Release Date: April 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Did you change the baseline assumption under CECL for calculating reserves if you go to an adverse scenario? A: Harold Carpenter, Chief Financial Officer: We kept it unchanged, but we used the adverse scenario to influence where a lot of our qualitative assumptions go.
Q: Is the growth or higher target for BHG dependent on continued securitizations, or is there flexibility to place more through the bank sale channel? A: Harold Carpenter, Chief Financial Officer: They have plenty of room through the bank channel and believe there will be another ABS issuance towards the end of the year. They have capacity and liquidity in the bank channel to place their credits.
Q: With strong loan and deposit growth in Q1, do you expect this to continue in Q2, or will there be a seasonal slowdown? A: Harold Carpenter, Chief Financial Officer: Traditionally, April is tough for deposit growth due to tax reasons. We expect similar loan growth in Q2, if not slightly more, due to a strong pipeline.
Q: How do you view the potential for payoff headwinds in CRE if the yield curve changes? A: Harold Carpenter, Chief Financial Officer: If the five-year rate comes in, we could see prepayments, but we hope clients will give us the opportunity to stay in the game with them. We're more concerned about pricing than volume.
Q: Has there been any change in thoughts on the stake of ownership in BHG given recent improvements? A: Harold Carpenter, Chief Financial Officer: No change. We remain at 49% ownership, and our partnership with BHG is strong.
Q: Can you discuss the lines of credit per loan type and expectations for movement throughout the year? A: Harold Carpenter, Chief Financial Officer: Clients typically maintain about a 50% usage rate. Growth will likely come from new customers and market share gains rather than changes in lines of credit.
Q: What is the outlook for the margin given the current rate environment? A: Harold Carpenter, Chief Financial Officer: We expect the margin to remain stable with some upward bias. We have flexibility to manage through rate cuts, but the yield curve shape is crucial.
Q: In what environment might the RM consolidation strategy not play out, and what is the internal appetite for balance sheet growth amid uncertainty? A: M. Terry Turner, President and CEO: Our strategy is to attract the best bankers and consolidate their books of business. We believe this approach is less risky and provides reliable growth, so it's hard to imagine a time we wouldn't pursue it.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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