Sharon Gee

Sharon Gee, on behalf of Manuel Navis at D.A. Davidson, asked about the credit impact on loans that repriced significantly higher during the quarter.

Answer

CFO Susan Cullen stated that no credit stress has been observed in the loans that repriced 154 basis points higher. She explained that 92% of these loans were retained and remain current, attributing the strong performance to the bank's underwriting discipline, which includes stress-testing loans at origination for rate increases up to 200 basis points.

Speaking on behalf of Manuel Navis, Sharon Gee from D.A. Davidson & Co. asked about any potential credit stress observed in loans that repriced significantly higher during the quarter.

Answer

Senior EVP and CFO Susan Cullen confirmed that no credit stress was observed. She noted a 92% retention rate on the repriced loans, which are current. She attributed the strong performance to the bank's practice of stress testing loans at origination for rate increases of up to 200 basis points, which provided confidence in their ability to perform at the new, higher rates.

Sharon Gee, on behalf of Manuel Navis at D.A. Davidson, asked about the credit implications of the significant loan repricing, specifically whether loans that repriced 154 basis points higher in Q2 experienced any credit stress.

Answer

CFO Susan Cullen stated that the bank is not seeing any credit stress from the repricing activity. She highlighted that 92% of the repriced loans were retained and remain current. Cullen attributed this strong performance to the bank's underwriting discipline, which includes stress testing loans at origination for rate increases of up to 200 basis points, providing a buffer for the actual repricing.

Sharon Gee of D.A. Davidson & Co., asking on behalf of Manuel Navis, questioned the outlook for operating expense trends following the Q2 restructuring and asked how the recent branch acquisition integrates with the company's de novo expansion plans.

Answer

CFO Marya Burgio Wlos stated that the restructuring charge was related to branch consolidation and that she expects operating expenses to be relatively flat going forward. CEO Dimitar Karaivanov added that the branch acquisition is a 'perfect complement' to their organic strategy, creating a top-five market share presence in the Lehigh Valley upon its expected Q4 closing.