Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Jeff, I think you mentioned -- I would just want to confirm that the mid-single-digit loan growth guidance. Does that include the anticipated runoff out of the ag portfolio?
A: It does, Jeff. Yes. We're working on with growth in other areas.
Q: Okay. And I think that balance was in the $200 million range. So you got about $100 million runoff for a headwind. Is that --
A: That's right. We expect between now and year-end, about $100 million would run off.
Q: Appreciate it. And maybe for Scott, just kind of seeing that uptick in line utilization. I may have missed it. Is there any commonality or is there any timing to that? Or could you read into that maybe an improvement in what you've seen?
A: Yes, Jeff, I think, again, I think we see our companies use cash in the first quarter with some of the outflow. I think you also see some of that on the lines. But I think it also reflects, as I said, I think companies are basically optimistic about their business and they're willing to draw down working capital, whether it's hiring good people if they can find them or just opportunistically investing in the business. So I think it's a combination of those two things.
Q: Do you -- I know that kind of higher for longer the general story has been more sidelines sitting and waiting. The longer we go with higher for longer, is there any -- do you see any expectation that borrowers say, look, this could take a while. I'm ready to get back into the pool? Or are you getting any indication that, that may be playing out that higher for longer is the reality and is kind of move on with projects?
A: Yes, I think that's a good observation. I think what I would say is I'm encouraged by the activity in the pipeline on the loan side overall. But I think what we've seen now for some time that the pace of those things move very slowly. And I think there has been a little bit of a wait and see, particularly when the expectations were maybe for lower rates earlier this year. But I think now with maybe the conclusion that it's going to be higher for longer, I think you may see some of this stuff start to move a little quicker because those decisions have been made. It's just a matter of when that is.
Q: Got it. And Scott, while I have you, I just -- I wanted to touch on the -- it looks like deposit runoff in the West was a particular -- that was a bigger driver or more there. Was there anything specific to that outflow? Or do you have a greater percentage of tax and bonus type activity that occurred out West for any reason?
A: Yes. I think the reasons are similar, but I think that the dollar amounts were a little larger. And I think if you dial into it, it's -- it's a group of our top-tier clients out there that are also some of our largest depositors and borrowers. So I think it is just a function of the same behavior that we've seen in other markets with taxes distributions, dividends and those relationships, for the most part, are all still intact and continues to be strong.
Q: Great. And the last one, I think you all communicated the capital side, TCE now above 9%, when you get the little dividend bump here. But also just wanted to see, is that you touched on the buyback authorization? Are those 2 exclusive of one another? Or do you feel like you could pull off a dividend increase and be nimble with the buyback as well?
A: Yes, Jeff, this is Jim. I would say this that we can certainly dribble with both hands in this regard and do both. We've announced the dividend increase and we'll be opportunistic relative to the buyback.
Q: Okay. And at this point, Jim, M&A, is that anywhere on the radar?
A: Not really. I think we just continue to create relationships. But given where the stock price is today, and we were focused, it just doesn't make sense at this point in time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
