Question · Q1 2026
Nathan Rice inquired about the current loan pipeline, expectations for net loan growth, and the potential for increased payoffs due to declining rates. He also asked about the bank's ability to maintain deposit gathering pace relative to loan growth and opportunities for deposit increases. Lastly, he sought an update on capital allocation strategies, including appetite for share repurchases and the size and timing of potential M&A deals, and clarification on future charge-off trajectory for previously discussed commercial real estate loans.
Answer
Matt Funke, President and Chief Administrative Officer, noted a consistent loan pipeline with expected seasonal slowdowns, projecting mid-single-digit loan growth for the fiscal year, and no material increase in payoffs from rate cuts. Greg Steffens, Chairman and CEO, added that ag portfolio payoffs remain an unknown. Matt Funke expressed confidence in maintaining loan-to-deposit ratios and reducing brokered deposit reliance. Greg Steffens indicated an increased appetite for share repurchases given current pricing, targeting a three-year earned back, and confirmed ongoing M&A discussions for ideal targets around $1 billion in assets, though nothing is immediately expected. Both confirmed that charge-offs from the specific CRE loans have been fully realized, expecting overall charge-off trajectory to move lower.