Economic Outlook - U.S. Producer Prices (PPI) have come in higher than expected, indicating persistent inflationary pressures in the economy [1][7] - Concerns about the economy's stability are growing, with warnings about potential job losses due to AI disruption and a lack of micro stability [2][6] - The Federal Reserve is not expected to adopt an easing bias, and any rate cuts may signal significant economic issues [3][7] Treasury Market Performance - U.S. Treasuries have seen a strong performance, with a return of 1.5% in February and a 25 basis point drop in the 10-year yield, as investors seek safety amid economic uncertainties [4] - There is a notable flight to safety in the bond market, with lower breakeven rates and a strong labor market contributing to this trend [3][4] Inflation and Consumer Behavior - Inflation remains a concern, with expectations of core PCE running slightly above 3%, driven by sectors like healthcare and airfare [21] - Consumers are expected to save or pay down debt with tax refunds rather than spend, as the savings rate has dropped to its lowest level in three years [17][16] Private Credit Market Concerns - The collapse of MFS in the U.K. has raised alarms about credit risks, particularly in the software sector, with potential default rates reaching 15% [22][24] - Allegations of fraud against MFS include double pledging of collateral, leading to significant financial shortfalls [27][28] Corporate Developments - Dell has reported robust demand for AI servers, projecting $50 billion in revenue for the current fiscal year, indicating strong market interest in AI technologies [31] - CoreWeave is facing challenges after reporting a larger-than-expected loss, raising concerns about its capital spending and infrastructure investments [32][39] Market Dynamics - The investment-grade market is experiencing strong demand, with expectations of $240 billion in issuance in March, driven by a solid appetite from institutional investors [42][51] - There is a notable divergence in credit spreads, with high-yield tech spreads widening while investment-grade spreads remain relatively stable [46][49]

Fear of rising defaults is spreading from the leveraged loan market to some of the retail funds that ultimately buy the debt as investors get choosier about taking on credit risk. https://t.co/0UnrUbCoB8 ...

Core Insights - There is a significant divergence in how finance and sales teams perceive credit risk, impacting deal approvals and lead qualification processes [2][3] Group 1: Sales Leaders' Perspectives - Approximately 49% of sales leaders consider company size and revenue as a "very important" criterion in lead-scoring and qualification [2] - 70% of sales leaders view a high late-payment rate as either important or very important when deciding on pursuing a deal [3] - Only 40% of sales leaders have ever regretted advocating for a high-risk deal to be approved [6] Group 2: Finance Leaders' Perspectives - Only 33% of finance leaders prioritize client size and revenue in their deal-approval process [2] - A significant 91% of finance leaders would likely reject a deal due to a late-payment history [3] - A third of finance leaders reported that only 25% to 49% of their customers met agreed payment terms in 2025 [4] Group 3: Deal Approval Trends - 69% of finance leaders rated "budget, authority, need and timeline" as the top deal-approval factor, compared to 41% of sales leaders [3] - Half of finance leaders indicated that more deals were rejected in 2025 compared to the previous year [5] - Finance teams have become noticeably more conservative regarding deal approvals [5]

If if Bitcoin falls 90% for the next four years, we'll refinance the debt. >> You refinance where, Michael. >> We'll just roll it forward.I mean, again, >> but you you you think banks would lend to you at that point. >> Yeah. Because because the volatility of Bitcoin is such that it's always going to be value.Look, you're at 68,000 right now. Literally has to fall to 8,000. Then we just refinance the debt.If you think it's going to zero, then we'll deal with that. But I don't think it's going to zero. And I ...

A decade of loose lending is starting to show cracks. Credit investors are bracing for more hidden “cockroaches” https://t.co/uiNhAdAMLn ...

RT True North (@MSTRTrueNorth)What is Credit Risk? | True North Podcast | Ep.53 https://t.co/vRb4rvCasz ...

Group 1 - The article discusses the impact of global instability and increased military spending on credit risk, highlighting concerns about overvalued equity markets [1] - The focus is on seeking safety assets amid market volatility, with an emphasis on identifying mispriced investments in fixed-income and closed-end funds [1] - Denislav Iliev, an experienced day trader, leads a team of analysts that provide frequent investment picks, portfolio management, and market reviews [1]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $21.71 per share for the fourth quarter, with core net income of $23.579 per share after excluding non-core items [10][11] - The core return on assets (ROA) was 1.16% in the fourth quarter, exceeding the company's stated goal of 1% [7][10] - Earnings per share (EPS) increased by 14% year-over-year, with a 20% improvement in the fourth quarter alone [8][10] - The tangible common equity ratio increased by 90 basis points, and consolidated CET1 capital rose by 50 basis points year-over-year [6] Business Line Data and Key Metrics Changes - Total loans held for investment increased by $168.4 million, or 11.1% annualized on a linked quarter basis, driven by improved demand and reduced paydowns [11] - Total deposits rose by $191.7 million, primarily due to a net increase in interest-bearing deposits [12] - The non-interest income for the fourth quarter was approximately $13.2 million, with significant contributions from swap fee revenue [18] Market Data and Key Metrics Changes - Texas-based loans slightly declined from 39% of total loans, expected to decrease to approximately 36% following the acquisition of Progressive Bank [12] - The company experienced strong loan growth in Southwest and North Louisiana, with both regions growing over $100 million in loans and deposits each during 2025 [66] Company Strategy and Development Direction - The company plans to focus on optimizing existing systems and deepening relationships rather than pursuing new major projects in 2026 [9][42] - The management emphasized the importance of sustainable ROAA, tangible book value accretion, and enhancing EPS as key strategic goals [9][44] - The company aims to leverage its correspondent banking initiative to increase non-interest income and cross-sell products to existing clients [81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026 being even more fruitful, with a focus on daily execution and maximizing the benefits of recent system implementations [9][42] - The company acknowledged challenges in the credit environment but highlighted lessons learned regarding concentration risk and exposure management [32][34] - Management expects to maintain a neutral position on the balance sheet and achieve modest margin improvement in a slightly down rate environment [16] Other Important Information - The company began share buybacks for the first time in nearly six years and increased its common stock dividend for the seventh consecutive year [7] - The acquisition of Progressive Bank is expected to enhance the company's footprint and contribute positively to its operations [21] Q&A Session Summary Question: Insights on loan growth and outlook - Management noted that improved pipeline demand and reduced payoffs contributed to strong loan growth in the fourth quarter, with expectations of mid-single-digit growth for 2026 [24][25] Question: Details on non-performing loans - A significant commercial real estate loan in Houston was identified as non-performing, with management indicating it is one of the largest exposures on their books [30][32] Question: Focus on daily execution versus M&A - Management clarified that while they are not prioritizing new M&A opportunities, they will focus on maximizing the output from recent investments and deepening existing relationships [43][44] Question: Capital management and buyback strategy - The company plans to continue share buybacks opportunistically, with a focus on attractive pricing below $120 [46][48] Question: Opportunities for hiring in the current environment - Management indicated a willingness to hire selectively, focusing on attracting the right talent to support growth without needing to hire aggressively [52][54]

Core Viewpoint - A Danish pension fund, AkademikerPension, plans to sell all its U.S. Treasury securities by the end of January due to concerns over credit risk associated with U.S. fiscal and political developments [1][2]. Group 1: Fund's Decision and Rationale - AkademikerPension, managing $25 billion in assets, will dispose of its U.S. government debt holdings, citing unsustainable U.S. government finances as a long-term concern [2]. - The Chief Investment Officer, Anders Schelde, highlighted "rising credit risk" linked to Trump's policies and mentioned that the fund held approximately $100 million in U.S. Treasuries at the end of 2025 [3]. - The fund will shift its strategy to utilize cash in USD, short-dated agency debt, and similar instruments instead of U.S. Treasuries [4]. Group 2: Market Implications - Economist Mohamed El-Erian noted that a significant vulnerability for U.S. government bonds and the dollar is that many investors are already "overweight" on these assets, making headlines like this concerning [5]. - Precious metals, including gold and silver, are experiencing a rally as investors move capital away from U.S. Treasuries and dollar-denominated assets, with the SPDR Gold Trust seeing a 3.78% increase [6]. - The SPDR Gold Trust is performing well in momentum rankings, indicating a favorable price trend across various time frames [7].

Core Viewpoint - SPDR Portfolio Mortgage Backed Bond ETF (SPMB) offers diversified access to U.S. agency residential mortgage-backed securities, focusing on high-quality credit and a distinct prepayment profile [1] Investment Strategy - The strategy emphasizes pass-through pools backed by government-related entities, limiting credit risk while returns are driven by spread and optionality dynamics [1] - Income potential is linked to mortgage spreads over Treasuries, with performance influenced by rate volatility, refinancing incentives, housing turnover, and the shape of the yield curve [1] Market Conditions - SPMB benefits from stable or declining interest rates but may face challenges from abrupt rate changes that increase negative convexity, extension risk, or basis widening [1] Use Cases - The ETF serves as a core bond diversifier focusing on high-quality income, a mortgage-spread sleeve complementing Treasuries, and a ballast within multi-sector fixed income [1] Target Investors - Suitable for core bond allocators seeking agency MBS exposure and institutions looking for a quality-biased income engine with moderate spread duration [1] Key Risks - A significant risk to monitor is optionality, as elevated rate volatility can lead to increased negative convexity and extended duration, impacting relative performance [1]