Margin Outlook
Q: Impact of expiring caps on margins?
A: Management noted that expiring interest rate caps added about 6bps of margin drag in Q1—this cost is now fully baked into the run rate, with sub-debt repricing adding an extra 1bps impact in Q2.

Securitization Impact
Q: What margin benefit did securitizations provide?
A: They observed roughly a 3bps margin lift from recent securitizations, with additional liquidity benefits expected from a $275M securitization scheduled for Q3.

Loan Growth
Q: Has loan growth guidance changed?
A: Guidance remains steady at 8%–10% loan growth on an annualized basis, with current early-quarter performance aligning with those expectations.

Loan Pricing
Q: What rates are achieved on new production?
A: New production loans priced at 7.64% (with roll-off loans at about 7.18%) are trending upward and could move closer to an 8% blended rate over time.

Deposit Levels
Q: How are deposit flows managing loan-to-deposit ratios?
A: Strong deposit growth has been reported, and management aims to slowly lower the loan-to-deposit ratio to around 90% over the next couple of years.

Sub Debt Repricing
Q: What’s the outlook for sub-debt repricing?
A: While there are no further synthetic items for 2024, a $20M tranche will reprice in July 2025—moving from a fixed 5.25% to a floating rate over 10%—and another $50M is set for later, which could affect long‐term margins.

Expense Swaps
Q: How will swap expense variations affect costs?
A: Even at the higher end of the guidance range, swap expenses will keep noninterest costs within the expected $49M to $52M range.

Capital Allocation
Q: What are plans for dividends or buybacks?
A: The primary focus remains on strengthening the balance sheet; share buybacks might be pursued in the latter half once capital ratios reach around 9% TCE, with dividends being a lower priority.

Rate Cuts Impact
Q: How might future rate cuts affect margins?
A: Management is well positioned to benefit from rate cuts, expecting additional margin pickup if cuts occur, thus enhancing overall performance.

Credit Charge-offs
Q: What’s driving current charge-off levels?
A: Charge-offs are mainly limited to small, micro-business loans and continue to remain well below historical averages, reflective of generally stable credit quality.

Wealth Management
Q: What is the progress in wealth management rollout?
A: The business is growing robustly—with 11% AUM increases and notable new client additions in key markets like Quad Cities, Des Moines, and Southwest Missouri—providing an additional revenue stream.

Deposit Costs
Q: How are deposit cost pressures evolving?
A: There was a $79M reduction in noninterest-bearing deposits, easing margin impact by about 5bps, while interest-bearing deposit costs have increased roughly 10bps, with signs of easing in Q2.

Credit Reserves
Q: What is the status of credit loss reserves?
A: Reserves have been maintained at 1.33% of total loans, reflecting a conservative approach in line with historical norms.

Accretion Levels
Q: How did accretion perform this quarter?
A: Accretion was somewhat lower this quarter, illustrating normal ebb and flow in the run rate, without significant concern.