Executive Summary

EPS of $0.99 beat Wall Street consensus by $0.25; operating momentum reflected in higher net interest margin (4.22%) and materially better efficiency ratio (62.93%) versus prior quarter and year . EPS consensus 0.74*, Revenue consensus $59.75mm*; Actual EPS $0.99, Revenue $60.686mm* → EPS beat; revenue modest beat*.
Noninterest income rose 6.1% q/q, driven by mortgage banking (+$0.7mm) and wealth management (+$0.5mm); noninterest expense fell 7.4% q/q due to facility sale gains ($0.17 per diluted share), improving operating leverage .
Balance sheet: deposits grew 3.0% q/q (end-of-period), loans HFI up 0.3% q/q (end-of-period); credit quality improved (NPAs 0.10% of assets; net charge-offs 0.09% annualized) .
Tax-rate guidance maintained at ~24% for 2025; dividend increased to $0.24 in February and maintained in May—supportive capital return cadence .

What Went Well and What Went Wrong

What Went Well
- Margin/efficiency: NIM up 5 bps to 4.22%; efficiency ratio improved to 62.93% (vs 69.74% Q4’24, 71.06% Q1’24), reflecting lower deposit costs and higher investment yields .
- Fee momentum: Mortgage banking revenue +$0.7mm q/q; wealth management fees +$0.5mm q/q; noninterest income +6.1% q/q .
- Credit quality: NPAs fell to 0.10% of assets (vs 0.15% Q4’24); net charge-offs dropped to 0.09% annualized (vs 0.25% Q4’24) .
- Management quote: “Strong core fundamentals… 2.6% increase in revenues, solid growth in deposit balances, and improvement in credit quality metrics… earnings included a $0.17 per diluted share gain from the sale of our operations center building” — William G. Smith, Jr. .
What Went Wrong
- Loan growth softness: Average loans HFI decreased 0.4% q/q and 2.3% y/y; consumer (indirect auto) and commercial categories remained headwinds y/y .
- Cost of funds sensitivity: Overnight funds rate declined q/q; investment yields offset, but mixed rate backdrop limits NII upside .
- Public funds seasonality: Deposit increases were largely seasonal public funds—mix effect may reverse intra-year, requiring continued core deposit focus .

Metric	Q3 2024	Q4 2024	Q1 2025
Diluted EPS ($)	$0.78	$0.77	$0.99
Net Income ($USD Millions)	$13.118	$13.090	$16.858
Net Interest Income ($USD Millions)	$40.211	$41.103	$41.547
Noninterest Income ($USD Millions)	$19.513	$18.760	$19.907
Noninterest Expense ($USD Millions)	$42.921	$41.782	$38.701
Net Interest Margin (%)	4.12	4.17	4.22
Efficiency Ratio (%)	71.81	69.74	62.93
ROA (annualized, %)	1.24	1.22	1.58

Operating revenue breakdown (noninterest components):

Noninterest Revenue Component ($USD Millions)	Q3 2024	Q4 2024	Q1 2025
Deposit Fees	$5.512	$5.207	$5.061
Bank Card Fees	$3.624	$3.697	$3.514
Wealth Management Fees	$4.770	$5.222	$5.763
Mortgage Banking Revenues	$3.966	$3.118	$3.820
Other	$1.641	$1.516	$1.749

Key balance sheet and credit KPIs:

KPI	Q3 2024	Q4 2024	Q1 2025
Loans HFI, end-of-period ($USD Millions)	$2,683.096	$2,651.550	$2,660.770
Deposits, end-of-period ($USD Millions)	$3,579.077	$3,671.977	$3,783.890
Cost of Deposits (%)	0.92%	0.86%	0.82%
Allowance % of Loans HFI	1.11%	1.10%	1.12%
Net Charge-offs % of Avg Loans (annualized)	0.19%	0.25%	0.09%
NPAs % of Total Assets	0.17%	0.15%	0.10%
Tangible Book Value per Diluted Share ($)	$22.60	$23.65	$24.59

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate	FY 2025	~24% (Q4’24)	~24% (Q1’25)	Maintained
Dividend (Quarterly)	Ongoing	$0.23 (Q4’24 payout)	$0.24 (declared Feb 27, 2025; maintained May 29, 2025)	Raised (Feb), Maintained (May)
Revenue/NIM/OpEx	FY/Qtr	Not provided	Not provided	—

Note: No Q1 2025 earnings call transcript was available in the document catalog; themes reflect management’s press releases.

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Net Interest Margin	+10 bps to 4.12% on repricing; lower deposit cost	+5 bps to 4.17% on higher investment yields and lower deposit costs	+5 bps to 4.22%; investment yield ↑, deposit cost ↓	Improving
Deposit Mix/Public Funds	Seasonal decline in public funds drove lower deposits	Seasonal inflow of public funds boosted NOW balances	Public funds seasonal increase; total deposits +3.0% q/q	Seasonal/Stable
Mortgage Banking	Slight q/q decline; higher gain-on-sale margin y/y	q/q decline on lower production	q/q increase (+$0.7mm); higher rate locks, gain-on-sale margin	Rebound
Wealth Management	q/q increase (+$0.3mm); retail brokerage strength	q/q increase (+$0.4mm); retail brokerage	q/q increase (+$0.5mm); insurance commissions	Growth
Credit Quality	ACL 1.11%; NPAs 0.17% of assets	ACL 1.10%; NPAs 0.15%	ACL 1.12%; NPAs 0.10%; NCOs 0.09%	Improving
Capital Ratios	Total Capital 17.97%	Total Capital 18.77%	Total Capital 19.20%	Strengthening

Strategy and performance: “Strong core fundamentals and strategic execution driven by a 2.6% increase in revenues, solid growth in deposit balances, and improvement in credit quality metrics… first quarter earnings also included a $0.17 per diluted share gain from the sale of our operations center building” — William G. Smith, Jr., Chairman, President, and CEO .
Operating drivers: Higher investment securities interest (new purchases at higher yields) and lower deposit interest expense offset lower loan interest; overnight funds interest aided y/y .
Capital and liquidity: Ability to generate ~$1.540B in additional liquidity; tangible common equity ratio 9.61% (non-GAAP) .

The Q1 2025 earnings call transcript was not available in the document catalog; Q&A detail could not be assessed.

Metric	Actual Q1 2025	Consensus (S&P Global) Q1 2025	Beat/Miss
EPS ($)	0.99	0.74*	Bold beat: +$0.25*
Revenue ($USD Millions)	60.686*	59.750*	Modest beat: +$0.936*

Values retrieved from S&P Global.*

Implications:

EPS beat driven by margin expansion, lower deposit costs, fee growth, and discrete gain ($0.17/share) from facility sale .
Revenue beat aligns with higher net interest income and stronger fee contributions in mortgage and wealth .

Margin trajectory remains constructive: sequential NIM expansion with deposit cost declines and investment yield tailwinds; monitor rate path and reinvestment opportunities .
Efficiency inflection: substantial improvement in efficiency ratio to 62.93% q/q suggests operating leverage from cost control and one-time gains; assess sustainability as facility sale effects normalize .
Fee diversification provides resilience: wealth and mortgage momentum offset loan growth softness; watch retail brokerage/insurance commission drivers .
Credit quality strengthening: lower NPAs and net charge-offs reduce capital strain; ACL coverage appropriately calibrated at 1.12% of loans HFI .
Deposit growth supportive but seasonal: public funds elevated; track mix normalization and core deposit initiatives to sustain balances amid seasonal outflows .
Capital return cadence intact: dividend raised to $0.24 and maintained; capital ratios well above “well-capitalized” thresholds, enabling ongoing shareholder returns .
Loan growth remains a watch item: average loans down q/q and y/y—focus on categories with momentum (residential, home equity) to offset consumer/indirect auto declines .

Dividend increase to $0.24 (Feb 27, 2025) ; dividend maintained (May 29, 2025) .
Q1 earnings release timing (Apr 8, 2025) .

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