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    Wood Lay • Keefe, Bruyette & Woods

    Wood Lay's questions to Firstsun Capital Bancorp (FSUN) leadership

    Wood Lay's questions to Firstsun Capital Bancorp (FSUN) leadership • Q1 2025

    Question

    Wood Lay of Keefe, Bruyette & Woods inquired about the drivers for the lowered full-year 2025 expense guidance and how the current economic uncertainty impacts the company's M&A strategy.

    Answer

    Chief Financial Officer Robert Cafera confirmed the lower expense guide is linked to moderated fee income expectations, citing a slowdown in mortgage activity and consumer spending on cards. Chief Executive Officer Neal Arnold added that for M&A, the company remains opportunistic and flexible, feeling well-positioned with its current capital levels to pursue in-footprint deals as they arise.

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    Wood Lay's questions to Hilltop Holdings Inc (HTH) leadership

    Wood Lay's questions to Hilltop Holdings Inc (HTH) leadership • Q1 2025

    Question

    Wood Lay from Stephens Inc. inquired about credit quality, specifically the size of a downgraded office credit and drivers of improvement in classified loans. He also asked about the potential for further reductions in deposit costs and a corresponding improvement in Net Interest Margin (NIM), including the deposit beta assumption used in the Net Interest Income (NII) guidance.

    Answer

    William Furr (executive) stated the downgraded office credit was an $18 million loan and that positive migration in classifieds came from a series of smaller credits. On deposit costs, Furr noted that while the team has done well, the largest portion of the benefit from the Fed's rate cuts has been realized, with only modest further declines expected. He expressed comfort that NII has stabilized due to the upward-sloping yield curve and confirmed the deposit beta assumption for the NII guide was 5%.

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    Wood Lay's questions to Hilltop Holdings Inc (HTH) leadership • Q4 2024

    Question

    Wood Lay followed up on asset sensitivity, asking for expected cash flows from the securities portfolio in 2025 and the potential yield pickup. He also inquired about the drivers of the strong Q4 deposit growth and sought details on the credit upgrades that reduced criticized loans.

    Answer

    Executive William Furr estimated securities portfolio cash flows between $250-$300 million for 2025, with a potential reinvestment yield pickup of about 150 basis points. He attributed the strong deposit growth to both normal customer activity and some larger, episodic events like clients selling businesses, noting balances may normalize in Q1. Furr specified that the reduction in criticized loans was driven by a few specific upgrades, including one in the commercial real estate space where a customer injected additional capital, improving property cash flows.

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    Wood Lay's questions to Hilltop Holdings Inc (HTH) leadership • Q3 2024

    Question

    Wood Lay of Keefe, Bruyette & Woods inquired about the sustainability of strong performance in the structured finance business, the potential for continued growth in fixed income fees, and whether fixed mortgage expenses have reached their lowest point.

    Answer

    EVP and CFO William Furr explained that the success in structured finance is tied to state-specific down payment assistance programs, which are episodic and not within Hilltop's control. He noted that while lower rates and a steeper yield curve generally benefit the fixed income business, results can be volatile. Regarding mortgage expenses, Mr. Furr anticipates they will remain relatively stable, with potential for a slow increase as the company hires more loan originators, while maintaining a focus on back-office efficiency.

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    Wood Lay's questions to Amerant Bancorp Inc (AMTB) leadership

    Wood Lay's questions to Amerant Bancorp Inc (AMTB) leadership • Q1 2025

    Question

    Wood Lay of Keefe, Bruyette & Woods inquired if the expense savings from the mortgage business restructuring would be reinvested or contribute to the bottom line. He also asked if persistent macroeconomic uncertainty could affect the timeline for strategic initiatives and requested more color on the five commercial loans that were downgraded to special mention status.

    Answer

    Chairman and CEO Gerald Plush confirmed that the expense savings from the mortgage business are expected to drop to the bottom line. He also stated that key strategic initiatives, such as new branch openings, are too far along to be delayed and are seen as significant contributors to deposit growth. Regarding the special mention loans, Plush and CFO Sharymar Yepez explained the downgrades were driven by updated 2024 year-end financials and missed milestones, not a systemic issue in a single industry, characterizing the action as proactive risk management.

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    Wood Lay's questions to Amerant Bancorp Inc (AMTB) leadership • Q3 2024

    Question

    Wood Lay of Keefe, Bruyette & Woods inquired about the core expense growth rate into 2025, considering ongoing talent acquisition and new office openings. He also asked for the outlook on a more normalized charge-off rate for 2025 and beyond, given the improving credit trends but remaining runoff in the consumer portfolio.

    Answer

    CEO Jerry Plush and CFO Sharymar Calderon clarified that the expense run rate from the sold Houston franchise is being reallocated to fund growth initiatives and personnel in Florida, making the guided $68.5 million a good go-forward run rate. Ms. Calderon projected a normalized charge-off level of 30-40 basis points for 2025, after an elevated Q4 2024 rate of around 70 basis points due to the runoff of the indirect consumer loan portfolio.

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    Wood Lay's questions to HomeStreet Inc (HMST) leadership

    Wood Lay's questions to HomeStreet Inc (HMST) leadership • Q4 2024

    Question

    Wood Lay of Keefe, Bruyette & Woods inquired about HomeStreet's Net Interest Margin (NIM) trajectory, the breakeven level needed to achieve profitability in the first half of the year, and whether additional strategic actions were planned.

    Answer

    CFO John Michel explained that while there is no specific NIM target, the recent loan sale and debt retirement will have an immediate positive impact on earnings. CEO Mark K. Mason confirmed that profitability in the first half of the year is achievable without further interest rate cuts. Mason added that the current strategy focuses on accelerating profitability by proactively working with commercial real estate borrowers on loan repricing.

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    Wood Lay's questions to HomeStreet Inc (HMST) leadership • Q3 2024

    Question

    Wood Lay of Keefe, Bruyette & Woods asked about the expected timing for clarity on the merger's next steps or the execution of the standalone 'Plan B'. He also sought commentary on deposit pricing trends following recent rate cuts, the outlook for net interest margin in Q4, and whether the company plans to backfill recently vacated positions.

    Answer

    Executive Mark K. Mason stated that the timeline depends on evaluating alternative regulatory structures or negotiating an early termination of the merger agreement, which matures in mid-January. Mason noted that competitors have also lowered deposit rates and that HomeStreet may seek to migrate CD customers to money market accounts. CFO John Michel added that falling rates most immediately benefit their wholesale funding costs. Mason confirmed they do not plan to backfill employee positions, as headcount is being aligned with business unit activity.

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    Wood Lay's questions to Origin Bancorp Inc (OBK) leadership

    Wood Lay's questions to Origin Bancorp Inc (OBK) leadership • Q4 2024

    Question

    Wood Lay asked if potential hiring from team lift-outs in 2025 is included in expense guidance, sought a reminder on the accounting changes from increasing ownership in Argent Financial, and requested an update on the anticipated Durbin amendment impact.

    Answer

    Chairman, President and CEO, Drake Mills, stated that significant hiring opportunities are not baked into the expense guidance but that the bank is prepared to act on culturally aligned C&I teams. CFO Wally Wallace explained that crossing 20% ownership in Argent would trigger the equity method of accounting, helping to partially offset the Durbin impact, which is estimated at $5.5 to $6 million pretax annually starting in Q3 2026. President and CEO of Origin Bank, Lance Hall, suggested the Argent share purchase would likely be a Q2 event.

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    Wood Lay's questions to Bank7 Corp (BSVN) leadership

    Wood Lay's questions to Bank7 Corp (BSVN) leadership • Q4 2024

    Question

    Wood Lay from Keefe, Bruyette & Woods asked about the drivers behind the loan shrinkage in Q4, particularly in the energy and hospitality segments, and inquired about the loan growth outlook for 2025. He also questioned if loan demand was improving and sought commentary on the sustainability of the Net Interest Margin (NIM) following its strong performance, especially if more rate cuts occur.

    Answer

    Jason Estes (Executive) attributed the Q4 loan shrinkage to unscheduled principal payoffs from clients selling assets, a trend expected to continue into Q1. He anticipates a return to growth for the full year 2025, supported by improved deal flow, but stressed a disciplined pricing strategy. Regarding the NIM, Estes acknowledged future compression is likely but expects it to stay within historical norms. Kelly Harris (Executive) clarified that Q4 NIM was boosted by one-time nonaccrual interest payments and the current real-time NIM is around 4.50%. Thomas Travis (Executive) added that he expects any future NIM fluctuations to be narrow and contained.

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    Wood Lay's questions to Bank7 Corp (BSVN) leadership • Q3 2024

    Question

    Wood Lay from Keefe, Bruyette & Woods inquired about Bank7's loan growth pipeline for the fourth quarter, the impact of recent interest rate cuts on client activity, and the bank's strategy regarding deposit betas and future rate adjustments.

    Answer

    Executive Jason Estes projected that Q4 loan growth would moderate, aligning with the full-year moderate-to-high single-digit target, noting continued selectivity in hospitality and energy. Executive Thomas Travis added that client activity remains steady due to regional economic strength and a historically normal interest rate environment. Regarding deposits, Travis explained that the lockstep movement of deposit and loan betas reflects disciplined balance sheet management. He and Executive Kelly Harris confirmed they are prepared for up to 100 basis points in rate cuts without significant issue, remaining confident in maintaining their historical Net Interest Margin (NIM) range.

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    Wood Lay's questions to Bank7 Corp (BSVN) leadership • Q1 2024

    Question

    Wood Lay asked about the drivers of Bank7's Q1 loan growth, particularly in the hospitality sector, and the outlook given macroeconomic uncertainty. He also inquired about recent trends in the hospitality portfolio and the company's strategy regarding share buybacks amid market volatility.

    Answer

    Executive Jason Estes noted that strong C&I bookings contributed to loan growth alongside hospitality, and that deal flow remained strong entering Q2. Executive Thomas Travis added that hospitality growth is within the bank's internal limits and long-term norms. Regarding hospitality trends, Travis stated that while Q1 is seasonally slow, feedback from large operators indicates business is steady. On share buybacks, Travis explained that with record capital and high ROE, there is no pressure to repurchase shares. He emphasized a cautious stance, preferring to preserve capital in the uncertain economic environment but retaining the flexibility to act if the share price declines significantly.

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