Trustmark - Earnings Call - Q3 2025

Executive Summary

• Q3 delivered solid core results: EPS of $0.94 grew 2% q/q and 12% y/y on higher net interest income and disciplined credit costs; NIM edged up to 3.83% and ROA/ROTE were 1.21%/12.84%.
• Mixed versus Street: EPS slightly beat consensus while revenue was below; management tightened full‑year NIM guidance to 3.78%–3.82% and affirmed other 2025 outlook items (loans mid‑single‑digit, deposits low‑single‑digit ex‑brokered, NII high‑single‑digit).
• Balance sheet momentum: loans +0.6% q/q (+3.4% y/y) to $13.55B; deposits +3.4% q/q (+2.6% y/y) to $15.63B with NIBD rising to 21.2%; CET1 improved to 11.88%.
• Key near‑term stock catalysts: tightened NIM range and deposit growth resiliency; offset by a revenue miss vs consensus and higher noninterest expense from ~$2.3M non‑routine items (charter conversion/legal and an OREO reserve).

What Went Well and What Went Wrong

• What Went Well

  • NIM expansion and NII growth: NIM rose 2 bps to 3.83% and net interest income (FTE) increased 2.4% q/q to $165.2M on higher loan and securities yields.
  • Core funding strength: deposits +$515M q/q (+3.4%), with NIBD +5.9% q/q to 21.2% of total; cost of total deposits only 1.84% (+4 bps q/q).
  • Management tone confident on outlook and hiring to drive growth: “Our momentum continues to build… We will continue to add seasoned professionals… to further enhance our financial performance” — CEO Duane Dewey.

• What Went Wrong

  • Noninterest expense elevated: up 4.7% q/q to $130.9M, including ~$2.3M non‑routine items; salaries/benefits +$3.2M q/q from merit increases, incentives, and growth hires; OREO expense +$1.8M from a single‑property reserve.
  • Revenue vs consensus: company “total revenue” $202.4M came in below S&P Global consensus revenue estimate; fee line items were flat overall q/q (noninterest income +0.1% q/q).
  • Credit optics: NPLs ticked up modestly (nonaccrual loans +$3.0M q/q), though NCOs remained low at 0.13% of average loans and total PCL declined to $1.7M.

Transcript

Speaker 5

Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's third quarter earnings conference call. At this time, all participants are in listen-only mode. Following the presentation this morning, there will be a question and answer session. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rein, Director of Corporate Strategy at Trustmark.

Speaker 6

Good morning. I'd like to remind everyone that a copy of our third-quarter earnings release and the presentation that will be discussed on our call this morning are available on the Investor Relations section of our website at trustmark.com. During our call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and we would like to caution you that these forward-looking statements may differ materially from actual results due to a number of risks and uncertainties, which are outlined in our earnings release and our other filings with the Securities and Exchange Commission. At this time, it's my pleasure to introduce Duane Dewey, President and CEO of Trustmark Corporation.

Speaker 3

Thank you, Joey, and good morning, everyone. Thank you for joining us again this morning. With me are Tom Owens, our Chief Financial Officer; Barry Harvey, our Chief Credit and Operations Officer; and Tom Chambers, our Chief Accounting Officer. Trustmark's momentum continued to build in the third quarter. Our performance reflected diversified loan growth and stable credit quality, along with cost-effective core deposit growth. During the quarter, we continued to implement organic growth initiatives and added established customer relationship managers and production talent in key markets across our franchise. These investments are designed to further enhance financial performance and shareholder value. Today, in our presentation, I will provide a summary of our performance in the quarter and discuss our forward guidance before moving to your questions. Now turning to slide three, the financial highlights.

From the balance sheet perspective, loans held for investment increased $83 million, or 0.6% linked quarter, and $448 million, or 3.4% year-over-year. Our linked quarter growth was diversified and led by commercial and industrial loans, other loans and leases, municipal loans, and other real estate secured loans. Our deposit base grew $550 million, or 3.4% linked quarter. Non-interest-bearing deposits grew at a faster clip of 5.9% linked quarter, or by $186 million. The total cost of deposits in the quarter was up 1.84%, or four basis points linked quarter. Very effective cost-effective growth in core deposits. Trustmark reported net income in the third quarter of $56.8 million, representing fully diluted EPS of $0.94 a share, up 2.2% from the prior quarter and 11.9% from the prior year.

This level of earnings resulted in a return on average assets of 1.21% and a return on average tangible equity of 12.84% in the quarter. Net interest income expanded 2.4% to $165.2 million, which produced a net interest margin of 3.83%, an increase of two basis points from the prior quarter. Non-interest income totaled $39.9 million, up 0.1% linked quarter and 6.3% year-over-year. Non-interest expense increased $5.8 million, or 4.7% linked quarter, and included approximately $2.3 million in non-routine items, including the establishment of a $1.4 million reserve for a single property in ORE and $900,000 in professional fees related to the conversion to a state banking charter and other corporate strategic initiatives.

Salaries and employee benefits increased $3.2 million linked quarter, principally due to annual salary merit increases effective July 1, increased annual incentive accruals, and the cost of additional customer relationship managers and production talent associated with our organic growth strategies. Credit quality remained solid. Net charge-offs were $4.4 million and included one individually analyzed loan totaling $3.1 million, which was reserved for in prior periods. Net charge-offs represented 13 basis points of average loans in the third quarter. Net provision for credit losses was $1.7 million, and the allowance for credit losses represents 1.22% of loans held for investment. Again, very solid credit performance. From a capital management perspective, each of our capital ratios increased during the quarter. The CET1 ratio expanded 18 basis points to 11.88%, while our total risk-based capital ratio increased 18 basis points to 14.33%. During the quarter, we repurchased $11 million of Trustmark common stock.

In the first nine months of the year, we repurchased $37 million of stock. We have $63 million in repurchase authority for the remainder of this year. This program continues to be subject to market conditions and management discretion. Tangible book value per share was $29.69 at September 30, up 3% linked quarter and 10.1% year-over-year. The board also declared a quarterly cash dividend of $0.24 per share, payable December 15 to shareholders of record on December 1. Now let's focus on our forward-looking guidance for the year, which is on page 15 of the deck. As you can see, we're tightening the range of our guidance for net interest margin and affirming all other previously provided guidance for the full year. We affirm our guidance and expect loans held for investment to increase mid-single digits for the full year 2025.

Similarly, we affirm our guidance of low single-digit growth in deposits, excluding brokered deposits for the full year 2025. There is no change in guidance regarding securities, as they are expected to remain stable as we continue to reinvest cash flows. We've tightened the anticipated range of the net interest margin for the full year. The range is now 3.78% to 3.82% for the year, compared to our prior of 3.77% to 3.83%. We've affirmed our expectations for net interest income to increase in the high single digits for 2025. From a credit perspective, the provision for credit losses, including unfunded commitments, is expected to continue to trend lower when compared to full year 2024. This is, of course, an affirmation of the prior guidance. There's no change in our non-interest income and non-interest expense guidance.

Non-interest income from adjusted continuing operations for the full year 2025 is expected to increase mid-single digits, while non-interest expense is expected to increase mid-single digits as well. We will continue our disciplined approach to capital deployment with a preference for organic loan growth, potential market expansion, M&A, and other general corporate purposes, depending on market conditions. As noted earlier, we do have remaining availability in our board-authorized share repurchase program that we will consider opportunistically. You may have noticed the addition of two new slides in our deck on pages 17 and 18. I encourage you to take a look at the progress we've made in improving our financial performance over the last several years. We're very committed to maintaining that momentum here moving forward. With that, I'd like to open the floor to questions.

Speaker 5

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Stephen Scouton with Piper Sandler. Please go ahead.

Hey, good morning, everyone.

Morning.

You guys mentioned, and apologies I missed the first minute or two of the call, but I know you mentioned in the release some of the expense growth was on progress on the new hire front. Can you give any color around kind of year-to-date hires, what you saw in the quarter, and what you have plans moving forward from a hiring perspective, assuming that's still kind of focused Houston, Birmingham, Atlanta, I think, as you've spoken to previously?

Speaker 3

Right. Great question. I'll start, Stephen. We hired approximately 29 new associates in the third quarter alone. 21 of those 29 new associates are production-related, either direct producers or direct support for production. Those cross all business units from commercial real estate, equipment finance, corporate banking, and commercial banking. The markets you noted are absolutely the markets of focus: Houston, Birmingham, Huntsville, Alabama, the Florida Panhandle, South Alabama, and Atlanta. The 21 are included in each one of those markets. We consider that a major focus for the organization here moving forward. I don't know that we'll hit those levels in every quarter. We likely, in the fourth quarter, will not reach that level of new associates. Moving into the coming year or two, we're very focused on that organic strategy in those key markets.

Would you expect to see some incremental expense build in the fourth quarter kind of related to the recent hiring levels? It seems as though to get to the increase of mid-single digits year-over-year, there needs to be a little bit of an uptick in the expense base from this quarter. I want to make sure I'm thinking about that right.

Speaker 1

Thanks, Stephen. This is Tom Chambers. Yeah, that's true. What hit us in the third quarter for the additional new hires was about $400,000. You know, that's because we're hiring throughout the quarter. Fully loaded, we would expect that to increase during the fourth quarter.

Speaker 3

I will add to that, Stephen. There are some, we'll call them non-routine parts of that expense because there are recruiting fees. There are one-time signing bonuses and things like that that are mixed into that. At a run rate level, Tom noted the amount, but I would say there were some non-routine things that would be included in that total. Additionally, as you know, the expectation is we're adding the talent to produce revenue as well. We will factor that into coming revenue projections.

Sure. No, that makes sense. Lastly, for me, just around the share repurchase, I think you've said previously maybe $10 million to $15 million a quarter is the right way to think about that. I'm just kind of curious, given how bank stocks have been trading and how rapidly you're building capital, if you would think about upsizing that range potentially and how you think about that earned back on the repurchase versus potential M&A.

Good morning, Stephen. This is Tom Owens. I'll start. We've been very pleased at our ability to continue to deploy capital via repurchase while supporting loan growth and continuing to drive nice accretion to our regulatory capital ratios. I think we're up 18 basis points linked quarter. Certainly, as you suggest, as our capital levels continue to build, it may well be the case that as we enter 2026, that we would probably lean more proactively into share repurchase, depending on how loan growth plays out. I think for the fourth quarter, it's reasonable to assume that we'll remain on the pace that we've been, which was about $50 million for this year.

Okay, great. Appreciate the color there, Tom. Everyone, thanks for the time today.

Thank you. Thank you, Stephen.

Speaker 5

The next question comes from Michael Rose with Raymond James. Please go ahead.

Hey, good morning, guys. Thanks for taking my questions. There's clearly been some M&A within some of the markets that you guys operate on. I was just wondering if you could discuss maybe some of the opportunities, maybe expanding on Stephen's question just for hiring as we move forward. If you think that kind of a mid-single digit growth rate for, I know it's a little early, but for next year is something we should contemplate, given some of the opportunities that are in front of you and given some of the hires that you put in place. Thanks.

Speaker 3

I'll start. Michael, good morning. Absolutely. We think that in prior experience, we'd say that every M&A deal in given markets does present opportunity. It's both to some extent on the hiring side and to some extent on the customer acquisition side. We look at it like that. I mean, it's a competitive world. The one that was announced here recently, in the last day or so, is very much, and there's a lot of overlap in our markets. We compete against them today. We have competed against them for a very long time. It goes with the territory. No real change, I don't think, from a real competitive perspective. We do see it as creating opportunity for us. It is really in predominantly all markets that we serve today. I think good opportunity ahead.

Okay, helpful. I do appreciate the new slides you put in. Obviously, there's been some real good progress, you know, due in part somewhat to the sale of the insurance business and the restructure a couple of years ago. Where do you think, you know, what's kind of the next evolution here, I guess, is what I'm trying to ask? Where do you think some of those numbers could go? Maybe if you can discuss some of the, you know, the puts and takes of kind of getting to whatever the new numbers as we move over the next few years might be. What are some of the opportunities you guys see? What are some of the headwinds you guys think you're going to face? Thanks.

Michael, this is Tom Owens. I'll start. First and foremost, when you look at those slides, I think the fourth quarter is likely to continue those trends. To your question about the longer term and what's the next evolution, we're focused on continuing to drive competitive growth in PP&R, which we think mid-single digits is reasonable in that regard. I think when you add the deployment of capital from our strong run rate profitability, as I just mentioned earlier, as we head into 2026, we're likely to, we'll see where loan growth shakes out. Clearly, that's our preferred method of deployment for capital. Given that we're approaching now 12% in terms of CET1, I think it's safe to say that we'll probably deploy at a more proactive rate in 2026. I think we're on pace this year to retire something like 2% of our shares outstanding.

If you add mid-single digit growth in PP&R to low single digit decline in EPS outstanding, I think we're likely to wind up in high single digit growth in EPS as a baseline. I'll let Duane and maybe Barry speak to what the opportunities might be from there. I would add to that. As we already discussed in the prior question, it allows better financial performance all in all, allows us to invest in that organic strategy. We're very, very focused. We're very focused on key growth markets. We believe we operate already in very significant growth markets in our footprint. We're focused in all business lines, really, at expanding in those key markets. The improved financial performance allows us the ability to do that a little more aggressively than we had in prior years. We're very optimistic there.

A market like Huntsville, Alabama, would be considered one of the top growth markets in the country. We hired a fantastic group of new bankers in that market. Very, very excited about them joining Trustmark. We've added teams across a couple of the other markets already mentioned, Atlanta, Birmingham, and so on. The improved financial performance allows us to invest in that organic strategy. The last comment I'd say, of course, there's a lot of activity right now. We're very aware of what's going on on an M&A front around us. There are discussions across the board, up and down. We're staying in tune with that. In a lot of cases, that creates additional opportunities. We're on it. We like the organic strategy, though, at this point.

I appreciate all the color. Thanks for taking my questions. I'll step back.

Thank you.

Speaker 5

The next question comes from Feddie Justin Strickland with Hovde Group. Please go ahead.

Hey, good morning. Just wanted to kick it off with a clarification question on expenses. It sounded like you might be guiding towards a little higher expenses in the fourth quarter. Is that the case? I thought you might have that $900,000 of non-routine professional fees and maybe the ORE expense come down a little bit.

Speaker 1

For you, this is Tom Chambers. We expect the, obviously, those non-recurrings should fall off. We're still guiding to mid-single digit growth year-over-year in expenses. If you look at our fourth quarter, we will have a slight increase in expense or expected expense without, you know, non-recurring items.

Got it. Got it. Just shifting gear to the margin, just given the asset-sensitive balance sheet, is it fair to assume we see a little bit of compression from here in the near term and maybe a little bit of recovery just as deposits catch up down the road?

Speaker 3

Betty, this is Tom Owens. I'll take that. It's sort of a yes and no on that. You saw we printed a 2 basis point linked quarter increase in net interest margin for the quarter from 3.81% to 3.83%. We've talked in the past about the ongoing repricing of the backbook fixed-rate loans for both loans and securities, providing a bit of a tailwind. I think that's what you saw with the 2 basis point increase in loan yield quarter over quarter. We are slightly asset-sensitive. When the Fed cuts, we have to be pretty proactive in terms of cutting deposit rates to maintain net interest margin on a linked quarter basis. Clearly, that is our intention. We anticipate that the Fed will cut tomorrow or later today, and then again in December.

I think we have three cuts penciled in for 2026, ending the year at about 3% at the top end of their range. In the short term, there can be some headwind. It just depends on how depositors and competitors in the market react to those cuts that we make in deposit rates. We are optimistic about maintaining NIM in this general area of 3.80% to 3.83%. When I look at analyst estimates for the fourth quarter, I think I see something like 3.83%, which is the number we just printed. When I look at full-year estimates for 2026, I think I see a median estimate there of 3.82%. I think those are reasonable numbers. There might be some choppiness quarter to quarter, as you suggest.

As we manage our way through it, on average, I think we would see net interest margin continuing to be in about this range where we are now. I'll make the point, we're at about 3.80% year to date. I think we're stabilizing here, but it might be choppy quarter to quarter.

Okay, great. That's fair. Just one last, sorry, go ahead.

No, go ahead.

Sorry. I thought I heard someone. Just one other quick question. I was just wondering if you could talk about trends in classified and criticized loans. The provision was a little lower this quarter, so I was kind of curious if either of those were flat or maybe even went down a little bit.

Speaker 1

Sure. Freddie, this is Barry. I just want to mention that we did have a nice trend down of about $49 million in criticized loans this quarter. That gives us about a trend down of about $123 million for the first three quarters of this year. Very encouraged by that, especially given the fact that we kind of were flat in the first quarter. That $123 million has really come in the last two quarters. Very encouraged by that positive trend. Like most of our peer banks, we trended up all during 2024, criticized classified, and then we flattened out in the first quarter. It felt like that was an inflection point. It turned out to be, and we've been moving down at a nice pace, both Q2 and Q3 of this year. Very encouraged by that. That is part of our lower provisioning.

That is one of probably four factors that went into the provision being lower this quarter than it has been in Q1 and Q2.

All right. That's great to hear. Thanks for taking the question.

Speaker 3

Thank you.

Speaker 5

The next question comes from the line of Catherine Mealor with KBW. Please go ahead.

Thanks. Good morning.

Speaker 3

Hey, good morning, Catherine.

Good morning.

I just want to follow up on the margin, just if we could kind of look at some of the components. It was interesting to see deposit cost increase a little bit this quarter. I know we've got the cut and maybe another one today coming. Can you talk a little bit about where you're seeing deposit cost trends and maybe how you're thinking about the beta over this next round of cuts relative to what we've seen over the past round of cuts? As kind of growth improves and maybe competition picks up, if it's fair to model maybe a little bit more conservative beta moving forward. Thanks.

Sure, Catherine. This is Tom Owens. The linked quarter increase in net interest margin almost builds on the answer that I just gave to Betty, which is, we are asset-sensitive. We do have an extremely valuable deposit base, which we continue to demonstrate as we manage our way through interest rate cycles. Because we're slightly asset-sensitive, we try to be proactive in pricing down deposits to maintain net interest margin. It's always a balancing act, right? You're always trying to optimize that. You want to reduce rates paid on deposits as much as you can at the same time as you're trying not to drive unwanted attrition of profitable customers. Most of what we saw in the third quarter is what I'll call the pushback, the extent to which you cut deposit rates, but depositors push back.

Certainly, we have a framework in place where when depositors push back, the more profitable the customer and the stronger the pushback, the more willing and able we are to accommodate with exception interest pricing. That's largely what drove that linked quarter increase, Catherine. We also engaged in a pretty proactive promotional deposit campaign during the third quarter. Our loan-to-deposit ratio at the second quarter had risen to 89% from 87% at year-end 2024. We wanted to manage that back down a bit. We were very pleased with the execution of that campaign. That was a bit of a driver to that, but not a big driver. In the third quarter, it continued to be what I would characterize as a surprisingly competitive environment for deposits in our space, with loan growth in the industry generally outpacing deposit growth somewhat. Surprisingly competitive in the third quarter.

I'd say the same thing I said in my prior answer to Feddie, which is, the extent to which we're able, we give you guidance when you look at slide nine and when you look at our outlook for fourth quarter deposit cost dropping from 1.84% to 1.72%. That reflects the intended price cut or deposit rate cuts that we'll be making as the Fed cuts today. The extent to which we achieve that is a function of those two factors. It's a function of how well that's received or tolerated by the deposit base, which in turn is also a function of what the competitive landscape looks like. How do our competitors react? Last point I'd say with respect to, you know, and that's why I talked about it. To Feddie Justin Strickland's point, it could be choppy quarter to quarter.

I do believe as we manage our way through this, we should maintain that interest margin on average over the next number of quarters in this range of about 3.80% or so. To your point, Catherine Mealor, about thinking about deposit betas, as I said earlier, I think we've got the Fed cutting to 3% by year-end 2026 based on market implied forward. The policy target range would be 2.75% to 3%. We've got deposit cost in that scenario going down to about 1.25%, which would be a beta this cycle by our calculations of about 40%, which is very consistent with the beta that we achieved as the Fed was hiking during the last cycle.

It's very helpful color and perspective. Thank you. Maybe the other side of it on just loan yields, can you talk about where incremental new loan pricing is coming on today?

Speaker 1

Catherine, this is Barry. It's kind of a, it varies, kind of dealing with the categories. I would say outside of commercial real estate, it's remained pretty consistent. We haven't really seen a lot of changes there. Within the commercial real estate category, it has gotten more competitive than it was earlier in the year and definitely more competitive than it was last year. The good news is there's a lot more deal flow. I was looking at the production for the last four quarters relative to the prior four quarters. On fourth quarter of 2024 through the first three quarters of this year, production is much, much stronger on the commercial real estate side. Having said that, the pricing is more competitive.

When you think about the spread, when you think about the origination fee we've been yielding, and that industry has really been yielding for quite a while, it is getting more competitive just through the number of players who are back in the market that hadn't been previously. That's been pretty much true for this entire year. There's been a lot more opportunities. We've been pitching on a lot more deals. We probably have landed, we have landed a few more deals than we did in the previous four quarters, but not as much as you would think based upon the number of opportunities. We are landing those. The price is thinner on the spread and the price is thinner on the fee and within the commercial real estate category.

The rest of the categories are pretty similar to the way they've been in terms of the competition and the rates that we're able to yield.

Great. It's a helpful color and great quarter. Thank you.

Speaker 3

Thank you, Catherine.

Speaker 5

The next question comes from the line of Gary Tenner with D.A. Davidson. Please go ahead.

Thanks. Good morning. A lot of my questions have been asked, but I wanted to just follow up on your comments around the recruiting in the quarter. As you think of the kind of producer or producer supporting hires, any kind of particular segment that you're leaning into? I think you talked that it's pretty varied geographically, but from a segment perspective, anything you're particularly leaning into or anything you know particularly focused on the deposit side in terms of the hires you make?

Speaker 3

In general, I'll say we are really focused geographically. We're focused on the markets that we feel present the best growth opportunity. I mentioned those previously, you know, Houston, Atlanta, Birmingham, Huntsville, Florida Panhandle, and South Alabama, and Jackson, Mississippi, frankly. Those present the best growth opportunities. We're focused on our business lines in those markets. To date, I would say if we're focused in specific categories, we've had pretty good success on the equipment finance team. We've added producers in that, which, you know, we've talked about the last several quarters as being, we're very pleased with the growth experience in that business and are seeing good opportunity there. We've had a really, really good approach and really nice team build there. That's been an area of focus.

Of the ones that I mentioned earlier, 21 new hires, it is pretty evenly spread between commercial real estate, corporate banking, commercial banking. We've even actually, in a somewhat challenging market, just created some opportunity on the mortgage front in markets where we have not had a mortgage production side. We've added a handful of mortgage producers. It's pretty well diversified across all the business lines that we serve with a little more focus on specific growth markets.

Thanks. I appreciate the comments there. Just on the deposit side, given the guide you gave for the fourth quarter, in terms of the public funds deposits, which are 13% to 14% of your total deposits, what's the repricing timing of that segment?

Gary, this is Tom. With respect to the public fund balances, by and large, those are administered rate or floating rate, even indexed down. It's a really small percentage of those that are bid on some fixed rate for any extended period of time.

Thanks very much.

The next question comes from the line of Christopher Marinac with Janney Montgomery Scott. Please go ahead.

Hey, thanks. Tom, you had touched a little bit on funding in some of the earlier questions, but I kind of wanted to ask at large. I mean, what is your thought about initiatives to fund the balance sheet the next couple of years? Should we expect to see the loan-to-deposit ratio around this sort of high 80s? Do you think it can trend differently? I guess just, you know, is M&A a part of that funding strategy in the big picture?

There's a lot there, Chris. It's a great question. I'll start off by saying that, as I said earlier, loan growth had outpaced deposit growth in the earlier part of the year, and we were in the first half of the year. Our loan-to-deposit ratio had floated up to 89%. We really want to keep that in the mid-80s, mid-to-high 80s. We do not want that floating up into the 90s. Yes, you should expect us to maintain that type of liquidity. As I said, we were really pleased with the execution of the promotional money market program in the third quarter. I think we had essentially conducted a similar campaign in the third quarter of 2024. Then fourth quarter 2024 through second quarter of 2025, we were not nearly as proactive in terms of promotional deposit campaign activity.

To your point, do we have the opportunity to continue to fund deposit growth to match loan growth? We're very confident in our ability to do that. The way I think about that is going to a more sort of always-on approach in terms of the next promotional campaign. There are certainly different and more proactive techniques that we can employ. The techniques we've employed have been reasonably conservative in that regard and pretty cost-effective in bringing on new balances. We're confident in our ability to fund loan growth cost-effectively. I would maybe turn it over to Duane to address the issue to the extent to which that does or does not play into our view on acquisition opportunities. I would just add a couple of notes.

One thing I did not mention when I was answering Gary's question a minute ago, the other element of that production staff has been on the treasury management side. We have added treasury management talent. All of our RMs across our entire system have deposit growth goals. Tom, you may have the number in front of you of commercial growth in the third quarter, but we have experienced solid commercial deposit growth as well, which has been part of that strategy. As we talk about our organic strategy, it's very focused on full relationship, including the deposit side. Like I said, in the third quarter, we're very pleased with progress there. As we bring on the new talent, that's, of course, loan growth, deposit growth, they're all part of the strategy. That's a key part.

In terms of M&A, yes, deposits, core deposits, core funding, that's all part of the equation. As I stated a bit ago, there is a lot of discussion going on out in the market. We're continuing to be very focused and very disciplined executing on our organic strategy and hopefully opportunistic when the right partner presents itself and will consider that as it goes. I would say, yes, deposits are a part of that consideration.

I would just follow up then, Chris, to Duane's point. You look at the $370 million of deposit growth we had in the third quarter. It was pretty evenly balanced between personal and commercial. Commercial was something like $180 million or so. Of the personal, that was pretty evenly mixed between the promotional campaign that I mentioned and just fundamental organic growth.

Great. Thank you both for the details here. Very helpful. I appreciate it.

Thank you.

Speaker 5

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Duane Dewey for any closing remarks.

Speaker 3

Thank you again for the questions. Thank you for being on the call. We look forward to getting back together at the end of the fourth quarter. I hope you have a great rest of the week. Thank you.

Speaker 5

Thank you. Our conference has now concluded. Thank you for attending today's presentation. You may now disconnect.