and the outlook for the Treasury Solutions and Private Wealth businesses.

Answer

CFO Matt Scurlock identified infrastructure, transportation, logistics, and general manufacturing as areas receiving heightened monitoring due to potential tariff impacts, but noted no single segment exceeds 1-2% of the loan portfolio. CEO Rob Holmes attributed the 22% year-over-year growth in treasury fees to a deep integration of a solutions-based approach into the bank's DNA. On Private Wealth, Holmes acknowledged the business was previously 'behind' due to its platform but expects 'real progress' moving forward following a recent technology upgrade that improves the client's digital journey.

Michael Rose sought to better understand the drivers of the 2025 loan growth expectation and asked for confirmation that the primary platform build-out is now complete, with future additions being minor.

Answer

President and CEO Rob Holmes explained that loan growth will be driven by their record pace of new client acquisition across all banking segments, ensuring they capture demand as the economy expands. He confirmed that the strategic platform is now 'wholly complete' after a multi-year transformation, allowing the firm to focus on execution and realizing operating leverage, though they will remain opportunistic about incremental product additions.

Michael Rose from Raymond James asked for clarification on the impact of higher hold limits, specifically whether it implies moving upstream or simply syndicating less, and sought an outlook for specialty businesses during the integration period. He also inquired about the company's plans for potential savings if LFI asset thresholds are lifted, asking if those funds would be reallocated to accelerated hiring or other projects.

Answer

Kevin Blair, President and CEO, Synovus Financial, clarified that higher hold limits do not imply moving upstream but rather slightly larger loan sizes kept on the balance sheet, while maintaining a strong syndicated platform. He expressed excitement for specialty units (e.g., equipment finance, auto dealer business from Pinnacle; asset-based lending, structured lending, family office from Synovus) to drive a large portion of loan and deposit growth through cross-footprint introductions and joint calling efforts. Regarding LFI thresholds, he stated that a significant portion of related data work costs would still be incurred, but any savings would not alter the commitment to hiring top talent, as it's a core strategy for long-term sustainable growth.

Michael Rose from Raymond James asked for clarification on the impact of higher loan hold limits, specifically whether it implies moving upstream or simply syndicating less. He also sought an outlook for specialty businesses during the integration period. As a follow-up, he inquired about the allocation of saved dollars if LFI thresholds were lifted, considering further hiring or other projects.

Answer

Kevin Blair (President and CEO, Synovus Financial) clarified that higher hold limits primarily mean slightly larger loan sizes on the balance sheet for existing client types, not a move upstream, while maintaining a strong syndicated platform. He expressed excitement for specialty units (e.g., equipment finance, auto dealer, ABL, structured lending) cross-pollinating capabilities across the combined footprint, expecting them to drive a large portion of loan and deposit growth. Jamie Gregory (CFO, Synovus Financial) stated that even if LFI thresholds are lifted, much of the data work expense would still be incurred, and any savings would not deter the commitment to hiring top talent, as it's a core strategy for long-term growth.

Michael Rose questioned the headwinds observed in loan growth within legacy markets, as shown on slide 28, and the potential for increased growth in C&D and CRE concentrations on a combined basis post-deal. He also asked about any broader concerns regarding the pickup in classified potential problems on slide 15, specifically mentioning structured credits and NDFI.

Answer

CEO Terry Turner clarified that 'legacy' refers to long-tenured bankers whose growth is tied to loan demand, with overall growth driven by new hires and specialty businesses. He confirmed that CRE would be a meaningful increment to loan volume as the firm has met concentration targets and is re-entering the market. CFO Harold Carpenter expressed confidence in the granular NDFI book and attributed the increase in potential problems to a single healthcare client with a new turnaround specialist, indicating the situation is well-managed.

Michael Rose from Raymond James asked about headwinds in loan growth from legacy markets, as depicted on Slide 28, and whether the combined entity would see growth opportunities in C&D/CRE given current concentrations are below target. He also inquired about any broader concerns regarding credit quality, specifically a pickup in classified potential problems on Slide 15, and exposure to structured credits like NDFI.

Answer

President and CEO Terry Turner clarified that "legacy" refers to long-tenured bankers whose growth is impacted by slack demand, with overall growth driven by new hires and specialty businesses. He confirmed that CRE concentrations have reached targets, allowing for a renewed focus on this area as a future loan growth driver. CFO Harold Carpenter addressed credit quality, expressing confidence in the granular NDFI book and attributing the increase in potential problems to a single healthcare client now under new management.

Michael Rose of Raymond James Financial, Inc. asked for details on the portfolios being reviewed for tariff impacts, the potential for related reserve builds, the ability to lower deposit costs, and plans for further geographic expansion.

Answer

Harold Carpenter (Executive) identified trucking and leveraged lending as initial focus areas for tariff impact analysis and noted that any significant economic deterioration would translate to higher reserves. He also explained that with over 50% of deposits indexed to Fed Funds and a short-term CD book, the bank has levers to pull on deposit costs. M. Turner (Executive) reiterated that expansion into new markets is contingent on finding the right leadership team, not a set timeline.

Michael Rose asked for clarification on the loan capacity generated by new hires as shown on Slide 21 and whether the firm's perspective on M&A has changed given the current environment and the company's strong stock currency.

Answer

M. Turner (executive) confirmed that loan capacity from new hires is expected to grow as the company continues its successful recruiting strategy, noting that new producers typically ramp up their books over a five-year period. On M&A, he stated the company's strategy remains unchanged, preferring its proven organic growth model of hiring revenue producers over the risks of acquisitions, though an exceptionally attractive opportunity would not be dismissed.

Michael Rose asked about the timeline for BankUnited to achieve its 34% Non-Interest-Bearing Deposit (NIDDA) mix target and the factors needed to reach it. Rose also questioned the contribution of newer markets to core loan growth and sought clarification on the increase in NDFI (Non-Deposit Financial Institutions) exposure, specifically how it relates to core growth guidance. Lastly, Rose inquired if the remaining buyback authorization is expected to be fully utilized this year.

Answer

Chairman, President, and CEO Raj Singh indicated a good chance of reaching a 33-34% NIDDA mix this year through continued double-digit NIDDA growth. Raj Singh and COO Tom Cornish confirmed significant core loan growth from newer markets like Atlanta, Texas, and North Carolina, with ongoing investments in these and existing markets like Tampa. Tom Cornish clarified the NDFI increase was largely due to investment-grade subscription credit facilities and healthcare insurance-related relationships, with some data refinement. Raj Singh stated that while growth opportunities are prioritized, the remaining buyback authorization is likely to be used to maintain the target 11.5% CET1 ratio.

Michael Rose (Raymond James) asked about the timeline for BankUnited to achieve its 34% non-interest-bearing deposit (NIDDA) mix target and what factors are crucial for reaching this level. He also inquired about the contribution of newer markets to core loan growth momentum and the implications of the $200 million increase in NDFI (finance and insurance) exposure for future core growth guidance.

Answer

Raj Singh (Chairman, President, and CEO) indicated a good chance of reaching around 33% NIDDA mix this year, driven by continued double-digit NIDDA growth. Raj Singh and Tom Cornish (COO) confirmed that new markets like Atlanta, Texas, and North Carolina significantly contributed to loan growth, with plans for further investment in these and existing Florida markets. Tom Cornish explained the NDFI increase was largely due to investment-grade subscription-type credit facilities and healthcare insurance-related relationships, with Raj Singh adding that about $100 million was due to refining methodology.

Michael Rose asked about Home Bancshares' long-term aspirations and strategy for the Tennessee market post-acquisition, drawing parallels to their success in Florida, and inquired about the level of paydowns in commercial real estate and construction, particularly for CCFG.

Answer

Chairman John Allison and Stephen Tipton, CEO of Centennial Bank, expressed optimism for growth in Tennessee, leveraging the founder-led Mountain Commerce Bank and Home Bancshares' larger balance sheet for bigger deals. Christopher Poulton, President of Centennial Commercial Finance Group, confirmed elevated paydowns in the past year, expecting them to continue. He noted increased non-bank entrants in commercial real estate but emphasized CCFG's long-standing client relationships and ability to find 'off-the-run' opportunities.

Michael Rose asked about the company's aspirations and strategy for growth in Tennessee post-acquisition, comparing it to the trajectory seen in Florida. He also inquired about paydowns in commercial real estate and construction, asking if a 'hangover effect' from post-COVID activity was observed, and the resulting opportunities and expected paydown levels for CCFG.

Answer

John Allison, Chairman, and Stephen Tipton, CEO of Centennial Bank, discussed the Tennessee growth strategy, emphasizing leveraging Mountain Commerce's founder and team, and openness to further M&A in the state, utilizing the company's capital to facilitate growth. Chris Poulton, President of Centennial Commercial Finance Group, confirmed elevated paydowns in the past year and anticipated their continuation. He noted the entry of non-bank lenders into CRE but expressed confidence in CCFG's long-standing client relationships and ability to find niche opportunities, estimating mid-single-digit net growth for 2026.

Michael Rose questioned the strategic timing of accelerating loan growth given potential economic softening and increasing credit concerns, and inquired about the company's hiring plans for loan officers and teams.

Answer

President and Chief Lending Officer Kevin Hester explained that Home BancShares' primary growth strategy is through whole bank M&A, not aggressively hiring loan teams, and they maintain a consistent lending culture. He emphasized that they operate in strong markets like Texas and Florida that can withstand economic weakness, and will continue to pursue well-underwritten loans that fit their policy. Chairman John Allison reinforced their conservative approach.

Michael Rose inquired about the company's plans for hiring lenders and asked about the potential for the CCFG division to capitalize on rebuilding efforts in California.

Answer

Chairman & CEO John Allison firmly stated that hiring teams of lenders from competitors is not the company's style and is not part of their strategy. President of CCFG, Christopher Poulton, commented that any opportunity from California rebuilding would be a long-term prospect, as the process has been very slow to start.

Michael Rose inquired about general borrower sentiment and loan demand, specifically asking about boat lending, and the current state of loan pipelines. He also asked for details on the net interest margin's puts and takes, new loan yields, and the near-term outlook. Finally, he asked for an update on the credit cleanup from the Happy acquisition and any new credit concerns, particularly related to tariff uncertainty.

Answer

Executive John Marshall noted that boat loan volume was elevated due to manufacturer subsidies, masking tariff uncertainty. Executive Kevin Hester confirmed general borrower tepidness but said core markets remain active, though it's too early for definitive tariff impacts. Executive John Tipton stated that Q1 new loan coupons averaged 7.75% and that while deposit competition is stiff, maturing CDs should provide some relief, with the margin expected to hold steady. Executive John Allison confirmed the Texas credit cleanup is nearly complete.

Michael Rose from Raymond James asked about the reasons for the decline in CCFG loans, the outlook for that portfolio, the impact of West Coast wildfires, and how the bank balances its pricing discipline with the need for loan growth in a competitive environment.

Answer

President of CCFG Chris Poulton explained the loan decline was an intentional, temporary rundown of the C&I book due to unattractive pricing and that the portfolio is expected to grow back. He also confirmed no direct exposure to the wildfires. Chairman John Allison and Chief Lending Officer Kevin Hester acknowledged competitive pressures but affirmed their opportunistic and disciplined approach to both loan growth and M&A.

Michael Rose inquired about any potential credit or demand impact on the Shore Premier Finance portfolio from the recent hurricanes and asked about the comfort level with the loan-to-deposit ratio rising to 88.7%.

Answer

Chief Lending Officer Kevin Hester stated he has not heard of any negative impact to the Shore Premier portfolio, with Chairman John Allison adding that the destruction could even spur some new boat sales. Regarding the loan-to-deposit ratio, CEO Stephen Tipton expressed no discomfort, noting the bank has historically operated above 100% and has access to significant liquidity in its markets.

Michael Rose asked about First Horizon's commercial real estate (CRE) expectations, specifically if the business is expected to inflect and grow this year despite potential headwinds from payoffs. He also inquired about the potential impact of interest rate cap discussions on the company's small credit card book.

Answer

Thomas Hung, CCO, stated that an inflection in CRE is reasonably expected this year, citing increased pipeline momentum, a skew towards construction, and a net increase in total CRE commitments for the first time in two years. Bryan Jordan, CEO, confirmed that the credit card book is small, and the impact of an interest rate cap would be insignificant, roughly $1 million per quarter.

Michael Rose of Raymond James asked about First Horizon's commercial real estate (CRE) expectations, specifically whether the business is expected to inflect and grow this year despite potential headwinds from payoffs and paydowns. He also inquired about the potential impact of interest rate cap discussions on the company's small credit card book.

Answer

Thomas Hung, Chief Credit Officer, stated that a CRE inflection is reasonably expected this year, noting that the business skews towards construction, which is now picking up due to rate decreases. He highlighted a healthy build in the CRE pipeline and a net increase in total CRE commitments in Q4 2025, the first in two years. Bryan Jordan, CEO, confirmed that the credit card book is small, and the impact of an interest rate cap would be insignificant, estimated at roughly $1 million per quarter.

Michael Rose of Raymond James Financial inquired about the current financial health and sentiment of borrowers, the outlook for loan growth in C&I and CRE, and any updates to the low single-digit loan growth forecast for the next year. He also asked about the potential to lower the CET1 capital target and the company's appetite for share buybacks.

Answer

President, Chairman & CEO Bryan Jordan responded that borrowers are remarkably resilient and increasingly optimistic, with an expectation for improved activity in the second half of 2025. Regarding capital, he stated that while they anticipate lowering capital levels over time, the immediate priority is organic loan growth. However, he affirmed the company is comfortable repurchasing stock, believing it creates significant value, and has the flexibility to do so.

Michael Rose of Raymond James Financial inquired about the current health and sentiment of borrowers, the outlook for C&I and CRE loan growth, and the bank's capital strategy, including its CET1 target and appetite for share buybacks.

Answer

President, Chairman & CEO Bryan Jordan described borrowers as "remarkably resilient" with increasing optimism, expecting improved activity in the latter half of 2025. Regarding capital, Jordan indicated that while he expects to lower capital targets over time, the bank will remain prudent. He affirmed that in the absence of strong organic growth, the company is comfortable repurchasing shares, viewing them as a valuable investment.

Michael Rose asked about the confidence in the full-year PPNR growth outlook, inquiring about the rate cut assumptions embedded in the guidance and the expected ramp in expenses. He also questioned the appetite for continued share repurchases given the CET1 target.

Answer

CFO Hope Dmuchowski affirmed confidence in the guidance, noting the base case assumes three rate cuts. She explained that fewer cuts benefit NII, while more cuts would boost countercyclical fee income from businesses like FHN Financial and mortgage, which would also drive higher variable compensation expenses. Chairman, President and CEO Bryan Jordan added that the 11% CET1 target remains appropriate amid uncertainty, but the company views its stock as a good value and will continue to use excess capital for buybacks, supported by expected PPNR growth.

Michael Rose inquired about the impact of the recent securities portfolio restructuring on operating leverage and investment capacity, and whether it would enable accelerated investments. He also asked about the outlook for the mortgage warehouse business and broader commercial loan demand.

Answer

CFO Hope Dmuchowski stated that the company has a structured approach to investments and is focused on PPNR growth, not necessarily accelerating spending. CEO Bryan Jordan added that the restructuring provides greater confidence in achieving positive operating leverage. Regarding loan demand, Jordan noted expected seasonal slowness in mortgage warehouse lending but highlighted recent market share gains. Chief Credit Officer Thomas Hung attributed these gains to the bank's expertise and consistent market presence.

Michael Rose of Raymond James inquired about the net interest margin's potential inflection point in Q4 and whether the bank expects to achieve PPNR growth and positive operating leverage in 2025.

Answer

CFO Hope Dmuchowski explained that the NIM will likely be a "push and pull" each quarter, dependent on the pace of rate cuts, and mentioned shortening promo deposit terms to gain flexibility. CEO Bryan Jordan affirmed his expectation for positive PPNR growth in 2025, driven by a balance of revenue growth and expense control.

Michael Rose asked about the opportunities arising from recent M&A activity in Trustmark's operating markets, particularly concerning hiring and customer acquisition. He also sought insight into the company's 'next evolution' for financial performance, including potential growth rates for the upcoming year, key opportunities, and anticipated headwinds.

Answer

Duane Dewey, President and CEO, confirmed that M&A deals present opportunities for both hiring and customer acquisition, especially in markets with overlap, and Trustmark views it as creating good opportunities. Tom Owens, EVP and CFO, projected continued competitive growth in PPNR (mid-single digits) and, with strong capital deployment (potentially retiring 2% of shares annually), anticipated high single-digit EPS growth as a baseline for 2026. Duane Dewey added that improved financial performance allows for more aggressive investment in organic strategies within key growth markets like Huntsville, Atlanta, and Birmingham, while also staying attuned to M&A discussions.

Michael Rose asked about opportunities arising from recent M&A activity in Trustmark's operating markets, particularly for hiring and customer acquisition. He also sought insight into the 'next evolution' of Trustmark's financial performance, discussing potential growth rates for the upcoming year and outlining key opportunities and headwinds for future numbers.

Answer

President and CEO Duane Dewey confirmed that M&A deals present opportunities for both hiring and customer acquisition, especially in overlapping markets, and that Trustmark views this as creating opportunity. EVP and CFO Tom Owens projected high single-digit EPS growth as a baseline for 2026, combining mid-single-digit growth in pre-provision net revenue (PP&R) with a low single-digit decline in shares outstanding, and mentioned a more proactive capital deployment rate in 2026 given strong CET1. Duane Dewey added that improved financial performance allows for more aggressive investment in organic strategies in key growth markets like Huntsville.

Michael Rose asked about the company's margin outlook, specifically inquiring about the core versus reported margin, the impact of potential rate cuts, and pricing dynamics on both the loan and deposit sides, including new production yields. He also questioned the loan growth environment, considering market dislocations and the company's focus on Texas and Colorado, along with hiring plans and future expectations.

Answer

Chief Strategy Officer Steve Young provided detailed guidance on the NIM, forecasting it to be in the $3.80-$3.90 range for Q4 and 2026, factoring in three rate cuts in 2025 and three more in 2026. He noted higher-than-expected accretion in Q3 due0 to early payoffs of older vintage loans and a decline in PCD loans, projecting Q4 accretion at $40M-$50M and $125M for 2026. He also discussed deposit beta, expecting it to be around 27% for the first 100 basis points of cuts, similar to the 2019-2020 easing cycle. CEO John Corbett addressed loan growth, guiding to mid-single-digit growth for the remainder of 2025, potentially accelerating to mid-to-upper single digits in 2026, driven primarily by commercial and industrial lending. He highlighted significant pipeline growth in Texas, Florida, and Atlanta, and the company's focus on recruiting bankers amidst market dislocation.

Michael Rose inquired about SouthState's net interest margin (NIM) outlook, specifically regarding excess accretion, the impact of potential rate cuts, and pricing dynamics for new loan production and deposits. He also asked about the broader loan growth environment, including opportunities from market dislocation in Texas and Colorado, hiring plans, and future growth expectations.

Answer

Steve Young, Chief Strategy Officer, explained that higher-than-expected accretion was due to early payoffs of specific vintage loans and a decline in PCD loans. He provided NIM guidance of $3.80 to $3.90 for Q4 and 2026, factoring in three rate cuts in 2025 and three in 2026, and a lower deposit beta of 27% for the easing cycle. New loan production rates were $6.56% overall, with Texas and Colorado at $6.79%. CEO John Corbett added that loan growth is expected to be mid-single digits for the remainder of 2025, potentially moving higher in 2026, driven by C&I and residential lending, with significant pipeline builds in Texas, Florida, and Atlanta, and a focus on recruiting bankers due to market dislocation.

Michael Rose of Raymond James Financial requested an update on the expense outlook after the company came in at the low end of its guidance range. He also asked about progress on revenue synergies and retention related to the Independent Financial acquisition.

Answer

CFO William Matthews reiterated prior expense guidance, attributing the Q2 result to normal variability and noting that merit increases will impact Q3. CEO John Corbett highlighted positive revenue synergies, such as the successful adoption of the interest rate swap product by the Texas team, and confirmed that employee and client retention has been excellent.

Michael Rose asked for clarification on the drivers behind the higher-than-expected accretion income in the first quarter and inquired about the outlook for the core net interest margin (NIM) for the remainder of the year.

Answer

Executive William Matthews attributed part of the accretion strength to early payoffs on acquired loans, which boosted loan yields by 6 basis points. Executive Stephen Young added that investors should focus on the total loan yield (6.25%), which is sustainable as new loans are originated at higher rates (6.90%), preventing a future 'cliff'. Young clarified that the reported NIM should be considered the core NIM going forward and guided for a steady range of 3.80% to 3.90% for the rest of 2025, an increase from prior guidance.

Michael Rose of Raymond James Financial, Inc. inquired about the lending environment, loan growth expectations, pro forma expense guidance, and the strategy for managing brokered deposits.

Answer

CEO John Corbett affirmed guidance for mid-single-digit loan growth in 2025, noting that pipelines are slightly softer in legacy markets but stronger in Texas. President William Matthews provided expense guidance, projecting quarterly noninterest expense of $355-$365 million early in the year, declining to $340-$350 million by Q4 as cost savings are realized. Executive Vice President and Chief Financial Officer Stephen Young stated that brokered deposits will serve as a flexible funding lever based on customer deposit growth.

Michael Rose of Raymond James asked about the potential for future reserve releases or lower provisioning given the improving economic outlook and strong credit quality. He also inquired about the loan growth outlook for 2025 and sought details on any other strategic business line changes beyond the disclosed exit of IBTX's mortgage warehouse business.

Answer

Executive William Matthews explained that the Q3 reserve release was model-driven by economic forecasts and that while future releases are possible, it's difficult to predict and not something to build into models. CEO John Corbett reiterated a mid-single-digit loan growth forecast for 2025, with potential for acceleration as the yield curve normalizes. Executive Stephen Young confirmed that the wind-down of IBTX's mortgage warehouse was already factored into their merger modeling and guidance.

Michael Rose asked about the drivers behind the sequential increase in expenses, particularly related to hiring efforts, and the outlook for expenses moving forward. He also sought clarification on the bank's M&A stance, noting a seemingly more open approach compared to previous quarters and whether more sellers are emerging.

Answer

Jefferson Harralson, EVP and CFO, indicated that the medium-to-longer-term expense run rate is expected to be in the 3%-4% range, with Q4 expected to be flat, as the higher variable compensation from Q3 is not necessarily repeating. Richard Bradshaw, President and Chief Banking Officer, added that the bank continues to be opportunistic in hiring top talent, observing a shift where culture is now a primary factor for recruits. Lynn Harton, Chairman and CEO, confirmed that the bank is seeing more potential sellers raising their hands now compared to 2-3 quarters ago, leading to more optimism regarding M&A opportunities, while regulatory confidence remains unchanged.

Michael Rose inquired about the drivers of the sequential increase in expenses, particularly the impact of hiring efforts, and sought an update on United Community Banks' M&A prospects, including any changes in seller interest.

Answer

EVP and CFO Jefferson Harralson indicated that the $4.3 million operating expense increase was primarily due to higher variable compensation, suggesting a flat expense guide for Q4 and a medium-to-longer-term growth rate of 3-4%. President and Chief Banking Officer Rich Bradshaw confirmed ongoing opportunistic hiring for top talent. Chairman and CEO Lynn Harton noted increased interest from sellers in M&A opportunities compared to two to three quarters ago, indicating a more optimistic outlook.

Michael Rose asked about the drivers of the 4.2% annualized loan growth, the impact of any paydowns, and the company's hiring initiatives. He also inquired about the M&A outlook and requested a detailed breakdown of the puts and takes for future net interest margin (NIM) expansion, including deposit beta expectations and any upcoming debt maturities.

Answer

President & Chief Banking Officer Richard Bradshaw stated that Q3 loan growth is expected to be stronger, around 6%, due to some Q2 closings slipping into Q3. He also announced new leadership and hiring in the Alabama market. Chairman & CEO H. Lynn Harton noted the M&A strategy is unchanged, with a more optimistic outlook for potential deals. Executive VP & CFO Jefferson Harralson projected about five basis points of NIM expansion in Q3, driven by lower deposit costs and a mix shift towards loans, and confirmed no significant near-term debt maturities.

Michael Rose followed up on BOK Financial's capital allocation strategy, asking if M&A is back on the table given strong capital levels, stock valuation, and a more favorable regulatory environment, or if the market is too competitive for deals.

Answer

Stacy Kymes, President and CEO, reiterated the capital allocation priority: organic growth first, followed by share repurchases and dividends. He noted the strong tangible common equity at 10.1% and CET1 at 13.6%, alongside significant share repurchases. Kymes stated that while M&A is considered for strong core deposit franchises that add long-term strategic value, BOK Financial is not interested in deals merely for the sake of doing one, maintaining a cautious approach.

Michael Rose asked about BOK Financial's strong loan growth trajectory, competitive dynamics in its markets, opportunities arising from M&A disruption, and the sustainability of this growth into the next year. He also inquired about the company's capital allocation strategy, including the potential for M&A given robust capital levels and a more favorable regulatory environment.

Answer

President and CEO Stacy Kymes highlighted consistent sequential loan growth of approximately 2.5% in Q2 and Q3 2025, driven by core CNI, personal loans, and commercial real estate, with mortgage finance expected to contribute more significantly in Q4. Kymes emphasized that M&A disruption in their footprint creates opportunities for talent and new prospects. Regarding capital allocation, Kymes reiterated the priority of organic growth, followed by share repurchases and dividends, noting strong capital levels (10.1% TCE, 13.6% CET1). He stated that while M&A is considered, BOK Financial seeks deals that add long-term strategic value rather than pursuing them for their own sake.

Michael Rose followed up on loan growth momentum into 2026, potential near-term risks to credit quality, and the company's outlook on stablecoins and technology-related lending.

Answer

CEO Stacy Kymes affirmed that mid-to-upper single-digit loan growth is a reasonable long-term expectation. Regarding credit, he highlighted the company's consistent and conservative underwriting, which should keep losses low. On technology, he sees limited domestic use cases for stablecoins but is monitoring developments, and reiterated a cautious lending approach, avoiding areas like private credit and binary-outcome tech ventures.

Michael Rose asked for a comparison of the current energy portfolio's risk profile to the 2014-2017 downturn, given falling energy prices. He also requested the potential impact on net interest income (NII) under scenarios of more Fed cuts or no cuts at all.

Answer

CEO Stacy Kymes distinguished the current environment from 2014, citing significantly lower leverage (under 1x vs. over 3x) and more robust hedging by borrowers, which mitigates risk from price declines. CFO Martin Grunst stated that neither a scenario with more rate cuts nor one with no cuts would materially impact NII guidance, though the mix between trading fees and trading NII could shift.

Michael Rose asked for details on the drivers behind the quarterly loan balance decline, the strength of the loan pipeline, and the potential impact of the upcoming election. He also inquired about the outlook for fee-based businesses, particularly identifying opportunities and headwinds amid changing interest rates.

Answer

EVP of Regional Banking Marc Maun and CEO Stacy Kymes addressed loan growth, attributing the quarterly decline to unique payoffs in energy and healthcare after 11 consecutive growth quarters. They affirmed that core C&I loans grew 6.4% year-over-year and that pipelines remain strong, with significant capacity in CRE. On fees, EVP of Wealth Management Scott Grauer noted trading weakness was confined to MBS and that an inflection point has been reached. CFO Marty Grunst and CEO Stacy Kymes highlighted future opportunities in mortgage banking and the stability of diversified fee streams like transaction card services.

Michael Rose requested a summary of the major changes from the pro forma EPS reconciliation for 2026 and 2027, as presented in the original deal slide deck, to understand the updated build from the Industry transaction.

Answer

CEO Dan Rollins and CFO Valerie Toalson highlighted the most significant change as an $80 million pickup in deferred tax assets, which contributed to a total $140 million improvement on the capital side. They clarified that while these adjustments significantly boosted day-one tangible book value, there wasn't a substantial change from an actual income statement standpoint.

Michael Rose asked about Cadence Bank's expense outlook for 2026, considering the remaining 75% of cost saves from the Industry acquisition, along with typical increases like merit and healthcare. He also requested a summary of major changes to the pro forma EPS reconciliation from the original deal announcement slide deck.

Answer

CEO Dan Rollins noted that significant cost saves from Industry are yet to be realized, primarily flowing through in 2026, with Q1 2026 expected to be a more representative run-rate quarter. CFO Valerie Toalson added that 2026 guidance will be provided with year-end earnings, but the bank anticipates continuing to build operating leverage. Regarding the pro forma EPS, Mr. Rollins highlighted an $80 million pickup from deferred tax assets and a total of $140 million improvement on the capital side from refined marks, which Ms. Toalson clarified primarily benefited day-one tangible book value rather than income.

Michael Rose asked if the Industry acquisition would materially change the bank's beta expectations or its overall interest rate sensitivity profile. He also inquired about the potential use of the share buyback authorization.

Answer

CFO Valerie Toalson stated that there are no significant changes expected to deposit betas and that the bank's interest rate sensitivity profile remains relatively neutral. CEO Dan Rollins confirmed that the bank does not anticipate using its share buyback program in the near term, as the priority is to build capital following the recent M&A activity.

Michael Rose from Raymond James Financial asked if the Industry acquisition would change the bank's beta expectations or its overall interest rate sensitivity profile. He also questioned the bank's current stance on its share buyback program.

Answer

Senior EVP & CFO Valerie Toalson stated there would be no significant changes to betas and that the bank's interest rate sensitivity profile remains relatively neutral. Chairman and CEO Dan Rollins confirmed that due to the need to build capital following the Industry transaction, the company does not expect to be active with its share buyback program in the current quarter.

Michael Rose asked if there was anything significant to read into the pickup in line utilization. He also inquired if management is seeing concern from customers in any specific portfolio segments, given the macroeconomic uncertainty.

Answer

CEO James Rollins and CFO Valerie Toalson dismissed the line utilization change as insignificant and within a normal range. Regarding credit concerns, Rollins stated that credit quality is stable. Executive Chris Bagley added that while there is anxiousness across the entire customer base due to uncertainty, the bank has not identified any specific segment that is overly concerning and continues to evaluate on a credit-by-credit basis.

Michael Rose of Raymond James requested a breakdown of the 2025 revenue guidance between net interest income and fees. He also asked about expense flexibility to preserve operating leverage and questioned if the credit charge-off guidance for 2025 was conservative.

Answer

CEO James Rollins indicated limited flexibility on expenses due to ongoing investments in people and technology. CFO Valerie Toalson stated they are more bullish on net interest income growth than fee income. Regarding credit, Rollins and executive Chris Bagley acknowledged the guidance could be conservative but is designed to account for the potential lumpiness of charge-offs.

Michael Rose of Raymond James inquired about the company's hiring pipeline and its potential impact on expense growth. He also asked about the near-term appetite for share repurchases and the strategic outlook for M&A.

Answer

Chairman and CEO James Rollins characterized hiring as 'normal investing' and not indicative of a large-scale team lift-out. He confirmed the bank will remain opportunistic with its share buyback program. On M&A, Rollins reiterated a strong preference for in-market acquisitions to build scale in key cities like Tampa, Nashville, Houston, and Dallas, confirming that conversations are ongoing.

Michael Rose inquired about any acceleration in loan paydowns during Q3 2025, whether moderation is expected with the forward curve into 2026, and how production versus payoff trends might impact standalone growth next year. He also asked about the competitive landscape for hiring lenders in the Southeast, the impact on meeting hiring goals, and potential cost implications.

Answer

CFO Jamie Gregory acknowledged elevated paydowns as a headwind to loan growth but emphasized strong production trends, with wholesale bank production up 70% year-over-year and commercial banking up 19% year-to-date, and Q4 pipelines up 14% quarter-over-quarter. CEO Kevin Blair addressed hiring competition by highlighting Pinnacle's track record of hiring teams, not just individuals, and their compensation structure (larger base, less variable). He stressed that the combined company offers a platform for bankers to serve clients without bureaucracy, with bigger balance sheets and better products, attracting talent from larger banks.

Michael Rose asked about the potential for increased capital return and a lower CET1 ratio target in a deregulatory environment, and also questioned the outlook for brokered deposits and assumptions for cash balances within the margin guidance.

Answer

CFO Jamie Gregory explained that the $400 million share repurchase authorization provides significant flexibility and that the company monitors industry capital levels, suggesting targets could be adjusted as stress tests show excess capital. He added that elevated cash balances are expected to decline, which will be accretive to the margin, and that brokered deposits should also decrease as core deposit growth is forecast to align with loan growth.

Michael Rose of Raymond James asked for Synovus's current thinking on M&A given the competitive landscape in the Southeast and requested clarification on what management considers a 'normal year' for loan growth.

Answer

CEO Kevin Blair reiterated that the company's primary focus is organic growth through talent and technology investments, viewing industry disruption as a market share opportunity. He defined a 'normal' loan growth year for Synovus as 100-200 basis points above underlying GDP growth, which would translate to 4-5% growth in a normal economic environment.

Michael Rose asked about Hancock Whitney Corporation's loan growth, specifically addressing the mid-single-digit target, ongoing paydowns (including SNCS and healthcare), and the potential outlook for 2026 growth given solid underlying production.

Answer

President and CEO John Hairston explained that while loan production was strong (up 6% quarter-over-quarter and 46% year-over-year), net growth was impacted by higher paydowns from faster-than-expected industrial project completions and core client sales to larger organizations. He noted private credit takedowns were consistent but not the primary driver. Hairston anticipates paydowns will remain high in 2026, necessitating increased production (from $1.8 billion to over $2 billion quarterly) and additional bankers to achieve consistent mid-single-digit annualized growth. CFO Mike Achary addressed capital, stating the company is not focused on M&A and aims to deploy capital through organic balance sheet growth (e.g., Dallas expansion) and shareholder returns via buybacks (expected to continue at current levels in Q4 2025) and potential dividend discussions in Q1 2026.

Michael Rose of Raymond James Financial inquired about Hancock Whitney's capital management strategy, asking for a target CET1 ratio for buybacks and the key drivers behind the company's loan growth outlook.

Answer

CFO Michael Achary stated that while the company is comfortable operating with a CET1 ratio between 11% and 11.5% and a TCE ratio around 8%, these are not hard limits. President and CEO John Hairston added that loan growth is primarily driven by acquiring new full-relationship clients, as businesses have become less sensitive to macroeconomic headlines.

Michael Rose of Raymond James inquired about the rationale for not increasing share buybacks more aggressively, the methods for assessing credit impacts from potential tariffs, and the drivers behind the increased PPNR guidance, specifically the contribution from the Sabal Trust acquisition versus core operations.

Answer

CFO Michael Achary confirmed Hancock Whitney is increasing its buyback, stating the pace will be at or above the prior quarter's level, representing a significant year-over-year increase, contingent on the external environment. Chief Credit Officer Chris Ziluca explained that the bank is analyzing sectors vulnerable to tariffs and engaging with customers, who are mostly in a 'wait and see' mode. CEO John Hairston added that client behavior does not indicate imminent recession fears. Finally, Mr. Achary clarified that the PPNR guidance increase is driven by both the Sabal acquisition and stronger core fee income, as well as underlying expense savings that offset Sabal's costs.

Michael Rose of Raymond James inquired about the potential aggressiveness of share buybacks, the key drivers for the strong 2025 loan growth outlook, and the expected financial impact from the Sabal Trust acquisition.

Answer

CFO Michael Achary stated that buybacks, which slowed in Q4 due to the Sabal deal, are expected to return to at least Q2/Q3 levels. CEO John Hairston attributed loan growth confidence to the cessation of the SNIC portfolio runoff and strong production in core areas like business banking and CRE. Regarding Sabal, Achary deferred detailed financial guidance until after Q1 but confirmed the deal is accretive from day one.

Michael Rose inquired about the drivers behind the increase in criticized commercial loans, the potential for lower rates to improve credit, and the outlook for loan growth after the planned reduction in the SNC portfolio.

Answer

Chief Credit Officer Christopher Ziluca explained that the criticized loan migration was diversified across the C&I book, partly influenced by a recent SNC exam, and not concentrated in specific sectors. He noted that while lower rates would help, softening demand and higher operating costs are also factors. President and CEO John Hairston added that the purposeful headwind from SNC reductions is now largely complete, and while overall demand is tepid, commercial pipelines are building, setting up for a better growth story in 2025.

Michael Rose of Raymond James Financial sought more details on the international deposit strategy, asking about the current size of the book, potential growth limits as a percentage of total deposits, and the beta and stickiness of these funds. He also asked about the M&A environment, including hiring and potential acquisitions, and requested an updated outlook on loan growth.

Answer

CFO Rob Anderson stated the global correspondent deposits are currently $268 million, or just over 10% of the total deposit book, and he doesn't foresee it exceeding 15%. President, CEO & Chairman Luis de la Aguilera added that the business is built on deep relationships and is handled conservatively. Both executives confirmed the deposits have a very low beta and are sticky. Regarding M&A, Mr. de la Aguilera noted they are always opportunistic. For loan growth, Mr. Anderson guided towards a conservative low-teens growth rate, with quarterly originations between $150 million and $180 million.

Michael Rose from Raymond James Financial questioned the potential size and concentration limits for the international deposit book, the impact of Florida's M&A environment on hiring and USCB's own acquisition strategy, and sought clarification on the loan growth outlook for the coming quarters.

Answer

CFO Rob Anderson stated the international deposit book is about $268 million, or just over 10% of total deposits, and has historically remained below 15%. CEO Luis de la Aguilera emphasized the business is handled conservatively and that the bank is always opportunistic regarding M&A and talent acquisition from market dislocations. Regarding growth, CFO Anderson guided towards a conservative low-teens loan growth rate, with quarterly originations expected between $150 million and $180 million.

Michael Rose from Raymond James Financial sought more detail on the international deposit strategy, asking about the current size of the book, potential growth limits as a percentage of total deposits, and its risk profile. He also asked about M&A opportunities, both for talent acquisition and bank acquisitions, and questioned if the recent strong loan growth is sustainable.

Answer

CFO Rob Anderson stated the global correspondent banking book is $268 million, or just over 10% of deposits, and has historically remained below 15%. President, CEO & Chairman Luis de la Aguilera emphasized the low-risk, relationship-based nature of the business and its high stickiness. Regarding M&A, he confirmed the bank is always opportunistic in hiring from market dislocations and maintains relationships for potential bank acquisitions. For loan growth, Mr. Anderson guided towards a more conservative low-teens rate, with quarterly originations expected between $150 million and $180 million.

Michael Rose from Raymond James Financial sought details on the international deposit strategy, including its current size and potential growth limits. He also asked about M&A strategy, both for hiring and potential acquisitions, and questioned if the recent mid-teens loan growth rate is sustainable.

Answer

CFO Rob Anderson stated the global correspondent banking book is $268 million, or just over 10% of deposits, and is not expected to exceed 15%. He confirmed these deposits have low beta and high stickiness. President, CEO & Chairman Luis de la Aguilera affirmed the bank is always opportunistic regarding M&A and hiring from market dislocations. Regarding growth, Rob Anderson guided towards a more conservative low-teens loan growth rate, with quarterly originations expected between $150 million and $180 million.

Michael Rose of Raymond James Financial sought details on the international deposit strategy, including the book's current size, potential growth limits, and deposit characteristics. He also asked about the impact of M&A on hiring, potential acquisition appetite, and the forward-looking loan growth rate.

Answer

CFO Rob Anderson specified the global correspondent banking book is $268 million, or just over 10% of deposits, and is not expected to exceed 15%. President, CEO & Chairman Luis de la Aguilera confirmed these deposits have low beta and high stickiness, and noted the bank is opportunistic regarding M&A-driven hiring. Regarding loan growth, Rob Anderson guided to a conservative low-teens percentage growth rate, with quarterly originations expected between $150 million and $180 million.

Michael Rose sought to better understand the international deposit strategy, asking about the current size of the book, its growth potential, and any internal limits on its concentration. He also asked about M&A opportunities, both for talent acquisition and bank acquisitions, and the outlook for loan growth.

Answer

CFO Rob Anderson stated the global correspondent banking deposits are $268 million, or just over 10% of total deposits, and he does not foresee the concentration exceeding 15%. He also guided loan growth more conservatively to the low-double-digits. President, CEO & Chairman Luis de la Aguilera confirmed the bank is always opportunistic regarding M&A and has a history of hiring talent from market dislocations. He also noted they leverage correspondent banking relationships to attract personal accounts from foreign executives.

Michael Rose followed up on the deposit discussion, asking about the impact from specialty verticals and new hires on the growth outlook. He also questioned how to model the expense base going forward and confirmed that organic growth remains the primary focus for capital allocation over share buybacks.

Answer

Executive Luis de la Aguilera confirmed new hires were made to support the HOA, business banking, and retail verticals, and highlighted a significant opportunity in HOA deposits due to new state legislation. CFO Robert Anderson projected the quarterly expense base would gradually increase from $12.1 million toward the $12.3-$12.4 million range, driven by new hires and performance-based incentive accruals. De la Aguilera affirmed that organic growth continues to be the bank's capital priority.

Michael Rose inquired about the association banking deposit vertical, asking about any concerns given market challenges and whether the bank might de-emphasize it. He also asked about the rationality of overall deposit competition, the source of the increase in 'other' service fees, and the company's hiring plans and expense outlook for 2025.

Answer

Executive Luis de la Aguilera stated he is 'bullish' on association banking, citing the large market and the bank's selective approach focused on professionally managed associations. He confirmed the scalability of this and other verticals. CFO Robert Anderson clarified that the increase in 'other' service fees was driven by loan prepayment penalties. On hiring, de la Aguilera said the bank is properly staffed for its 2025 plans but will remain opportunistic for key talent, without budgeting for new teams.

Michael Rose of Raymond James asked for historical context on the growth of specialized deposit verticals, potential limits on their growth, and details on incentive structures. He also questioned the outlook for the Net Interest Margin (NIM) from its September level, debt repayment plans, and future expense trends.

Answer

CEO Luis de la Aguilera detailed the growth of specialized deposit verticals from $312 million in 2020 to $644 million in Q3 2024, noting the trend is continuous. He described the incentive plan as semiannual, rewarding loan and deposit growth with a strong focus on asset quality. CFO Robert Anderson projected the NIM would continue to grind higher from the 3.09% September level, driven by loan repricing and effective management of deposit costs. Anderson also confirmed the expense-to-average-assets ratio is expected to hold in the 1.80% to 1.90% range.

Michael Rose of Raymond James Financial asked about the company's capital deployment strategy, including the appetite for its new $50 million share repurchase program and its M&A outlook. He also questioned the plan for managing the bank's asset size relative to the $10 billion regulatory threshold.

Answer

Chairman, President & CEO Drake Mills stated that a key capital priority is the redemption of $75 million in subordinated debt in the fourth quarter, which he views as a beneficial use of cash. Regarding M&A, he emphasized a preference for lift-out strategies to attract banking teams from competitors, especially amid market consolidation, but remains open to quality core deposit opportunities. He also confirmed the current forecast indicates the bank will remain under the $10 billion asset threshold for 2025, thereby delaying the financial impact of the Durbin Amendment for another year.

Michael Rose inquired about the confidence in deposit beta assumptions for the NIM outlook, the structure of the incentive program, potential changes to the mortgage business, and the bank's capital allocation priorities, including buybacks and M&A.

Answer

CFO Wally Wallace expressed confidence in their in-house deposit beta modeling, which aligns with historical trends. President and CEO of Origin Bank, Lance Hall, detailed how the 2025 incentive plan will shift to a 50/50 loan and deposit focus to drive growth. Chairman, President and CEO, Drake Mills, confirmed the bank will continue its mortgage warehouse business but is re-evaluating the broader mortgage delivery model for efficiency. He also stated that the primary use of capital is for organic growth and sub-debt redemption, prioritizing it over buybacks or M&A for the next 12-18 months.

Michael Rose asked for the outlook on near-term deposit growth and costs, as well as the loan growth forecast for the second half of the year, seeking a breakdown by major loan categories like CIB and RESG.

Answer

COO Cindy Wolfe indicated that deposit costs are expected to remain stable until a change in Fed policy. CFO Tim Hicks raised the full-year loan growth guidance to a range of 11% to 13%, noting that strong growth from the CIB group is expected to be partially offset by a significant increase in prepayments within the RESG portfolio.

Michael Rose inquired about the bank's stock buyback plans and the potential for increased repurchase activity. He also asked about the company's ability to maintain its high profitability (e.g., a 2% ROA) as the business mix shifts more towards lower-yielding CIB loans, and questioned the typical size of a CIB credit.

Answer

President Paschall Hamblen confirmed plans to increase the parameters for stock buybacks, though actual repurchases will remain dependent on the stock price. Chairman and CEO George Gleason addressed profitability, stating that while CIB coupons may be lower, the impact is offset by fees and deposits, making the overall return profile comparable. He believes ROE could even improve long-term due to better capital efficiency from diversification. President of CIB Jake Munn added that CIB loans are relationship-focused and smaller than RESG deals, typically under $150M-$200M.

Michael Rose asked about the potential deposit-gathering opportunities within the Corporate & Institutional Banking (CIB) build-out and the potential impact on overall credit quality as the loan mix shifts away from the historically low-loss RESG portfolio.

Answer

CIB President Jake Munn detailed the deposit opportunities, particularly within the corporate banking and sponsor finance verticals, targeting a 30% self-funded ratio over time for that business line. CEO George Gleason acknowledged that other verticals might have slightly higher loss rates than RESG but stressed that the bank's disciplined, credit-first culture is embedded in all teams, expecting to maintain its historically low charge-off ratio relative to the industry.

Michael Rose of Raymond James sought to understand the drivers of the decline in problem loans, the rationale for building reserves, the sensitivity of loan paydowns to rate changes, and the outlook for the mortgage business.

Answer

CEO Phillip Green attributed the reduction in problem loans to specific resolutions and payoffs, including a large apartment project. CFO Dan Geddes added that the reserve build was a prudent measure to account for tariff and recession risks. Regarding the mortgage business, Green noted growth is strong due to its small base and a successful internal referral strategy, with Geddes highlighting that 30% of mortgages are to new bank customers.

Michael Rose asked for an outlook on the government-guaranteed lending business (formerly North Avenue Capital), the potential fee income from that line item for the year, and the forecast for the mortgage warehouse business, including any potential for RWA relief.

Answer

CEO Malcolm Holland and CFO Terry Earley expressed a bullish outlook on government-guaranteed lending, especially the more granular SBA business, expecting it to outperform in late 2025 and 2026. They guided for fee income to be materially better than last year but not at the peak levels of two years ago. Regarding the warehouse, Terry Earley noted that while balances are rate-dependent, RWA relief is a priority and the business maintains strong risk-adjusted returns.

Michael Rose sought an outlook for the North Avenue Capital government-guaranteed lending business, a forecast for its related fee income, and an update on the mortgage warehouse business, including any potential for RWA relief.

Answer

CEO Malcolm Holland and CFO Terry Earley expressed strong optimism for the government-guaranteed lending business, highlighting a strategic shift towards the more granular and stable SBA lending space. They expect fee income from this line to be materially better than last year. Regarding the mortgage warehouse, Terry Earley noted that while balances are sensitive to interest rates, the risk-adjusted returns remain attractive, and securing RWA relief is a key priority for the bank.

Michael Rose of Raymond James asked for an updated outlook on the North Avenue Capital government-guaranteed lending business, a forecast for its related fee income, and the outlook for the mortgage warehouse business, including any potential for Risk-Weighted Asset (RWA) relief.

Answer

Chairman and CEO Malcolm Holland expressed a bullish outlook for the government-guaranteed lending business, highlighting a shift in focus to the more granular SBA lending space and significant investments in new personnel. CFO Terry Earley added that the SBA business has had two very strong quarters and provides a more stable revenue stream. Regarding fee income, they projected it would be 'materially better' than the previous year but not back to 2023 levels. On the mortgage warehouse, Terry Earley noted that balances are highly dependent on interest rates but that risk-adjusted returns remain strong, and securing RWA relief is a key priority.

Michael Rose inquired about the drivers behind loan growth trends, particularly the impact of paydowns, and asked for expectations for the mortgage warehouse. He also questioned the net interest margin (NIM) impact of an expiring hedge and sought early insights from the bank's engagement with a consulting firm.

Answer

CEO Malcolm Holland confirmed that significant loan payoffs are tempering net growth, projecting it to be below mid-single-digits. CFO Terry Earley added that while payoffs helped reduce CRE concentration, the mortgage warehouse outlook is cautious due to seasonality and rates. Earley explained the expiring hedge contributes $1 million/month to NIM and will not be renewed at similar favorable terms, though other hedges will partially mitigate the impact. Both executives noted the consulting firm's work is a long-term initiative focused on broad process and technology efficiencies, not a quick fix.

Michael Rose asked about the potential for deposit costs to peak, opportunities to shed higher-cost funding, the composition of the nonaccrual loan portfolio, and whether the bank was considering any further securities portfolio restructurings.

Answer

CFO Terry Earley responded that deposit costs are at or near their peak and the focus is now on remixing the deposit base by repricing or moving out higher-cost funds. Chief Credit Officer Curtis Anderson described the nonaccrual bucket as having a 'stable to positive' outlook with defined strategies for each credit. CEO Malcolm Holland added he expects a 'pretty good dip' in NPAs in Q3. Regarding the portfolio, Terry Earley stated that no further securities restructurings are planned, citing the portfolio's good yield and short duration, but mentioned they are looking at a BOLI restructure.

Michael Rose of Raymond James questioned which areas of the loan portfolio are under deeper review, the company's appetite for share repurchases given its stock performance, and the flexibility of its expense-to-average-asset ratio target if revenue growth slows.

Answer

Executive Tyson Abston responded that while they are monitoring for any direct tariff impacts, they remain confident in the portfolio's credit quality due to its high granularity and the resilience of their customer base. Executive Shalene Jacobson provided specifics on the low average balances in CRE, construction, and C&I loans. Regarding buybacks, Abston confirmed they are a capital allocation priority and the company will re-enter the market when opportunities arise. He also clarified that the 2.5% expense-to-average-asset ratio is a long-term target, not a rigid rule, allowing for flexibility to make strategic investments.

Michael Rose from Raymond James questioned which portfolio segments are under increased credit scrutiny, the company's appetite for share repurchases, and the flexibility of its expense-to-asset ratio target.

Answer

Executive Tyson Abston stated that while they are monitoring for tariff impacts, they remain confident in the portfolio's granularity and underwriting. Executive Shalene Jacobson added that low average balances in C&I and real estate loans mitigate risk. Regarding capital, Tyson Abston confirmed that share buybacks are a priority for excess capital and they will re-enter the market when opportune. He described the 2.5% expense-to-average-asset ratio as a long-term target that allows for short-term flexibility to support growth.

Michael Rose from Raymond James sought more detail on the employee compensation expense trend, the outlook for credit provisions, the potential aggressiveness of the stock buyback plan, and more specific guidance on NIM expansion.

Answer

Executive Shalene Jacobson clarified that employee expenses, while down in Q4, are expected to rise in Q1 and that the budget includes new lender hires. On asset quality, she stated that if the economy improves, the provision could be reduced or even reversed, depending on loan growth. Executive Tyson Abston stated the bank plans to be 'much more aggressive' with its stock buyback due to a perceived disconnect between its stock price and intrinsic value. For NIM guidance, Abston reaffirmed that 2 basis points of expansion per month serves as a 'good baseline' for 2025.

Michael Rose inquired about the net interest margin (NIM) outlook, considering the interplay between deposit and loan repricing and recent securities purchases. He also asked for an update on the company's long-term growth strategy, including the potential for $1-2 billion in growth via organic means and M&A, and sought clarification on the stock buyback program.

Answer

Executive Shalene Jacobson confirmed an expected NIM increase of about 2 basis points per month, targeting just under 3.50% by the end of 2025, driven by significant CD repricing at lower rates. Executive Tyson Abston added that the company is strategically adding duration to its bond portfolio. Regarding growth, Abston outlined a strategy to leverage the company's strong position for both organic growth and bolt-on acquisitions over the next 3-4 years. On buybacks, Jacobson noted that the current stock price makes repurchases less attractive, and the company will remain opportunistic.

Michael Rose asked about the strategy behind increasing on-balance sheet liquidity, the outlook for the net interest margin (NIM) given declining loans, and the expected pace of the share repurchase program.

Answer

Executive Tyson Abston explained that the bank is building liquidity to be well-positioned for growth when the economy improves, a strategy similar to their approach during the 2008 financial crisis. He confirmed the NIM is still expected to improve by 2-3 basis points per month and could surpass the previous 3.50% target. He also affirmed the bank's commitment to the share buyback program, stating it will continue as long as the earn-back period remains attractive.

Inquired about the pace of loan officer hiring, cost preparations for crossing $100 billion in assets, and whether the company expects to achieve positive operating leverage in 2025.

Answer

The company is focused on its internal training program for new talent but will also hire selectively. Costs for crossing $100 billion are being layered in over time to avoid a large single-year impact. Achieving positive operating leverage is the goal for 2025.

Michael Rose inquired about the pace of future investments in loan officer hiring, updates on costs related to crossing the $100 billion asset threshold, and whether the bank expects to achieve positive operating leverage in 2025.

Answer

Chief Banking Officer Peter Sefzik emphasized Comerica's focus on its internal training program for developing talent over expensive external hires. CFO Jim Herzog noted that costs for $100B readiness are being layered in over time to avoid a sudden expense increase. Herzog also confirmed that achieving positive operating leverage in 2025 is the bank's goal and expectation.

Asked for details on the drivers behind the projected steep margin ramp-up to ~3% by year-end, the impact of a 'higher for longer' rate environment on the long-term margin outlook, and the bank's intermediate-term loan growth potential.

Answer

The margin ramp is supported by accelerating asset repricing (new loans are ~300 bps higher) and the Q2 benefit of paying down expensive funding. The long-term margin target of ~3.50% is still achievable but might be delayed from late 2025 to 2026 in a 'higher for longer' scenario. The bank's intermediate-term organic loan growth potential is seen as 8-10% in a stable economy, bolstered by the new San Antonio expansion.

Asked for details on a specific CRE credit that was moved to non-accrual, the accounting treatment for an OREO loss, and a bridge to the bank's long-term NIM target, including the underlying rate assumptions.

Answer

The non-accrual credit is a single property in Houston that is expected to be resolved soon. The OREO loss was booked through the fee income line, consistent with the bank's historical accounting policy. The path to a mid-3% NIM is driven by repricing earning assets higher (even in a flat rate environment) and significant liability cost reductions in a falling rate environment, thanks to a large portfolio of short-duration and indexed funding.

Inquired about potential bond portfolio restructuring, the outlook for mortgage warehouse lending, and the credit quality and reserve allocation for that specific portfolio.

Answer

Executives stated they have no plans to restructure the bond portfolio to preserve capital. They expect warehouse balances to remain stable at current levels through 2024. The reserve for this portfolio is not broken out separately, and there were no downgrades in the quarter.

Questioned the bank's credit quality given its relatively short history, the interplay between future expense levels and fee income growth, and the potential risks to the net interest margin if rate cuts do not occur.

Answer

Management defended their credit quality, citing strong metrics, third-party validation, and performance through recent challenges. They confirmed investments in fee-generating areas are complete and will now drive operating leverage, with an expected expense run rate of ~$37M. The NIM is expected to remain stable, as the increase in asset yields is keeping pace with the moderating increase in deposit costs.

Asked for details on managing down-rate sensitivity for the NIM, an update on purchase accounting accretion, and clarification on the decline in service charges and the outlook for fee income.

Answer

The bank is confident in a down-rate scenario due to a high percentage of indexed deposits that will reprice quickly. They are conservative in their modeling but believe they can expand margin with new loan pricing and growth. Purchase accounting accretion was $450,000 in Q4 with $9.4 million remaining, to be spread over 3-4 years. The Q4 dip in service charges was an anomaly; they expect significant growth in fee income in 2024 from treasury and credit card services, supported by a recent price increase.

Asked for details on purchase accounting accretion, the drivers behind recent credit quality changes, and expectations for loan growth in the upcoming year.

Answer

Purchase accounting accretion from the Canyon deal was about $80,000, with total accretion around $650,000 for the quarter. Future accretion is expected to be $500k-$600k per quarter. The credit quality changes are more one-off and proactive rather than systemic, though higher rates are pressuring some CRE clients' expenses. A mid-single-digit loan growth rate for next year is considered a fair expectation.