Will Jones

Will Jones, continuing for Catherine, asked about the immediacy and extent of the talent and client acquisition opportunities arising from M&A disruption. He also inquired about incremental deposit betas and the company's leverage to manage deposit costs in 2026, given the competitive market. Finally, he asked Chris Holmes to frame the ideal M&A opportunity in terms of size, geography, and desired characteristics.

Answer

CEO Chris Holmes and COO and CFO Michael Mettee described the talent acquisition opportunity as both immediate and long-term, driven by market disruption and M&A activity, emphasizing FB Financial's culture and long-term vision. Michael Mettee discussed deposit costs, expecting incremental deposit betas to remain in the 55%-60% range for interest-bearing deposits, acknowledging competitive pressures but stressing a fair value proposition for long-term customer relationships. Chris Holmes outlined M&A targets as banks performing well, typically $2 billion to $7 billion in assets, located in the Southeast, Carolinas, or Virginia, preferably contiguous to existing geographies, and not requiring significant fixes.

Will Jones asked about the immediacy and active observation of M&A-driven talent and client acquisition opportunities on the ground. He also inquired about incremental deposit betas and the company's leverage to manage deposit costs in 2026, given expected growth and market competitiveness. Finally, he asked Chris Holmes to frame the ideal M&A opportunity in terms of size, geography, and characteristics.

Answer

CEO Chris Holmes explained that M&A creates disruption, and the impact on talent varies, emphasizing FB Financial's focus on culture, long-term plan, and client care. COO and CFO Michael Mettee cited Huntsville, Alabama, as an example of significant banker disruption creating opportunities, even without M&A. Both agreed the opportunity is both immediate and a long-term play. Regarding deposit costs, Michael Mettee acknowledged potential margin compression from competitive new relationships but stated FB Financial aims for a fair value proposition, not zero-cost deposits, estimating incremental deposit betas in the 55-60% range for interest-bearing deposits. For M&A, Chris Holmes specified geographic interest in the Southeast (Carolinas, Virginia, Georgia, Alabama, northern Florida), preferring contiguous locations. He targets well-performing banks typically between $2 billion and $6-7 billion in assets, avoiding those needing significant fixes, but would consider smaller for strategic market entry.

Will Jones sought further insight into Amrize's confidence regarding 2026 pricing in building materials, specifically for cement and aggregates, and asked about demand differences between Canada and the U.S.

Answer

Jan Jenisch, Chairman and CEO of Amrize, declined to provide specific guidance for next year's pricing or volumes, stating that market dynamics had been extensively discussed. He confirmed that Amrize made good progress in both Canada and the U.S. in Q3.

Will Jones explored Amrize's confidence in 2026 Building Materials pricing, specifically if cement pricing relies on volume growth and if aggregates could see mid-to-high single-digit price growth. He also asked about demand views for Canada versus the U.S.

Answer

Jan Jenisch, Chairman and CEO, declined to provide specific 2026 guidance on volumes or pricing, stating that extensive comments were already provided on market dynamics and action plans. He noted good progress in Q3 in both Canada and the U.S.

Will Jones inquired about Seacoast Banking Corporation's growth outlook, specifically the potential to accelerate growth in 2026 given record pipeline momentum and the added flexibility from The Villages Bancorporation balance sheet. He also asked whether 2026 would be a year of optimization or continued modest balance sheet growth, and for an update on the Atlanta market expansion and talent acquisition strategy.

Answer

CEO Chuck Shaffer expressed confidence in delivering high single-digit growth, highlighting the strong commercial banking team and increased liquidity from The Villages acquisition. Chief Strategy Officer Michael Young added that the company de-risked its portfolio and expects continued deposit growth in 2026, with the balance sheet expanding in line with deposits. Mr. Shaffer detailed the strategic expansion into Atlanta, focusing on the northern arc and leveraging M&A consolidation opportunities to add talent and potentially open new branches.

Will Jones asked about Seacoast Banking Corporation of Florida's growth outlook, the consistency of its mid to high single-digit growth, pipeline momentum, and the flexibility provided by The Villages Bank Corporation acquisition, inquiring about the opportunity to accelerate growth into 2026 and the company's willingness to scale up.

Answer

Chuck Shaffer (CEO) and Michael Young (CSO) highlighted the impressive consistent growth, successful Heartland conversion, strong pipeline, and liquidity from The Villages transaction. They emphasized the maturity of the commercial banking team and reiterated a high single-digit growth guide for coming quarters, noting a de-risked portfolio and net growth from new relationships. Michael Young (CSO) also detailed plans to de-lever slightly in Q4 by paying off wholesale funding, anticipating significant deposit growth opportunities in 2026 from new locations and The Villages expansion, leading to balance sheet expansion. Regarding Atlanta expansion, Michael Young (CSO) explained a careful entry with commercial real estate and C&I teams, expecting a handful of branches in the northern arc over 3-5 years, while also focusing on Florida market fill-ins and talent acquisition from market disruption.

Will Jones of Keefe, Bruyette & Woods questioned if First Western Financial's significant deposit growth in Q3 2025 was intended to pre-fund expected growth for 2026 and if the company would be opportunistic with securities purchases. He also asked if the magnitude of NIM expansion seen in 2025 is repeatable in 2026, and about the company's scarcity value and potential as a downstream buyer amidst M&A disruption.

Answer

CEO Scott Wylie clarified that deposit growth is an ongoing effort, not a one-off pre-funding, driven by market disruption and focus on relationships, expressing optimism for continued asset growth. CFO David Weber noted $50 million in Q3 bond portfolio additions, primarily floaters, but reaffirmed the primary focus on deploying liquidity into loans. Scott Wylie anticipated continued NIM expansion towards a historical 3.15%-3.25% range, driven by deposit betas and operating leverage. He highlighted First Western Financial's unique franchise value, citing the Findmark acquisition as a data point, and expressed interest in acquisitions once the stock price improves.

Will Jones questioned if the significant deposit growth in Q3 was intended to pre-fund expected growth for 2026, potentially leading to a balance sheet remix, and if the company plans to be more opportunistic with securities purchases given the excess liquidity. He also asked about the repeatability of the 20-25 basis points year-over-year margin expansion seen in 2025 into 2026, and how the company views its scarcity value and potential as a downstream buyer amidst M&A disruption.

Answer

Scott Wylie, CEO, clarified that deposit growth is an ongoing, company-wide effort driven by market disruption and low market share, not a one-off pre-funding for 2026, expecting continued asset growth. David Weber, CFO, added that while liquidity is earmarked for loans, $50 million in floaters were added to the bond portfolio in Q3. Scott Wylie expressed confidence in continued NIM expansion towards a historical 3.15-3.25% range, citing positive deposit betas. He emphasized the company's unique franchise and scarcity value, referencing the Findmark sale, and stated a desire to be an acquirer once the stock price improves.

Will Jones asked about Stellar Bank's net interest margin (NIM) strategy, specifically how they plan to defend or improve the 4% NIM (excluding purchase accounting) during a period of Fed easing, and their approach to lowering deposit costs. He also inquired about their terminal interest-bearing deposit beta and how they manage it during a down-rate cycle. Lastly, he asked if the bank would be more opportunistic in adding to its bond book if loan growth remains slow and excess liquidity persists.

Answer

Paul Egge (CFO) stated that the bank will focus on lowering deposit costs primarily on 'specials and exception-level pricing' and will benefit from immediate repricing of index-linked products. He noted tailwinds from securities and loan repricing, expressing satisfaction at reaching the 4% NIM (ex-PAA) faster than expected. Regarding deposit beta, he explained a nuanced approach focused on managing price-sensitive customers and having a game plan for each rate cut. He confirmed that adding to the bond book is 'definitely an option' and is discussed daily, emphasizing the goal of building a strong balance sheet for opportunistic growth.

Will Jones asked about Stellar Bancorp's ability to defend or improve its 4% net interest margin (excluding purchase accounting) during a period of Fed easing, specifically whether this would be driven by fixed-through pricing tailwinds or aggressive deposit cost lowering. He also inquired about any terminal interest-bearing deposit beta targets and the bank's strategy for managing deposit costs. Finally, he asked if the bank would be opportunistic in adding to its bond book if loan growth remains subdued.

Answer

Paul Egge, CFO of Stellar Bank, stated that the bank would focus on lowering deposit costs for specials and exception-level pricing, benefiting from index pricing. He noted tailwinds from securities and loans repricing, expressing confidence in defending the margin and being pleasantly surprised to reach 4% NIM (ex-PAA) so quickly. He clarified there's no terminal deposit beta target, but a nuanced approach to managing price-sensitive customers. Regarding excess liquidity, Paul Egge confirmed that adding to the bond book is an option discussed daily, emphasizing the bank's strong balance sheet and flexibility for opportunistic growth.

Will Jones from Keefe, Bruyette & Woods (KBW) asked about the net interest margin (NIM) outlook amid deposit competition, the bank's strategy for its securities portfolio, and the approach to deploying excess capital between buybacks and organic growth.

Answer

Senior EVP & CFO Paul Egge expressed confidence in defending the margin, noting it will be driven by funding composition and a reduced reliance on wholesale funds. He also confirmed satisfaction with the current size of the securities portfolio as a percentage of assets. Regarding capital, Egge prioritized organic growth, followed by other strategic uses, viewing share repurchases as a price-sensitive tool.

Will Jones of Keefe, Bruyette & Woods inquired about USCB's strategy for international deposit gathering following its new investment-grade rating, the potential scale of this opportunity, and the cost differential compared to domestic deposits. He also asked about the net interest margin (NIM) outlook, particularly the potential impact of future interest rate cuts.

Answer

President, CEO & Chairman Luis de la Aguilera explained the relationship-driven strategy to grow deposits from their portfolio of 30+ correspondent banks in the Caribbean Basin and Central America, noting the new rating removes deposit limits for some of these clients. CFO Rob Anderson specified that the $268 million in global banking deposits have a low cost of 1.74%. He also confirmed that due to the bank's liability-sensitive balance sheet and large money market book, they expect the NIM to improve in a rate-cut environment.

Will Jones from Keefe, Bruyette & Woods (KBW) inquired about the strategy and potential of the international deposit business following the new investment-grade rating, the cost differential versus domestic deposits, and the outlook for the net interest margin (NIM) if rate cuts occur.

Answer

CEO Luis de la Aguilera detailed a relationship-driven strategy to grow international correspondent banking deposits, noting the new rating removes deposit limits for some foreign banks. CFO Rob Anderson specified the current international book is $268 million at a cost of 1.74%, below the bank's overall funding cost. He also confirmed the bank is liability-sensitive and expects NIM to improve in a rate-cut environment due to its ability to reprice its large money market book downward.

Will Jones from Keefe, Bruyette & Woods inquired about the strategy for international deposit gathering following the new investment-grade rating, the potential size of this opportunity, the cost difference versus domestic deposits, and the outlook for the net interest margin (NIM) if rate cuts occur.

Answer

President, CEO & Chairman Luis de la Aguilera detailed a relationship-driven strategy to grow deposits from a portfolio of approximately 30 correspondent banks, noting the new rating removes deposit limits for some institutions. CFO Rob Anderson added that the $268 million in global deposits have a lower cost at 1.74% and confirmed the bank's liability-sensitive position should allow the NIM to improve in a rate-cut environment.

Will Jones of Keefe, Bruyette & Woods inquired about USCB's strategy for growing its international deposit base following its new investment-grade rating, the cost difference between international and domestic deposits, and the outlook for the net interest margin (NIM) if rate cuts occur.

Answer

President, CEO & Chairman Luis de la Aguilera explained the relationship-driven strategy to grow deposits from correspondent banks in the Caribbean and Central America, noting the new rating removes deposit limits for some foreign bank clients. CFO Rob Anderson added that the $268 million in global deposits have a low cost of 1.74% and confirmed that in a rate-cut environment, the bank's liability-sensitive position and large money market book should allow for margin improvement.

Will Jones from Keefe, Bruyette & Woods (KBW) asked about the strategy for gathering international deposits following the bank's new investment-grade rating, inquiring about the potential size of this opportunity and the cost difference compared to domestic deposits. He also questioned how potential interest rate cuts would impact the net interest margin (NIM).

Answer

President, CEO & Chairman Luis de la Aguilera explained the relationship-driven strategy to grow deposits from a portfolio of correspondent banks in the Caribbean Basin and Central America, noting the new rating removes deposit limits for some of these foreign banks. CFO Rob Anderson specified that the $268 million in global deposits have a cost of 1.74%, below the bank's overall funding cost. He added that the bank is liability-sensitive, and with a large money market book, rate cuts are expected to provide a boost to the NIM.

Will Jones inquired about the strategy and potential scale of gathering international deposits following the company's new investment-grade rating. He also asked about the cost difference between international and domestic deposits and the outlook for the net interest margin (NIM) if rate cuts occur.

Answer

President, CEO & Chairman Luis de la Aguilera explained the relationship-driven strategy to grow deposits from a portfolio of 30+ correspondent banks in the Caribbean and Latin America, noting the new rating removes deposit limits for some partners. CFO Rob Anderson added that the current $268 million in global banking deposits have a low cost of 1.74%. He also confirmed that in a rate-cut scenario, the bank's liability-sensitive balance sheet and large money market book would allow for repricing that should boost the NIM.

Will Jones asked for the dollar amount of Q2 interest recoveries to normalize the NIM, inquired about the bank's asset sensitivity to potential rate cuts, questioned the decision to grow the securities portfolio versus paying down wholesale funding, and asked about M&A's place in the company's priorities.

Answer

CFO Sharymar Calderón quantified the Q2 recovery impact at $1.2M-$1.3M and stated a rate cut would impact NII by $1.4M-$1.5M per quarter. She explained that the securities portfolio adds yield, improves CET1, and provides funding optionality. CEO Jerry Plush reiterated that organic growth is the top priority and M&A is not a current focus, though it remains an option as the bank's performance and currency improve.

Will Jones asked how Ferguson is managing its own-brand business amid changing tariff dynamics. He also requested an update on the company's distribution center network, including recent openings and future plans.

Answer

CEO Kevin Murphy explained that the own-brand business, about 10% of revenue, is managed through a diversified sourcing strategy across 31 countries to mitigate tariff risks. CFO Bill Brundage added that the company continues to invest in its supply chain, with five market distribution centers now open, two more in process, and ongoing investment in automation and local inventory.

Will Jones asked about the balance sheet strategy for 2025, questioning if the investment portfolio would remain flat and how aggressively the bank would deploy its liquidity. He also inquired about deposit beta expectations and the NII impact per Fed rate cut.

Answer

Chairman and CEO Phillip Green stated the bank plans to accelerate securities purchases in Q1, targeting a $4 billion investment strategy for 2025, funded by maturities and existing liquidity. He expects the cumulative deposit beta to land around 45%. He confirmed a potential $1.7 million monthly NII impact per rate cut, which CFO Dan Geddes cautioned is an 'all else equal' figure subject to other balance sheet dynamics.

Will Jones of Redburn asked whether the H1 or Q2 volume run-rate was more indicative for H2, requested an update on European construction glass capacity, and sought to understand the significant margin seasonality in the Americas during the prior year.

Answer

CEO Pierre-André de Chalendar stated that the H1 volume run-rate is more representative, as Q2 was skewed by working days and a high comparison base. He described the European glass market as balanced, not expecting significant price changes. COO Benoit Bazin explained that the stronger H2 margin in the Americas last year was driven by a very favorable pricing environment.