Q3 2025 BOK Financial Corp Earnings Call

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Speaker #3: Greetings. Welcome to BOK Financial Corp's third quarter 2025 earnings conference call. As a reminder, this conference is being recorded. If you would like to ask a question, please press *1 to enter the queue.

Operator: Greetings. Welcome to BOK Financial Corporation's third quarter 2025 earnings conference call. As a reminder, this conference is being recorded. If you would like to ask a question, please press star one to enter the queue. If you would like to withdraw your question, simply press star one again. I would now like to turn the presentation over to Heather King of Investor Relations for BOK Financial Corporation. Please proceed.

A reminder, this conference is being recorded.

I would now like to turn the presentation over to Heather King director of Investor Relations for beef, Okay Financial Corporation. Please proceed.

Speaker #3: If you would like to draw your question, simply press *1 again. I would now like to turn the presentation over to Heather Kymes of Investor Relations for BOK Financial Corp.

Good afternoon, and thank you for joining our discussion of be Okay. Financial's third quarter 2025 financial result, our Ceos Safety Council will provide opening and cover the loan portfolio and related credit metrics, Scott Grauer Executive Vice President of wealth management will cover our fee based result, and our CFO.

Speaker #3: Please proceed.

Speaker #4: Good afternoon, and thank you for joining our discussion of BOK Financial's third quarter 2025 financial results. Our CEO, Stacy Kymes, will provide opening comments and cover the loan portfolio and related credit metrics.

Heather King: Good afternoon, and thank you for joining our discussion of BOK Financial Corporation's third quarter 2025 financial results. Our CEO, Stacy Kymes, will provide opening comments and cover the loan portfolio and related credit metrics. Scott Grauer, Executive Vice President of Wealth Management, will cover our fee-based results, and our CFO, Marty Grunst, will then discuss financial performance for the quarter as well as our forward guidance. Slide presentation and press release are available on our website at BOKF.com. We refer you to the disclaimers on slide two regarding any forward-looking statements made during this call. I will now turn the call over to Stacy Kymes, who will begin on slide four.

So Marty grants will then discuss financial performance for the quarter as well as off we'll work at it.

The presentation and press release are available on our website at B O K S. Dotcom, we refer you to the disclaimers on slide two regarding any forward looking statements made during this call I will now turn the call over to Stacy times, who will begin on slide four.

Speaker #4: Scott Grauer, Executive Vice President of Wealth Management, will cover our fee-based results. Our CFO, Martin Grunst, will then discuss financial performance for the quarter as well as our four guidance.

Speaker #4: Slide presentation and press release are available on our website at bokf.com. We refer you to the disclaimers on slide 2 regarding any forward-looking statements made during this call.

Thank you Heather we appreciate you joining the call this afternoon.

We are pleased to report earnings of about $140 9 million or EPS of $2.22 per diluted share for the third quarter.

Speaker #4: I will now turn the call over to Stacy Kymes, who will begin on slide 4.

Last quarterly call I spent a lot of time talking about momentum this quarter, we built on that progress and remain confident in the trajectory we're on and the solid foundation, we've established for future growth.

Speaker #5: Thank you, Heather. We appreciate you joining the call this afternoon. We are pleased to report earnings of $140.9 million, or EPS of $2.22 per diluted share, for the third quarter.

Stacy Kymes: Thank you, Heather. We appreciate you joining the call this afternoon. We are pleased to report earnings of $140.9 million or EPS of $2.22 per diluted share for the third quarter. On our last quarterly call, I spent a lot of time talking about momentum. This quarter, we built on that progress and remain confident in the trajectory we're on and the solid foundation we've established for future growth. During the quarter, we delivered broad-based growth across our loan portfolio, with total outstanding balances up 2.4% sequentially, adding almost $1.2 billion in outstanding loan balances over the past two quarters. Our core C&I portfolio posted strong results for the second consecutive quarter, while specialized businesses remain stable. CRE balances expanding meaningfully as commitments from late 2024 and early 2025 have continued to fund up during their construction life cycles.

In the quarter, we delivered broad based growth across our loan portfolio with total outstanding balances up two 4% sequentially.

Speaker #5: On our last quarterly call, I spent a lot of time talking about momentum. This quarter, we've built on that progress and remain confident in the trajectory we're on and the solid foundation we've established for future growth.

Adding almost $1 2 billion and outstanding loan balances over the past two quarters.

Our core C&I portfolio posted strong results for the second consecutive quarter, while specialized businesses remained stable.

Speaker #5: During the quarter, we delivered broad-based growth across our loan portfolio, with total outstanding balances up 2.4% sequentially, adding almost $1.2 billion in outstanding loan balances over the past two quarters.

Rebalanced as expanding meaningfully as commitments from late 2024 and early 2025.

We continue to find out during their construction lifecycle.

Speaker #5: Our core C&I portfolio posted strong results for the second consecutive quarter, while specialized businesses remained stable. ERE balances are expanding meaningfully as commitments from late 2024 and early 2025 have continued to fund up during their construction life cycles.

Importantly, this momentum is independent of our mortgage finance launch, which began generating fundings in the third quarter with more meaningful outstanding as expected during the fourth quarter.

Net interest margin continue to expand this quarter, increasing 11 basis points.

Speaker #5: Importantly, this momentum is independent of our mortgage finance launch, which began generating fundings in the third quarter, with more meaningful outstandings expected during the fourth quarter.

Stacy Kymes: Importantly, this momentum is independent of our mortgage finance launch, which began generating fundings in the third quarter, with more meaningful outstandings expected during the fourth quarter. The interest margin continued to expand this quarter, increasing 11 basis points. We believe the key elements are in place to sustain strength in this area, regardless of whether the Fed cuts rates faster or slower than expected. Our strong liquidity profile, with a loan-to-deposit ratio in the mid-60% range, provides strategic flexibility. Going into this interest rate cutting cycle with a strong liquidity profile should enable us to achieve effective pricing outcomes. This positions us well to build upon our already attractive early cycle total liability beta. Our balance sheet remains relatively neutral to interest rate risk, which is consistent with our long-held philosophy of managing rate risk.

We believe the key elements are in place to sustain strength in this area, regardless of whether the fed cuts rates faster or slower than expected.

Our strong liquidity profile with a loan to deposit ratio in the mid 60% range provides strategic flexibility.

Speaker #5: Interest margin continued to expand this quarter, increasing 11 basis points. We believe the key elements are in place to sustain strength in this area, regardless of whether the Fed cuts rates faster or slower than expected.

Going into this interest rate cutting cycle with a strong liquidity profile should enable us to achieve effective pricing outcomes.

Speaker #5: Our strong liquidity profile, with a loan-to-deposit ratio in the mid-60s percent range, provides strategic flexibility. Going into this interest rate-cutting cycle with a strong liquidity profile should enable us to achieve effective pricing outcomes.

This positions us well to build upon our already attractive early cycle total liability beta.

Our balance sheet remains relatively neutral to interest rate risk, which is consistent with our long held philosophy of managing rate risk.

Speaker #5: This positions us well to build upon our already attractive early-cycle total liability beta. Our balance sheet remains relatively neutral to interest rate risk, which is consistent with our long-held philosophy of managing rate risk.

This neutral positioning helps protect margin whether costs are more or less aggressive than anticipated.

Importantly, while we are neutral to interest rates, we are not neutral to the shape of the yield curve.

Current market implied forward suggests the yield curve will continue to see over the next 12 months.

Speaker #5: This neutral positioning helps protect margin whether cuts are more or less aggressive than anticipated. Importantly, while we are neutral to interest rates, we are not neutral to the shape of the yield curve.

Stacy Kymes: This neutral positioning helps protect margin whether cuts are more or less aggressive than anticipated. Importantly, while we are neutral to interest rates, we are not neutral to the shape of the yield curve. Current market implied forwards suggest the yield curve will continue to steepen over the next 12 months. This should provide a further tailwind to margin. Fee income was another solid contributor to overall performance this quarter, growing 3.6% sequentially. We recognize a record quarter for investment banking revenue, bolstered by municipal bond underwriting activity, a key strength in our fee income and advisory business. We also saw significant growth in AUMA this quarter, reaching more than $122 billion. Our capital levels remain peer-leading and were further reinforced this quarter as tangible common equity grew to 10.1% and CET1 reached 13.6%. We repurchased over 365,000 shares at an average price of $111 per share during the quarter.

Would provide a further tailwind to margin.

Fee income was another solid contributor to overall performance this quarter growing three 6% sequentially we.

Speaker #5: Current market-implied forwards suggest the yield curve will continue to steepen over the next 12 months. This should provide a further tailwind to margin. Fee income was another solid contributor to overall performance this quarter, growing 3.6% sequentially.

We recognized a record quarter for investment banking revenue bolstered by a municipal bond underwriting activity a key strength in our fee income and advisory business.

We also saw significant growth in <unk> this quarter, reaching more than 122 billion.

Speaker #5: We recognize a record quarter for investment banking revenue, bolstered by municipal bond underwriting activity. A key strength in our fee income and advisory business.

Our capital levels remain poorly and were further reinforced this quarter as TCE grew to 10, 1% and.

CET, one reached 13, 6%.

Speaker #5: We also saw significant growth in AUMA this quarter, reaching more than $122 billion. Our capital levels remain peer-leading, and we're further reinforced this quarter as TCE grew to 10.1%, and CET1 reached 13.6%.

We repurchased over 365000 shares at an average price of $111 per share during the quarter.

This reflects our continued commitment to providing value to our shareholders.

Credit quality continues to be a core strength for us.

Speaker #5: We repurchased over 365,000 shares at an average price of $111 per share during the quarter. This reflects our continued commitment to providing value to our shareholders.

We remain well reserved with a combined allowance representing a healthy 132% of outstanding loans.

Stacy Kymes: This reflects our continued commitment to providing value to our shareholders. Credit quality continues to be a core strength for us. We remain well-reserved with a combined allowance representing a healthy 1.32% of outstanding loans. Risk size and classified levels remain well below their pre-pandemic levels, reflecting our disciplined approach to risk management. Slide six provides a closer look at our loan portfolio. Total outstanding loans grew 2.4% this quarter, led by growth in our core C&I portfolio, commercial real estate, and loans to individuals. Our core C&I loan portfolio, which represents our combined services and general business portfolios, grew 1.4% quarter over quarter. Our specialty lending portfolio, consisting of our energy and healthcare books, increased slightly this quarter, with growth in healthcare loans partially offset by contraction in the energy portfolio. Healthcare loans increased 1.8%, driven by strong origination activity, particularly within the senior housing space.

Criticized and classified levels remain well below their pre pandemic levels, reflecting our disciplined approach to risk management.

Speaker #5: Credit quality continues to be a core strength for us. We remain well-reserved, with a combined allowance representing a healthy 1.32% of outstanding loans. To criticize and classify levels remain well below their pre-pandemic levels, reflecting our disciplined approach to risk management.

Slide six provides a closer look at our loan portfolio.

It'll outstanding loans grew two 4% this quarter led by growth in our core C&I portfolio commercial real estate and loans to individuals.

Our core C&I loan portfolio, which represents our combined services and general business portfolios grew one 4% quarter over quarter.

Speaker #5: Slide 6 provides a closer look at our loan portfolio. Total outstanding loans grew 2.4% this quarter, led by growth on our core C&I portfolio, commercial real estate, and loans to individuals.

Our specialty lending portfolio, consisting of our energy and healthcare books increased slightly this quarter with growth in health care loans, partially offset by contraction in the energy portfolio.

Speaker #5: Our core C&I loan portfolio, which represents our combined services and general business portfolios, grew 1.4% quarter over quarter. Our specialty lending portfolio, consisting of our energy and healthcare books, increased slightly this quarter, with growth in healthcare loans partially offset by contraction in the energy portfolio.

Health care loans increased one 8% driven by strong origination activity, particularly within the senior housing space.

The growth was not limited outstanding balances, we saw notable ryzen commitments reinforcing our confidence in long term sustainable growth in this portfolio.

Speaker #5: Healthcare loans increased 1.8%, driven by strong origination activity, particularly within the senior housing space. The growth was not limited to outstanding balances; we saw a notable rise in commitments, reinforcing our confidence in long-term sustainable growth in this portfolio.

This is despite normal refinancing churn.

Both of our specialized lending books continued to demonstrate resilience supported by healthy pipeline, but indicates sustained performance ahead.

Stacy Kymes: The growth was not limited to outstanding balances. We saw a notable rise in commitments, reinforcing our confidence in long-term sustainable growth in this portfolio. This is despite normal refinancing churn. Both of our specialized lending books continue to demonstrate resilience, supported by healthy pipelines that indicate sustained performance ahead. Our CRE business increased 4.2% quarter over quarter, with growth covering multifamily, industrial, office, retail, and construction. We expect growth in outstanding balances to continue for the remainder of the year as our commitments established in the previous few quarters fund up. We remain well below our internal concentration limits on this portfolio. Let's move to slide seven. I'll keep this brief. Credit quality continues to be very strong. Non-performing assets not guaranteed by the U.S. government decreased $7 million to $67 million.

Our CRE business increased four 2% quarter over quarter with good carbon multifamily industrial office retail and construction.

Speaker #5: This is despite normal refinancing churn. Both of our specialized lending books continue to demonstrate resilience, supported by healthy pipelines that indicate sustained performance ahead.

We expect growth in outstanding balances to continue for the remainder of the year as our commitments established in the previous few quarters fund out.

Speaker #5: Our CRE business increased 4.2% quarter over quarter, with growth coming from multifamily, industrial, office, retail, and construction. We expect growth in outstanding balances to continue for the remainder of the year as our commitments established in the previous few quarters fund up.

We remain well below our internal concentration limits on this portfolio.

Let's move to slide seven I'll keep this brief credit quality continues to be very strong.

<unk> is not guaranteed by the U S government decreased 7 million to $67 million.

Speaker #5: We remain well below our internal concentration limits on this portfolio. Let's move to slide 7. I'll keep this brief: credit quality continues to be very strong.

The resulting nonperforming assets to period end loans and repossessed assets decreased four basis points to 27 basis points.

Committed criticized assets increased this quarter, but remained very low relative to historical standards.

Speaker #5: NPA is not guaranteed by the U.S. government, decreased $7 million to $67 million. The resulting non-performing assets to period loans and repossessed assets decreased 4 basis points to 27 basis points.

Stacy Kymes: The resulting non-performing assets to period loans and repossessed assets decreased four basis points to 27 basis points. Committed criticized assets increased this quarter but remained very low relative to historical standards. We had net charge-offs of $3.6 million during the quarter, averaging 2 basis points over the last 12 months. Importantly, the limited charge-offs we've seen recently show no patterns or concentrations that raise concerns about specific business lines or geographies. Looking ahead, we expect net charge-offs to remain well below historical norms. We took a provision of $2 million this quarter, primarily reflecting loan growth. Our combined allowance for credit losses is $328 million, or 1.32% of outstanding loans, which is a healthy reserve level. Our exposure to NDFIs is approximately 2% of total loans, with a vast majority in the two highest credit quality subcategories: subscription lines and residential mortgage warehouse lines.

We had net charge offs of $3 6 million during the quarter, averaging two basis points over the last 12 months.

Speaker #5: Committed criticized assets increased this quarter but remained very low relative to historical standards. We had net charge-offs of $3.6 million during the quarter, averaging 2 basis points over the last 12 months.

Importantly, the limited charge offs, we've seen recently, so no patterns or concentrations that raise concerns about specific business lines or geographies.

Looking ahead, we expect net charge offs to remain well below historical norms.

Speaker #5: Importantly, the limited charge-offs we've seen recently show no patterns or concentrations that raise concerns about specific business lines or geographies. Looking ahead, we expect net charge-offs to remain well below historical norms.

We took a provision of $2 million this quarter, primarily reflecting loan growth.

Combined allowance for credit losses was $328 million for 132% and outstanding loans, which is a healthy reserve level.

Our exposure to <unk> is approximately 2% of total loans with a vast majority and the two highest credit quality subcategories subscription lines and residential mortgage warehouse lines.

Speaker #5: We took a provision of $2 million this quarter, primarily reflecting loan growth. Our combined allowance for credit losses is $328 million, or 1.32% of outstanding loans, which is a healthy reserve level.

Exposure outside of these categories is very granular with an average loan size of $8 million we.

Speaker #5: Our exposure to NDFIs is approximately 2% of total loans, with a vast majority in the two highest credit quality subcategories: subscription lines and residential mortgage warehouse lines.

We have no credit exposure to companies recently publicized or.

Our strong performance in the credit space speaks volumes about our disciplined approach.

Speaker #5: Exposure outside of these categories is very granular, with an average loan size of $8 million. We have no credit exposure to companies recently publicized.

Stacy Kymes: Exposure outside of these categories is very granular, with an average loan size of $8 million. We have no credit exposure to companies recently publicized. Our strong performance in the credit space speaks volumes about our disciplined approach. We've built a strong reputation through consistent execution and excellence in credit over time. I'll now turn the call over to Scott. Thank you, Stacy. Turning to our operating results for the quarter on slides nine and ten, total fee income increased $7.1 million on a linked quarter basis, contributing $204.4 million to revenue. Total trading revenue, which includes trading-related net interest income, was $29.8 million, relatively consistent with the prior quarter. Trading fees were up $1.1 million, largely driven by increased municipal bond trading and a more stable market environment. Our trading business is focused on very high-quality fixed income products, largely agency MBS and municipal bonds.

We built a strong reputation through consistent execution and excellence and credit over time.

I'll now turn the call over to Scott.

Speaker #5: Our strong performance in the credit space speaks volumes about our disciplined approach. We've built a strong reputation through consistent execution and excellence in credit over time.

Thank you Stacey turning to our operating results for the quarter on slides nine and 10 total fee income increased $7 1 million on a linked quarter basis, contributing $204 4 million to revenue.

Speaker #5: I'll now turn the call over to Scott.

Speaker #6: Thank you, Stacy. Turning to our operating results for the quarter on slides 9 and 10, total fee income increased $7.1 million on a linked-quarter basis.

Total trading revenue, which includes trading related net interest income was $29 8 million relatively consistent with the prior quarter trading fees were up $1 1 million largely driven by increased municipal bond trading and a more stable market environment.

Speaker #6: Contributing $204.4 million to revenue, total trading revenue, which includes trading-related net interest income, was $29.8 million, relatively consistent with the prior quarter. Trading fees were up $1.1 million, largely driven by increased municipal bond trading and a more stable market environment.

Our trading business is focused on very high quality fixed income products largely agency MBS in municipal bonds.

As Stacy mentioned investment banking revenue, which includes investment banking fees and syndication fees was a record quarter coming in at $16 1 million driven by impressive municipal bond underwriting activity.

Speaker #6: Our trading business is focused on very high-quality fixed-income products, largely agency MBS and municipal bonds. As Stacy Kymes mentioned, investment banking revenue, which includes investment banking fees and syndication fees, was a record quarter, coming in at $16.1 million, driven by impressive municipal bond underwriting activity.

Turning to slide 10, our asset management and transaction businesses increased $1 2 million linked quarter.

Stacy Kymes: As Stacy mentioned, investment banking revenue, which includes investment banking fees and syndication fees, was a record quarter coming in at $16.1 million, driven by impressive municipal bond underwriting activity. Turning to slide ten, our asset management and transaction businesses increased $1.2 million linked quarter. I'll keep my commentary brief here because, as you can see, each of these businesses has produced strong and consistent results quarter over quarter. I would like to call out fiduciary and asset management revenue. While third quarter revenue remained relatively flat compared to the prior quarter, it's important to note that second quarter results were elevated by seasonal tax preparation fees. In contrast, the third quarter performance was more reflective of typical run rate, excluding seasonal items, with growth driven by increased trust fees resulting from higher market valuations and continued customer expansion.

I'll keep my commentary brief here because as you can see each of these businesses has produced strong and consistent results quarter over quarter.

Speaker #6: Turning to slide 10, our asset management and transaction businesses increased by 1.2 million, linked quarter. I'll keep my commentary brief here, because as you can see, each of these businesses has produced strong and consistent results quarter over quarter.

I would like to call out fiduciary and asset management revenue, while third quarter revenue remained relatively flat compared to the prior quarter. It is important to note that second quarter results were elevated by seasonal tax preparation fees and contrast, the third quarter performance was more reflective of typical run rate excluding.

Speaker #6: I would like to call out fiduciary and asset management revenue. While third-quarter revenue remained relatively flat compared to the prior quarter, it's important to note that second-quarter results were elevated by seasonal tax preparation fees.

The seasonal items with growth driven by increased trust fees, resulting from higher market valuations and continued customer expansion.

Speaker #6: In contrast, the third-quarter performance was more reflective of a typical run rate, excluding seasonal items. Growth was driven by increased trust fees resulting from higher market valuations and continued customer expansion.

<unk> grew four 1% to $122 7 billion in the third quarter, the highest quarter on record.

Very proud of the stable fee edges, we have built here over many years.

And now I'll hand, the call over to Marty to cover the financials.

Speaker #6: AUMA grew 4.1% to $122.7 billion in the third quarter, the highest quarter on record. We are very proud of the stable fee engines we have built here over many years.

Stacy Kymes: AUMA grew 4.1% to $122.7 billion in the third quarter, the highest quarter on record. We are very proud of the stable fee engines we have built here over many years. Now I'll hand the call over to Marty to cover the financials.

Thank you Scott turning to slide 12, net interest income increased nine 5 million and reported net interest margin expanded 11 basis points.

Speaker #6: And now, I'll hand the call over to Marty to cover the financials.

Excluding training core net interest income increased to $11 3 million and core margin grew four basis points driven by several factors.

Speaker #7: Thank you, Scott. Turning to slide 12, net interest income increased 9.5 million and reported net interest margin expanded 11 basis points. Excluding trading, core net interest income increased 11.3 million and core margin grew 4 basis points, driven by several factors.

Martin Grunst: Thank you, Scott. Turning to slide 12, net interest income increased $9.5 million and reported net interest margin expanded 11 basis points. Excluding trading, core net interest income increased $11.3 million and core margin grew four basis points, driven by several factors. First, fixed-rate asset repricing in both the securities portfolio and the fixed-rate portion of the loan portfolio. Second, incremental deposit repricing opportunities in both CDs and interest-bearing core deposit categories. Third, growth in loans and deposits. Since Q2 of 2024, core margin has grown 22 basis points in total, which is an average of four to five basis points per quarter. We expect those drivers to continue to support both margin and NII growth in future quarters.

First fixed rate asset repricing is both the securities portfolio and the fixed rate portion of our loan portfolio second incremental deposit repricing opportunities in both Cds and interest bearing core deposit categories and third growth in loans and deposits.

Speaker #7: First, fixed-rate asset repricing in both the securities portfolio and the fixed-rate portion of the loan portfolio. Second, incremental deposit repricing opportunities in both CDs and interest-bearing core deposit categories.

Since Q2 of 'twenty four core margin is around 22 basis points in total which is an average of four to five basis points per quarter.

We expect those drivers to continue to support both margin and NII growth in future quarters.

Speaker #7: And third, growth in loans and deposits. Since Q2 of '24, core margin has grown 22 basis points in total, which is an average of 4 to 5 basis points per quarter.

Looking at headline net interest margin growth of 11 basis points and specifically the seven basis point incremental growth over the four basis points. We saw in core margin that was largely driven by the denominator effect of the decline in the average balance of the trading book quarter over quarter.

Speaker #7: We expect those drivers to continue to support both margin and net interest income (NII) growth in future quarters. Looking at headline net interest margin growth of 11 basis points and specifically the 7 basis point incremental growth over the 4 basis points we saw in core margin, that was largely driven by the denominator effect of the decline in the average balance of the trading book quarter over quarter.

Martin Grunst: Looking at headline net interest margin growth of 11 basis points, and specifically the seven basis point incremental growth over the four basis points we saw in core margin, that was largely driven by the denominator effect of the decline in the average balance of the trading book quarter over quarter. Given the thinner spread on the trading book, the NII impact of the balance decline was very small. We typically expect average trading assets to be near the levels we had in the third quarter, although from time to time, our desk will hold more or less, driven by market conditions and expectations of customer demand. Turning to slide 13, total expenses increased $15.3 million. Personnel expenses were up $11.6 million. Regular compensation increased $3.1 million, largely reflecting transitional payments as we realign our workforce to meet the current and future needs of the business.

Given the thinner spread on the trading book.

The impact of the balanced decline was very small.

We typically expect average trading assets to be near the levels. We had in the third quarter, although from time to time, our desk will hold more or less driven by market conditions and expectations of customer demand.

Speaker #7: Given the thinner spread on the trading book, the NII impact of the balance decline was very small. We typically expect average trading assets to be near the levels we had in Q3, although from time to time our desk will hold more or less, driven by market conditions and expectations of customer demand.

Turning to slide 13, total expenses increased $15 3 million personnel expenses were up 11 6 million.

Regular compensation increased $3 1 million, largely reflecting transitional payments as we realign our workforce to meet the current and future needs of the business.

Speaker #7: Turning to slide 13, total expenses increased 15.3 million, personnel expenses were up 11.6 million. Regular compensation increased 3.1 million, largely reflecting transitional payments as we realign our workforce to meet the current and future needs of the business.

Incentive compensation costs grew $7 9 million with $5 $4 million related to cash based incentives, reflecting stronger underwriting and loan origination activity.

Meaning $2 5 million increase reflects higher deferred compensation costs, which are offset in other gains and losses.

Speaker #7: Incentive compensation costs grew by $7.9 million, with $5.4 million related to cash-based incentives reflecting stronger underwriting and loan origination activity. The remaining $2.5 million increase reflects higher deferred compensation costs, which are offset in other gains and losses.

Martin Grunst: Incentive compensation costs grew $7.9 million, with $5.4 million related to cash-based incentives, reflecting stronger underwriting and loan origination activity. The remaining $2.5 million increase reflects higher deferred compensation costs, which are offset in other gains and losses. Deferred compensation expense totaled $5.8 million for the quarter. Non-personnel expense rose $3.6 million, mainly due to mortgage banking costs. Last quarter's expenses there were lower than normal seasonal trends due to lower levels of mortgage servicing-related expenses. Slide 14 provides an update on our outlook for full year 2025. We have tightened up our ranges for most categories since we are farther through the year. Loan growth has been robust over the last two quarters, and our pipelines are strong across both C&I and CRE. We feel very good about our full-year loan growth projections of 5 to 7%. For net interest income, we expect $1.325 to $1.35 billion.

Deferred compensation expense totaled $5 8 million for the quarter.

Non personnel expense rose $3 6 million, mainly due to mortgage banking costs last quarters expenses, there were lower than normal seasonal trends due to lower levels of mortgage servicing related expenses.

Speaker #7: Deferred compensation expense totaled $5.8 million for the quarter. Non-personnel expense rose $3.6 million, mainly due to mortgage banking costs. Last quarter's expenses were lower than normal seasonal trends due to lower levels of mortgage servicing-related expenses.

Slide 14 provides an update on our outlook for full year 2025, we have tightened up our ranges for most categories. Since we are further through the year.

Loan growth has been robust over the last two quarters and our pipelines are strong across both C&I and CRE.

Speaker #7: Slide 14 provides an update on our outlook for full-year 2025. We have tightened up our ranges for most categories since we are farther through the year.

We feel very good about our full year loan growth projections of 5% to 7%.

For net interest income, we expect 1.325 to $1 35 billion.

Speaker #7: Loan growth has been robust over the last two quarters, and our pipelines are strong across both C&I and CRE. We feel very good about our full-year loan growth projections of 5% to 7%.

And for fees and commissions, we expect $775 million to $810 million, reflecting good momentum in that set of businesses.

Speaker #7: For net interest income, we expect $1.325 to $1.35 billion, and for fees and commissions, we expect $775 to $810 million, reflecting good momentum in that set of businesses.

Our guide for total revenue is mid single digit growth versus prior year.

As a reminder, I will note interest rate levels, and especially curve steepness can affect the geography of total trading revenue between NII and fees.

Martin Grunst: For fees and commissions, we expect $775 to $810 million, reflecting good momentum in that set of businesses. Our guide for total revenue is mid-single-digit growth versus prior year. As a reminder, I will note interest rate levels and especially curve steepness can affect the geography of total trading revenue between NII and fees, but that shift would be neutral to total revenue. We expect our full-year efficiency ratio to be in the 65 to 66% range, reflecting the higher quarter-specific actual expenses we saw in Q3. Finally, regarding credit, non-performing assets declined sequentially, and portfolio credit quality is exceptionally strong. This reinforces our expectation that charge-offs will remain low in the near term, and 2025 provision expense will be well below 2024 levels. With that, I would like to hand the call back to the operator for Q&A, which will be followed by closing remarks from Stacy.

Speaker #7: Our guide for total revenue is mid-single-digit growth versus the prior year. As a reminder, I will note that interest rate levels, and especially curve steepness, can affect the geography of total trading revenue between NII and fees.

But that shift would be neutral to total revenue.

We expect our full year efficiency ratio to be in the 65% to 66% range, reflecting the higher quarter specific actual expenses, we saw in Q3.

Finally regarding credit nonperforming assets declined sequentially and portfolio of credit quality is exceptionally strong. This reinforces our expectation that charge offs will remain low in the near term and 2025 provision expense will be well below 2024 levels.

Speaker #7: But that shift will be neutral to total revenue. We expect our full-year efficiency ratio to be in the 65% to 66% range, reflecting the higher quarter-specific actual expenses we saw in Q3.

Speaker #7: Finally, regarding credit, non-performing assets declined sequentially, and portfolio credit quality is exceptionally strong. This reinforces our expectation that charge-offs will remain low in the near term, and 2025 provision expense will be well below 2024 levels.

With that I would like to hand, the call back to the operator for Q&A, which will be followed by closing remarks from statements.

At this time I would like to remind everyone. If you have a question. Please press star one.

Speaker #7: With that, I would like to hand the call back to the operator for Q&A, which will be followed by closing remarks from Stacy.

Thank you Pat.

We'll pause for just a moment to compile the Q&A Rob.

Your first question comes from the line of Michael Rose with Raymond James You May go ahead.

Speaker #3: At this time, I would like to remind everyone that if you have a question, please press *1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster.

Operator: At this time, I would like to remind everyone, if you have a question, please press star one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Michael Rose with Raymond James. You may go ahead.

Hey, good morning, everyone. Thanks for taking my questions maybe.

Maybe we could just start on loan growth you guys have had pretty high expectations for the bulk of the year, that's largely come true come through.

Speaker #3: Your first question comes from the line of Michael Rose with Raymond James. You may go ahead.

You've talked about the pipeline as being relatively strong could you just talk about some of the competitive forces, maybe that youre seeing and by market and we have seen some mergers announced within some of those markets is discuss maybe some of the opportunities there.

Speaker #8: Hey, good morning, everyone. Thanks for taking my questions. Maybe we could just start on, you know, loan growth. You guys have had, you know, pretty high expectations for the bulk of the year.

[Analyst]: Hey, good morning, everyone. Thanks for taking my questions. Maybe we could just start on, you know, loan growth. You guys have had pretty high expectations for the bulk of the year that's largely come through. You talked about the pipelines being relatively strong. Can you just talk about some of the competitive forces maybe that you're seeing in by market? We have seen some mergers announced within some of those markets. Can you just discuss maybe some of the opportunities there? Maybe too early, but is there any reason to expect that you shouldn't be able to generate the same level of growth next year as you did this year? If you can just talk about the puts and takes. Thanks.

Speaker #8: That's, that's largely come true, come through. You've talked about the pipelines being relatively, you know, strong. Can you just talk about some of the competitive forces, maybe, that you're seeing in by market?

Maybe too early but is there any reason to expect that you shouldnt be able to generate the same level of growth next year. As you did this year. If you could just talk about the puts and takes.

Speaker #8: And we have seen some mergers announced within some of those markets. Can you just discuss maybe some of the opportunities there? And maybe it’s too early, but is there any reason to expect that you shouldn't be able to generate the same level of growth next year as you did this year? If you can just talk about the puts and takes.

Sure.

Michael. Thank you guys I think loan growth has been really a big story for us in the first quarter, we were tracking pretty well in kind of the noise around the tariffs kind of slowed sentiment a little bit, but second quarter third quarter, both quarters consistently around two 5%, so 10% annualized growth without significant.

Speaker #8: Thanks.

Speaker #7: Sure, Michael, thank you. I think loan growth has been really a big story for us. I mean, in the first quarter, we were tracking pretty well. The noise around the tariffs kind of slowed sentiment a little bit, but in the second quarter and third quarter, both quarters consistently around 2.5 percent.

Stacy Kymes: Sure. Michael, thank you. I think loan growth has been really a big story for us. I mean, the first quarter we were tracking pretty well, and the noise around the tariffs kind of slowed sentiment a little bit. Second quarter, third quarter, both quarters consistently around 2.5%. So 10% annualized growth without a significant contribution from mortgage finance, which is obviously we hope to see on the outstanding side more so in the fourth quarter. We feel really good about where we're at. We've got room on commercial real estate. Obviously, we limit more so than others our appetite around how much commercial real estate we'll do, but we're under our concentration limits there. Energy's been a headwind this year. I don't expect it to be a tailwind next year, but I also don't expect it to be a headwind.

<unk> from mortgage finance, which is obviously.

Hope to see on the outstanding side more more so in the fourth quarter, but we feel really good about where we're at we've got room on commercial real estate, obviously, we limit more so than others or appetite around how much commercial real estate will do but were under our concentration limits there.

Speaker #7: So 10 percent annualized growth without significant contribution from mortgage finance, which is obviously, we hope to see on the outstanding side more, more so in the fourth quarter.

He has been a headwind this year I don't expect it to be a tailwind next year, but I also don't expect it to be a headwind.

Speaker #7: But we feel really good about where we're at. We've got room on commercial real estate, obviously. We limit, more so than others, our appetite around how much commercial real estate we'll do.

So that underlying.

Growth that you see in just core C&I.

Speaker #7: But we're under our concentration limits there. Energy's been a headwind this year. I don't expect it to be a tailwind next year, but I also don't expect it to be a headwind.

Personal loans on the wealth side has really done very well.

We're very well positioned to.

And be able to grow at a very strong level. We're obviously not providing guidance for 2026 would obviously feel good about where we're at and feel good about sustaining that into the fourth quarter.

Speaker #7: And so that underlying growth that you see in just core C&I and personal loans on the wealth side has really done very well. We're very well positioned to be able to grow at a very strong level.

Stacy Kymes: That underlying growth that you see in just core C&I, personal loans on the wealth side has really done very well. We're very well positioned to be able to grow at a very strong level. We're obviously not providing guidance for 2026, but obviously feel good about where we're at and feel good about sustaining that into the fourth quarter. As you think about merger activity in our footprint, that disruption creates opportunity for us. We feel very well positioned to take advantage of that. Some of the fastest growing periods of my career have been when there was great disruption in the market from M&A. We're working very hard to position ourselves. I think being a source of strength and stability and growth during a time of disruption should position us well, both with talent and with prospects in the market.

Obviously as you think about merger activity in our footprint that disruption creates opportunity for us and obviously, we feel very well positioned to take advantage of that some of the fastest growing periods of my career has been when there was great disruption in the market for M&A and so we're working very hard.

Speaker #7: We're obviously not providing guidance for 2026, but we feel good about where we're at and feel confident about sustaining that into the fourth quarter.

Speaker #7: Obviously, as you think about merger activity in our footprint, that disruption creates opportunity for us. And obviously, we feel very well positioned to take advantage of that.

Positioning ourselves.

And I think being a source of strength and stability and growth.

Speaker #7: Some of the fastest-growing periods of my career have been when there was great disruption in the market from M&A. And so we're working very hard to position ourselves.

During a time of disruption should position us well, both with talent and with prospects in the market.

Thanks. Thank you I appreciate the question and maybe just the flip side of that.

Speaker #7: I think being a source of strength, stability, and growth during a time of disruption should position us well, both with talent and with prospects in the market.

Just given where.

Capital levels are given where the stock is in buybacks.

Can you just frame kind of capital use and given that we are seeing pretty quick approval times and a more favorable regulatory backdrop does M&A entered the equation for you guys again.

Speaker #8: Thanks, Stacy. Appreciate the question. And maybe just as a, a flip side of that, you know, just given where, you know, capital levels are, given where the stock is and, and buybacks, can you just frame kind of capital use and, and, you know, given that, we are seeing pretty quick approval times, and a more favorable regulatory backdrop, does M&A, you know, enter the equation for you guys again?

[Analyst]: Thanks, Stacy. Appreciate the question. Maybe just as a flip side of that, just given where capital levels are, given where the stock is and buybacks, can you just frame kind of capital use? Given that we are seeing pretty quick approval times and a more favorable regulatory backdrop, does M&A enter the equation for you guys again, or is this just too many buyers out there searching for too few deals? Thanks.

Or is it just too many buyers out there searching for Q2 few deals. Thanks.

From my perspective, the order of <unk>.

Capital allocation remains obviously, we want to grow organically, we are at our core and again a growth company and so that's our primary use of capital.

Speaker #8: Or is this just too many buyers out there searching for too few deals? Thanks.

Secondary.

Speaker #7: You're, you're from my perspective, the order of capital allocation remains obviously. We want to grow organically. We are, at our core, an organic growth company.

We will look at share repurchases, we will look at the dividend levels and things like that over time, you saw we printed over 10% TCE. This quarter I am not sure Thats, a good thing or a bad thing, but obviously proud to have very strong capital but.

Stacy Kymes: From my perspective, the order of capital allocation remains. Obviously, we want to grow organically. We are, at our core, an organic growth company, and that's our primary use of capital. Secondary, we'll look at share repurchases. We'll look at the dividend levels and things like that. Over time, you saw we printed over 10% tangible common equity this quarter. I'm not sure that's a good thing or a bad thing, but obviously proud to have very strong capital. We did that and repurchased a reasonably large amount of shares this quarter. M&A is something that exists for us that we'll look at. We're focused on strong core deposit franchises. We've kind of identified in the past the types of things that would be interesting to us, and if those things become available, then we'll be interested.

Speaker #7: And so that's our primary use of capital. Secondarily, you know, we'll look at share repurchases. We'll look at, you know, the dividend levels and things like that.

But we did that and repurchased a reasonably large amount of shares this quarter and then obviously M&A is is something that exist for us that we will look at.

Speaker #7: Over time, you saw we printed over 10% TCE this quarter. I'm not sure if that's a good thing or a bad thing, but, you know, obviously proud to have very strong capital.

We're focused on strong core deposit franchises, we've kind of identified in the past the types of things that would be interesting to us.

Speaker #7: But we did that and repurchased a reasonably large amount of shares this quarter. And then, obviously, M&A is something that exists for us that we'll look at.

And if those things become available then we will be interested.

But we're not interested in doing a deal just for the sake of doing one or because somebody else did it ever because the regulatory environment is more conducive to it.

Speaker #7: We're focused on, you know, strong core deposit franchises. We've kind of identified in the past the types of things that would be interesting to us.

There are a lot of work in a very disruptive.

Speaker #7: And if those things become available, then we'll be interested. But we're not interested in doing a deal just for the sake of doing one, or because somebody else did it, or because the regulatory environment is more conducive to it.

And so they need to be worse.

And really add strategic value long term and so.

Stacy Kymes: We're not interested in doing a deal just for the sake of doing one or because somebody else did it or because the regulatory environment is more conducive to it. They're a lot of work and they're very disruptive. They need to be worth the effort and really add strategic value long term. We're interested, but I think we're going to be very cautious about how we think about that.

Were interested but I think we're going to be very cautious about how we think about that.

Speaker #7: There is a lot of work, and it is very disruptive, so it needs to be worth the effort and really add strategic value long-term.

Really appreciate it thank you.

Just finally I just wanted to wish Heather I have perfect. Thanks, Paul.

Thank you.

Speaker #7: And so, we're interested, but I think we're going to be very cautious about how we think about that.

Your next question comes from the line of John Armstrong.

Capital markets. Okay go ahead.

Speaker #8: Really appreciate it, Stacy. And, just finally, I want to wish Heather a happy birthday. Thanks, all.

[Analyst]: Really appreciate it, Stacy. Finally, I just want to wish Heather a happy birthday. Thanks all.

Hey, good afternoon.

Hey, Marty maybe for you.

Speaker #4: Thank you.

Heather King: Thank you.

Touched on it a little bit in your prepared comments, but on slide 12.

Speaker #3: Your next question comes from the line of John Armstrong with RBC Capital Markets. You may go ahead.

Operator: Your next question comes from the line of Jon Arfstrom with RBC Capital Markets. You may go ahead.

On the core margin.

How do you feel about that trend in the core margin excluding trading is it still kind of.

Speaker #9: Hey, good afternoon.

Stacy Kymes: Hey, good afternoon.

Speaker #8: John?

[Analyst]: John?

Grind higher.

Speaker #9: Hey, Marty, maybe for you, you touched on it a little bit in your prepared comments, but on slide 12, regarding the core margin, how do you feel about that trend in the core margin excluding trading?

Stacy Kymes: Hey, Marty, maybe for you, you touched on it a little bit in your prepared comments, but on slide 12 in the core margin, how do you feel about that trend in the core margin excluding trading? Is it still that kind of grind higher? Can you just give us some of the puts and takes in terms of what you expect there.

You just kind of give us some of the puts and takes in terms of what you expect there.

Yes, we do still think that that is a grant higher trend.

The repricing.

Speaker #9: Is it still that kind of grind higher? Could you give us some of the puts and takes in terms of what you expect there?

Fixed rate portion of the loan book and fixed rate Securities book those are trends that will continue we had.

Just over $600 million securities basically price up around 100 basis points, this quarter and around $200 million.

Speaker #7: Yeah, we do still think that that is a grind-higher trend. You know, the repricing of the fixed-rate portion of the loan book and the fixed-rate securities book, you know, those are trends that will continue.

Martin Grunst: Yeah, we do still think that that is a grind higher trend. The repricing of the fixed-rate portion of the loan book and the fixed-rate securities book, those are trends that will continue. We had just over $600 million of securities basically price up around 100 basis points this quarter and around $200 million of fixed-rate loans price up similarly. Those trends don't last forever, but those are durable for a number of quarters over time. On the deposit pricing, we were able to do a little bit more on the repricing around the edges on the core deposit book earlier in the quarter and saw no adverse impact on that from depositors. We still think that those trends have legs.

Fixed rate loans price up similarly.

Those trends don't last forever, but those those are terrible for a number of quarters.

Speaker #7: We had, you know, just over $600 million of securities basically priced up around 100 basis points this quarter, and around $200 million of fixed-rate loans priced up similarly.

Overtime.

And on the deposit pricing and we were able to.

And do a little bit more on the.

Speaker #7: And, you know, those trends don't last forever, but, but, you know, those, those are durable for a number of quarters. over time. And, and on the, on the deposit pricing, you know, we, we were able to, you know, do a little bit more on the, you know, just repricing around the edges, on the, the core deposit book earlier in the quarter, and saw no, you know, no adverse, impact on that from a, from depositors.

Just repricing around the edges on the core deposit book earlier in the quarter and no.

No adverse impact on that from a from depositors so.

We still think that those trends have legs.

Okay.

And then Youre also seeing the trading book, probably stays relatively flat in the fourth quarter is that right.

Yes, I mean, thats our base expectation.

Speaker #7: So, you know, we still think that those trends have legs.

We need to have our desk needs to have a specific reason to want to move higher or lower than that kind of point to date are typically at.

Speaker #9: Okay. And then, you're also seeing the trading book probably stays relatively flat in the fourth quarter. Is that right?

Stacy Kymes: Okay. You're also saying the trading book probably stays relatively flat in the fourth quarter. Is that right?

And but that's a reasonable assumption based on what we can see today.

Speaker #7: Yeah, I mean, that's our base expectation. You know, you, you, we need to have our desk needs to have a specific reason to want to move higher or lower than that kind of point that they are typically at.

Martin Grunst: Yeah, I mean, that's our base expectation. We need to have, our desk needs to have a specific reason to want to move higher or lower than that kind of point that they are typically at. That's a reasonable assumption based on what we can see today.

Okay. Okay.

And then Stacy you mentioned it a couple of times, so I wouldn't want to give the opportunity to talk about it but we've talked about the mortgage finance launch in that business funding up and maybe making contributions.

Speaker #7: And, but, you know, that's a reasonable assumption based on what we can see today.

Greater contributions in the coming quarters can you talk a little bit more about what's possible there and the timeline. So we can understand that.

Speaker #9: Okay. Good. And then, Stacy, you mentioned it a couple of times, so I want to give you the opportunity to talk about it. You talked about the mortgage finance launch and that business funding up, maybe making contributions.

Stacy Kymes: Okay, good. Stacy, you mentioned it a couple of times, so I want to give the opportunity to talk about it. You talked about the mortgage finance launch and that business funding up and maybe making contributions, you know, greater contributions in the coming quarters. Can you talk a little bit more about what's possible there in the timeline so we can understand that?

Sure. So I think we previously talked about having $500 million and commitments by the end of the year I think that's very doable I think the utilization there will be plus or minus 50%.

Speaker #9: You know, greater contributions in the coming quarters. Can you talk a little bit more about what's possible there and the timeline so we can understand that?

As it matures, we'll kind of get a better feel for that but thats kind of how we're modeling it today.

Speaker #7: Sure. So, I think, you know, we've previously talked about having $500 million in commitments by the end of the year. I think that's very doable.

Martin Grunst: Sure. I think, you know, we previously talked about having $500 million in commitments by the end of the year. I think that's very doable. I think the utilization there will be, you know, plus or minus 50%. As it matures, we'll kind of get a better feel for that. That's kind of how we're modeling it today. I think we ended the third quarter with about $70 million, plus or minus, in mortgage finance loans outstanding. That kind of gives you a little bit of the runway. Obviously, we intend to grow that. We expect, as we get out into 2026, that the commitment level will increase pretty materially from there. We're very comfortable with that. The recourse there, the nature of the collateral and how we perfect on the collateral makes it a very safe lending aspect for us that we like.

I think we enter.

The third quarter with about $70 million plus or minus in the mortgage finance loans outstanding and so that kind of gives you a little bit of a runway obviously, we intend to grow that and so we expect.

Speaker #7: I think the utilization there will be, you know, plus or minus 50%. You know, as it matures, we'll kind of get a better feel for that, but that's kind of how we're modeling it today.

Speaker #7: I think we've ended the third quarter with about $70 million, plus or minus, in mortgage finance loans outstanding. And so that kind of gives you a little bit of the runway.

Get out into 'twenty, six, but the commitment level will increase pretty materially premier we're very comfortable with that.

Recourse there the nature of the collateral and how we perfect on the collateral.

Speaker #7: Obviously, we intend to grow that, and so we expect, as we get out into 2026, that the commitment level will increase pretty materially from there.

Makes it a.

Very safe winding aspect for us that we like.

Fits our profile well in addition to fitting our kind of mortgage ecosystem here with mortgage trading and more.

Speaker #7: We're very comfortable with that. It, the, the recourse, there, the, the, the nature of the collateral and how we perfect on the collateral, makes it, a very safe lending aspect for us that we like.

Mortgage TBA hedging that we do.

And then just the core.

Mortgage finance that we're adding here is an important leg of that so we see real growth opportunity here.

Speaker #7: fits our profile well. In addition to fitting our kind of mortgage ecosystem here with mortgage trading and mortgage TBA, hedging that we do, and then just the core mortgage finance that we're adding here is an important leg of that.

Martin Grunst: It fits our profile well, in addition to fitting our kind of mortgage ecosystem here with mortgage trading and mortgage TBA hedging that we do. The core mortgage finance that we're adding here is an important leg of that. We see real growth opportunity here out for the foreseeable future here for sure.

For the foreseeable future here for sure Okay. Okay. That's helpful context. Thank you.

Your next question comes from the line of Peter Winter with D. A Davidson you May go ahead.

Speaker #7: So, we see real growth opportunity here for the foreseeable future, for sure.

Thank you.

Speaker #9: Okay. Good. That's helpful context. Thank you.

Stacy Kymes: Okay, good. That's helpful context. Thank you.

I wanted to ask about just.

Fee income range.

Speaker #3: Your next question comes from the line of Peter Winner with DA Davidson. You may go ahead.

Operator: Your next question comes from the line of Peter Winter with D.A. Davidson. You may go ahead.

So that's a pretty wide.

Quarter left and maybe if you could talk about the puts and takes within that range. Because you did tighten the range on net interest income.

Speaker #10: thank you. I wanted to ask about, just the fee-income range. It, it, you know, it's still pretty wide with just one quarter left, and maybe if you could talk about the, the puts and takes within that range, because you, you did tighten the range, net interest income.

[Analyst]: Thank you. I wanted to ask about just the fee income range. It's still pretty wide with just one quarter left. Maybe if you could talk about the puts and takes within that range, because you did tighten the range on net interest income.

Yes, Peter we did tighten the range on fee income as well a bit but as you know that those are just great businesses to be in they've got really nice growth dynamics over time, it is a little bit more challenging to pinpoint any given quarter.

Speaker #7: Yeah, Peter, we did tighten the range on fee income as well a bit, but as you know, you know, that those are just great businesses to be in.

Martin Grunst: Yeah, Peter, we did tighten the range on fee income as well a bit. As you know, those are just great businesses to be in. They've got really nice growth dynamics over time. It is a little bit more challenging to pinpoint any given quarter in those fee businesses. We think that we've got good activity going across the board, whether that's fiduciary has good backdrop for both production of new volume, and so far our market's behaving pretty well. Transaction card has a nice growth rate year in and year out. Brokerage and trading, that's the most difficult to really be able to give any solid guidance on. I will say this, with the expectation for some lower rates in the fourth quarter, that at least gives you a constructive backdrop for that line of business.

In those businesses, but we think that.

We've got good activity going across the board whether that.

Speaker #7: They've got, you know, really nice, growth dynamics, over time. it is a little bit more challenging to pinpoint any given quarter, in those fee businesses, but, you know, we think that, you know, we've got, got good activity going across the board, whether that's, you know, fiduciary has, has good, good, you know, backdrop for both production of, new volume and, you know, so far our market's behaving pretty well.

Fiduciary is good good backdrop for both production of new volume and so far our markets behaving pretty well.

Transaction card that is a nice.

A nice growth rate year in and year out.

Brokerage and trading and Thats, the most difficult to really be able to give any any.

Solid guidance on but I will say this.

Speaker #7: Transaction card that has a nice growth rate year in and year out. You know, brokerage and trading, that's the most difficult to really, you know, be able to give any solid guidance on.

With the expectation for some.

Lower rates in the fourth quarter that at least gives you a constructive backdrop for for that line of business.

Speaker #7: But I'll, I will say this, you know, the, with the expectation for some, you know, lower rates in the fourth quarter, you know, that at least gives you a constructive backdrop for, for that line of business.

Okay. Thanks, and then.

Just on the updated expense guidance.

Does it imply youre expecting expenses to be down in the fourth quarter.

<unk>.

If you could provide maybe some expense growth color for next year would you expect expenses to moderate.

Speaker #10: Okay, thanks. And then, you know, just on the updated expense guidance, does it imply you're expecting expenses to be down in the fourth quarter?

[Analyst]: Okay, thanks. Just on the updated expense guidance, does it imply you're expecting expenses to be down in the fourth quarter? If you could provide maybe some expense growth color for next year, would you expect expenses to moderate? I guess what's a normal expense growth rate for BOK Financial?

I guess, what's a normal expense growth rate.

Okay.

Speaker #10: And, you know, if you could provide maybe some expense growth color for next year, just, you know, would you expect expenses to moderate? And, you know, I guess, what's a normal expense growth rate for BOK?

Yes, we will probably stop short of doing.

Any 2026th guidance, but I think it might be helpful to just talk about.

Q3 expense levels, and especially within the personnel because that was a little off trend for us and so if you look at that 226 million expense for personnel in Q3.

Speaker #7: Yeah, we'll probably stop short of doing any 2026 guidance, but I think it might be helpful to just talk about Q3 expense levels, especially within personnel, because, you know, that was a little off-trend for us.

Martin Grunst: Yeah, we'll probably stop short of doing any 2026 guidance, but I think it might be helpful to just talk about Q3 expense levels and especially within the personnel because, you know, that was a little off-trend for us. If you look at that $226 million expense for personnel in Q3, a couple of components in there that I think are just good to understand. $5.8 million was the level of deferred comp in that $226 million. As you know, Peter, deferred comp, some quarters that's positive, some quarters it's negative. The average is small, but it's truly inconsequential to EPS because it is always offset in the other gains and losses. If you're going to, some people adjust out the gains and losses in total, but if you do that, you really have to adjust it out of personnel anyway.

A couple of components in there that I think are just good to understand.

$5 8 million was the level of deferred comp in that $226 million and as you know Peter deferred comp some quarters. That's positive some quarters. It's negative is the average is small, but it's truly inconsequential to EPS because it is always offset in the other gains and losses.

Speaker #7: And so, if you look at that $226 million expense for personnel in Q3, there are a couple of components in there that I think are just good to understand.

Speaker #7: So, $5.8 million was the level of deferred comp in that $226 million. And as you know, Peter, deferred comp sometimes, some quarters that’s positive; some quarters it’s negative.

And so if youre going to.

Some people adjust out the gains and losses in total, but if you do that you really have to adjust it out of personnel anyway. In fact, when we do our guidance we leave that article side.

Speaker #7: The average is small, but it's truly inconsequential to EPS because it is always offset in the other gains and losses. And so, you know, if you're going to—some people adjust out the gains and losses in total—but if you do that, you really have to adjust it out of personnel anyway.

But that's $5 8 million that doesn't recur.

Some quarters quarter staff, so thats, one deferred comp too.

There is a little bit of workforce realignment, there so thats nearly $3 million in the current period. So you want to be thoughtful about that and then third the incentive comp.

Speaker #7: In fact, when we do our guidance, we leave it out of both sides. But, you know, the $5.8 million, that doesn't recur. You know, that's some quarters up, some quarters down.

Martin Grunst: In fact, when we do our guidance, we leave it out of both sides. $5.8 million, that doesn't recur. That's some quarters up, some quarters down. That's one. Deferred comp two, there's a little bit of workforce realignment there. That's nearly $3 million in the current period. You want to be thoughtful about that. Third, the incentive comp, $5.1 million cash incentive comp, higher quarter over quarter. That's production-driven, some iBanking, some loan production. Really, throughout the wealth business and other businesses, that's kind of spread throughout the company. That'll give you a little bit of sense for how to think about that Q3 number going forward.

$5 1 million in cash incentive comp higher quarter over quarter and Thats production driven.

Speaker #7: So that's one deferred comp. Two, you know, there's a little bit of workforce realignment there, so that's nearly $3 million in the current period.

My banking.

Term loan production and really.

Speaker #7: So, you want to be thoughtful about that. And then third, the incentive compensation: $5.1 million cash incentive compensation, higher quarter over quarter.

Throughout the wealth business and other business I mean, thats kind of spread throughout the company. So that will give you a little bit of a sense for how to think about that Q3 number going forward.

Speaker #7: And that's, you know, production-driven, some eye-banking, some loan production. And really, throughout the wealth business and other businesses, I mean, that's kind of spread throughout the company.

Okay. Thanks.

One last question.

I'll give it a shot I just wanted to follow up with.

Speaker #7: So that'll give you a little bit of sense for how to think about that Q3 number going forward.

With John's question with.

The mortgage finance.

I'm wondering if you could put some guardrails around.

Speaker #10: Okay. just one last question, Stacy. I'll, I'll give it a shot. I, I just want to follow up with, with John's question with the, the mortgage finance, you know, just I'm wondering if you could put some guardrails around, you know, materially higher next year.

[Analyst]: Okay. Just one last question. Stacy, I'll give it a shot. I just want to follow up with John's question with the mortgage finance. I'm wondering if you could put some guardrails around, you know, materially higher next year. It just seems with the Fed starting to cut rates, it really could be a significant grower for you next year.

Materially higher next year, just seems like the fed starting to cut rates.

Okay.

Could be a significant grower.

For you next year.

I agree with that assessment I think.

I think I indicated 500 commitments by the end of the year, roughly 50% utilization and then materially higher in 2026, obviously, we're going to be very careful here about providing any 2026 guidance because we're not prepared to do that we will do that when we get together in.

Speaker #10: It just seems with the Fed starting to cut rates, I mean, it could really be a significant grower for you next year.

Speaker #7: I agree with that assessment. I think that, you know, I indicated, you know, there will be 500 commitments by the end of the year.

Stacy Kymes: I agree with that assessment. I think I indicated $500 million in commitments by the end of the year, roughly 50% utilization, and then materially higher in 2026. Obviously, we're going to be very careful here about providing any 2026 guidance because we're not prepared to do that. We'll do that when we get together in January. We'll provide very detailed guidance around that. We're obviously very optimistic. We have a strong appetite to grow it. We believe it's very low credit risk. I think you'll see us be very open about growing that very aggressively in 2026.

Speaker #7: Roughly 50% utilization. And then, materially higher in 2026. Obviously, you know, we're going to be very careful here about providing any 2026 guidance because we're not prepared to do that.

January we provide very detailed guidance around that but we're obviously very optimistic we have a strong appetite to grow. It. We believe it's very low credit risk and so I think youll see us be.

Speaker #7: We'll do that when we get together in January. We'll provide very detailed guidance around that. But we're obviously very optimistic; we have a strong appetite to grow it.

Very open about growing that very aggressively in 2026.

Okay. Thank you.

Speaker #7: We believe it's very low credit risk. And so, I think you'll see us be very open about growing that very aggressively in 2026.

Our next question comes from the line David <unk> with Jefferies. You May go ahead.

Hi, Thanks, So I wanted to follow up on Peter's question there.

Speaker #10: Okay. Thank you.

[Analyst]: Okay, thank you.

Asking it a different way.

How high as a percent of loans mortgage finance essentially get say over two to three years.

Speaker #3: Your next question comes from the line of David Shiverini with Jefferies. You may go ahead.

Operator: Our next question comes from the line of David Chivirini with Jefferies. You may go ahead.

Speaker #11: Hi, thanks. So I wanted to follow up on Peter's question there to ask it a different way. You know, how high as a percent of loans could mortgage finance eventually get, say, over two to three years?

We typically look at it if you look at kind of the areas that we have our concentrations and you think about things, we think about things in terms of percent of capital.

[Analyst]: Hi, thanks. I wanted to follow up on Peter's question there. To ask it a different way, you know, how high as a % of loans could mortgage finance eventually get, say, over two to three years?

So obviously, we have lots of capital and we have lots of capacity to grow that when we start in any area.

Speaker #7: Yeah, we typically look at, if you look at kind of the areas that we, we have our concentrations in, you think about things, we think about things in terms of percent of capital.

Stacy Kymes: We typically look at, if you look at kind of the areas that we have our concentrations in, you think about things, we think about things in terms of % of capital. Obviously, we have lots of capital and we have lots of capacity to grow that. When we start in any area, we don't start where we want to end up. We learn from it, we get better, we grow, we understand what the client selection opportunities are and what the market gives us. It's hard to look out and say with great certainty, but we have a very long runway here in mortgage finance. We don't see where we're necessarily going to be constrained internally in the next couple of years around this. At some point, we would be.

We don't start where we want to end up.

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Speaker #7: And so, you know, obviously, we have lots of capital, and we have lots of capacity to grow that. You know, when we start in any area, we don't start where we want to end up.

Learn from it we get better we grow we understand what the client selection opportunities are and what the market gives us and so it's hard to look out and say with great certainty, but we have a very long runway here in mortgage finance and we're we don't see where where necessary.

Speaker #7: We learn from it. We get better. We grow. We understand what the client selection opportunities are and what the market gives us. It's hard to look out and say with great certainty, but we have a very long runway here in mortgage finance.

We are going to be constrained internally in the next couple of years around at some point, we would be there would be a point in time, where we would reach our kind of interim risk appetite. If you will but we're nowhere close to that today, we're very excited about the possibilities here.

Speaker #7: And we're, we're, we don't see where we're necessarily going to be constrained internally in the next couple of years around this. At some point, we would be.

And see a pretty long runway to grow it.

Speaker #7: There would be a point in time where we would reach our kind of interim risk appetite, if you will. But we're nowhere close to that today.

Stacy Kymes: There would be a point in time where we would reach our kind of interim risk appetite, if you will. We're nowhere close to that today. We're very excited about the possibilities here and see a pretty long runway to grow it.

And in terms of the competitive environment for mortgage finance are you seeing competitors pulled back from that business at all.

Speaker #7: We're very excited about the possibilities here and see a pretty long runway to grow it.

Not particularly I mean, not today I mean, there have been some who pulled out over liquidity issues call. It a couple of years ago.

Speaker #11: And in terms of the competitive environment for mortgage finance, are you seeing competitors pull back from that business at all?

[Analyst]: In terms of the competitive environment for mortgage finance, are you seeing competitors pull back from that business at all?

But if you think about the environment specifically to today not necessarily.

It does fall under the non depository financial institutions lending and so I think that there will be folks who look at that.

Speaker #7: Not particularly. I mean, not today. I mean, there have been some who pulled out, you know, over liquidity issues—call it a couple of years ago.

Stacy Kymes: Not particularly. I mean, not today. There have been some who pulled out, you know, over liquidity issues, call it a couple of years ago. If you think about the environment, specifically to today, not necessarily, although it does fall under the non-depository financial institution lending. I think that there will be folks who look at that and think about that maybe a little bit differently because of the scrutiny that's evolved from that. This is one of the most secure areas of lending in our view, no matter how it's classified, that we can do. We feel very, very comfortable with that. We are bringing to market a very experienced team, a very strong leadership group who's well known by the participants in the market. We have synergies with our existing businesses that most do not have.

And think about that maybe a little bit differently because of the scrutiny.

Speaker #7: But if you think about the environment, you know, specifically to today, not necessarily. Although, you know, it does fall under the non-depository financial institution lending.

Evolve from that but this is one of the most secure areas of lending in our view.

No matter how to classify.

Speaker #7: And so I think that there will be folks who look at that and think about that maybe a little bit differently because of the scrutiny that's evolved from that.

Can do and so we feel very very comfortable with that.

We are bringing to market a very experienced team a very strong leadership group, who is well known by the participants in the market, we have synergies with our existing businesses that most do not have.

Speaker #7: But this is one of the most secure areas of lending in our view, no matter how it's classified. We can do it, and so we feel very, very comfortable with that.

Speaker #7: We're, you know, bringing to market a very experienced team of strong leadership who are well-known by the participants in the market.

So with our mortgage trading business with our mortgage TBA hedging business Theres enormous synergy with the same clients that our mortgage finance prospects and so we really think.

Speaker #7: We have synergies with our existing businesses that most do not have. So, with our mortgage trading business and our mortgage TBA hedging business, there's enormous synergy with the same clients that are mortgage finance prospects.

Theres enormous opportunity here, where one plus one is three mortgage finance is going to grow on its own but we also think it will enhance other businesses as well and frankly, even on the treasury side, the cash management side, the corporate Treasury side, we're seeing opportunities that perhaps we didn't foresee as we entered this business we were bare.

Stacy Kymes: With our mortgage trading business, with our mortgage TBA hedging business, there's enormous synergy with the same clients that are our mortgage finance prospects. We really think there's enormous opportunity here where one plus one is three. Mortgage finance is going to grow on its own, but we also think it will enhance other businesses as well. Frankly, even on the treasury side, the cash management side, the corporate treasury side, we're seeing opportunities that perhaps we didn't foresee as we entered this business. We have a very strong delivery platform on the treasury side that, as those begin to explore a full relationship, are very impressed with relative to where they are. We're seeing much more traction there than perhaps we anticipated. We talk about the loans, and I understand why. They're a strong driver of earning assets. This is about a complete and full relationship.

Speaker #7: And so we really think there's enormous opportunity here where one plus one is three. Mortgage finance is going to grow on its own, but we also think it will enhance other businesses as well.

Very strong delivery platform on the treasury side.

Speaker #7: And frankly, even on the treasury side, the cash management side, the corporate treasury side, we're seeing opportunities that perhaps we didn't foresee as we entered this business.

As those begin to explore a full relationship.

Very impressed with relative to where they are and so we're seeing much more traction there than perhaps we anticipated. So this is we talked about the loans and I understand why they are a strong driver of earning assets.

Speaker #7: We have a very strong delivery platform on the treasury side that, as those begin to explore full relationships, are very impressed with relative to where they are.

This is about a complete and full relationship and so that's part of why we've entered this business in the way we have with hiring a very experienced team investing in the technology tools to be successful.

Speaker #7: And so we're seeing much more traction there than perhaps we anticipated. So this is, we talk about the loans, and I understand why they're a strong driver of earning assets.

And so I think youre going to see a lot of success here.

Speaker #7: But this is about a complete and full relationship. And so that's part of why we've entered this business in the way we have—with hiring a very experienced team and investing in the technology tools to be successful.

Stacy Kymes: That's part of why we've entered this business in the way we have with hiring a very experienced team, investing in the technology tools to be successful. I think you're going to see a lot of success here.

Thanks very much.

Your next question comes from the line of Brad Reback with hardware you May go ahead.

Speaker #7: And so, I think you're going to see a lot of success here.

Hey, good afternoon, everyone. Thanks for the question.

Speaker #11: Thanks very much.

[Analyst]: Thanks very much.

Wanted to just go back to loan growth and I noticed that you guys grew quite a bit in office this quarter.

Speaker #3: Your next question comes from the line of Brett Robotton with Hobdegroup. You may go ahead.

Operator: Your next question comes from the line of Brett Rabatin with Hovde Group. You may go ahead.

And so I was just curious if you were seeing opportunities where others may be were trying to reduce exposure relative to certain CRE buckets kind of given you're a lot.

Speaker #12: Hey, good afternoon, everyone. Thanks for the question. I wanted to just go back to loan growth. I noticed that you guys grew quite a bit in office.

[Analyst]: Hey, good afternoon, everyone. Thanks for the question. Wanted to just go back to loan growth. I noticed that you guys grew quite a bit in office this quarter. I was just curious if you were seeing opportunities where others maybe were trying to reduce exposure relative to certain CRE buckets, given you're a lot lower relative to some peers on concentration. Maybe just any other segments that you're seeing people pull back from, whether it be multifamily or construction, that might also be an opportunity.

Lower relative to some peers on concentration and then maybe just any any other segments that you are seeing people pull back from whether it be multifamily or construction that might also be an opportunity.

Speaker #12: This quarter, it was just curious if you were seeing opportunities where others maybe were trying to reduce exposure relative to certain CRE buckets, given that you are a lot lower relative to some peers on concentration.

Yes, I would say from.

Office is really consistent with where it was the same quarter a year ago. The balances are going to ebb and flow a little bit from period to period, just based on activity. We're not afraid of office, obviously it depends upon who the tenants are what the lease.

Speaker #12: And then maybe just any other segments that you're seeing people pull back from, whether it be multifamily or construction, that might also be an opportunity.

Speaker #7: Yeah, I would say from, you know, office is really consistent with where it was the same quarter a year ago. I mean, the balance is we're going to ebb and flow a little bit from period to period, just based on activity.

Stacy Kymes: I would say from, you know, office is really consistent with where it was this same quarter a year ago. The balances are going to ebb and flow a little bit from period to period just based on activity. We're not afraid of office. Obviously, it depends upon who the tenants are, what the lease roll looks like, the term of the leases, those types of things. Much like there was the demand, everything was going to go away in retail because of Amazon. That didn't prove to be true. I think office is going to prove to be a better class than people originally were concerned about because of changing work preferences. I think people are returning to the office. Workspace is important.

Roll looks like the term of the leases.

Those types of things I think.

Much like there was that everything was going to go away in retail because of Amazon that didnt prove to be true I think obviously is going to prove to be a better class than people. Originally we're concerned about because of changing work preferences, but I think people are returning to the office workspace is important.

Speaker #7: We're not afraid of office. You know, obviously, it depends upon who the tenants are, what the lease role looks like, the term of the leases, those types of things.

Speaker #7: I think, you know, much like there was the demise, everything was going to go away in retail because of Amazon. That didn't prove to be true.

We're not.

Speaker #7: I think the office is going to prove to be a better class than people originally were concerned about because of changing work preferences. But I think people are returning to the office.

Leading with office per se, but for the right deal for the right opportunity with the right tenant profile. We are in the business of making office loans and so you see a little bit of that this quarter. Obviously, our focus is multifamily and industrial primarily.

Speaker #7: Workspace is important, and we're not leading with office per se. But for the right deal, for the right opportunity, with the right tenant profile, we are in the business of making office loans.

Stacy Kymes: We're not leading with office per se, but for the right deal, for the right opportunity, with the right tenant profile, we are in the business of making office loans. You see a little bit of that this quarter. Obviously, our focus is multifamily and industrial primarily. We're seeing good opportunities there. We see kind of a good runway to kind of fill out the bucket, if you will, in commercial real estate and continue to grow the outstandings there.

And we're seeing good opportunities there.

We see kind of a good runway to kind of fill up the bucket. If you will in commercial real estate and.

Speaker #7: And so, you see a little bit of that this quarter. Obviously, our focus is multifamily and industrial primarily, and we're seeing good opportunities there.

Continue to grow the outstanding there.

Okay. That's helpful. Thanks, and then the other question I wanted to ask was just around the strong growth.

Speaker #7: we, we see kind of a good runway to kind of fill out the bucket, if you will, in commercial real estate. and continue to grow the outstandings there.

This quarter and really the past year.

And just how much of that might be the market versus new clients new customers.

Speaker #11: Okay, that's helpful, Stacy. And then the other question I wanted to ask was just around the strong growth this quarter and really the past year in AUMA.

[Analyst]: Okay. That's helpful, Stacy. The other question I wanted to ask was just around the strong growth this quarter and really the past year in AUMA and just, you know, how much of that might be the market versus new clients, new customers, any fee changes that might drive the revenue relative to flattish going forward in Q3 to Q2.

Any fee changes.

That might drive the revenue relative to flattish.

Going forward <unk>.

Speaker #11: And just, you know, how much of that might be the market versus new clients, new customers? Any fee changes that might drive the revenue relative to flat-ish going forward Q3 to Q2?

Sure so.

This quarter, specifically as we have on slide 10.

We are getting both.

We have a fair amount of planned distributions and natural churn in that business. So are excellent new asset attraction is significant but if you look at the net at the end of the quarter it was half and half.

Speaker #7: Sure. So, this quarter specifically, as we have on slide 10, we're getting both. And, you know, we have a fair amount of planned distributions and natural churn in that business.

Stacy Kymes: Sure. This quarter specifically, as we have on slide 10, we're getting both. We have a fair amount of planned distributions and natural churn in that business. Our actual new asset attraction is significant. If you look at the net at the end of the quarter, it was half and half. Of the $4.8 billion increase for the quarter, it was increased by both market valuation improvements, which accounted for about half of that, and the other was new business growth, net new business growth. It's a combination of the two. We feel good about it, and it's really across the broad spectrum. It's safekeeping assets, it's fiduciary assets across all the business lines inside of wealth, from retail brokerage to the institutional side.

Of the $4 8 billion increase.

For the quarter it was increased by both market.

Speaker #7: So our actual new asset attraction is significant. But if you look at the net at the end of the quarter, it was half and half.

Valuation improvements accounted for about half of that and the other was new business growth net new business growth.

Speaker #7: We had, of the $4.8 billion increase, you know, for the quarter, it was increased by both market valuation improvements, which accounted for about half of that.

So it's a combination of the two we feel good about and it's really across the broad spectrum.

Safekeeping assets its fiduciary assets across all the business lines inside of wealth.

Speaker #7: And the other was net new business growth. Net new business growth, so it's a combination of the two. We feel good about it, and it's really across the broad spectrum.

From retail brokerage to the institutional side.

Okay.

Speaker #7: It's, safekeeping assets. It's fiduciary, assets, across all the business lines inside of wealth. from retail brokerage to the institutional side.

Well first of all the color guys.

Thank you Brett.

Your next question comes from the line of Woody lay with K B W. You May go ahead.

Hey, Thanks for taking my question.

Speaker #11: Okay, that's helpful. I appreciate all the color, guys.

[Analyst]: Okay, that's helpful. I appreciate all the color, guys.

Just wanted to start on trading income.

Speaker #7: Thank you, Brett.

How do you think about the mix shift of trading income between fees and NII based on the expectation of the steepening yield curve.

Stacy Kymes: Thank you, Brett.

Speaker #3: Your next question comes from the line of Woody Lay with KBW. You may go ahead.

Operator: Your next question comes from the line of Woody Lay with KBW. You may go ahead.

Speaker #12: Hey, thanks for taking my question. just wanted to start on trading income. how do you think about the mixed shift of trading income between fees and NII based on the expectation of the deepening yield curve?

[Analyst]: Hey, thanks for taking my questions. Just wanted to start on trading income. How do you think about the mix shift of trading income between fees and NII based on the expectation of the steepening yield curve?

Yes, so Ed it's Marty so to the extent that you get a little more steepness in the curve youre going to see a little bit more of that revenue be in the NII category in a little bit less in fees.

And.

So that's a reasonable thing to assume but the total we're really paying attention to how the business performs and adding those two together thats really the right way to think about.

Speaker #7: Yeah, so this is Marty. To the extent that you get a little more steepness in the curve, you're going to see a little bit more of that revenue be in the NII category and a little bit less in fees.

Martin Grunst: Yeah. This is Marty. To the extent that you get a little more steepness in the curve, you're going to see a little bit more of that revenue be in the NII category and a little bit less in fees. That's a reasonable thing to assume. The total, we're really paying attention to how the business performs and adding those two together, that's really the right way to think about the trends in the business.

Trends in the business.

Speaker #7: And so, you know, that's a reasonable thing to assume, but the total, you know, we're really paying attention to how the business performs and adding those two together.

Yes.

Okay, and then maybe shifting over to credit.

Really really clean, but it did look like criticized assets ticked up just a touch do you have the dollar amount that it increased in any color you can give there.

Speaker #7: That's really the right way to think about trends in the business.

Speaker #11: Yeah, okay. And then maybe shifting over to credit. Obviously, it looks really clean, but it did appear that criticized assets picked up just a touch. Do you have the dollar amount that it increased, and any color you can give there?

[Analyst]: Okay. Maybe shifting over to credit, obviously, really clean, but it did look like credit-sized assets picked up just a touch. Do you have the dollar amount that it increased and any color you can give there?

Increased by $50 million.

20, almost $25 billion in loans.

You look at Chris.

Levels as a percent of tier one capital.

It crept up a little bit, but it's too small to move I mean, one loan can move the number here a little bit. So if you think about we're at 11, 3% at the end of the third quarter, we were at 12% at the end of the fourth quarter last year.

Speaker #7: I-increased by 50 million dollars. You know, on a 20, almost 25 billion dollars in loans. And if you look at, you know, criticized levels as a percent of tier one in capital, I mean, it crept up a little bit, but it, it's too small to move.

Stacy Kymes: It increased like $50 million, you know, on almost $25 billion in loans. If you look at, you know, credit-sized levels as a percent of tier one capital, it crept up a little bit, but it's too small to move. One loan can move the number here a little bit. If you think about it, we're at 11.3% at the end of the third quarter. We were at 12% at the end of the fourth quarter last year, kind of at a similar level we were at the third quarter. Obviously, we saw improvement in the first half of the year, but these numbers are so small that, you know, one or two loans can move these percentages here a little bit. I guess this is a good segue for me to remind everybody, this is not normal. These are abnormally strong credit numbers.

Kind of at a similar level, we were at the third quarter. Obviously, you saw improvement in the first half of the year, but these numbers are so small that that one or two loans can move these percentages here a little bit and I guess this is a good segue for me to remind everybody.

Speaker #7: I mean, one loan can move the number here a little bit. So, if you think about where we were at 11.3% at the end of the third quarter, we were at 12% at the end of the fourth quarter last year.

Speaker #7: kind of at a similar level, we were at the third quarter. Obviously, saw improvement in the first half of the year, but these numbers are so small that, that, you know, one or two loans can move these percentages here a little bit.

This is not normal either abnormally strong credit numbers and we include kind of that fourth quarter 2018 fourth COVID-19.

Speaker #7: And I, I guess this is a good segue for me to remind everybody: this is not normal. These are abnormally strong credit numbers. And we include, kind of that fourth quarter 2018, fourth quarter 2019; that is the mean, if you will.

That is the main if you will that is a normal those look good for US we were happy with those levels and so there will be a time, where both charge offs criticized levels of nonperforming levels kind of revert to the mean and that doesn't mean credits deteriorated. It just means that there's been kind of a reversion back to kind of a more normal period of time. These are abnormally.

Stacy Kymes: We include kind of that fourth quarter 2018, fourth quarter 2019. That is the mean, if you will. That is normal, those look good for us. We were happy with those levels. There will be a time where both charge-offs and credit-sized levels and non-performing levels kind of revert to the mean, and that doesn't mean credit's deteriorated. It just means that there's been kind of a reversion back to kind of a more normal period of time. These are abnormally good credit periods. You know, we're kind of looking under every rock trying to find where we think the next, you know, risk element can come from. We're not seeing it in a line of business. We're not seeing it in geography. Everybody's kind of jumping on the next credit thing.

Speaker #7: That, that is normal. Those look good for us. We were happy with those levels. So, there will be a time where both charge-offs and criticized levels and non-performing levels kind of revert to the mean.

Good credit periods, and we're kind of looking under every rock trying to find where we think the next.

Speaker #7: And that doesn't mean credit's deteriorating. It just means that there's been kind of a reversion back to a more normal period of time.

Risk element can come from and we're not seeing it in a line of business, we are not seeing any geography.

Speaker #7: These are abnormally good credit periods. And, you know, we are kind of looking under every rock trying to find where we think the next, you know, risk element can come from.

And everybody is kind of jumping on the next credit thing but.

There will be a reversion to the mean, but but we're not seeing any deterioration really meaningful deterioration at all in asset quality today.

Speaker #7: And we're not seeing it in a line of business. We're not seeing it in geography. And everybody's kind of jumping on the next credit thing.

Yes, and that was kind of go into my next question I mean, if I just look in the past.

Speaker #7: But, there will be a reversion to the mean, but, but we're not seeing any deterioration, really meaningful deterioration at all in asset quality today.

Stacy Kymes: There will be a reversion to the mean, but we're not seeing any deterioration, really meaningful deterioration at all in asset quality today.

On average over the past three years youre averaging.

Our net charge off rate of about <unk>.

Basis points, which is pretty remarkable considering.

Speaker #11: Yeah, they, and that was going to go into my next question. I mean, if I just look at the past, you know, on average over the past three years, you're averaging a net charge-off rate of about 6 basis points, which is just pretty remarkable considering, you know, your commercially focused business.

[Analyst]: Yeah, that was going to go into my next question. I mean, if I just look at the past, you know, on average over the past three years, you're averaging a net charge-off rate of about 6 basis points, which is just pretty remarkable considering, you know, you're a commercially focused business. Do you think, just based on where you see the macroeconomy today, we get a more normalized environment in the year ahead, or is it really just too unpredictable to tell?

Commercially focused business.

Do you think.

Just on where you see the macro economy today do you think we get.

A more normalized environment in the year ahead or is it really just too unpredictable to tell.

It's really hard to say I mean, we included in the appendix I think it's slide 18.

Speaker #11: Do you think, just based on where you see the macro economy today, do you, do you think we get a, a more normalized environment in the, in the year ahead, or i-i-is it really just too unpredictable to tell?

Kind of refer people that could we get caught up in these one year to one year and you don't really pick up our credit cycle. When you do that we've included in there are essentially a 20 year loss history that picks up the worst of the great financial crisis embedded in that and that history, and we've got to basically a 26 basis points.

Speaker #7: It's really hard to say. I mean, we include in the appendix, I think it's slide 18, and I always kind of refer people to that because we get caught up in these, you know, one year to one year, and you don't really pick up a credit cycle when you do that.

Stacy Kymes: It's really hard to say. I mean, we include in the appendix, I think it's slide 18. I always kind of refer people to that because we get caught up in these, you know, one year to one year, and you don't really pick up a credit cycle when you do that. We've included in our, you know, essentially a 20-year loss history that picks up the worst of the great financial crisis embedded in that history. We've got basically a 26 basis point average charge-off over that period of time, which includes some pretty significant losses if you think about coming out of the, through the great financial crisis. I think as we think about through the cycle, we kind of think 20 to 25 basis points is average losses for us. Maybe we do a little bit better.

Average charge off over that period of time, which includes a pretty pretty.

Speaker #7: We've included in our, you know, essentially a 20-year loss history that picks up, you know, the worst of the great financial crisis embedded in that, in that history.

Significant losses, and if you think about coming out of it through the great financial crisis and.

Speaker #7: And we've got basically a 26 basis point average charge-off over that period of time, which includes some pretty significant losses in the, if you think about coming out of the Great Financial Crisis.

And so I think as we think about through the cycle, we kind of think 20% to 25 basis points as average losses for us maybe we do a little bit better we think our asset quality has differentiated itself in a very positive way.

But as you're trying to look out in the near term it.

Speaker #7: And so, I think as we think throughout the cycle, we kind of think 20 to 25 basis points is average losses for us.

It's hard to see that we revert back to that mean quickly just based on what we see today, there's as much positive going on in there is negative and so.

Speaker #7: Maybe we do a little bit better. We think our asset quality has differentiated itself in a very positive way. But as you try to look out in the near term, it's hard to see that we revert back to that mean quickly.

Stacy Kymes: We think our asset quality has differentiated itself in a very positive way. As you try to look out in the near term, it's hard to see that we revert back to that mean quickly. Just based on what we see today, there's as much positive going on as there is negative. I don't foresee that certainly, but it's, you know, there's so many factors that can predicate that. It's typically something that we didn't expect or that kind of an extragenous shock that creates the stress. It's very difficult with real certainty to predict. As we model, as we think about our business through a cycle, we really focus on that long-term loss rate, which we think is somewhere around 20 to 25 basis points. We're nowhere near that today and don't certainly foresee that in the near term.

I don't foresee that certainly, but there's so many factors that can predicate that.

Speaker #7: Just based on what we see today, there's as much positive going on as there is negative. And so, you know, I don't foresee that, certainly, but it's, you know, there's so many factors that can predicate that.

It's typically something that we didn't expect that.

The next <unk> is shocked that creates the stress and so it's very difficult with real certainty predict and so as we as we model as we think about our business through a cycle, we really focus on that long term loss rate, which we think is somewhere around 20 to 25 basis points, but we're nowhere near that today and so certainly foresee that in the near term.

Speaker #7: It's typically something that we didn't expect, or that kind of an extraordinary shock that creates the stress. And so, it's very difficult, with real certainty, to predict.

Speaker #7: And so, as we model, as we think about our business through a cycle, we really focus on that long-term loss rate, which we think is somewhere around 20 to 25 basis points.

Got it that's great color. Thanks for taking all my questions.

Thank you.

Your next question comes from Bill.

Speaker #7: But we're nowhere near that today and don't certainly foresee that in the near term.

Timur <unk> with Wells Fargo go ahead.

Hi, good afternoon.

Speaker #11: Got it. That's great color. Thanks for taking all my questions.

[Analyst]: Got it. That's great color. Thanks for taking all my questions.

Hi, there.

A couple more on the warehouse finance business I guess, what are the typical line sizes look like today, and how does that progression grow potentially as you build out that business.

Speaker #7: Thank you.

Stacy Kymes: Thank you.

Speaker #3: Your next question comes from the line of Timur Braziler with Wells Fargo. You may go ahead.

Operator: Your next question comes from the line of Samir Basra with Wells Fargo. You go ahead.

Speaker #12: Hi, good afternoon.

[Analyst]: Hi, good afternoon.

Speaker #7: Hi Hi there.

Stacy Kymes: Hi there.

Okay.

Speaker #12: A couple more on the warehouse finance business. I guess, what do the typical line sizes look like today? And how does that progression grow potentially as you build out that business?

[Analyst]: A couple more on the mortgage finance business. I guess, what do the typical line sizes look like today? How does that progression grow potentially as you build out that business?

All signs are going to be loan commitments here youre going to be larger than maybe a typical C&I loan commitment be so let's call it $75 million to $100 million plus or minus.

And some are going to be smaller so we're going to be bigger, but but generally speaking theyre going to be a little bit larger there, mostly because of the quality of the credit is in some cases correlated to the size of the facility and so we want to be sensitive about adverse selection.

Speaker #7: I mean, line sizes, like, loan sizes are going to be, you know, loan commitments here are going to be larger than maybe a typical C&I loan commitment would be.

Stacy Kymes: I mean, loan sizes are going to be, you know, loan commitments here are going to be larger than maybe a typical C&I loan commitment would be. Let's call it $75 to $100 million, plus or minus.

Martin Grunst: You know, and some are going to be smaller, some are going to be bigger, but, you know, generally speaking, they're going to be a little bit larger there, mostly because the quality of the credit is, in some cases, correlated to the size of the facility. We want to be sensitive about adverse selection, but it is less granular than a typical C&I portfolio for sure. The asset quality is much, much better over a long period of time.

But it is less granular than a typical C&I portfolio for sure, but the asset quality is much much better over a long period of time.

Okay, and then Marty I talked to you three months ago in your comments are a big pit prosodic you had mentioned the essentially the risk of double pledging some of this collateral.

It also said that the mortgage registration system that are in places today kind of eliminate some of these graphs I guess the events of the last couple of weeks of that potentially make you reconsider how you think about that statement.

Stacy Kymes: Okay. Marty, I talked to you three months ago, and your comments were a bit prophetic. You had mentioned essentially the risk of double pledging some of this collateral. You had also said that the mortgage registration system that's in place today kind of eliminates some of these risks. I guess the events of these last couple of weeks, does that potentially make you reconsider how you think about that statement?

As close as you build the ramp does that give you even greater conviction around the process.

Yes, no. That's a great question because there is a distinction between the situations that are in the news.

Martin Grunst: Uh-huh.

Stacy Kymes: Does that give you even greater conviction around the process as close as you've been to the ramp?

Those are not residential.

Mortgage warehouse lines, where those loans are all registered at <unk> I mean, that's the beauty of a component of mortgage warehouse that we're doing so all of that collateral.

Martin Grunst: Yeah. No, that's a great question because there's a distinction between the situations that are in the news. Those are not residential mortgage warehouse lines where those loans are all registered at MERS. I mean, that's the beauty of the component of mortgage warehouse that we're doing. All of that collateral, you know, not only do we have a very strong team that's very experienced, but we've got the leading platform to operate that business. That gives us the ability to ensure that all the individual loans, we have clear title to all the loans that are securing our warehouse line through MERS. There are other flavors of warehouse finance that aren't like that. What we're doing is 100% what I just described, where our ability to have clear line of sight on title so that we know we've got those loans as collateral.

Not only do we have a very strong team that's very experienced but we've got the leading platform to operate that business and that gives us the ability to ensure that all of the individual loans.

We have clear title to all the loans that are securing our warehouse line through mergers and so there are other.

Flavors of warehouse finance that arent like that but what we're doing is 100% what I just described where our ability to have clear line of sight on titles, but we know we've got those loans with collateral not only that we've got the ability to deal with them, if we ever needed to.

Just given the talent we've got onboard.

So we are as convicted as ever that the way, we're going into this business and the portion of the business that we're doing is the right one that meets our risk appetite.

Martin Grunst: Not only that, we've got the ability to deal with them if we ever needed to, you know, just given the talent we've got on board. We are as convicted as ever that the way we're going into this business and the portion of this business that we're doing is the right one that meets our risk appetite.

Great. That's good color. Thank you and then just last from me just a clarifying question the comment on trading assets being more or less in line with <unk> is that on an average basis our period end.

Yes average always yes, we always talk about average there you can almost ignore that period is on trading because one gig one day isn't representative so so as youre thinking about that business. It's always the most sensible thing to look at the averages.

Stacy Kymes: Great. That's good color. Thank you. Just last for me, just a clarifying question. The comment on trading assets being more or less in line with Q3, is that an average basis or a period end?

Great. Thank you.

Martin Grunst: Yeah, average. We always talk about average there. You can almost ignore the period end on trading, 'cause just one day isn't representative. As you're thinking about that business, it's always the most sensible thing to look at the averages.

Our next comes from the line of Jared Shaw with Barclays. You May go ahead.

Hey, good afternoon.

Hi, Jared.

Stacy Kymes: Great. Thank you.

Hey, So just I guess going back to the overall loan growth.

Look at the high end of that range.

Heather King: Our next question comes from the line of Jared Shaw of Barclays. You may go ahead.

It feels like Thats, just driven by the Optionality of the potential of mortgage warehouse is that right and I guess what are your assumptions for energy.

Martin Grunst: Hey, good afternoon.

Stacy Kymes: Hey, Jared.

Martin Grunst: Just, you know, I guess, going back to the overall loan growth, if we look at the high end of that range, it feels like that's just driven by the optionality or the potential of mortgage warehouse. Is that right? I guess what are your assumptions for energy, payoff activity or payoff activity, you know, paydown activity? Is that going to slow going into the end of the year, or could we still see pressure on those balances?

Payoff activity or payoff and paydown activity is that going to slow going into the end of the year or could we still see pressure on those balances.

Yes, I think we're we're growing the last few quarters, we've grown loans at 10% without really any meaningful contribution from mortgage finance and so I think that there is there is and that's with some headwinds in the energy space.

I feel very confident about where we are from a loan growth perspective, we've got a good momentum.

Stacy Kymes: Yeah. I think, you know, we're growing. The last two quarters, we've grown loans at 10% without really any meaningful contribution from mortgage finance. I think that there's, and that's with some headwind in the energy space. I feel very confident about where we are from a loan growth perspective. We've got good momentum. We look at the sales pipeline, obviously, going into, we look at it more frequently, but particularly coming into the call to be able to feel good about talking about that here. Sales pipelines are very strong right now, and we feel good about where we're positioned from that perspective. As we think about the future, energy lending, the leverage, the commodity prices are low. There's consolidation happening in the space. I do think, plus or minus a little bit, we've kind of hit the bottom in terms of the risk of material payoff activity.

We look at the sales pipeline, obviously going into if we look at it more frequently but particularly coming into the call to be able to feel good about talking about that here.

Sales pipelines are very strong right now.

So we feel good about where we're positioned from that perspective.

As we as we think about the future I mean energy lending deleverage with the commodity prices are low there is consolidation happening in space I do think.

Plus or minus a little bit we've kind of hit the bottom in terms of.

The risk is material payoff activity, but I don't think its going to grow at 10% either and so I think from our perspective, having stable balances. There is a positive we do expect it to grow a little bit, but but we're close to bouncing off the bottom here a little bit on the energy balances, which which is helpful.

Stacy Kymes: I don't think it's going to grow at 10% either. From our perspective, having stable balances there is a positive. We do expect it to grow a little bit, but we're close to bouncing off the bottom here a little bit on the energy balances, which is helpful. Obviously, we like that space, feel very good about the asset quality there, but the growth has been more challenged in the last 12 to 18 months as there's been lower commodity prices and more merger and acquisition activity in that space.

Obviously, we like that space feel very good about that.

Asset quality, there, but the growth has been more challenged in the last 12 to 18 months is we've been lower commodity prices.

More merger and acquisition activity in that space.

Okay, Alright, Thanks, and then if we do see the stronger growth in the mortgage side is that going to be enough to impact the expected.

Growth in loan yields.

Here I am guessing thats tighter spreads on that lending rate.

Martin Grunst: All right. Thanks. If we do see the stronger growth in the mortgage side, is that going to be enough to impact the expected growth in loan yields here? I'm guessing that's tighter spreads on that lending, right?

It is tighter spread there is really going to depend on what the mix is at that particular point in time. It's a hard question to answer until you will farther along.

And just overall, yes.

And the spreads on mortgage warehouse or are tighter than they are on on let's say a typical C&I deal. The flip side of that we still got lots of room to grow in commercial real estate those.

Stacy Kymes: It is tighter spreads. It's really going to depend on what the mix is at that particular point in time. That's a hard question to answer until we get a little farther along. I mean, just overall, yes. You know, the spreads on mortgage warehouse are tighter than they are on, let's say, a typical C&I deal. The flip side of that, we still got lots of room to grow in commercial real estate. Those spreads tend to be wider than a typical C&I deal. It really just depends on the mix at that particular point in time.

Spreads tend to be wider than a typical C&I deal and so it really just depends on the mix at that particular point in time and Gerry one thing to think about as that business also brings deposits and so when you think about the combination of the loan deposits Treasury management revenue and incremental trading revenue broadly speaking that bring.

<unk> are pretty standard margin.

Martin Grunst: Yeah. Jared, one thing to think about is that business also brings deposits. When you think about the combination of the loans, deposits, the treasury management revenue, and, you know, some incremental trading revenue, broadly speaking, that's bringing a pretty standard margin to the bottom line for us. I think overall, you know, it's not going to be diluted to overall returns if that's sort of the way you're thinking about it.

The bottom line for us so I think overall.

It's not going to be dilutive to overall returns that's sort of what you are thinking about it.

Alright, Thanks, and then.

It is tighter spread and it's really going to depend on what the mix is at that particular point in time. It's a hard question to answer until we get a little farther along. I mean, just overall, yes. Um, the the spreads on mortgage Warehouse are are tighter than they are on on. Let's say, a typical C and ideal. The flip side of that, we still got lots of room to grow and Commercial Real Estate. Those uh, spreads tend to be wider than a typical C and ideal and so it really just depends on the mix at that particular point in time and Jared, 1 thing to think about is that business also brings deposits. And so when you think about the combination of the loans, the deposits the treasury management revenue. And you know,

How should we think about maybe your internal thoughts around loan to deposit ratios in funding funding this growth.

Assume that should we assume that youre comfortable with that ratio, which is <unk>.

Stacy Kymes: All right. Thanks. How should we think about maybe your internal thoughts around loan-to-deposit ratios and funding this growth? Should we assume that you're comfortable with that ratio, which is pretty low, starting to grow back to where we maybe saw in prior years?

Incremental trading revenue, you know, broadly speaking, that's bringing a pretty standard margin to the bottom line for us. So I think overall, uh you know, it's not going to be diluted to overall returns if that's sort of the way you're thinking about it.

Pretty low starting to grow back to where we maybe saw in prior years.

Yes, we have as you know and as you've just had very strong loan to deposit ratio of that can drift up and that's fine that's not our central our central cases that will continue to grow loans will continue to grow deposits, maybe loans are a little higher than the deposits in that could drift up and that would be fine but.

Okay, all right. Thanks and then um how should we think about maybe your your internal thoughts around loan to deposit ratios and and funding funding this growth? Um

Assume that, should we assume that you're comfortable with that ratio, which is...

Martin Grunst: We have a, as you know, and as you just said, very strong loan-to-deposit ratio. That can drift up, and that's fine. That's not our central, you know, our central case is that we'll continue to grow loans. We'll continue to grow deposits. Maybe loans are a little higher than the deposits, and that could drift up, and that'd be fine. We've got a lot of balance sheet flexibility, and that'll put us in very good position for the next couple of years.

Pretty low, starting to grow back to where we, you know, maybe you saw in prior years.

Sure.

We've got a lot of balance sheet flexibility and that will put us in very good position for the next couple of years.

Thanks, a lot.

Your final question comes from the line of Matt.

Yeah, we we have a as you know, and as you just said, very strong loan to deposit ratio that can drift up and that's fine. That's not our Central. You know, our Central cases that we'll continue to grow, loans will continue to grow deposits. Maybe loans are a little higher than the deposits and that could drift up and that'd be fine.

Hey, Stephen Hey go ahead.

Yes, thanks for taking the question guys.

I guess sticking with your first question on the loan yields are there any material loan floors that would become effective.

Stacy Kymes: Thanks a lot.

Uh, uh, you know, we've got a lot of balance sheet flexibility, and, uh, that'll put us in a very good position for the next couple of years.

Thanks a lot.

Heather King: Your final question comes from the line of Matt Olney and Steven. Go ahead.

<unk> continues to cut rates.

Yes.

Operator: Yeah. Thanks for taking the question, guys. I guess sticking with Jared's first question on the loan yields, are there any material loan floors that would become effective as the Fed continues to cut rates?

Your final question comes from the line of Matt. Only Steven, I go ahead.

Not really I mean, certainly.

These.

We still have.

Pretty high rates here in the Grand scheme of things. So, yes fluids are not going to be a factor in the foreseeable future.

Okay.

Martin Grunst: Yeah. Not, not really. I mean, certainly, you know, in these, you know, we still have, you know, pretty high rates here in the grand scheme of things. Yeah, floors are not going to be a factor in the foreseeable future.

Yeah, thanks for taking the question, guys. Um, I guess sticking with Jared's first question on the loan yields, are there any material loan floors that would become effective as the Fed continues to cut rates?

Thanks for that Marty and then I guess going back to the credit discussion.

You gave us some great details and I'm looking at the allowance ratio call. It $1 32, which I think is the low end of what we've seen since the seasonal adoption over the last.

Yeah, not really. I mean, and certainly, you know, in these, you know, we still have.

You know, pretty high rates here in the grand scheme of things. So, yeah, floors are not going to be a factor in the foreseeable future.

Operator: Okay. Thanks for that, Marty. I guess going back to the credit discussion, you gave us some great details, and I'm looking at the allowance ratio, call it 1.32%, which I think is the low end of what we've seen since the CECL adoption of the last, you know, a few years ago. It feels like it's going to be really tough to keep that flat, and we could see that start to or continue to drift lower. Am I interpreting the commentary there right on the allowance ratio?

A few years ago.

It feels like it's going to be really tough to keep that flat and we could see that start to or continue to drift lower and my interpreting the commentary there right on the allowance ratio.

And that's really predicated on.

Asset quality at the point in time in loan growth and lots of other factors there.

We obviously don't foresee loss content being material that's going to help.

Martin Grunst: I mean, that's really predicated on asset quality at the point in time and loan growth and lots of other factors there. You know, we obviously don't foresee lost content being material that's going to help. If you look at, you know, the reserve relative to criticized levels or relative to non-performing levels or relative to charge-offs, obviously, it's very healthy. We've got something that we'll continue to look at there.

But if you look at the reserve relative to criticized levels are relative to nonperforming levels relative to charge offs, obviously, it's very healthy.

Okay, thanks for that. Marty and then I guess going back to the credit discussion. Um, you gave us some great details and I'm looking at the allowance ratio, call it 1 132 which I think is the low end of what we've seen since the CEO adoption of the last uh, you know, a few years ago. Um it feels like it's going to be really tough to keep that flat and we could see that start to or continue to drift lower and my interpreting the commentary there, right on the allowance ratio.

I mean that's really predicated on.

And we've got.

Something that will continue to look at there.

Yes.

Okay.

That's all from me thanks, guys.

Yep. Thanks.

Your final question comes from the line of newer Bridezilla with Wells Fargo. You May go ahead.

Hi, Thanks for the follow up just one more for me.

Operator: Yeah, okay. That's all for me. Thanks, guys.

Asset quality at the point in time and loan growth and lots of other factors there. Uh, you know, we obviously don't foresee loss content being material that's going to help, but if you look at, you know, the reserve relative to criticized levels or relative to non-performing levels or relative to charge-offs, obviously it's very healthy. Uh, and we've got something that we will continue to look at there.

Yeah.

A couple of times that.

Martin Grunst: Yep. Thanks.

Looking to align.

Heather King: Your final question comes from the line of Miller Brzeziler with Wells Fargo. You may go ahead.

Okay, that's all for me. Thanks, guys. Yep. Thanks.

<unk> base with future growth initiatives can you just maybe put some context around that statement and maybe how far in the process. We are there.

Stacy Kymes: Hi. Thanks for the follow-up. Just one more for me. You had called out a couple of times that you're looking to align talent base with future growth initiatives. Can you just maybe put some context around that statement and maybe how far in the process we are there?

Your final question comes from the line of em Brasil with Wells Fargo. You may go ahead.

Yes.

We're constantly.

We are part of our corporate DNA is we're always looking to see where the growth opportunities where the highest returns on our capital and where areas that are mature and so we've been very focused.

Hi, thanks for the follow-up. Um, just one more from me. Uh, you had called out a couple of times that you're looking to align talent base with future growth initiatives. Can you just maybe put some context around that statement and maybe how far in the process we are there?

Martin Grunst: We're constantly, I mean, it, you know, part of our corporate DNA is we're always looking to see, you know, where are the growth opportunities, where are the highest returns on our capital, and where are areas that are mature. We've been very focused, as we have these expansion areas like San Antonio, like mortgage warehouse, where we're making big investments. We have big technology investments in Wells and in the corporate bank. Obviously, as we think about that, we also think about where are some areas that are mature that we need to be more efficient in and focus on that.

We have these expansion areas like San Antonio like mortgage warehouse, where we're making big investments, we have big technology investments and wealth in the corporate bank.

Obviously as we think about that we also think about where some areas that are mature that we need to be more efficient and focus on that and so as.

As we've.

Work through that over the course of the year, we've taken actions in both the third quarter and in the fourth quarter.

That resulted in transitional payments that are nonrecurring.

Personnel expenses principally.

Martin Grunst: As we've worked through that over the course of the year, we've taken actions in both the third quarter and in the fourth quarter that will result in transitional payments that are non-recurring, that will impact personnel expenses principally, but create benefit in future periods as we right-size the workforce with the areas that we think provide the most opportunity for us to grow.

But create benefit in future periods as we as we right size the workforce with the areas that we think provides the most operating for us to grow.

Okay. Thank you.

This concludes today's Q&A session.

I'd now like to turn the call back over to closing remarks.

Thank you. This was another strong quarter marked by solid performance across our core businesses. We had this momentum we built this quarter reflect the strength and resilience of our team. We're entering the final quarter of 2025 with a clear focus on sustaining the positive trajectory. We appreciate your interest and be OK financial and your willingness to spend time with us This afternoon.

Recurring expenses will impact personnel expenses principally, but will create benefits in future periods. As we right-size the workforce, we are focusing on the areas that we believe provide the most opportunity for us to grow.

Stacy Kymes: Okay, thank you.

Okay, thank you.

Heather King: This concludes today's Q&A session. I would now like to turn the call back over to Stacy for closing remarks.

Please reach out to Heather Keith if you have any questions at eight stock King at <unk> Dot com.

Stacy Kymes: Thank you. This was another strong quarter, marked by solid performance across our core businesses. The additional momentum we built this quarter reflects the strength and resilience of our team. We're entering the final quarter of 2025 with a clear focus on sustaining the positive trajectory. We appreciate your interest in BOK Financial Corporation and your willingness to spend time with us this afternoon. Please reach out to Heather King if you have any questions at h.king@bokf.com.

This concludes today's Q&A session. I would now like to turn the call back over to Stacy for closing remarks.

This concludes today's conference call you may disconnect.

Thank you. This was another strong quarter, marking my solid performance across our core businesses. The additional minimum we built this quarter reflects the strength and resilience of our team.

As we enter the final quarter of 2025, we want to maintain our positive trajectory. We appreciate your interest in BOK Financial and your willingness to spend time with us this afternoon.

Please reach out to Heather King. If you have any questions at h. King at bokf.com,

Heather King: This concludes today's conference call. You may disconnect.

Best Conquest today.

This call, you may disconnect.