Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What allowed the loan yield to remain stable in the fourth quarter despite rate cuts? Was there any onetime interest benefit? A: Steven Crockett, Chief Financial Officer, explained that there was a minor non-accrued interest benefit of less than $200,000, which is typical. The stability was mainly due to loans paying off at lower rates and new loans being booked at higher rates. There was no significant non-recurring item affecting the yield.
Q: What are the expectations for the net interest margin (NIM) in the near term? Can it remain stable or move higher? A: Steven Crockett, Chief Financial Officer, stated that while they hope to maintain or incrementally improve the NIM, it largely depends on loan growth. Deposit costs may decrease slightly, and loan yields might trend down, but with the right loan growth, the NIM could stabilize or grow incrementally.
Q: Can you provide more color on the loan pipeline and whether it's concentrated in any segment? Is it due to new hires or hard work? A: Brent Bates, Chief Credit Officer, mentioned that the pipeline is a combination of new hires and optimism from clients planning capital outlays. The pipeline is much better than last year, reflecting both new hires and increased client activity.
Q: What is the outlook for M&A activity, and are there any potential acquisition opportunities? A: Curtis Griffith, Chairman and CEO, noted an increase in M&A opportunities but emphasized the importance of finding the right deal. They are cautious about overpaying and want acquisitions that benefit shareholders long-term. They are well-positioned for acquisitions but will remain disciplined.
Q: How do you view the potential impact of drilling activity in the Gulf of America on your economies and loan demand? A: Cory Newsom, President, and Brent Bates, Chief Credit Officer, expressed optimism about the energy sector, particularly in the Permian Basin. They noted that the region is a low-cost producer, and increased activity could lead to more opportunities and optimism in the local economy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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