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CFO Keene Turner stated that while there are some near-term pressures, he expects net interest income dollars to grow and the margin to be stable to growing over the next four quarters, absent any rate cuts. CEO James Lally expressed confidence that loan growth would accelerate from 4% to a 5-7% annualized rate in the back half of the year, driven by pent-up demand and increased economic certainty.

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CFO and COO Keene Turner projected a potential 5 basis point sequential step-down in NIM for Q2 due to sub-debt repricing, but expects a stable margin thereafter, even with 75 basis points of Fed cuts. He anticipates no major shifts in the core expense run-rate, aside from transaction costs. He confirmed the acquired branches are modeled to have an efficiency ratio in the 52% to 54% range.

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Executive James Lally affirmed that a mid-single-digit loan growth rate is "very achievable" for 2025, noting that market opportunities could even push it slightly higher. He also confirmed that all associates were safe from the wildfires with no collateral issues. CFO & COO Keene Turner addressed the reserve, stating they are comfortable with the current level (1.34% of unguaranteed loans) given its pessimistic weighting and do not expect it to move dramatically.

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CFO & COO Keene Turner projected the NIM would remain above 4% in Q4 before drifting into the high 3% range during 2025, assuming five additional rate cuts. He revised the tax credit income outlook, noting it would likely fall short of the $9-$10 million target due to SOFR movements. Turner also stated the company will prudently maintain its ACL, with provisioning being a function of loan growth rather than releasing reserves.

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An executive, likely EVP & Chief Banking and Revenue Officer Jim Collins, stated that loan growth is primarily from taking market share and expanding existing relationships, with a continued focus on C&I in the lower-middle market. EVP & CFO Al Villalon confirmed the full-year margin guidance of 3.25% to 3.35% is on a reported basis, inclusive of all purchase accounting accretion.

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Chief Financial Officer Alan Villalon detailed that about $380 million in loans are set to mature in 2025 with an expected 100 basis point yield pickup, and roughly $100 million in 9-month CDs are also repricing. Chief Operating Officer Karin Taylor suggested a provision in the $1.5 million to $2.0 million range is a fair assumption, contingent on economic forecasts for the CECL model.

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Chief Banking and Revenue Officer Jim Collins explained the guidance reflects a strategic focus on C&I relationships while slowing investor CRE originations. COO Karin Taylor confirmed the increase in nonperforming assets was primarily driven by advances on a single large multifamily construction project. CFO Al Villalon affirmed the expense outlook, clarifying the core 2024 expense base for the growth calculation is approximately $175-$176 million.

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CFO Alan Villalon stated that Q4 expenses would be 'messy' due to deal-related costs but confirmed that a core run rate could be estimated by adding HMNF's base to Alerus's core expenses. Chief Operating and Risk Officer Karin Taylor provided details on the new nonaccruals, specifying one relationship of about $8.5 million has a 5% reserve. For the large construction loan, she clarified that the outstanding balance was $25 million against a total approval of just under $29 million, and that additional funding remains a possibility as part of the resolution strategy.

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CEO Corey Chambas expressed confidence in the transportation portfolio, noting the equipment finance portion is running off and the conventional side is well-collateralized. CFO Brian Spielmann projected modest expense growth, anticipating the company will achieve positive operating leverage for the year. Spielmann also suggested the recent provision run rate of $2.5M to $2.7M per quarter is a reasonable expectation to support growth.

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CFO Brian Spielmann confirmed the reclassification added approximately 5 basis points to the 'fees in lieu of interest' component of the NIM and suggested modeling this component at the higher end of its historical 15-20 basis point range. CEO Corey Chambas noted a modest repricing opportunity remains in their small CD portfolio, with over $100 million maturing at a '4 handle' and renewing at a 'sub-4 handle,' but acknowledged that repricing opportunities on the broader loan and bond portfolios are diminishing.

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CFO Brian Spielmann responded that the bank believes it is adequately reserved as of year-end, particularly in the small-ticket space, and that the reserve is built to absorb the expected run-rate of charge-offs from the equipment finance portfolio. Regarding fee income, he suggested that the Q4 total fee income of about $8 million serves as a good starting point for 2025, with an expectation to grow that by 10% year-over-year, despite variability in individual components like SBIC gains.

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CFO Brian Spielmann stated that while there is an elevated reserve for the small-ticket transportation portfolio, the current overall reserve level is appropriate and expected to remain stable, absent broader macroeconomic events. Both Spielmann and Executive Corey Chambas clarified that the costs for RPA and AI are now a baked-in, run-rate expense since the development teams are on staff, though Q3 did have a unique increase in capitalized costs related to a separate, larger software project.

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CEO Charles Reeves stated that he expects provision expense to return to more normalized levels. He anticipates the allowance coverage ratio will revert to the 1.20% range post-resolution of the large CRE credit, with a charge-off likely in Q3. He also noted securities runoff will continue to fund loan growth and guided to a full-year effective tax rate of around 22%.

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CEO Charles Reeves stated that he expects the provision expense to return to normalized levels in the second half of the year, with a charge-off for the large CRE loan likely in Q3. He also noted that cash flows from the securities portfolio are being redeployed into loans and projected a full-year effective tax rate of approximately 22%.

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Chief Credit Officer Gary Sims explained that the bank proactively used stressed economic scenarios to maintain its reserve coverage at 1.25% and expects to keep it in the mid-1.20s range. He also noted that while 2025 looks stable for the ag portfolio, there is concern about the impact of tariffs on 2026. Executive Barry Ray clarified that expenses are expected to ramp up slightly from Q1 levels through the rest of the year.

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Chief Credit Officer Gary Sims identified office and senior living as continued pressure points but noted operational improvements in the latter and affirmed the reserve is adequate for planned resolutions. CEO Charles Reeves stated the bank will continue its organic growth strategy by investing in talent and infrastructure, with a geographic focus on the Twin Cities, Denver, and Iowa Metro markets, while also preparing for potential M&A.

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Chief Credit Officer Gary Sims attributed the NPA decline to successful resolution efforts, including the payoff of a large, long-term agricultural credit. He noted a decrease in classified assets but an increase in criticized assets due to two specific C&I downgrades. Sims expects the reserve to remain in the mid-to-high 1.20s range. EVP and CFO Barry Ray observed that competitors have been aggressive with deposit pricing, with some front-running the Fed cut, and expects deposit betas on the way down to be similar to the ~40% seen on the way up.

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EVP, CFO & Treasurer Thomas Bell responded that the company will likely let cash flows from the securities portfolio run off to fund loan growth rather than growing the portfolio further. He confirmed that the increase in money market costs was directly related to blending in deposits from the First Security transaction and not a result of increased competitive pricing pressure in their core markets.

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CFO Thomas J. Bell reiterated the guidance for an average of $5 million per quarter in SBA gain-on-sale with premiums around 9.5% to 10%. He confirmed the Q2 NII guidance of $87M-$89M (excluding the acquisition) incorporates the market's expectation of a June rate cut. Bell also stated that he expects the securities portfolio to remain flat or potentially decrease for the remainder of the year, given strong loan growth.

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President Alberto Paracchini highlighted treasury management, wealth management, and customer derivatives as key areas for fee income growth. He also stated that the normalized net charge-off range is expected to be between 30 to 40 basis points, with some potential quarterly volatility from resolving acquired PCD loans. CFO and Treasurer Thomas J. Bell confirmed that the tax rate outlook for 2025 remains consistent with prior periods.

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President Alberto Paracchini noted that while lower short-term rates help, the CRE pipeline's strength is driven more by well-capitalized sponsors than by recent rate cuts. He pointed out that the net charge-off rate, when excluding purchased credit deteriorated (PCD) loans, is around 35 basis points, consistent with historical levels. Regarding capital, Paracchini reiterated Byline's strategy: prioritize organic growth, then consider dividends, buybacks, or strategic M&A like the recent deal, before returning excess capital to shareholders.

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CEO Denis Sheahan attributed the C&I growth to increased customer confidence and strategic hiring of lending talent. CFO David Rosato added that the growth was broad-based across all C&I verticals. Rosato projected a 'flattish' core NIM for the second half of 2025, noting that the competitive deposit environment has intensified. He also clarified that Rabbi Trust income is directly impacted by equity market performance, with positive markets leading to higher income.

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CFO R. Rosato explained that share repurchases will be paused until after the HarborOne shareholder vote. He also confirmed a target closing date before October 31, with an option to delay to Q1 2026 to avoid year-end complications. CEO Denis Sheahan added that two seasoned leaders were hired for the franchise lending group, which drove growth in Q1, and they are optimistic about its continued expansion.

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CFO R. Rosato confirmed that the benefit from the restructuring would be phased in during Q1, as the transactions would occur mid-quarter. He noted the full-year NIM of 3.45% to 3.55% will be influenced by the rate environment, but will see incremental improvement through the year due to CD repricing and hedge amortizations. Rosato also clarified that while Eastern is hopeful to capitalize on market disruption from recent mergers, any potential benefit is not currently factored into the 2% to 4% loan growth guidance.

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CFO David Rosato responded that while further expense savings in 2025 are possible, a clearer picture will be available in January after the budget process is complete. On capital, Rosato confirmed the company has excess capacity, views its stock as a good value for buybacks, and is actively discussing a potential securities restructuring. He also noted that the high cash balance will be used to fund a maturing deposit, seasonal outflows, organic loan growth, and potentially modest securities purchases.

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President and CEO Marty Birmingham confirmed that Upstate New York currently offers more robust loan growth opportunities, though early construction loan prepayments have tempered overall growth. CFO Jack Plants clarified that the full-year net charge-off guidance of 25-35 basis points is unchanged, and the loan loss coverage ratio is expected to remain between 1.04% and 1.08%. He also reaffirmed the $140 million full-year expense guidance, noting that elevated Q2 medical costs are expected to be mitigated by stop-loss insurance in the second half of the year.

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CFO, Jack Plants, clarified that COLI income will see a slight increase in Q2 before normalizing at a rate higher than 2024 levels. The temporary Q2 elevation is due to a delay in receiving $73 million in cash surrender value from a restructured policy. Regarding credit, he suggested the allowance for credit losses to average loans ratio would likely remain stable around the current 1.07%-1.08% level for the remainder of the year.

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CFO Jack Plants explained the loan growth forecast is conservative due to construction lending demand awaiting rate cuts and the timing of major economic development impacts expected later in the year. For the NIM, he projected a starting point in the 3.30% range for Q1, with further expansion driven by favorable loan repricing and a faster-than-anticipated positive reaction to rate cuts on deposit costs.

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CFO Jack Plants explained that while deposit repricing has been faster than initially modeled, he expects a neutral near-term impact on net interest margin from rate cuts. President and CEO Marty Birmingham confirmed confidence in achieving mid-single-digit loan growth in 2025 as the commercial pipeline rebuilds. Regarding expenses, Mr. Plants noted a focus on prudent management and highlighted that redeploying staff from the discontinued BaaS business represents a cost avoidance for future growth initiatives.

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Chief Commercial Banking Officer Lynn Kerber stated that commercial loan growth is primarily driven by expanding relationships with existing customers. CEO Thomas Prame confirmed the CD portfolio is homogenous with a short duration, so no large repricing events are anticipated. He added that expense control is due to diligent, business-as-usual management across the organization rather than a specific named initiative.

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Executive Thomas Prame attributed the positive outlook to the company's embedded local talent, diversified portfolio, and consistent underwriting, which builds market reputation. He noted consumer credit remains stable. EVP & Chief Commercial Banking Officer Lynn Kerber added that commercial clients are cautious but not halting projects. Regarding mortgages, Thomas Prame mentioned that while originations are up year-over-year, low housing inventory in their Midwest markets remains the primary constraint, potentially tempering growth below MBA forecasts.

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John Stewart, EVP and CFO, confirmed that after adjusting for non-recurring Q4 items, the go-forward quarterly expense run rate is approximately $39.5 million to $40 million. He also affirmed the 3.15%-3.20% margin range is the target for the end of Q4 2025. Lynn Kerber, EVP and Chief Commercial Banking Officer, addressed the reserve, stating that while loan growth is a factor, the mix shift away from higher-loss indirect auto loans and stable credit quality lead to a 'relatively stable' outlook for the ACL ratio.

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Executive Thomas Prame explained that the elevated Q4 expenses, tied to strategic internal projects, would be evenly distributed between salary/benefits and third-party professional services. Lynn Kerber, EVP and Chief Commercial Banking Officer, stated she does not foresee a significant directional change in the reserve level, citing the portfolio mix shift away from higher-loss indirect auto loans and the strong performance and net recoveries in the commercial portfolio.

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EVP & CFO Nick Anderson explained that the NIM guidance of static to up 4 bps is supported by a strong June NIM, favorable repricing on maturing loans and CDs, and the company's liability-sensitive position, which would add 2-3 bps to margin per 25 bp rate cut. President & CEO Todd Gipple stated the next securitization is targeted at a minimum of $350 million to improve economics and free up capital. Gipple also affirmed expectations for continued double-digit growth in the wealth management business, which has seen a 10% CAGR over the last five years.

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EVP & CFO Nick Anderson provided a Q3 NIM guidance of static to up four basis points, citing strong loan and CD repricing opportunities. He also noted that a 25 basis point Fed cut could add 2-3 basis points to the margin. President & CEO Todd Gipple added that the next securitization is targeted for Q1 2026 with a floor of $350 million, and that the wealth management business is expected to maintain double-digit growth.

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EVP & CFO Nick Anderson provided guidance for the Q3 NIM to be static to up four basis points, citing strong loan and CD repricing dynamics. He also noted a 25 bps rate cut could add 2-3 bps to the margin. President & CEO Todd Gipple stated the next securitization in Q1 2026 is targeted at $350 million to improve economics and free up capital. Gipple also expressed confidence in achieving double-digit growth in the wealth management business, which has seen a 10% CAGR over the past five years.

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Executive Larry Helling explained the reduced loan growth guidance stems from broad macroeconomic uncertainty affecting client capital decisions, rather than a weak LIHTC pipeline. Executive Todd Gipple confirmed that lower loan growth would likely lead to a reduced provision expense. Gipple also noted a positive 36 basis point spread on new loans versus maturing loans and detailed that the $2.8 billion fixed-rate portfolio has an approximate 36-month weighted average duration.

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Executive Larry Helling addressed the swap fee outlook, noting that while the pipeline is robust, higher long-term rates could be a headwind and the first quarter is typically lighter. Executive Todd Gipple explained that the Q1 NIM guidance of static to up 5 basis points already includes the 4 basis point negative impact from expiring caps. He anticipates further modest NIM expansion through 2025, driven by deposit beta performance and dependent on the steepening of the yield curve.

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Executive Todd Gipple clarified that the Q4 NIM expansion guidance of 2-7 basis points does not include a Fed cut, which would add another 1-2 basis points. He detailed that the company has $2.2 billion in immediately repricing core deposits. Regarding expenses, Gipple expressed confidence in staying within the $49-$52 million range, citing approximately $900,000 in cost savings from the m2 Equipment Finance restructuring, with potential upward pressure only from performance-based incentives tied to strong earnings.

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EVP & CFO Michele Kawiecki projected a modest 1-2% increase in expenses for the back half of the year. CEO & Director Mark Hardwick and President Michael Stewart added that recent strategic hires are embedded in the expense base and will drive future growth. Regarding the provision, Kawiecki stated it will depend on macroeconomic factors and loan growth, but the bank will continue to provide for growth at the current coverage ratio level, making the Q2 level subject to these variables.

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CFO Michele Kawiecki confirmed that prior guidance for 1% to 3% expense growth over the 2024 base still holds. She also stated that cash flows from the securities portfolio are being used to support loan growth and not being reinvested at this time. Executive Mark Hardwick noted no change in M&A strategy, which remains focused on Indiana, Ohio, and Michigan, but mentioned that stock price volatility makes it difficult to gain momentum in conversations.

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Chief Financial Officer Michele Kawiecki explained that cash flows from the securities portfolio are intended to fund loan growth and that the bank plans to grow its net interest margin in 2025, despite two planned rate cuts. President Michael Stewart and Executive Mark Hardwick confirmed a mid-single-digit loan growth outlook, targeting around 6%. Mark Hardwick outlined capital priorities as organic growth first, followed by dividends, with any M&A activity focused on core markets in Indiana, Ohio, and Michigan.

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CFO Michele Kawiecki suggested Q3's expense level is a good run rate for Q4 and that core fee income guidance of $30-$32 million for the second half of the year remains reasonable. CEO Mark Hardwick emphasized a focus on maintaining the current expense level in 2025. Chief Credit Officer John Martin clarified that a $1 million specific reserve is already allocated to the trucking relationship, though the ultimate provision expense depends on the entire portfolio's performance.

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President & Secretary Kevin Comps explained the custodial deposit deal was negotiated directly with the holder, aligning with the IPO strategy to diversify funding. He noted the floating rate is slightly better than brokered CDs and helps reduce the wholesale funding ratio and FDIC premiums. EVP & CFO Brad Howes affirmed that current capital levels are sufficient to support guided growth, with organic capital generation providing a buffer above internal minimums. Kevin Comps added that the loan participation program could be leveraged if growth exceeds forecasts.

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EVP & CFO Charles Christmas confirmed the current expense guidance does not include any significant costs related to the core conversion for the rest of the year. He explained the fee income guidance reflects a normalization from an exceptionally strong Q2 in swaps and mortgage banking, not a negative outlook. He projected the acquisition would likely close in the back half of Q4 2025, pending regulatory approvals.

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EVP and CFO Charles Christmas stated that securities purchases are expected to be similar to loan growth in dollar terms, funded by deposit growth. He clarified that Q1 salary expenses were lower than Q4 2024 due to higher year-end bonus accruals in the prior quarter. He also explained the Q1 provision increase was a prudent move to blend base and adverse economic forecasts due to uncertainty, making future builds difficult to predict.

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EVP and CFO Chuck Christmas explained that the 2025 provision expense is expected to be driven primarily by loan growth, with a stable economic outlook and low net charge-offs anticipated. President and CEO Ray Reitsma described the mortgage pipeline as 'seasonally strong.' Christmas clarified the lower Q4 tax rate was due to year-end true-ups, mainly related to successful low-income housing and historical tax credit activities, which are expected to continue benefiting the bank's profitability.

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EVP and CFO Chuck Christmas confirmed that forecasting higher securities and cash is correct, noting the securities portfolio is growing by about $10 million per month. He stated that NII could actually increase, as balance sheet growth can have a positive impact on net income dollars despite compressing the margin percentage. He also provided specifics on repricing opportunities, including $150 million in fixed-rate loans maturing in 2025. President and CEO Raymond Reitsma added that mortgage activity increased with the fall rate drop, offsetting normal seasonality and suggesting a stronger-than-typical fourth quarter.

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Chairman & CEO Edward Handy confirmed a strong commercial pipeline at quarter-end, supporting the bank's low single-digit growth guidance for the full year. He characterized borrower sentiment as 'optimistic but careful' and 'a little better than lukewarm.' SEVP, CFO & Treasurer Ronald Ohsberg described the derivative income as 'chunky' and hard to predict, suggesting it would likely return to more normalized levels, although the bank is actively promoting the product.

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Chairman & CEO Edward Handy confirmed the commercial loan pipeline grew to approximately $140-145 million, supporting the low single-digit growth guidance for the year despite some anticipated payoffs. He characterized borrower sentiment as 'optimistic but careful,' noting continued caution in investments. SEVP & CFO Ronald Ohsberg advised that the high level of derivative income is 'chunky' and hard to predict, suggesting it would likely return to more normal levels in subsequent quarters.

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Chairman & CEO Edward Handy confirmed strong loan growth, noting the pipeline increased substantially to approximately $140-145 million, supporting the low single-digit growth guidance for the year. He characterized borrower sentiment as 'optimistic but careful.' SEVP, CFO & Treasurer Ronald Ohsberg indicated that the high derivative income was transactional and likely to return to more normalized levels, as it is difficult to predict.

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Chairman & CEO Edward Handy confirmed strong Q2 loan growth was driven by the commercial portfolio and noted the pipeline grew substantially to nearly $145 million, supporting low single-digit growth guidance for the year. He characterized borrower sentiment as "optimistic but careful." SEVP, CFO & Treasurer Ronald Ohsberg commented on derivative income, stating that the strong Q2 result was transactional and likely to return to more normalized levels rather than being repeated.

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Chairman & CEO Edward Handy confirmed the commercial loan pipeline grew to nearly $105 million, supporting the bank's low single-digit growth guidance for the year. He characterized borrower sentiment as 'optimistic but careful.' SEVP, CFO & Treasurer Ronald Ohsberg indicated that the strong derivative income is 'chunky in nature' and likely to return to more normalized levels, though the bank is actively promoting the product.

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Chairman & CEO Edward Handy confirmed a healthy loan pipeline of around $140-145 million, supporting guidance for low single-digit growth for the year. He characterized borrower sentiment as 'optimistic but careful,' noting a level of uncertainty persists. SEVP, CFO & Treasurer Ronald Ohsberg commented on derivative income, suggesting it would likely return to more normalized levels as it is transactional and 'chunky' in nature, though the bank is actively promoting the product to customers.

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CFO Ronald Ohsberg explained that the recent restructuring has moved the bank to a more rate-neutral position, reducing upside from potential future rate cuts. He also attributed the strong deposit growth to a combination of a single large new relationship and successful organic growth strategies, including new retail sales officers and targeted promotions, despite intense market competition.

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CEO Edward Handy projected modest commercial loan growth around 3%, with a strategic focus on C&I loans to manage CRE concentration, while the residential portfolio is expected to see a mild reduction. CFO Ronald Ohsberg provided detailed expense guidance, indicating a higher run rate than suggested due to the restoration of incentive compensation and strategic people investments. He projected quarterly salaries and benefits of approximately $23.5 million and other expenses around $13.5 million.

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CFO Ronald Ohsberg explained the loan decline resulted from an intentional pullback and managed credit exits, which are now complete. CEO Ned Handy projected low single-digit loan growth for Q4 and into 2025. Ohsberg confirmed the NII outlook reflects this growth and expects Q4 expenses to be stable with Q3, with an increase in 2025.

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President & CEO Joseph Turner stated that the loan market remains highly competitive, and he does not anticipate a significant change in origination volume from the first half of the year. He added that loan payoffs are inherently "lumpy" and difficult to predict. On expenses, CFO Rex Copeland projected that costs would remain "fairly consistent," with potential for minor increases from technology and compensation adjustments, but nothing dramatic.

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CFO Rex Copeland clarified that the ~$2 million quarterly benefit from the terminated swap will cease at the beginning of Q4 2025. CEO Joseph Turner stated that the company expects to remain active with its share repurchase program, contingent on price and share availability. Regarding expenses, Turner confirmed that aside from a non-recurring benefit in Q1, the expense run rate should remain relatively stable with no major planned expenditures.

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Executive Joseph Turner stated that while the company doesn't provide forward guidance, the outlook for loan growth is similar to the previous year. He and Executive Rex Copeland noted that unfunded commitments fund at a rate of $50-$70 million per month, which is often offset by repayments. Regarding loan repricing, they directed him to detailed tables in the upcoming 10-K filing but confirmed the repricing of the low-yield fixed-rate portfolio should be a net positive for the bank.

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CEO Joseph Turner stated that he feels the current reserve ratios are "pretty good" and does not anticipate a significant "bleed out" in coming quarters. CFO Rex Copeland added that the reserve level will also be influenced by future loan growth. On loan growth, Turner suggested that the year-to-date growth trend would be the best indicator for the full year, avoiding specific forward-looking guidance.

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Richard Sems, CEO of Equity Bank, expressed optimism for loan growth, citing record-high pipelines in C&I and CRE and an expectation for payoffs to normalize. He and Chairman & CEO Brad Elliott explained that lower line utilization was a unique, temporary event caused by a few wealthy clients receiving funds and paying down their lines. EVP & CFO Chris Navratil projected the core margin would remain stable around 4.17%, supported by lagged repricing on both loans and deposits, with further repricing opportunities extending into 2026.

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CFO Chris Navratil confirmed that a stable core margin in Q2 is a fair expectation. He stated that while the bank is positioned to defend its margin during rate cuts, there is modest upside potential given its demonstrated liability sensitivity. He also affirmed that management is actively focused on managing expense lines to improve efficiency and create value, indicating flexibility exists.

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CFO Chris Navratil provided the adjusted December spot margin of 4.06%. He confirmed that the Q1 guidance reflects potential risk to the margin from loan payoffs and competitive pricing pressures, which could create a short-term headwind, justifying the conservative range.

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CFO Chris Navratil detailed that $300-400 million in fixed-rate loans (many sub-5%) will reprice over the next five quarters and that CD maturities are continuous, not in large blocks. He quantified purchase accounting accretion at 4 basis points for the quarter. He explained the lower tax rate resulted from a tax planning strategy, with the full-year rate expected around 21%. CEO Brad Elliott confirmed the M&A strategy and geography are unchanged and noted that the pipeline of potential deals is strong and has recently become more active.

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EVP of Commercial Banking Joel Rahn concurred that there is likely pent-up demand for business expansion loans that could materialize if economic uncertainty subsides. President and CEO William Kessel affirmed the company's interest in M&A, stating that technology investments and the successful 2018 acquisition of Traverse City State Bank have positioned IBCP to be a good partner for other community banks.

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President & CEO Simon Griffiths confirmed the loan growth forecast does not factor in any significant runoff, citing a similar credit philosophy and strong portfolio at Northway. Regarding provisioning, Griffiths stated that the Q1 reserve build was a conservative move due to macroeconomic uncertainty and that the bank would continue to take a thoughtful approach, potentially adding more reserves in Q2 depending on the economic outlook.

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President and CEO Simon Griffiths clarified that the low single-digit loan growth guidance is for organic growth on a standalone basis. EVP and CFO Michael Archer reiterated post-closing actions, including paying down $45 million in FHLB borrowings and selling approximately $55 million of Northway's bond securities to optimize the balance sheet. Archer also confirmed a pro forma earning asset base around $6.5 billion is a reasonable estimate.

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CFO Michael Archer explained the C&I loan decrease was due to a few large, non-recurring pay-downs and confirmed a core expense run rate of approximately $28.2 million. CEO Simon Griffiths highlighted strong residential and commercial loan pipelines ($72M and $124M, respectively) supporting year-end momentum, while noting ongoing franchise investments are self-funded within the current expense base.

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The provision outlook is based on expected loan growth and a conservative view of the economy. The credit that drove the provision higher was a smaller part of the overall NPL increase. The flat fee income forecast is correct, with pressure from lower service fees expected to be offset by growth in areas like treasury management.

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The increase in OREO was due to a single multifamily credit being moved to that status for a quick resolution and is not considered a systemic issue. Loan growth continues to be strongest in the Mountain West and Southwest regions, driven by consistent calling efforts and the bank's "open for business" stance while competitors have pulled back.

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Executive Eric Lemke responded that while some near-term pressure on the NIM is possible, he anticipates it will be 'relatively stable' for the next quarter, assuming moderate Fed rate hikes allow fixed-rate assets to reprice. Executive Jeffrey Ludwig added that the loan loss provision for 2023 might be slightly higher than Q4's low level but should not be dramatically different from the full-year 2022 figure, provided the economy avoids a deep recession.

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Executive Eric Lemke explained that while there may be near-term pressure on the NIM, it is expected to stabilize in the coming quarter, assuming a moderation in Federal Reserve rate hikes. He noted that the rapid turnover of the fixed-rate equipment finance portfolio would help support the margin. Executive Jeffrey Ludwig addressed the provision, stating that while it's hard to predict, he expects it to be slightly higher than Q4 but not dramatically so for the full year, assuming a mild recession and continued improvements in credit quality.

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CFO Eric Lemke projected a net $30 million decline in the consumer portfolio next quarter as a $50 million GreenSky runoff will only be partially offset by LendingPoint originations. Lemke and CEO Jeffrey Ludwig expressed hope that the $7 million provision is a peak, contingent on slowing loan growth, though the economic outlook remains a wildcard. Ludwig identified office and residential development as areas of increased caution. Lemke attributed the lower tax rate to benefits from finalized state tax returns and guided to a forward rate of around 23.5%.

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President and CEO Jeff Ludwig stated that loan growth is expected to moderate from its strong first-half pace to below double-digit levels. He anticipates the equipment finance business will remain a key driver, while commercial real estate growth will likely slow. He described the LendingPoint portfolio as high-FICO home improvement loans with credit enhancements, similar to the GreenSky program. Ludwig expects the provision for credit losses to remain at a level similar to the current quarter.

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CFO Eric Lemke quantified the PPP loan impact on the margin at approximately five basis points and noted some minor prepayment fees in equipment finance, ultimately suggesting a core NIM in the low 3.40s. President and CEO Jeff Ludwig projected that while CRE would remain the primary driver of loan growth, the commercial and equipment finance segments are also expected to contribute. Ludwig also confirmed that fee income should rebound to over $16 million quarterly as seasonal softness in interchange and service charges subsides.

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