Margin Outlook
Q: Margin expansion beyond 3.18%?
A: Management expects margins to exceed 3.18% with additional upside from current loan repricing and favorable curve adjustments, noting a recent 10bps expansion that could build further benefits. "

Capital Allocation
Q: How will excess capital be used?
A: The team is focused on executing its plan to boost CET1 into the 10.5% range before considering M&A, buybacks, or dividends, emphasizing disciplined capital management. "

Loan Repricing
Q: How much loan repricing is available?
A: They have approximately $375M in loan repricing lined up at an average rate of 4.38%, signaling significant interest rate sensitivity on the asset side. "

Loan Growth Outlook
Q: What is the 2025 loan growth target?
A: Targeting mid to high single-digit growth, management is encouraged by a strong pipeline despite some CRE payoffs that will occur as projects mature. "

Deposit Pricing
Q: How are competitors reacting on deposits?
A: Competitors have been aggressive by front‐running rate cuts, with deposit betas around 40%, prompting the bank to monitor pricing closely. "

ROA Outlook
Q: What is the ROA forecast?
A: Expectations are for ROA to remain above 1%, with indications that figures could trend positively into the fourth quarter. "

Expense Outlook
Q: What are near-term expense expectations?
A: Management anticipates a run rate of roughly $34.5M for Q4, projecting total 2025 expenses in the mid‐$140M range due to strategic investments. "

Fed Cuts Impact
Q: How does the balance sheet fare with Fed cuts?
A: With its restructured balance sheet reducing short-term liabilities, the bank is positioned for additional margin improvement should the yield curve steepen with further Fed cuts. "

Rate Cut Impact
Q: What is the NII impact per 25bps cut?
A: Management did not disclose specific figures on the static net interest income impact from a 25bps rate cut. "

Earning Assets
Q: What level for Q4 earning assets?
A: Average earnings assets for Q4 are expected to start around $5.7M, setting a baseline for asset yield performance. "

Reserve Levels
Q: Will loan loss reserves be released?
A: The bank plans to maintain reserve levels in the mid- to high 120s given ongoing asset quality considerations, with no release expected soon. "

C&I Growth
Q: Which drivers support 11% C&I growth?
A: Growth was largely driven by acquisition activity and robust performance in key markets, including the Twin Cities and Denver, reflecting a balanced mix. "

Balance Sensitivity
Q: Is the balance sheet liability sensitive?
A: Despite having liabilities that reprice more frequently, the bank sees opportunities for margin expansion if the yield curve develops a positive slope. "

SBA Outlook
Q: How sustainable is SBA fee income?
A: SBA fee income has shown nice traction and is expected to remain at strong, consistent levels as part of the bank’s broader fee-driven platforms. "

Wealth Business
Q: What drove wealth business trends?
A: The wealth segment reported 2% sequential AUM growth, although fee income was slightly down, attributed to episodic revenue components. "

Credit Trends
Q: What are the credit quality trends?
A: Nonperforming assets are steadily declining as resolution efforts improve asset quality, with focused action on problematic credits showing progress. "

C&I Credit Details
Q: What about the downgraded C&I credits?
A: Two long-term C&I relationships, one in higher education ($17M) and the other in gasoline retailing ($21M), were downgraded but remain within the bank’s desired risk profiles. "

Ag Loans
Q: How are agricultural loans performing?
A: The agricultural portfolio is robust, with improved customer resilience and favorable crop yields offsetting price pressures, though input costs remain a concern for the next crop year. "