Executive Summary

Q3 2025 delivered adjusted EPS of $0.64 and GAAP EPS of $0.58; both EPS and revenue modestly beat consensus, driven by 9 bps NIM expansion and lower deposit costs as balance sheet optimization progressed. Bold beat: EPS +1.5% vs consensus $0.624 and revenue +0.7% vs $196.0M* *
Net interest margin rose to 3.58% (3.45% ex-PAA) on loan repricing and intentional runoff of $794.6M high-cost deposits, reducing spot deposit cost to 2.01% by quarter-end .
Credit metrics improved: net charge-offs fell q/q, ACL coverage remained 3.67x NPLs, and classified assets dropped to 7.0% of capital; CET1 remained strong at an estimated 12.33% .
Management expects deposit costs to decline further in Q4, an additional ~$115M high-cost deposit runoff, and operating expense ex-acquisition/restructuring near ~$112M in Q4—potential near-term catalysts for further NIM/efficiency gains .

What Went Well and What Went Wrong

What Went Well

NIM expanded +9 bps q/q to 3.58% (3.45% ex-PAA), helped by new loan pricing spreads (+8 bps) and reduced funding costs (+7 bps) following targeted runoff of high-cost, non-relationship deposits .
Efficiency improved: adjusted efficiency ratio fell to 54.85% vs 55.30% in Q2, with adjusted PPNR/avg assets up to 1.78% .
CEO tone confident on optimization: “We continued to optimize our balance sheet... net interest margin expanding 9 bps... spot deposit cost improved 21 bps to 2.01%... Capital remained strong... Credit quality showed improvement...” .

What Went Wrong

Loan balances contracted ($13.60B vs $13.81B in Q2) due to elevated payoffs, with management flagging continued CRE payoff pressure into year-end .
Total noninterest income fell 8.2% q/q primarily due to lower securities gains, which boosted Q2 results, highlighting some volatility in non-core items .
Preferred dividends ($5.1M) reduced net income available to common; the first Series B preferred dividend included extra days and added ~$0.5M that is not expected to recur .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Operating Revenue (Non-GAAP) ($USD Millions)	$117.688	$192.049	$196.667
Diluted EPS (GAAP) ($)	$0.55	$0.52	$0.58
Adjusted Diluted EPS ($)	$0.57	$0.63	$0.64
Net Income (GAAP) ($USD Millions)	$32.004	$47.404	$57.098
NIM (tax-equivalent, Non-GAAP) (%)	3.02	3.49	3.58
Adjusted NIM (ex-PAA, %)	2.97	3.33	3.45
Efficiency Ratio (Non-GAAP, %)	61.81	63.91	58.51
Adjusted Efficiency Ratio (%)	60.16	55.30	54.85
ROAA (GAAP, %)	1.06	1.00	1.21
Adjusted ROAA (%)	1.09	1.21	1.33
ROATCE (GAAP, %)	12.80	11.24	11.96
Adjusted ROATCE (%)	13.17	13.61	13.20

Estimate comparison (Q3 2025):

EPS actual $0.64 vs consensus $0.624; beat +1.5%*.
Revenue actual $197.32M vs consensus $196.03M; beat +0.7%*.
of estimates: EPS 7; Revenue 6*.

Note: *Values retrieved from S&P Global.

Segment and revenue composition (Q3 2025):

Noninterest Income Component ($USD Thousands)	Q3 2024	Q2 2025	Q3 2025
Wealth management fees	$15,378	$16,777	$17,184
Payment technology solutions	$5,265	$4,956	$5,092
Treasury management services	$2,201	$4,981	$4,598
Card services and ATM fees	$3,557	$4,880	$4,799
Other service charges on deposit accounts	$2,390	$1,513	$1,617
Mortgage revenue	$355	$776	$657
Income on BOLI	$1,189	$1,745	$1,623
Other noninterest income	$4,706	$3,238	$5,916
Total noninterest income	$35,845	$44,863	$41,198

Key KPIs:

KPI	Q3 2024	Q2 2025	Q3 2025
Total Deposits ($USD Billions)	$9.943	$15.802	$15.070
Core Deposits (% of total)	96.46%	92.52%	93.81%
Spot Deposit Cost (%)	—	2.22%	2.01%
Total Deposit Cost of Funds (%)	—	2.21%	2.15%
Portfolio Loans ($USD Billions)	$7.809	$13.809	$13.598
NPLs / Loans (%)	0.11%	0.40%	0.35%
NPAs / Assets (%)	0.07%	0.31%	0.32%
ACL / Loans (%)	1.09%	1.33%	1.28%
Coverage (ACL / NPLs, x)	10.34x	3.36x	3.67x
Classified assets / capital (%)	5.89%	7.70%	7.03%
CET1 (%)	13.78%	12.22%	12.33% (est.)
TCE / TA (%)	8.90%	9.27%	9.88%
Wealth AUC ($USD Billions)	$13.69	$14.10	$14.96

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total deposit cost of funds	Q4 2025	Normalize 45–50% beta to Fed funds; Q2 cost rose to 2.21%, betas to lessen over year	Expect further decrease in Q4 as rate cuts flow through and optimization continues; spot cost 2.01% at 9/30	Maintained directional; near-term lower costs
Intentional runoff of high-cost deposits	Q4 2025	Brokered balances reduced $368.6M in Q2	Additional ~$115M runoff (4.3% rate) anticipated in Q4 2025	New specific amount
Net interest income rate sensitivity	Next 12 months	+100 bps shock: +2.8% NII (Q2)	-100 bps shock: -1.3% NII (Q3)	Updated sensitivity profile
Adjusted noninterest expense (ex-acq/restruct. incl. amort.)	Q4 2025	—	~$112M expected	New
Deposit campaigns/CD term & rate	Q3 2025 actual	Q2 CDs: 8.0 months, 3.74%	Q3 CDs: 7.6 months, 3.79% (50 bps below wholesale equivalent)	Maintained approach

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in our document system; we searched externally and did not find a full transcript. We rely on the press release and investor presentation for themes .

Topic	Previous Mentions (Q1–Q2)	Current Period (Q3)	Trend
Balance sheet optimization & deposit cost	Plan to unwind non-core funding; deposit beta to normalize 45–50%; brokered balances reduced $368.6M (Q2)	Intentional runoff $794.6M high-cost deposits; spot deposit cost down 21 bps to 2.01%; further declines expected in Q4	Improving funding mix; cost trending down
NIM trajectory	+21 bps in Q1 (3.16%); +33 bps in Q2 (3.49%) with PAA contribution	+9 bps to 3.58%; ex-PAA 3.45%; drivers: loan repricing, lower funding costs	Sustained expansion
Credit quality & PCD dynamics	Elevated NCOs in Q1 on PCD; stable coverage; classified assets rose post-acquisition	NCOs down q/q; ACL/NPLs coverage 3.67x; classified assets to capital 7.0%	Stabilizing/improving
CRE payoff pressure	Expect paydowns through 2025 (Q2)	Continued pressure, elevated payoffs outpacing new production	Ongoing headwind
Expense synergies & hiring	$25M annual cost saves on track; ramping talent post-merger (Q2)	~90% of saves in run-rate exiting Q3; expect 100% by YE; 45+ new producers; forecast Q4 NIE ex-acq ~ $112M	Synergies flowing; invest in growth
Wealth & treasury/payment growth	WM revenues at record; TM/Interchange up post-merger (Q2)	AUC $14.96B (+6% q/q); WM rev $17.4M; treasury services + corporate card interchange annualized to ~$22.8M	Strengthening fee mix

Management Commentary

“We continued to optimize our balance sheet to be more efficient and profitable with adjusted return on average assets improving to 1.33% and net interest margin expanding 9 basis points to 3.58%... Deposit costs continued to fall... Capital remained strong... Credit quality showed improvement...” — Van A. Dukeman, Chairman & CEO .
“Components of the 9 basis point increase in net interest margin... new loan pricing spreads (+8 bps), reduced deposit funding costs (+7 bps), preferred issuance/sub debt redemption (+5 bps), offsets from lower cash/securities (-6 bps) and lower purchase accounting (-3 bps)” .

Q&A Highlights

A full Q3 2025 earnings call transcript was not available to review; we searched and did not locate it . Themes inferred from investor materials include:

Clarifications on deposit strategy: targeted runoff of high-cost deposits and expected additional ~$115M in Q4 .
Expense trajectory and synergy timing: ~90% of announced saves embedded exiting Q3; target 100% by year-end; Q4 NIE ex-acq ~ $112M .
Rate sensitivity positioning: -100 bps shock implies ~1.3% NII headwind over 12 months; hedging strategies under evaluation .

Estimates Context

EPS: $0.64 vs consensus $0.624; beat by ~$0.02; seven estimates*. Revenue: $197.32M vs consensus $196.03M; beat by ~$1.29M; six estimates*. Likely upward pressure on near-term NIM and efficiency assumptions while maintaining caution on loan growth given payoff dynamics.
Directional estimate revisions may reflect: lower deposit costs, continued PAA deceleration, and modest loan contraction; fee lines (wealth/treasury/payment) provide diversification that could cushion revenue in slower loan growth periods .