Trustmark's Q3 earnings rise 2.2% sequentially; strong loan growth and hiring boost outlook for continued financial momentum.

OPERATOR - (00:02:16)

Good morning ladies and gentlemen and welcome to Trustmark Corporation's third quarter earnings conference call. At this time all participants are in listen only mode. Following the presentation this morning, there will be a question and answer session. To ask a question, you may press Star then one on your touchtone phone. To withdraw your question, please press Star then 2. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rain, Director of Corporate Strategy at Trustmark.

Joey Rain - Director of Corporate Strategy - (00:02:52)

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

Duane Duwe - President and CEO - (00:03:37)

Thank you, Joey and good morning everyone. Thank you for joining us again this morning. With me are Tom Owens, our Chief Financial Officer, Barry Harvey, our Chief Credit and Operations Officer and Tom Chambers, our Chief Accounting Officer. Trustmark's momentum continued to build in the third quarter. Our performance reflected diversified loan growth and stable credit quality along with cost effective cORE deposit growth. During the quarter, we continued to implement organic growth initiatives and added established customer relationship managers and production talent in key markets across our franchise. These investments are designed to further enhance financial performance and shareholder value. Today in our presentation, I will provide a summary of our performance in the quarter and discuss our forward guidance befORE moving to your questions. Now Turning to Slide 3, the financial highlights from the balance sheet perspective. Loans held for investment increased $83 million or 0.6% linked quarter and $448 million or 3.4% year over year. Our linked quarter growth was diversified and led by C&I, other loans and leases, municipal loans and other real estate secured loans. Our deposit base grew $550 million for 3.4% linked quarter. Non interest bearing deposits grew at a faster clip of 5.9% linked quarter or by $186 million. The total cost of deposits in the quarter were up 1.84% or 4 basis points linked quarter Very effective cost effective growth. Very cost effective growth in cORE deposits. Trustmark reported net income in the third quarter of $56.8 million, representing fully diluted EPS of $0.94 a share, up 2.2% from the prior quarter and 11.9% from the prior year. This level of earnings resulted in a return on average assets of 1.21% and a return on average tangible equity of 12.84% in the quarter. Net interest income expanded 2.4% to $165.2 million which produced a net interest margin of 3.83%, an increase of 2 basis points from the prior quarter. Non interest income totaled $39.9 million, up 0.1% linked quarter and 6.3% year over year. Non interest expense increased $5.8 million or 4.7% linked quarter and included approximately 2.3 million in non routine items including the establishment of a $1.4 million reserve for a single property in Ore and $900,000 in professional fees related to the conversion to a state banking charter and other corporate strategic initiatives. Salaries and Employee benefits increased 3.2 million linked quarter, principally due to annual salary merit increases effective July 1, increased annual incentive accruals and the cost of additional customer relationship managers and production talent associated with our organic growth strategies. Credit quality remains solid. Net charge offs were $4.4 million and included one individually analyzed loan totaling $3.1 million which was reserved for in prior periods. Net charge offs represented 13 basis points of average loans in the third quarter. Net provision for credit losses was $1.7 million and the allowance for credit losses represents 1.2% of loans held for investment. Again, very solid credit performance from a capital management perspective. Each of our capital ratios increased during the quarter. The CET1 ratio expanded 18 basis points to 11.88% while our total risk based capital ratio increased 18 basis points to 14.33%. During the quarter we repurchased $11 million of Trustmark common stock. In the first nine months of the year we repurchased $37 million of stock. We have 63 million in repurchase authority for the remainder of this year. This program continues to be subject to market conditions and management discretion. Tangible book value per share was 29.6 $29.60 at September 30, up 3% linked quarter and 10.1% year over year. The board also declared a quarterly cash dividend of $0.24 per share payable to September 15th to shareholders of record on December 1st. Now let's focus on our forward looking guidance for the year which is on page 15 of the deck. As you can see, we're tightening the range of our guidance for net interest margin and affirming all other previously provided guidance for the full year. We affirm our guidance and expect loans held for investment to increase mid single digits for the full year 25. Similarly, we affirm our guidance of low single digit growth in deposits excluding broker deposits for the full year 25. There is no change in guidance regarding securities as they are expected to remain stable as we continue to reinvest cash flows. We've tightened the anticipated range of the net interest margin for the full year. The range is now 3 to 3.82% for the year compared to our prior of 3.77% to 3.83%. We've affirmed our expectations for net interest income to increase in the high single digits for 2025. From a credit perspective, the provision for credit losses including unfunded commitments is expected to continue to trend lower when compared to full year 24. This is of course an affirmation of the prior guidance. There is no change in our noninterest income and non interest expense guidance. Non interest income from adjusted continuing operations for the full year 25 is expected to increase mid single digits while non interest expense is expected to increase mid single digits as well. We will continue our disciplined approach to capital deployment with with a preference for organic loan growth potential market expansion, M&A and other general corporate purposes depending on market conditions. As noted earlier, we do have remaining availability in our board authorized share repurchase program that we will consider opportunistically. You may have noticed the addition of two new slides in our deck on pages 17 and 18. I encourage you to take a look at the progress we've made in improving our financial performance over the last several years. We're very committed to maintaining that momentum here. Moving forward with that, I'd like to open the floor to questions.

OPERATOR - (00:11:27)

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

Stephen Scouten - Equity Analyst - (00:12:09)

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

Duane Duwe - President and CEO - (00:12:36)

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

Stephen Scouten - Equity Analyst - (00:13:51)

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

Tom Chambers - Chief Accounting Officer - (00:14:11)

Hey Steven, this is Tom Chambers. Yeah, that's true. What hit us in the third quarter for the additional new hires was about $400,000, you know, and of course that that's because we're hiring throughout the quarter fully loaded. We would expect that to increase during the fourth quarter there. I will add to that, Steven, there are some, we'll call them non routine parts of that expense because there are recruiting fees, you know, there's, there's one time signing bonuses and things like that that are mixed into that. So at a run rate level, you know, Tom noted the amount, but I would say there were some non routine things that would be included in that total. Additionally, as you know, I mean the expectation is we're adding the talent to produce revenue as well. And so we will factor that into coming revenue projections.

Stephen Scouten - Equity Analyst - (00:15:12)

Sure, that makes sense. And then lastly for me, just around. The share repurchase, I think you said previously, maybe 10 to 15 million if quarter is the right way to think about that. But just kind of curious given how bank stocks have been trading and just how rapidly you're building capital, if you would think about upsizing that range potentially and kind of how you think about that earn back on the repurchase versus potential M and A.

Tom Owens - Chief Financial Officer - (00:15:40)

Good morning Steven. This is Tom Owens. I'll start. So yeah, you know we've been very pleased at our ability to continue to deploy capital via repurchase while supporting loan growth and continuing to drive nice accretion to our regulatory capital ratios. I think we're up 18 basis points linked quarter. Certainly as you suggest as our capital levels continue to build, it may well be the case that as we enter 26 that we probably lean more proactively into share repurchase depending on how loan growth plays out. I think for the fourth quarter it's reasonable to assume that we'll remain on the pace that we've been which is about 50 million for this year.

Stephen Scouten - Equity Analyst - (00:16:30)

Okay, great. Appreciate the color there, Tom and everyone. Thanks for the time today.

OPERATOR - (00:16:34)

Thank you, Stephen. The next question comes from Michael Rose with Raymond James. Please go ahead.

Michael Rose - Equity Analyst - (00:16:44)

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

Duane Duwe - President and CEO - (00:17:17)

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

Michael Rose - Equity Analyst - (00:18:18)

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

Tom Owens - Chief Financial Officer - (00:18:58)

So Michael, this is Tom Owens. I'll start, you know, first, first and foremost, when you look at those slides. I think the fourth quarter is likely. To continue those trends. And then to your question about the longer term and what's the next evolution, you know, we're focused on continuing to drive competitive growth in ppnr which we think mid single digits is reasonable in that regard. And I think when you add the deployment of capital from our strong run rate profitability, as I just mentioned earlier, as we head into 26, we're likely to, we'll see where loan growth shakes out. Clearly that's our preferred method of deployment for capital. But given that we're approaching now 12% in terms of CET1, I think it's safe to say that we'll probably deploy at a more proactive rate in 2026. So I think we're on pace this year to retire something like 2% of our shares outstanding. And so I think if you add mid single digit growth in PPNR to low single digit decline in EPS outstanding, I think we're likely to wind up in high single digit growth in EPS would be a baseline. And then I'll let Dwayne and maybe Barry speak to what the opportunities might be from there.

Duane Duwe - President and CEO - (00:20:29)

Well, I would add to that, I mean, and as we already discussed in the prior question, you know, it allows better financial performance, all in all allows us to invest in that organic strategy. And so we're very, very focused. We're very focused on key growth markets. We believe we operate already in very significant growth markets in our footprint and we're focused in all business lines really at expanding in those key markets. And the improved financial performance allows us the ability to do that a little more aggressively than we had in prior years. So we're very optimistic. There a market like Huntsville, Alabama that would be considered one of the top growth markets in the country. We hired a fantastic group of new bankers in that market. Very, very excited about them joining trustmark. We've added teams across a couple of the other markets already mentioned, Atlanta, Birmingham and so on. So the improved financial performance allows us to invest in that organic strategy. And in the last comment I'd say, you know, of course there's a lot of activity right now. We're very aware of what's going on on an M and A front around us. There are discussions across the board up and down. So we're staying in tune with that. In a lot of cases that creates additional opportunities. So we're on it. We like the organic strategy though at this point.

Michael Rose - Equity Analyst - (00:22:11)

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

OPERATOR - (00:22:14)

Thank you. The next question comes from Freddy Strickland with Hoveday Group. Please go ahead.

Freddy Strickland - Equity Analyst - (00:22:27)

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

Tom Chambers - Chief Accounting Officer - (00:22:47)

This is Tom Chambers. Yeah, we expect obviously those non recurrings should fall off but we're still guiding to mid single digit growth year over year in expenses. So if you look at our fourth quarter we will have a slight increase. In expense or expected expense without, you. Know, non recurring items.

Freddy Strickland - Equity Analyst - (00:23:14)

Got it. And then just geared at the margin. Just given the asset sense of balance sheet, is it fair to assume you see a little bit of compression from here near term and maybe a little bit of recovery just as deposits catch up down the road?

Tom Owens - Chief Financial Officer - (00:23:31)

Betty, this is Tom Owens. I'll take that. It's sort of a yes and no on that. You know we are. First of all you saw we printed a two basis point linked quarter increase in net interest margin for the quarter from 381 to 383. You know, we've talked in the past about the ongoing repricing of the back book fixed rate loans for both loans and securities providing a bit of a tailwind. And I think that's what you saw with the 2 basis point increase in loan yield quarter over quarter. We are slightly asset sensitive. And so when the Fed cuts, you know, we have to be pretty proactive in terms of cutting deposit rates to maintain net interest margin on a linked quarter basis. And clearly that is our intention. We anticipate that the Fed will cut later today, later today and then again in December. And then I think we have three cuts penciled in for 2026 so ending the year at about 3% at the top end of their range. So yeah, in the short term there can be some headwinds. You know, it just depends on how depositors and competitors in the market react to those cuts that we make in deposit rates. But we are optimistic about maintaining NIM in this general area of 380 to 383. You know, when I look at analyst estimates for the fourth quarter, I think I see something like 383, which is the number we just printed. And then when I look at full year estimates for 26, I think I see a median estimate there of 382. And so I think those are reasonable numbers. I think that there might be some choppiness quarter to quarter, as you suggest. But as we manage our way through it, on average, I think we would see net interest margin continuing to be in about this range where we are now. And I'll make the point, we're at about 380 year to date. And so, you know, I think we're stabilizing here, but it might be choppy quarter to quarter.

Freddy Strickland - Equity Analyst - (00:25:58)

Okay, great. That's fair. And then just one last. Sorry, Go ahead, go ahead. Sorry, I thought I heard someone. Just one other quick question. I was just wondering if you could talk about trends in classified and criticized loans. Provision was a little lower this quarter. So I was kind of curious if either those were flat or maybe even went down a little bit. Sure.

Barry Harvey - Chief Credit and Operations Officer - (00:26:24)

And this is Barry. I'm just going to mention that we did have a nice trend down of about 49 million in criticized loans this quarter. That gives us about a trend down of about 123 million for the first three quarters of this year. So very encouraged by that, especially given the fact that we kind of were flat in the first quarter. So that 123 million has really come in the last two quarters. And so we're very encouraged by that positive trend. Like most of our peer banks, we trended up all during 2024. Chris. Classified and then we flattened out in first quarter. Felt like that was an inflection point. It turned out to be. And then we've been moving down at a nice pace both Q2 and Q3 of this year. So we're very encouraged by that. That is part of our lower provisioning. That is one of probably four factors that went into the provision being lower this quarter than it has been in Q1 and Q2.

Freddy Strickland - Equity Analyst - (00:27:32)

All right, that's great to hear. Thanks for taking the questions.

OPERATOR - (00:27:35)

Thank you. The next question comes from the line of Catherine Millar with kbw. Please go ahead. Thanks.

Catherine Millar - Equity Analyst - (00:27:46)

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

Tom Owens - Chief Financial Officer - (00:28:24)

Sure. Kathryn, this is Tom Owens. Yeah, you know, the linked quarter increase in net interest margin, you know, it almost builds on the answer that I just gave Fettie, which is, you know, we are asset sensitive. We do have an extremely valuable deposit base which we continue to demonstrate as we manage our way through interest rate cycles. Because we're slightly asset sensitive, we try to be proactive in pricing down deposits to maintain net interest margin. And it's always a balancing act. Right. You're always trying to optimize that. I mean, you want to reduce rates paid on deposits as much as you can at the same time as you're trying not to drive unwanted attrition of profitable customers. And so most of what we saw in the third quarter is what I'll call the pushback, right, the extent to which you cut deposit rates. But depositors push back. And so certainly we have a framework in place where when depositors push back, the more profitable the customer and the stronger the pushback, the more willing and able we are to accommodate, with exception, interest price. And so that's largely what drove that linked quarter increase. Katherine. We also, you know, engaged in a pretty proactive promotional deposit campaign during the third quarter. You know, our loan to deposit ratio the second quarter had risen 89% from 87% at year end 24. We wanted to manage that back down a bit. We were very pleased with the execution of that campaign. So that was a bit of a driver to that, but not a big driver, I'd say. In the third quarter it continued to be what I would characterize as a surprisingly competitive environment for deposits in our space with loan growth in the industry general generally outpacing deposit growth somewhat, so surprisingly competitive in the third quarter. And, you know, I'd say the same thing I said in my prior answer to Fetti, which is, you know, the extent to which we're able, you know, we give you guidance when you look at, when you look at Slide 9 and when you look at our outlook for fourth quarter deposits, cost dropping from 184 to 172, you know, that reflects the intended price cut or deposit rate cuts that we'll be making as the Fed cuts today. And the extent to which we achieve that is a function of those two factors. It's a function of how well that's received or tolerated by the deposit base, which in turn is also a function of what the competitive landscape looks like. How do our competitors react. So, but last point, I'd say with respect to, you know, and so that's, that's why I talked about, to Fetty's point, it could be choppy quarter to quarter but I do believe as we manage our way through this, we should maintain that interest margin on average over the next number of quarters in this range of about 380 or so. And so to your point, Catherine, about thinking about deposit, deposit betas, as I said earlier, I think we've got the fed cutting to 3% by year end 26 based on market implied forwards. So the policy target range would be 2 and 3/4 to 3%. We've got deposit cost in that scenario going down to about one and a quarter, which would be a beta cycle by our calculations of about 40% which is very consistent with the beta that we achieved as the Fed was hiking during the last cycle.

Catherine Millar - Equity Analyst - (00:32:32)

Very helpful color perspective. Thank you. And then maybe the other side of it on just loan yields. Can you talk about where incremental new loan pricing is coming on today?

Barry Harvey - Chief Credit and Operations Officer - (00:32:43)

Kathleen, this is Barry. You know, from my. It'S a little. It varies kind of dealing with the categories. I would say outside of CRE it's remained pretty consistent. We haven't really seen a lot of changes there. I would say within the CRE category it has gotten more competitive than it was earlier in the year and definitely more competitive than it was last year. And so the, the good news is there's a lot more deal flows. And I was looking at the production for the last four quarters relative to the prior four quarters and fourth quarter of 24 through the first three quarters of this year were much, well, production is much, much stronger on the CRE side. Having said that, the pricing is more competitive. And so when you, when you think about the spread, when you think about the origination fee, we've been been yielding and that industry has really been yielding. For quite a while. It is getting more competitive just due. To the number of players who are. I would say back in the market that hadn't been previously and that's been pretty much true for this entire year. There's been a lot more opportunities we've been pitching on a lot more deals we probably have landed. We have landed a few more deals than we did in the previous four quarters, but not as much as you would think based upon the number of opportunities. And we are landing those. The price is thinner on the spread and the price is thinner on the fee and within the CRE category. The rest of the categories are pretty similar to the way they've been in terms of the competition and the rates. That we're able to yield.

Catherine Millar - Equity Analyst - (00:34:41)

Great helpful caller and great quarter. Thank you. Thank you, Katherine.

OPERATOR - (00:34:49)

The next question comes from the line of Gary Tano with DA Davidson. Please go ahead. Thanks.

Gary Tano - Equity Analyst - (00:34:56)

Good morning. A lot of my questions have been asked. Hey, but I wanted to just follow. Up on your comments around the recruiting and the quality quarter as you think of the kind of producer or producer supporting hires, any kind of particular segment that you're leaning into, I think you talked that it's pretty varied geographically, but from a, from a segment perspective, anything. You'Re particularly leaning into or anything, you. Know, particularly focused on the deposit side.

Duane Duwe - President and CEO - (00:35:23)

In terms of the hires you make. So in general, I'll say we are really are focused geographically. We're focused on the markets that we feel present the best growth opportunity. And I mentioned those previously, the Houstons, Atlanta's, the Birmingham, Huntsville Panhandle and South Alabama present in our mind and Jackson, Mississippi frankly. But those present the best growth opportunities. So we're focused on our business lines in those markets. To date, I would say if we're focused in specific categories, we've had pretty good success on the equipment finance team. We've added producers in that which we've talked about the last several quarters has been we're very pleased with the growth experienced in that business and are seeing good opportunity there and we've had a really, really good approach and, and really nice team build there. And that's been an area of focus. But I would say of the ones that I mentioned earlier, 21 new hires, it is pretty evenly spread between CRE, corporate banking, commercial banking. We've even actually in a somewhat challenging market has created some opportunity on the mortgage front. In markets where we have not had a mortgage production side, we've added a handful of mortgage producers. So it's pretty well diversified across all the business lines that we serve with a little more focus on specific growth markets.

Gary Tano - Equity Analyst - (00:37:07)

Thanks, I appreciate the comments there. And then just on the, on the deposit side, you know, given the guide. You gave for the fourth quarter in. Terms of the public funds deposits which. Are 13 14% of your total deposits.

Tom Owens - Chief Financial Officer - (00:37:23)

What's the repricing timing of that segment? So, Gary, this is Tom. So with respect to the public fund balances, by and large those are administered rate or floating rate, even indexed down. It's a really small percentage of those that are bid on some fixed rate for any extended period of time. Thanks very much.

OPERATOR - (00:38:02)

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

Christopher Marinak - Equity Analyst - (00:38:10)

Hey, thanks Tom. You had touched a little bit on. Funding and some of the earlier questions, but I kind of wanted to ask. At large, what is your thought about. Initiatives to fund the balance sheet the. Next couple of years? Should we expect to see the loan.

Tom Owens - Chief Financial Officer - (00:38:23)

To deposit ratio around this sort of high 80s? Do you think it can trend differently? And I guess just, you know, is M and A a part of that funding strategy in the big picture? So there's a lot there. Chris, it's a great question. I'll start off by saying that, you know, as I said earlier, loan growth had outpaced deposit growth in the earlier part of the year and we were in the first half of the year and so our loan to deposit ratio had floated up to 89%. We really want to keep that in the mid-80s, mid to high 80s. We do not want that floating up into the 90s. And so yes, you should expect us to maintain that type of liquidity. As I said, we were really pleased with with the execution of the promotional money market program in the third quarter. And I think, you know, we had so we had conducted a similar campaign in 3Q24 and then 4Q4 through 4Q24 through 2Q25. We were not nearly as proactive in terms of promotional deposit campaign activity. So to your point, do we have the opportunity to continue to fund deposit growth to match loan growth? We're very confident in our ability to do that. The way I think about that is going to a more sort of always on approach in terms of the next promotional campaign. And there are certainly, you know, different and more proactive techniques that we can employ. You know, the techniques we've employed have been reasonably conservative in that regard and so pretty cost effective in bringing on new balances. So.

Duane Duwe - President and CEO - (00:40:17)

But we're confident in our ability to fund loan growth cost effectively. And I guess I would maybe turn it over to Dwayne to address the issue, the extent to which that does or to not play into our view on acquisition opportunities. Yeah, just a couple notes. I mean, one thing I did not mention when I was answering Gary's question a minute ago. The other element of that production staff has been on the treasury management side. So we have added treasury management talent. All of our RMS across our entire system have deposit growth goals. And Tom, you may have the number in front of you of commercial growth in the third quarter, but we have experienced solid commercial deposit growth as well, which has been part of that strategy. We're very, as we talk about our organic strategy, it's very focused on full relationship, including the deposit side. And so, and like I said in the third quarter, we're very pleased with progress there. And as we bring on the new talent that's, you know, of course, loan growth, deposit growth, they're all part of the strategy. So that's a key part in terms of ma, you know, yes, deposits, core deposits, core funding, that's all part of the equation. And as I stated a bit ago, there is a lot of discussion going on out in the market. We're continuing to be very focused and very disciplined executing on our organic strategy and hopefully opportunistic when the right partner presents itself. And we'll consider that as it goes. And I would say, yes, deposits are a part of that consideration.

Tom Owens - Chief Financial Officer - (00:42:03)

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

Christopher Marinak - Equity Analyst - (00:42:30)

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

OPERATOR - (00:42:40)

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

Duane Duwe - President and CEO - (00:42:51)

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

OPERATOR - (00:43:06)

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