Q3 2025 Business First Bancshares Inc Earnings Call

Hello, and thank you for standing by. My name is Mark, and I will be your conference operator. Today, at this time, I would like to welcome everyone to Business First Bancshares Inc.'s Q3 2025 earnings call.

Unless I will place you on mute to prevent any background noise. After the speaker's remarks, there will be an expression and answer session.

If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. To enjoy your question, press star 1 again.

Matt Sealy: Thank you. Good afternoon, and thank you all for joining. Earlier today, we issued our third quarter 2025 earnings press release, a copy of which is available on our website, along with the slide presentation that we will reference during today's call. Please refer to slide three of our presentation, which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. For those of you joining by phone, please note the slide presentation is available on our website at www.b1bank.com. Please also note our safe harbor statements are available on page seven of our earnings press release that was filed with the SEC today. All comments made during today's call are subject to the safe harbor statements in our slide presentation and earnings release. I'm joined this afternoon by Business First Bancshares, Inc.

I would like to turn the call over to Matt silly. You may begin.

Thank you, good afternoon, and thank you all for joining earlier today. We issued our third quarter 2025 earnings press release, the copy of, which is available on our website, along with the slide presentation that we will reference during today's call.

Please refer to slide 3 by presentation, which includes our Safe Harbor statements, regarding forward-looking statements and the use of non-gaap financial measures. For those of you joining by phone, please note that slide presentation is available on our website at www.b1bank.com.

Please also note our safe harbor statements are available on page 7. I've earned this press release that was filed with the SEC today.

Subject to the safe harbor statements in our slide presentation and earnings release.

Matt Sealy: Chairman and CEO, Jude Melville, Chief Financial Officer, Greg Robertson, Chief Banking Officer, Philip Jordan, and President of b1BANK, Jerry Vascocu. After the presentation, we'll be happy to address any questions you might have. With that, I'll turn the call over to you, Jude.

Jude Melville: Okay. Thanks, Matt. Good afternoon, and thank you all for being with us today. It was another solid work-a-day quarter for our company. Greg will follow my remarks with specific numbers that I know you're eager to dive into, but I'd like to use my time to highlight three themes on which we are focused. First, we continue to show incremental quality earnings improvement, and importantly, that improvement has been driven in large part by strong expense control. To be specific, three quarters of essentially flat core non-interest expenses. We've made significant investment over the past few years in our effort to reach a meaningful asset size distributed over what we consider to be an attractive footprint. Having done so, I've been pivoting our focus to the generation of operating leverage and expected to remain there.

I'm joined this afternoon by Business First Bancshares, Inc. Chairman and CEO Jude Melville, Chief Financial Officer Greg Robertson, Chief Banking Officer Philip Jordan, and President of V1 Bank Jerry Vasquez. After the presentation, we'll be happy to address any questions you might have. And with that, I'll turn the call over to you, Jude.

Okay, thanks, Matt, and good afternoon. Thank you all for being with us today. It was another solid workday quarter for our company. Greg will follow my remarks with specific numbers that I know you're eager to dive into, but I'd like to use my time to highlight three teams that we are focused on.

First, we continue to show incremental quality earnings Improvement and importantly that Improvement has been driven in large part by strong expense control.

To be specific 3/4 of essentially flat core non-interest expenses.

Jude Melville: As a result, our aggregate earnings, our capital ratios, our tangible book value levels, and our efficiency ratio all showed material improvement over the quarter and year to date, trends we expect to continue. Second, our team has executed magnificently on the operational challenges we committed to this year, converting our entire core bank at the end of the second quarter to a new processor, and following quickly behind that, converting Oakwood Bank to the new system at the end of the third quarter. Although this aspect of performance doesn't easily fit into an earnings model, it's critical to our ongoing performance as an institution. Preparing to be better as we get bigger creates value that, unfortunately, may only be recognized over time. I want to be sure to congratulate our team now on the job excellently done.

We've made significant investments over the past few years in our effort to reach a meaningful asset size, distributed over what we consider to be an attractive footprint. Having done so, we have been pivoting our focus to the generation of operating earnings, which we expect to remain there. As a result, our aggregate earnings, capital ratios, tangible book value levels, and our efficiency ratio all show material improvement over the quarter and year-to-date trends, which we expect to continue.

Second, our team is executed a magnificently on the operational. Challenges, we committed to this year converting our entire core bank, at the end of the second quarter to a new processor and following quickly behind that converting Oakwood Bank to the new system at the end of the third quarter.

Although this aspect of performance doesn't easily fit into an earnings model, it's critical to our ongoing performance as an institution.

Jude Melville: In addition to system-wide efficiencies, operational excellence is also what allows us to feel confident that we can reap the financial potential associated with our two current M&A initiatives. We expect to see much more of the all-in economic benefit from the Oakwood transaction achieved by the first quarter of 2026. We also remain on pace to close the Progressive Bank transaction early in the first quarter and scheduled to convert that asset in August, enabling us to fully incorporate both institutions and demonstrate unified post-integration financials in full by the fourth quarter of 2026. We are focused on execution as we optimize the partnerships and opportunities on our plate. Third, we've included a new chart in our deck on page 15, illustrating the momentum we are experiencing in revenue generation from our young correspondent banking unit.

Preparing to be better as we get bigger creates value. That, unfortunately, may only be recognized over time, but I want to be sure to congratulate our team. Now, on the job, excellently done.

In addition to systemwide efficiencies operational excellence is also. What allows us to feel confident that we can reap the financial potential associated with our 2, current m&a initiatives, we expect to see much more of the all-in economic benefit from the Oakwood transaction achieved by the first quarter of 2026.

We also remain on Pace to close the Progressive Bank transaction early in the first quarter, and scheduled to convert that asset in August to enabling us to fully incorporate both institutions and demonstrate unified post-integration financials in full by the fourth quarter of 26.

We are focused on execution as we optimize the Partnerships and opportunities on our plate.

Jude Melville: We have about 175 banks that we partner with in some form and expect to generate over $17 million in revenue this year, leading to the unit contributing roughly $5 million towards our combined net income over the course of the year. We're only getting started on this front and believe the investments we've made towards this initiative will lead to even more capital-efficient earnings production as we grow operating leverage within the unit, much as we're beginning to see the efficiency benefit of scale across our entire bank. Our job for the next few quarters is relatively straightforward and clear.

Third, we've included a new chart on our Deck home page, 15 illustrations, and revenue generation from our young correspondent banking unit.

We have about 175 banks that we partner with, in some form and expect to generate over 17 million in Revenue. This year, leading to the unit contributing roughly, 5 million towards our combined, net income, over the course of the year.

We're only getting started on this front and believe the Investments. We've made towards this initiative will lead to even more Capital efficient earnings production as we grow operating leverage within the unit much, as we're beginning to see the efficiency, uh, benefit of scale across our entire Bank.

Jude Melville: Remain committed to effective expense control, fully execute on our recent acquisitions, maintain our historically stable and relatively strong net interest margin as we grow within our retained capital, and continue the progress we've been building, as we've been building an alternate source of non-interest income through the building of our correspondent banking unit. As we execute on these priorities, we're confident the combined effect will equate to steady profitability and tangible book value increases over the course of 2026 in both aggregate and per-share basis, with visibility into our roughly 1.2% core ROAA run rate by the end of the fourth quarter. It's an exciting time, and we look forward to answering any questions you might have. With that, I'll turn it over to Greg.

So, our job for the next few quarters is relatively straightforward and clear.

Remain committed to effective expense control?

Fully execute on our recent acquisitions. Maintain our historically stable and relatively Strong, net interest margin as we grow within our retained capital.

And continue the progress we've been building on now as we've been building an alternate source of non-interest income through the building of our correspondent banking unit.

As we execute on these priorities, we're confident that combined effect will create the steady profitability and tangible Book, value increases over the course of 2026 and both Aggregate and per share basis.

With visibility into a roughly $1.2 billion run rate by the end of the fourth quarter.

It's an exciting time, and we look forward to answering any questions you might have.

Greg Robertson: Thank you, Jude, and good afternoon, everyone. As always, I'll spend a few minutes reviewing our results, and we'll discuss our updated outlook before we open up the Q&A. Third quarter GAAP net income and EPS available to common shareholders was $21.5 million and $0.73 per share and included a $1.6 million merger and core conversion-related expense, a $2.0 million employee retention tax credit, and a $77,000 gain on sale of securities. Excluding these non-core items, non-GAAP core net income and EPS available to common shareholders was $21.2 million and $0.72. From our perspective, third quarter results marked another solid quarter of consistent profitability, generating a 1.06% core ROAA, with our core efficiency ratio falling to 60.45% for the quarter. From a corporate perspective, we were active during the quarter with a successful core conversion of the Oakwood Bank systems, which occurred at the end of September.

With that, I'll turn it over to Greg.

Thank you, Jude and good afternoon everyone as. As always, I'll spend a few minutes reviewing, our results. And we'll discuss our updated outlook before we open up to Q&A.

Third quarter, gaap net income, and EPS available to Common. Shareholders was 21.5 million and 73 cents per share and included. 1.6 million merger and core conversion related expense.

$2.0 million Employee Retention Tax Credit.

And a 777000 gain on sale of securities.

Excluding these non-core items, non-GAAP core net income and EPS available to common shareholders were $21.2 million and $0.72, respectively.

From our perspective, third quarter results marked another solid quarter of consistent profitability, generating a 106 core ROAA, with our core efficiency ratio falling to 60.45% for the quarter.

Greg Robertson: Additionally, in conjunction with announcing our third quarter results, we announced an increase in our quarterly common stock dividend by one penny. Starting on the balance sheet, total loans held for investment declined $26.6 million or 1.7% annualized on a linked quarter basis. Scheduled and non-scheduled paydowns and payoffs accelerated somewhat during the third quarter, totaling $479 million, while new loan production was $452 million during the quarter. On a linked quarter basis, residential one-to-four family and C&D loans increased $47.6 million and $38.6 million, respectively. This was offset by total CRE loans decreasing $71.1 million, while total C&I loans declined $40.2 million from the second quarter of 2025. Based on unpaid principal balances, Texas-based loans remain flat at approximately 40% of the overall portfolio as of September 30, 2025.

Active during the quarters with a successful core conversion of the Oakwood Bank systems, which occurred at the end of September. Additionally, in conjunction with our announcing our third quarter results, we announced an increase in our quarterly common stock dividend by 1 penny.

Starting on the balance sheet, total loans held for investment decline, 26.6 million or 1.7% annualized on link quarter basis.

Scheduled and non-scheduled paydowns and payoffs accelerated somewhat during the third quarter, totaling $4,779 million on new loans. Production was $452 million during the quarter.

On a link quarter basis, residential 1 to 4 family and C and D loans increased $47.6 million and $38.6 million, respectively.

Greg Robertson: Total deposits increased $87.2 million, mostly due to a net increase in interest-bearing deposits of $131.4 million on a linked quarter basis, somewhat offset by a net decrease in non-interest-bearing deposits of $44.15 million from the prior quarter. The net decrease in non-interest-bearing balances was not unexpected. As you might recall, at the end of the prior quarter, we experienced a large $60 million influx related to a single non-interest-bearing account relationship. This was a temporary deposit, which was expected to withdraw in early Q3. This withdrawal did, in fact, occur, which pressured overall growth during the third quarter. I think it's worth mentioning, in spite of the Q3 outflow, net growth in non-interest-bearing deposits since March 31, 2025, was $58.2 million. This represents approximately 9% annualized growth in non-interest-bearing deposits.

This was all set by total CRA loans, decreasing 71.1 million. While total cni loans declined 40.2 million from the second quarter of 2025 based on unpaid, principal balances, Texas based loans, remain flat at approximately 40% of the overall portfolio as of September 30th 2025

Total deposits increased by $87.2 million, mostly due to a net increase in interest-bearing deposits of $131.4 million on a linked quarter basis.

Somewhat offset by a net decrease in non-interest bearing deposits of 44.15 million from the prior quarter.

The net decrease in non-interest bearing, the balances was not inspected unexpected as you might recall recall at the end of the prior quarter, we experienced a large 60 million influx related to a single non-interest bearing account relationship. This was a temporary deposit which was expected to withdraw an early Q3 this was withdrawal. Did in fact occur, which pressured overall growth during the third quarter? I think it's worth mentioning in spite of the Q3 outflow, net growth, and non-interest bearing deposits since March. 31st 2025 was 50 588.2 million

Greg Robertson: As of the end of the third quarter of 2025, non-interest-bearing deposits represent 21.0% of total deposits compared to 20.3% at the end of Q1. Lastly, on the funding side of the balance sheet, FHLB borrowings decreased $125.5 million from the prior quarter, which was a deliberate decision to reduce those excess borrowings. Moving over to the margin, our GAAP reported third quarter net interest margin remained unchanged linked quarter at 3.68%, while the non-GAAP core net interest margin, excluding purchase accounting accretion, declined one basis point from 3.64% to 3.63% for the quarter ended September 30. The margin performance during the third quarter was driven by lower net loan growth during the third quarter and the influx of interest-bearing deposits coupled with the outflow of the non-interest-bearing deposits mentioned before.

This represents approximately 9%, annualized growth in non-interest bearing deposits.

As of as of the end of the third, quarter of 2025, non-interest bearing deposit, deposits represent, 21.0% of total deposits compared to the 20.3% at the end of q1.

Lastly, on the funding side, of the balance sheet, fhlb borrowings decreased to 125.55 million from the prior quarter, which was a deliberate decision to reduce those excess borrowings.

Moving over to the margin, our Gap reported, third quarter, net interest margin remained unchanged link quarter at 3.68% while the non-gaap coordinate interest margin margin. Excluding purchase accounting, accretion declined, 1 basis point from 364 to 3.63%.

Greg Robertson: Loan discount accretion during the quarter was slightly elevated at $1.1 million, which we expect to drop back into the $800,000 to $900,000 range going forward. On a linked quarter basis, cost of total deposits increased three basis points, while total loan yields increased five basis points. Core loan yields, excluding loan discount accretion for the third quarter, was 6.94%. Total cost of deposits for the month ended September 2025 was 2.65%, which compared to the weighted average of the third quarter at 2.67%. We are pleased with our ability to hold the line in new loan yields during the quarter, with the weighted average of new and renewed loan yield at 7.46% for the third quarter.

For the quarter ended, September 30th, the margin performance during the third quarter was driven by lower net loan growth during the third quarter and the influx of interest bearing, deposits, a couple of the outflow of the non-interest bearing deposits mentioned before.

Loan discount accretion during the quarter was slightly elevated, at 1.1 million, which we expect to drop back into the 8 to 900,000 range going forward.

On a linked quarter basis, the cost of total deposits increased 3 basis points, while total loan yields increased 5 basis points. Core loan yields, excluding loan discount accretion, for the third quarter, was it 6.94%?

Total cost of deposits for the month ended September 2025 was 2.65%, which compared to the weighted average of the third quarter at 2.67%.

Greg Robertson: We are equally pleased with our ability to manage funding costs for the quarter, with the weighted average rate on all new accounts during September of 3.32%, down from June's weighted average rate on new accounts at 3.34%. I'd like to make a note of a few takeaways to slide 23 in our investor presentation. We continue to see 45% to 55% overall deposit paydays as achievable regarding any future rate cuts. I would also like to point out overall core CD balance retention rate was at 83% during September. This impressive statistic reflects our team's continued focus on maintaining and retaining core deposit relationships.

We're pleased with our ability to hold the line on new loan yields during the quarter, with the weighted average of new and renewed loan yields at 7.46%. For the third quarter, we are equally pleased with our ability to manage funding costs, with the average weighted rate on all new accounts during September.

Of 3.32% down from June's weighted average rate on new accounts at 3.34%.

I'd like to make a note of a few takeaways from Slide 2020 twice, specifically Slide 23 in our investor presentation. We continue to see the 45% to 55% overall. The deposit rate is achievable regarding any future rate cuts. I would also like to point out that the overall core CD balance retention rate was at 83% during September.

Greg Robertson: As you will see on slide 24 in our presentation, we have approximately $3 billion in floating rate loans at approximately 7.33% weighted average rate, but also have approximately $646 million in fixed rate loans maturing over the next 12 months at a weighted average of 6.30%, which we would expect to reprice in the mid to low 7% range. Lastly, on the topic of net interest margin, I'd like to mention a new slide we created and added to the quarterly slide presentation on page 22 of our investor presentation. It includes a longer-term look at our GAAP and core net interest margin in the context of the volatility of the Fed funds rate since 2020.

This impressive statistics reflects our teams continued focus on maintaining and retaining core deposit relationships.

3% weighted average rate but also have approximately $646 million in fixed-rate loans maturing over the next 12 months at a weighted average of 6.30%.

Which we would expect to reprice in the mid- to low-7% range.

Lastly, on the topic of net interest margin, I'd like to mention a new slide we created and added to the quarterly slide presentation on page 22 of our investor presentation.

Greg Robertson: We're proud of our ability over the years to maintain the margin with a relatively tight range, with the core margin peaking at 3.99% at the end of 2020 and bottoming out at 3.27% in the beginning of 2024. Moving on to the income statement, GAAP non-interest expense was $48.9 million and included $1.16 million acquisition-related expense and $439,000 in conversion-related expense, and $2 million in employee retention tax benefit, which ran through payroll taxes and employee salaries. Core non-interest expense for the third quarter of $49.3 million was down slightly from the prior quarter. We do expect this to increase modestly in Q4. It's primarily due to the timing of various investments hitting in Q4. We do expect to recognize partial quarter impact of the Oakwood cost saves during the current quarter. Third quarter GAAP and core non-interest income was $11.7 million and $11.6 million, respectively.

Includes a longer term. Look at our Gap and core net interest margin in the context of the volatility of the FED funds rate since 2020. We're proud of our ability over the years to maintain the margin with a relatively tight range. With the core margin peaking at 3.99% at the end of 2020 and bottom bottoming out at 3.27% in the beginning of 2024.

Moving on to the income statement. Yeah, non-interest expense was 48.9 million and included, 1.16 million, acquisition related, expense and 439,000 in conversion related expense.

And $2 million in employee retention tax benefit, which ran through payroll taxes in employee salaries.

Core non-interest expense for the third quarter of 49.3 million was down slightly from the prior quarter. We do expect this to increase some modestly in Q4,

Is primarily due to the timing of various investments hitting in Q4.

We do expect to recognize partial quarter impact of the Oakwood cost saves during the current quarter.

Greg Robertson: GAAP results did include $77,000 gain on the sale of securities. Non-interest income results for the third quarter were relatively in line with our expectations, and over the long run, we continue to expect to build on our trend in core non-interest income, although the trajectory may be bumpy, as we've mentioned, from quarter to quarter. Lastly, I'd like to provide some context to the credit migration from the second quarter. Total loans past due 30 days and more, excluding non-accruals, as a percentage of total loans held for investment decreased from 0.89% to 0.27%, roughly $38 million at September 30, 2025. The ratio of non-performing loans compared to loans held for investment decreased 15 basis points from 0.82% to 0.67% on September 30, while the ratio of non-performing assets compared to total assets slightly increased seven basis points to 0.83% compared to the linked quarter.

Third quarter GAAP and core non-interest income was $11.7 million and $11.6 million, respectively. GAAP results did include a $77,000 gain on the sale of securities.

Non-interest income results for the third quarter were relatively in line with their expectations.

And over the long run, we continue to expect to build on our trends and core non-interest income. Although the trajectory may be bumpy, as we've mentioned, from quarter to quarter,

Lastly, I'd like to provide some context with the credit migration through from the second quarter. The total loans past due 30 days and more, excluding non-ACRS, as a percentage of total loans held for investment, decreased from 0.89% to 0.27%. That's roughly $38 million as of September 30, 2025. The ratio of non-performing loans compared to loans held for investment decreased 15 basis points from 0.82%.

Greg Robertson: The increase in the non-performing assets ratio over the linked quarter was attributable to the transfer of some non-accrual loans to other real estate owned. That includes my prepared remarks for today. I'll hand it back over to you, Jude, for anything you'd like to add before opening up the Q&A.

September, uh, 2.82% on September 30th, while the ratio of non-performing assets compared to total assets, slightly increased 7 basis points to 0, 83 compared to the link quarter, the increase in the in the non-performing assets ratio over the link quarter was attributable to the transfer of some non-accrual loans. To other real estate owned,

Matt Sealy: I think I'm good. We'll go ahead and answer questions. I will mention real quick that, you know, Greg Robertson mentioned the $0.01 dividend increase, and I will mention that we started paying a dividend in 2015. This marks our ninth year in a row of increasing the dividend, which we're proud of. We still have a very strong retail shareholder base, about 50/50 retail versus institutional, with a diverse set of interests and reasons for being partners with us. I know the steady increase of that dividend over the years has been important, and we remain committed to trying to keep doing that. I'm excited about that news and wanted to be sure we highlighted that. With that, I'll certainly be ready to answer any questions that we might have in the queue.

That includes my prepared remarks for today. I'll hand it back over to you for anything you'd like to add before opening up the Q&A.

Uh I think uh I think I'm good. We'll we'll go ahead and answer your question. I will I will mention real quick that you know Greg mentioned the 1 cent dividend increase and I will mention that we started paying a dividend in 2015. So this can make marks our ninth year in a row of increasing the dividend.

Jude Melville: We will now begin the question and answer session. If you would like to ask questions, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Your first question comes from the line of Matt Olney with Stephens Inc. Matt, please go ahead.

We will now begin the question and answer session. If you would like to ask questions due to press star followed by the number 1 on your telephone keypad. And if you'd like to reach out your question, press star 1 again,

[Analyst 1]: Hey, Greg. Thanks for taking the question, guys. I want to ask about expectations around the core margin for the fourth quarter in light of the recent September Fed cut and your expectations of any impact from additional Fed cuts that we could see as well in coming weeks. On deposit costs side, Greg, you disclosed that September interest-bearing deposit cost. I appreciate that. It sounds like there's some good momentum there. Just any other general commentary you can share with us within your marketplace with respect to deposit pricing competition?

And your first question comes from the line of Matt Ali with Stevens Inc. Matt, please go ahead.

Hey, great. Thanks for taking the question, guys. I want to ask about expectations around the core margin for the fourth quarter in light of the recent September Fed cut and your expectations of any impact from additional Fed cuts that we could see.

See as well in the coming weeks. Um, and then on the deposit costs side, Greg, you disclosed that in September, just bearing deposit costs. I appreciate that. It sounds like there's some good momentum there. Just any other general commentary you can share with us within your marketplace with respect to deposit pricing competition?

Greg Robertson: I'll answer your first question on the margin. We expect to pick up a couple of bps in the fourth quarter in margin for that to expand again, primarily because of the momentum on the deposit side. We also think that the loan growth will come back and normalize. I think it's worth pointing out, I mentioned in the remarks that the paydowns were about $479 million against originations of $452 million for the quarter. The origination for the third quarter was very strong. That was about an elevated payoff paydown quarter of about $100 million more from the previous two quarters. We feel like with the normalization of loan growth and our management of deposit costs, we feel like we'll have a little margin expansion. What we're seeing, deposit cost is still competitive in the markets and all of the markets we're in.

Um, I I'll answer your first question first, on the margin. We expect to um, to pick up a couple of bits in the fourth quarter, margin for that to, to expand again, and, uh, primarily because of the, the momentum on the deposit side. But we also think that the, the, uh, the, the lump loan growth will will come back and normalize, I think it's worth pointing out.

Greg Robertson: I would think we'll continue to have to be nimble and be aware of the competition set out there. We do a pretty deep dive on the value, weight, and competition in our markets every week. We'll continue that.

[Analyst 1]: Okay. Appreciate that, Greg. On loan growth, it sounds like, like you just mentioned, you think loan growth will rebound in the fourth quarter. Are you seeing some evidence of this in the first few weeks of the fourth quarter? I'm just trying to appreciate kind of what you're seeing that gives you the conviction.

Uh, I mentioned in in the remarks that, uh, the pay Downs were about 479 million against originations of 452 million for the quarter. So, the original, the origination, uh, for the third quarter is very strong. And, you know, really that was about an elevated uh, payoff pay down quarter of about 100 million more from the previous 2 quarters. So, uh, we feel like that that with the normalization of loan growth, uh, and our our management of the deposit cost, we, we feel like we'll have a little margin expansion. Uh, what we're seeing, you know, deposit costs, uh, is still competitive in the markets and all of the markets we're in. So, I would think we'll, we'll continue to have to be nimble and be aware of uh of the the competition set out there. We do a, a pretty deep dive on evaluating competition in in our markets every week. So we'll continue that.

Okay.

Greg Robertson: I think a little bit of both. I think, as I mentioned, we had a pretty steady clip of originations that's slightly built over the years. I think page 25 on our investor presentation kind of highlights that. We had some early success in the quarter that lead us to believe we'll be back to the low to mid-single-digit loan growth in the fourth quarter.

Appreciate that Greg and then on on on loan growth it sounds like like you just mentioned, you think lung growth will will rebound the fourth quarter are are you seeing some evidence of this and the first few weeks of the fourth quarter or just just trying to appreciate kind of what you're what you're seeing that gives you the conviction.

Yeah, I think I think a little bit of both, I think, as I mentioned, we had a, we had a pretty steady clip of originations. It's slightly built over the years. I think, Paige 25 on our investor presentation, kind of highlights that. But uh, had a little bit of, uh, of early early, uh, some early success in the quarter that lead us to believe, we'll be back to the, to the low to mid single digit. Um,

Long growth in the fourth quarter.

Matt Sealy: We also had some success with unfunded line commitments in the third quarter that wouldn't have shown up in our net numbers. We will see if we'll have the opportunity to see some of that come to fruition in the fourth quarter.

We also had some success with um,

Unfunded lines.

Commitments in the third quarter that wouldn't show.

Excuse me, in our net numbers and we will see we'll have the opportunity to see some of that.

Come to fruition in the fourth quarter.

[Analyst 1]: Okay. All right, guys. Thank you. I'll step back.

Okay.

Greg Robertson: Thank you, Greg. Thanks, Matt.

All right, guys, thank you. I'll step back.

Thank you. Good. Thanks, Matt.

Jude Melville: Your next question comes from the line of Feddie Strickland with the Hofstra Group. Feddie, please go ahead.

[Analyst 2]: Hey, good afternoon, guys.

And your next question comes from the line of fed District land with half the group Petty. Please go ahead.

Matt Sealy: Hey, Fedi.

Hey, good afternoon, guys.

[Analyst 2]: I just wanted to touch back on the non-interest income piece again real quick. It sounds like you've still got some momentum there from the various businesses. It sounds like it's still going to grow, but Greg, I think you said it'll be a little bumpy. As we think about the fourth quarter, do you think that you can kind of grow it quarter over quarter? It sounds like you definitely think you can grow it year over year in 2026, considering you also have the deal in there as well, right?

Um, it's just 1 of 1 of the Touchback on the non interesting come piece again real quick. Um, it sounds like you've still got some momentum there from from the various businesses.

Greg Robertson: I'll take you back to slide 15 in our presentation to give you a little bit more insight into that. Specifically on the fourth quarter, we feel like the momentum is building with a little bit of a caveat. You know, the government shutdown greatly impacts the ability to sell the guaranteed portion of SBA loans. There could be some influence on our performance in the fourth quarter with that. Now, outside of that, we feel comfortable that our performance will continue to grow in those other areas, but I just wanted to note that. Because of that, it might be more realistic to think that non-interest income quarter over quarter may be flat. We're quickly approaching the midway point of the quarter, and the government still hasn't resolved their issues.

Uh it sounds like it still going to grow but Greg I think he said it'll be a little bumpy you know as we think about the fourth quarter, do you think that you can kind of grow a quarter of a quarter? And it sounds like you definitely think he can grow it uh year over year of 2020 in 2026. Uh concerning you also have the deal in there as well, right?

yeah, um, I I'll I'll

Take you back to slide 15 in our presentation, kind of to give you a little bit more insight into that. But, um, specifically on the fourth quarter, we feel like the momentum is building with a little bit of a caveat.

Our performance will continue to uh to grow in these in those other areas, but I just wanted to note that. So because of that um, might be more realistic to think that that non-interest income quarter of a quarter may be flat.

we're we're uh, approaching

Matt Sealy: Which still gives us an annual number that's over 20% above last year. No reason to think at this point that we wouldn't be able to achieve a similar level of accelerated growth over the course of next year. It's just a little harder to predict on a quarter-by-quarter basis than the spread business is.

Quickly approaching the midway point of the quarter, the government still hasn't resolved their issues.

Which still gives us an annual number that's over 20% above last year. And, um, no reason to think at this point that we wouldn't be able to achieve a similar level of accelerated growth over the course of next year. It's just a little harder to predict on a quarter-by-quarter basis than the spread businesses.

[Analyst 2]: Understood. That makes sense. Then just shifting gears to, you know, more strategically, now you have Oakwood behind you, Progressive on the horizon. Do you still anticipate doing additional M&A in your term in the next 12 to however many months, or do you really feel like organic growth and integrating these is maybe a little bit more of the priority? A follow-on to that is, you know, is there the opportunity to maybe do share repurchases down the road if the stock price doesn't pick up as much?

Understood, that makes sense. Um, and then just shifting gears to, you know, more strategically. Uh, now you have Oakwood behind you Progressive on the horizon. Um, you know, do you do you still anticipate doing additional m&a to your term next 12 to however many months? Uh, or do you really feel like organic growth and integrating these, uh, is maybe a little bit more of the priority and, and a follow on to that is, you know, is there the opportunity to maybe do share repurchases down the road? If, if the stock price doesn't pick up as much,

Greg Robertson: Yeah. That was essentially the point that I was attempting to make in my opening comments that I feel like we have a pretty exciting path just executing on what we already have on the table and making sure that we're focused on not only following through on the acquisitions, but also our organic opportunities, which I think are only growing as others do M&A. A number of our markets, particularly Dallas, there's been a lot of M&A. I think that provides opportunity for us from a recruitment standpoint and from a production standpoint. We want to, I think our priority will be to kind of let that play out. I'm not saying never would we consider just a perfect acquisition that gets us some core deposits in market, low risk, but we're not aggressively looking for anything. In fact, we're not even looking for anything.

Yeah, so, uh, you know, that was essentially the point that I was attempting to make in my opening comments that, you know, I feel like we have a very exciting path, uh, just executing on what we already have on the table and, and, uh, making sure that we're focused on not only following through on the acquisitions, but also our organic opportunities, uh, which I think.

Greg Robertson: We'll see what opportunities just come to our door. We believe we have great opportunities in front of us just to do what it is that we do and to keep seeking operating leverage and to make sure that we're more focused on profitability than we are on growth just for growth's sake. That'll be our priority for the foreseeable future. We like our footprint. We want to be deeper in our footprint, and we want to be more productive in our footprint. As far as capital allocation decisions go, we are pleased that we've been able to increase our capital ratios at a pretty good clip over the past year, really a couple of years.

Are only growing as others. Do m&a. You know, number of our markets, particularly Dallas has been a lot of m&a and, uh, I think that provides opportunity for us from a recruitment standpoint from a, from a production standpoint. So we want to, I think our priority will be to kind of, let that play out. Not saying never, would we consider just the perfect acquisition that gets us some core deposits in Market low risk? Um, but we're not aggressively looking for anything. Um, AC, we're not even looking for anything, so we'll, we'll, we'll, um, we'll see what opportunities, just come to our door. But but we believe we have great opportunities in front of us, just to do what it is that we that we do.

And, um, to keep seeking operating leverage and, uh, to make sure that we're more focused on profitability than we are on.

On our growth for just, for growth sake. So,

That'll be our priority for the foreseeable future. Um,

We like our footprint, uh, we want to be deeper in our footprint and we want to be more productive in our footprint.

Uh, you know, as far as, uh, Capital allocation decisions go. Uh, we are pleased that we've been able to uh, increase our Capital ratios uh, pretty good clip.

Greg Robertson: If you think about the last time that we raised capital, back in 2022, we have since then put on, by the time we finish with the Progressive acquisition, we will have put on a little over $2 billion worth of assets, and we'll actually have higher capital ratios than we did at the end of that last capital raise. We feel good about the accretion of capital that we've been able to prioritize. That ultimately gives us more optionality on how to deploy that capital, more freedom to consider options, including potentially buybacks. I do think that we are entering a period in which we could contemplate that over the next few years. That's certainly been one of our goals as an organization to get our capital levels back up to a spot at which we have maximum optionality. That ought to be one of the options.

Um, over the past year, really a couple of years and...

you know if you uh um think about the last time that we raised Capital uh back in 2022, uh we had since then put on by the time we finished with the progressive acquisition, we will have put on

A little over 2 billion dollars worth of assets. And we'll actually have higher Capital ratios than we did at the end of that last couple of days. So we're we feel good about the the, um, increasing of capital that we've been able to prioritize and that ultimately gives us

Um, more optionality on how to deploy that capital, more freedom to consider options, including potentially buybacks. So I do think that we are entering a period in which we could contemplate that.

Greg Robertson: I would say that we are open to considering that as we continue to think about organic growth within the construct of our retained earnings, which should lead to further capital accretion over the next few quarters.

Um, over the next few years and that's that's certainly been 1 of our goals as an organization to get our Capital levels, back up to a spot at which we have maximum optionality. And that's that all the um, ought to be 1 of the options. So um,

so I would say we are open to considering that um as as we continue to

Think about organic growth within the construct of our retained earnings. Um,

Should lead to further, Capital accretion uh or the over the next few quarters.

[Analyst 2]: All right, great. Thank you.

Greg Robertson: Yeah, I would all appreciate that. Yeah, thanks. Thank you. The thing that also makes it attractive, that makes it worthwhile thinking about, is that we feel like we're trading at a very attractive price. You know, one of the things that you have to consider when it comes to M&A is pricing, right? When you think about M&A opportunities at certain prices versus the price that we find ourselves trading at, I like where we are. I shouldn't say I like where we are. I like the attractiveness of the price if I'm considering buybacks over time, and that certainly heightens the need to give that some serious consideration over the coming quarters.

Hi Craig, I would appreciate.

Yeah. Thanks. Thank you. And the thing that also makes is attractive, is it makes that

Worthwhile thinking about is that we feel like we are trading at a, at a very attractive price and, you know, 1 of the things that you have to consider when it comes to m&a is, um, is, uh, pricing, right? And, um, when you think about m&a opportunities at certain prices versus the price,

The attractiveness of the price if I'm considering BuyBacks over time.

Um, and so that's certainly heightened the need to get that some serious consideration over the coming quarters.

[Analyst 2]: Fair enough. Thanks, Jude.

Greg Robertson: Okay, thank you.

Fair enough. Thanks to you.

Okay, thank you.

Jude Melville: Your next question comes from the line of Christopher Marinac with Janney Montgomery Scott. Christopher, please go ahead.

[Analyst 1]: Hey, thanks. Greg and Jude and team, I just wanted to ask a little bit more about kind of pricing new loans. From your standpoint, as interest rates fall in months ahead, can you still get pricing for risk? Do you have to look at that differently as we move along?

And your next question comes from the line of Christopher Marina with Jenny Montgomery Scott. Christopher, please go ahead.

Hey, thanks. Um, Greg and Jude and team, I just want to ask a little bit more about kind of pricing new loans. From your standpoint, as interest rates fall in the months ahead, can you still get pricing for risk? Do you have to look at that differently as we move along?

Greg Robertson: Yeah, I think we have a pricing model we stick to that values, you know, are risk-adjusted to capital. Pricing for risk is part of the equation. I think as rates continue to move, we'll have to be competitive, and we'll have to understand pricing relative to the type of credits we want. That's logical that that's going to move down from the, let's just say, the mid-7s where we are today into the lower 7s, the high 6s, as the rate environment moves and the competition set moves as well.

Yeah, I think, um,

we have a pricing model, we stick to the the um, you know values, you know, are are uh risk adjusted to Capital and so pricing for risk is

Um, part of the part of the equation. So I think, as rates continue to move, uh, we'll have to be competitive. And we'll have to understand, uh, pricing and relative to the to the type of credits we want. So that's that's logical that that's going to move down from the, let's just say, the mid 7s where we are today into um, you know, the lower 7s, the highest sixes as as the rate environment moves and the competition set moves as well.

[Analyst 1]: Have you had any feedback from your customers just in recent weeks? Are they feeling more bullish about the next few quarters, or is there more caution? Is this perhaps just a little bit of a temperature check comparing now with earlier in the year?

And have you had any, um, I guess, feedback from your customers, uh, just in recent weeks? Are they feeling more bullish about the next few quarters, or is there more caution? I mean, it is perhaps just a little bit of a temperature check, comparing now with earlier in the year.

Greg Robertson: I would say that the feedback we're getting from our markets is the customers, I think, with interest rates moving downward, it gives them a little bit of hope. I don't know that they're bullish would be quite the word, but maybe more optimistic with the lower rate environment or the prospects of rates continuing to fall.

Matt Sealy: Yeah, they remain active. We see a lot of forward planning from the client base, as they forecast their own interest rate environment.

Yeah, I would say that the feedback we're getting from our markets is that the customers, I think, with interest rates moving downward, it gives them a little bit of hope. I don't know that "bullish" should be quite the word, but maybe, uh, more optimistic with the lower rate environment or the prospects of rates continuing to fall.

Yeah, they remain active. I mean, we we see a lot of forward planning from the, from the client base, uh, as a, a forecast, their own interest rate environment.

[Analyst 1]: Okay, great. Thank you for taking my questions.

Greg Robertson: Thanks, Christian.

Great. Thank you for taking my questions.

Jude Melville: Your next question comes from the line of Michael Rose with Raymond James. Michael, please go ahead.

[Analyst 3]: Hey, good afternoon, guys. Thanks for taking my questions. I just wanted to touch on expenses, core expenses, you know, flat, really good expense control this quarter. I believe last quarter you guys had talked about kind of somewhere in the low 50s. I'm just trying to better appreciate the delta there. If you can discuss, you know, hiring plans. It seems like a lot of banks are out there trying to hire lenders. I just wanted to see if there's been any shift in your strategy at this point and how that could maybe translate into an early rate on expenses for next year. Thanks.

And your next question comes from the line of Michael rose with Raymond James, Michael. Please go ahead.

Hey, good afternoon guys, thanks for taking my questions. Um, just wanted to touch on expenses, uh, core expenses, you know, flat really good expense control this quarter. Um, I believe last quarter, you guys have talked about kind of somewhere in the in the low 50s. So just trying to better appreciate the the Delta there. And then you know more broadly, if you can discuss, um, you know, hiring plans, it seems like a lot of banks are out

There trying to hire lenders. Um, just wanted to see if there's been any uh, any shift in your strategy at this point. And you know how that could uh you know, maybe translate into uh, into an early read on expenses for next year. Thanks.

Greg Robertson: Yeah, I would say in the first part of the question, Michael, we just, you know, as Jude mentioned in his comments or opening remarks, I think this year we have really made a concerted effort as a company to really evaluate our expense base. The largest part of that in this business is personnel. Just being thoughtful about those positions, I think, is something we've done all year. I think the third quarter was really just a continuation of that, of being mindful. When we talk about employees and roles and efficiency in those roles, I think the fourth quarter will be a slight increase. The fourth quarter is typically noisy anyway. I do think that we'll continue to look at investments and ways to continue to bolster production.

Yeah, I would, I would say in the first part of the question, Michael. Um, we, we just, you know, for the is Jude mentioned in his comments are open remarks. I think this year, we have have really made a, a concerted effort, as a company.

Um, to really evaluate our expense base. Um, and the largest part of that in this business is personnel.

Greg Robertson: I will say, you know, as far as 2026 goes, with the disruption in the markets, mainly in Texas, I think it would be easy to understand that if the opportunity presented itself, we would want to hire a good banker.

And so just being thoughtful about um, those positions I think is something we've done all year and I think the the 4 the third quarter was a a really a just a continuation of that of being Mindful and and when we talk about employees and roles and efficiency in those roles, um I think the fourth quarter will be slightly slightly increase. Um, the fourth quarter is typically noisy anyway, uh, but I do think that we'll continue to do look at an investments in, in ways, to, to continue, to, to bolster production. I will say, um,

Matt Sealy: Yeah, and I think having discipline along the way, those two things. One, it means that hopefully we don't ever reach a point where we have to think of expenses as being on the edge of the cliff. If we can kind of make good decisions along the way, whether it be not hiring as much or just automatically replacing people, or it means thinking about the life cycle of branches. We've shown a pretty good record of closing branches over time, even outside the timeframe of an acquisition. If we can keep doing that, then we don't have to make drastic cuts. Also, on the flip side, it gives us the opportunity to be poised to be able to take advantage of opportunities as Greg Robertson alluded to when they show up.

You know, as far as 26 goes with the disruption in the markets, mainly in Texas, I think it would be easy to understand that, um, if the opportunity presented itself, we would want to hire good bankers.

Yeah, and I think having discipline along the way, um,

That's 2 things 1. It means that hopefully we don't ever reach a point where we have to think of expenses as being on the edge of the cliff and and if we can kind of make good decisions along the way, whether it be not, not hiring as much or just automatically replacing people. Or, or it means thinking about the life cycle of branches, we're pretty, we've done a pretty good record of

Closing branches over time, even outside the, uh, the time frame of an acquisition, um, we can keep doing that. Then we don't have to make drastic cuts. Um,

Matt Sealy: You know, we have had a lot of disruption, particularly in the Texas markets where we now have a solid footprint and foundation. Dallas is actually our largest market, and so we feel that we'll get our fair shot at opportunities in some of the aftermath of M&A activity that's taking place there. We'll be ready for that, but it won't be because we're exercising discipline along the way, and we'll continue to do that. Then, you know, those kind of decisions won't be kind of bet-the-year decisions, so to speak, just normal taking-care-of-business type investments. We certainly want to position ourselves to take advantage of the organic opportunities that will be out there in the next few years, and we think they are.

But also on the flip side, it gives us the opportunity to be poised to be able to take advantage of opportunities as Greg alluded to when they show up. And

you know, we have had a lot of disruption and particularly in the Texas markets where we know how the solid

footprint and Foundation. Uh, Dallas is actually our largest market, um, and

So we feel that we'll get our fair shot at opportunities in some of the aftermath of emanated taking place there, and, um, so we'll be ready for that, but it won't be.

Because we're exercising discipline along the way and we'll continue to do that. And you know that that those kind of decisions won't be kind of bet the year decision so to speak, uh, normal taking care of business and type Investments. But we certainly want to position ourselves to take advantage of the organic. Um,

Opportunities that will be out there in the next few years, and we think they are.

[Analyst 2]: Michael, one other thing that I'd add, as you know, there's a bit of a correlation just between the balance sheet dynamics and kind of the overall expense, investments. I think we were expecting a little bit more of a balance sheet growth during the third quarter that didn't quite come through on a net basis. Part of that kind of speaks to just lower overall expense builds on the third quarter. The other thing is I think that we started seeing a little bit more in the way of the Oakwood cost saves coming through. A combination of those things helped in expenses being flat down just very slightly in the third quarter. Lastly, there's a little bit of timing in certain IT investments that just didn't necessarily hit in the third quarter, which could come around in the fourth quarter.

it. Michael 1 of the things that I'd add as you know, there's a bit of a correlation just between balance sheet, Dynamics and kind of the overall expense Investments. And, and I think we were expecting a little bit more of a balance sheet growth during the third quarter, that didn't quite come through on a net basis. So, but part of that kind of speaks to the uh, to just lower overall expense Builds on the third quarter. And then the other thing is I think that

Um, we started seeing a little bit more in the way of the Oakwood cost saves coming through. So combination combination of those things helped in expenses, being flat down, just very slightly in the third quarter, um, and and and then there's lastly, a little bit of timing in in certain, uh, it uh Investments that uh, just didn't necessarily hit in the third quarter which could come around in the fourth quarter.

[Analyst 3]: I really appreciate all that color. It really frames it out. Maybe just a follow-up. It did look like some of the paydown activity did happen in Dallas and Houston. If I look at one of the beginning slides versus last quarter, obviously, loan production was up a little bit Q1Q, about 4.5%. Any sort of competitive dynamics there that maybe drove those paydowns as we find out, or just trying to get more color on this quarter's paydowns. Thanks.

Greg Robertson: Yeah. I think, Michael, the biggest driver of the paydowns in the quarter, or a big portion of the paydowns that also had a corollary to past dues at the end of the second quarter was a fairly large relationship that was past due that we commented on last time we talked, that did effectively pay down during the quarter. That was an outsized example of things like that. I don't know that,

Uh, really appreciate all that color. Um, really frames it out. May maybe just a follow-up. It it did look like some of the paid on activity, you know, did happen in in Dallas and Houston. If I look at the 1 at the beginning, slides versus versus last quarter. Um, obviously I'm on production was was, was up a little bit about 4 and a half percent, but any sort of, uh, you know, competitive Dynamics there that maybe drove those pay Downs is just be find out or just just trying to get more color on this course pay down. So thanks

I think Michael the biggest driver of the pay Downs in the quarter are are big portion of of the pay Downs.

That also had a coral area to, uh, pass through. At the end of the second quarter was a very fairly large relationship that was passed to that. We commented on last time we talked.

Matt Sealy: We had a couple of strong CNI relationships where the company was sold to another company. I don't think we've lost much in either of those markets or any of our markets through competitive pressures. I think it's been more the kind of natural life cycle of the good credit issue. You often want them to pay off eventually because that means they've been successful, and the bad credits, you want them to pay off because it means we don't have to deal with it anymore. It's more of that than any kind of material competitive posture, I would say.

That did effectively pay down, uh, during the quarter. So that was that was an outsized example of of, of things like that, but uh, I don't, I don't know that and we had a couple of strong cni relationships that, uh, that

The company was sold to another company. Um, so I don't think I wouldn't say that we've lost much, neither of those markets or any of our markets through competitive pressures. I think it's been more the kind of natural life cycle of

The good credit issue: you often want them to pay off eventually because it means they have been successful in the bad credit you wanted to pay off. That means we don't have to deal with it anymore, so it's more of that than it was.

[Analyst 3]: Yeah, it's a high-five problem when a good credit pays off. Appreciate the color, guys. Thank you.

Than any kind of material competitive posture, I would say.

Greg Robertson: Sure, Michael.

It's a high class problem when a good credit pays off. Um, appreciate the color guys. Thank you.

Michael.

Jude Melville: Your next question comes from the line of Matt Olney with Stephens Inc. Matt, please go ahead.

And your next question comes from the line of again, with Matt alni with Stephan's in Matt, please go ahead.

[Analyst 1]: Yeah. Hey, thanks for the follow-up. Greg, I think it was your comment around the SBA sales that could potentially slow in the fourth quarter should this government shutdown be extended. I'm looking at that slide deck, and it looks like the SBA sales have been around just over $3 million so far this year. Call it $1 million per quarter. Is that the right way to think about the risk under this scenario of government shutdown for most of the quarter? If that's the case, help us appreciate, does this just delay the SBA sales so it's more of a delayed income into the first quarter, or is that not the right way to think about that?

Yeah. Hey, thanks for the follow-up. Um,

Greg. I think it was your comment around the SBA sales that that could potentially slow in the fourth quarter. Should this government shut down uh be extended. Uh I'm looking at that slide deck and it looks like the SBA sales has been around just over 3 million dollars so far this year. So call it a million dollars per quarter is that the right way to think about the the risk uh under this scenario of

Greg Robertson: No, you're exactly right. That just delays the income stream potentially into the first quarter. Those are loans that are closed, that are really waiting to be sold. It just delays the revenue opportunity.

Government shutdown for most of the quarter and then if that's the case, help us appreciate. Is it is this does this just delay? The SBA sales. So it's more of a delayed income into the first quarter or is that not not the right way to think about that.

Matt Sealy: Matt, we've got a pretty good pipeline of loans that can't get approved until they open back up, right? There's some kind of demand for sure.

No you're you're exactly right that that just delays. The the income stream into potentially into the first quarter. Um those are loans that are that are closed um that that are really waiting to be sold. So it just delays the revenue opportunity.

[Analyst 2]: One other thing to point out on this slide is that $3.3 million is annualized through nine months, through the three quarters. It's a little bit, it's not exactly $1 million per quarter. That's just the annualized figure.

And then 1 other thing to point out on this slide that 3.3 million is annualized through 9 months to through the 3 quarters. So it's a little bit, it's not exactly a million per quarter that's just the annual annualized figure.

[Analyst 1]: Oh, okay. I see that now. Thanks for clarifying that. Okay. I just want to ask about Progressive Bank. Any updates on recent trends you're seeing or hearing there? Also, an update on the M&A application process and expectations of deal closing.

Oh, okay. I I see that now. Thanks for clarifying, that okay.

Greg Robertson: I think all positive. They've been doing what they said they would do in terms of continuing to incrementally improve profitability over the course of the year, in line with their budgets and our projections. I feel very good about that. I feel really good about the people interaction. We've had the opportunity to spend a lot of time.

And then also just want to ask about uh, Progressive Bank, um, any updates on on recent Trends. You're you're seeing or hearing there, um, and then just update on the uh m&a application process and expectations of of of deal closing.

Yeah, I think all uh, all positive and and uh,

Operator: We are more excited today than we were originally, and that's all going well. They did achieve a positive shareholder vote last week. That's one of the hurdles that you have to get over to get a deal. We were excited about the positive reception for the opportunity by the shareholders of Progressive and excited about the trust in the management team and board's judgment. That's a big step. We are in the process of having our regulatory application reviewed and feel really good about that and confident about the positive outcome there in the next few weeks as well. We feel like we're still on pace to close early January as we've been projecting. Excited about that.

They've been doing what they said they would do in terms of continuing to incrementally improve profitability over the course of the year, you know, in line with their budgets and our projections. And so I feel very good about that. Um, so we're really good about the people interaction. We've had the opportunity to spend a lot of time.

With them, and, um, um, more excited today than we were originally, and it's, um, it's all going well. Uh, they did um, um, because she is a positive shareholder vote, uh, last week. So that's one of the, the, uh, hurdles that you have to get over to get a deal. So, we were excited about the positive reception for the opportunity, and by the shareholders of.

Of progressive and excited about the trust, and the management team and board's judgment. Um, so, uh, it's a big step, uh, we're in the process of, uh, having our regulatory, um, application reviewed and built for the good about that, incompetent about the positive outcome there, over the next few weeks as well. So, we're we feel like we're still on Pace to to, uh, close early January, as we've been, um, projecting, so excited about that.

Jude Melville: Okay, great. Thanks, guys.

Operator: Okay. Thanks, Matt. I think I mentioned in my opening remarks, but we have a conversion date of August for the Progressive Bank. As we think about projecting out the economic benefits, that might be valuable information to you as well.

Okay, great. Thanks, guys.

Okay, thanks, man. I also think I mentioned in my opening remarks that we have a conversion date of August for the progressive.

Uh, bank. So as we think about...

Projecting out the economic benefits, uh, that might be valuable information to you as well.

Matt Sealy: There's no further questions at this time. I will now turn the call back over to Jude Melville for closing remarks. Jude.

Operator: Okay. I appreciate all the questions, and we appreciate everybody's time. As I started off by saying, it's just a good, solid, kind of grounded-up quarter. In a lot of ways, those are the ones that you're proudest of and most excited about. We're just taking care of business on a daily basis and love to see that one of our core values is built around incremental improvement. We certainly are doing that and look to continue that and believe we have a clear track to significantly increase profitability over the next few quarters as we capitalize and optimize some of the opportunities that we have in front of us. Thanks again to all of you and thanks to all of our partners. I look forward to seeing you and talking to you in a few months.

There's no further questions at this time. I will now turn the call back over to jit novel for closing remarks to it.

Okay, we appreciate all the questions and we appreciate everybody's time, you know, as a as a started off. By saying it's just a good solid kind of ground that grind it out quarter and

A lot of ways, those are the ones that you're proudest of and most excited about. We're just taking care of business on a daily basis and love to see the, um, one of our core values is built around incremental improvement. And so we, um, we certainly are doing that and, uh, look to continue that and believe we have a clear track to, um, significantly increase profitability over the next few quarters as we capitalize, uh, and optimize some of the opportunities that we have in front of us. So, thanks again to all of you and thanks to all of our partners. Um, look forward to seeing you and talking to you in a few months.

Matt Sealy: This concludes today's call. You may now disconnect.

This concludes today's call. You may now disconnect.