Adjusted PPNR
Q: Will adjusted PPNR grow next year?
A: Management expects positive PPNR in 2025 through disciplined expense management and revenue growth, indicating stronger operating leverage and profitability. "

Margin Dynamics
Q: Are NII margins at a trough?
A: They described a push-pull scenario this quarter—with rate cuts causing temporary pressure but potential fee income increases offsetting lower NII—so margins will likely fluctuate before stabilizing. "

Mortgage Outlook
Q: What rate is needed for mortgage improvement?
A: Management stressed that mortgage rates need to fall to a sub‑6% level to boost both refinancing and new home purchase activity. "

Deposit Pricing
Q: What’s new on the $18B deposit pricing?
A: They recently shortened the guarantee term to 45 days, with current money market rates at about 4.25% and a retention offer of 3.5%, setting the stage for further adjustments with upcoming rate cuts. "

Regulatory/CET1 Guidance
Q: How will CET1 and the $100B milestone be managed?
A: The team plans to maintain an 11% CET1 ratio and is investing in infrastructure to prepare for crossing the $100B threshold, while carefully monitoring capital needs. "

Fixed Income Upside
Q: Can fixed income yield improve further?
A: Management noted that after a $47M increase, further headroom exists if additional rate cuts occur, pointing to potential upside in the fixed income business. "

Loan-to-Deposit Ratio
Q: What is the target loan-to-deposit ratio?
A: They remain comfortable with the current ratio around 94%, emphasizing customer relationships over strict ratio targets. "

Short-Term Margin Outlook
Q: Will margins stabilize with upcoming rate cuts?
A: They expect a variable quarter-to-quarter outcome—margin pressure from timing mismatches between loan and deposit repricing will persist until adjustments take full effect. "

Loan Growth Trends
Q: How will loan growth progress?
A: Loan growth is expected to be modest given the generally muted market, although customer conversations suggest pent-up demand may support incremental increases. "

Fixed Income ADRs
Q: What were the ADR levels in recent months?
A: While August and September were similar overall, a notable uptick occurred late in September post-rate cuts, reflecting shifting market sentiments. "

Brokered Deposits
Q: Will brokered deposits play a larger role?
A: The strategy is to prioritize client deposits; brokered funds will remain a secondary source mainly used for mortgage warehouse funding. "

Noninterest Deposits
Q: What are the plans for noninterest-bearing deposits?
A: Efforts continue to grow low-cost, noninterest-bearing deposits, supporting broader customer relationships across retail and commercial segments. "

Loan Yield Benchmark
Q: What is the yield on fixed ARM loans?
A: Although exact figures weren’t detailed, consumer loan yields are around 5.8%, serving as a proxy for the ARM yield performance. "

PPNR Composition
Q: Is PPNR growth driven by revenue or expense discipline?
A: Management attributes improvements to a blend of revenue growth and cost control, aiming for higher returns on tangible common equity. "

Q4 Revenue Variability
Q: What drives Q4 revenue variability?
A: They expect a mix: higher fee income if rates decline, but with lower NII if rate cuts continue, along with one-time items around $5M impacting results. "

CRE Paydowns
Q: What is the outlook on CRE paydowns?
A: Paydowns depend on the construction financing market dynamics, so expected changes remain uncertain in the current environment. "

SNC Impact
Q: Will SNC issues affect charge-offs?
A: There is no anticipated material impact from shared national credits, as SNC performance aligns with the overall loan book. "

Operational Losses
Q: Are there concerns over operational losses or fraud?
A: No significant operational losses or fraud have been reported; variances remain minor and within normal ranges. "