James Abbott

James Abbott inquired about the context and sustainability of the $120 million C&I loan growth, asking if it was driven by syndications or bilaterals and about typical deal sizes. He also sought clarification on the current cash levels and brokered deposit balances, including their weighted average rate, the anticipated reduction in brokered deposits, and how cash might be used for paydowns.

Answer

Ryan Riel, Chief Lending Officer for Commercial Real Estate, confirmed that C&I platform growth is a sustainable expectation, though the Q4 growth rate is not. He noted that while some syndications and participations exist, they are not an ongoing strategy, and typical deal sizes are in the $15-30 million range. Eric Newell, CFO, explained that Q4 cash levels were higher in anticipation of paying down brokered deposits. He stated that brokered deposits at year-end totaled $1.56 billion with a 4% weighted rate, and the goal is to significantly reduce the $715 million in brokered CDs throughout 2026.

James Abbott asked for context on the $120 million C&I loan growth, including whether it was sustainable, the typical size of these deals, and details on the company's cash levels and brokered deposits, specifically the current level, anticipated reduction, and maturity profile.

Answer

Ryan Riel, Chief Lending Officer for Commercial Real Estate, confirmed that C&I platform growth is a sustainable expectation, though the Q4 growth rate was not. He noted that the C&I portfolio lacks significant industry concentration, includes some syndications/participations (not an ongoing strategy), and saw greater deposit growth than loan growth in Q4. He estimated typical deal sizes in the $15-30 million range. Eric Newell, CFO, explained that Q4 cash levels were higher in anticipation of paying down brokered deposits. He reported $1.56 billion in brokered deposits at year-end (excluding two-way), with a weighted rate of 4%, and a goal to significantly reduce these, particularly the $715 million in brokered CDs, throughout 2026.

James Abbott questioned the potential impact of Canadian tariffs on Chinese aluminum and broader tariff risks, and also asked for specifics on the legislation affecting foam plates.

Answer

President and CEO Lance Mitchell stated that the Canadian aluminum tariff has a 'de minimis' impact on the company but that they are closely monitoring the broader tariff environment, citing past success in managing such challenges. He clarified that the foam plate legislation consists of bans in certain states and localities, primarily on the West and Northeast coasts where foam usage is already lower.