Capital Ratios
Q: Capital target for 2025?
A: Management expects the CET1 ratio to be around 10% and plans to steadily build capital, with potential refinancing of preferred notes as market conditions allow.

NII Growth
Q: How will NII grow?
A: With a stable net interest margin near 3.5% and mid-to-high single-digit asset growth, they anticipate net interest income to grow in a similar range.

Loan Growth
Q: What drives organic loan growth?
A: A robust pipeline driven by diversified portfolios, new customer inflows, and enhanced line utilization supports steady organic loan growth.

Margin Hedge
Q: Impact of hedges on margin?
A: Hedges dragged the margin by about 17 basis points this quarter, with expectations for improvement as interest rates decline further.

CECL Provision
Q: Q4 credit loss outlook?
A: Excluding a one-time $15.5M adjustment, the core provision was $6.8M and is expected to rise modestly at mid-to-high single-digit rates, subject to economic conditions.

Expense Run Rate
Q: Post-acquisition expense impact?
A: Integration of the acquisition is expected to add roughly $5M to the run rate in Q4, while overall expense growth remains in the mid-single digits due to operating leverage.

Deposit Cost
Q: How are deposit costs trending?
A: Deposit costs are trending lower, with a beta in the mid-60s as rate cuts take effect and competitors adjust promotional rates, benefiting both deposit and lending costs.

Credit Performance
Q: Any concerns on charge-offs?
A: Most charge-offs occurred in the C&I segment, particularly within the transportation niche, while overall credit quality remains stable with nonperforming loans slightly down from 39 to 38 bp.

Gain Sale Margin
Q: What about gain on sale margins?
A: Margins were lower than expected this quarter due to hedging volatility, but management anticipates a rebound to around 2% in Q4.

Acquisition Integration
Q: Plans for new bank integration?
A: The plan is to build on the strong existing team by adding veteran bankers to better penetrate market opportunities such as ESOP and construction loans.

Yield Spread
Q: What spreads are expected?
A: Incremental yields vary by asset category—with mid-market deposits yielding roughly 200 basis points and higher spreads in P&C—ensuring appropriate risk-adjusted returns.

Delinquency Trend
Q: Concerns about early delinquencies?
A: An uptick in the 30–89 day bucket is viewed as largely administrative and manageable as borrowers are actively repositioned.

Overhead Ratio
Q: Overhead ratio target?
A: They aim for a net overhead ratio below 150 basis points over the medium term, balancing rising noninterest income with controlled expenses as mortgage business fluctuates.