Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Have you started to see improving demand and accelerating loan growth in your pipeline for 2025? A: Yes, there is a sense of optimism going forward. We have had a good start to the year on the loan front, with improving pipelines, although not yet at desired levels. There is enthusiasm among clients, and we believe we can execute on loan growth as customers revisit shelved plans.
Q: How do you plan to deploy capital, and are buybacks or additional restructurings on the table? A: We aim to utilize capital for internal growth and are actively engaging in M&A conversations. Although there is often a disconnect between what sellers expect and what we are willing to pay, we are optimistic about executing something in 2025. We also have a 10b5-1 plan for opportunistic buybacks.
Q: Have you received any pushback from clients regarding interest-bearing deposit costs, and what is your outlook for core deposit growth? A: We have grown deposits by 3.3% on a 5-year cumulative average growth rate. We are confident in our ability to grow deposits, especially with optimism in the market. We continue to drive growth in our Specialty Banking and government services groups, and we are optimistic about deposit growth as customers start new projects.
Q: Can you provide insights on the timing of rate reductions for deposits and your outlook for deposit costs in 2025? A: The cost of nonmaturity deposits will likely continue to decline in the near term, with some lag from the last Fed cut in December. We expect a slight decline in deposit costs over the next month or two, after which it will likely level out if the Fed does not make further cuts.
Q: What is your perspective on the outlook for California, given challenges like population outflows and wildfires? A: Despite challenges, California remains a large and diversified economy with significant market share opportunities for us. While there is out-migration, many businesses remain in California, and we continue to see opportunities to attract clients. We are optimistic about our prospects in the state.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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