Financial Data and Key Metrics Changes - The company generated net income of $4,200,000 or $0.43 per diluted share in the quarter, representing substantial increases from the prior quarter [8] - Tangible book value per share increased by 1.6% this quarter [8] - Gross revenue increased by 3.4% from the prior quarter, driven by increases in both net interest income and noninterest income [13] Business Line Data and Key Metrics Changes - New loan production was $71,000,000 in the first quarter, offset by $72,000,000 in loan payoffs, resulting in a slight decrease in total loans [10] - The average rate on new loan production was 6.89%, higher than the average rate on loan payoffs, contributing positively to the loan portfolio's yield [10] - Total deposits were up slightly from the end of the prior quarter, with inflows of noninterest bearing deposits from existing clients and new relationships [11] Market Data and Key Metrics Changes - The company saw a $144,000,000 decrease in assets under management in the first quarter, primarily due to net withdrawals in fixed fee accounts [12] - The company continues to experience strong demand for commercial real estate loans as borrowers seek to take advantage of lower property valuations [10] Company Strategy and Development Direction - The company is focused on growing its Trust Investment Management business and has added a new Head of Wealth Planning from Goldman Sachs to enhance this area [20] - The management anticipates continued positive trends in asset quality, net interest margin, and overall efficiencies as processes improve throughout the organization [19] Management Comments on Operating Environment and Future Outlook - Management expressed that while profitability has improved, they are not satisfied with the current performance level and aim to achieve a return on assets (ROA) of 1% [40] - There is uncertainty regarding the macroeconomic outlook, which could impact loan demand later in the year [20] - The company expects to see continued growth in net interest income due to a reduction in the cost of funds and redeployment of cash from the sale of OREO properties [15] Other Important Information - The company successfully resolved its two largest OREO properties, selling them for a net gain [8] - Noninterest expense decreased by $1,000,000 from the prior quarter, primarily due to a write-down recorded in the previous quarter [16] Q&A Session Summary Question: Can you isolate any interest recoveries on a dollar basis? - Management noted that there was a $200,000 increase in amortized loan fees that contributed to the uptick in loan yields [24][25] Question: What is the spot rate on deposits and average margin in March? - The cost of deposits was 2.98%, and the cost of funds was approximately 3.05% [28] Question: What is the outlook for nonperforming loans? - Management expects to sell one remaining OREO property this year and is working through the resolution of a substantial nonperforming loan [30][31] Question: Will there be a significant increase in expenses due to new hires? - Management indicated that while expenses are expected to remain flat, new hires may take time to become accretive to the bottom line [72] Question: How does the origination pipeline relate to new hires? - Management acknowledged that new hires are contributing positively, but the exact impact is difficult to quantify [47] Question: Are there any markets that are softer in terms of loan originations? - Management noted that the front range of Colorado remains healthy, while resort communities and newer markets like Bozeman are performing well [68]

Financial Data and Key Metrics Changes - Net income for the first quarter of 2025 was $19.8 million, or $0.43 per diluted share, with a return on assets (ROA) of 1.42% and a return on average tangible common equity of 14.7% [3][4] - The tangible common equity ratio increased by 30 basis points from the previous quarter to 10.34%, and common equity Tier 1 rose to 13.47% from 12.82% [5] - Net interest income increased by $1.3 million or 2.1% from the previous quarter and by $3.1 million or 5.2% year-over-year [16] Business Line Data and Key Metrics Changes - Total loans decreased by $41.1 million from the previous quarter, primarily due to net paydowns in commercial and multifamily portfolios [7] - The purchase participation portfolio declined by $46 million or over 10% in the quarter, and since the West Suburban acquisition, it has decreased by nearly 49% [8][9] - Noninterest income grew by $528,000 or 20.6% in wealth management fees and $304,000 or 12.6% in service charges on deposits [13] Market Data and Key Metrics Changes - Tax equivalent income on average earning assets increased by $221,000 or 0.3%, while interest expense on average interest-bearing liabilities decreased by $2.9 million or 21.3% [6] - The total cost of deposits was 82 basis points for the first quarter of 2025, down from 89 basis points in the previous quarter [8] Company Strategy and Development Direction - The company aims to manage liquidity and capital while building commercial loan origination capabilities for long-term stability [15] - The focus is on creating a more stable long-term balance sheet with a mix of more loans and fewer securities to maintain returns on equity [15] - The company is optimistic about the upcoming merger with Evergreen Bank Group, which is expected to enhance profitability [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning and opportunities ahead, noting a strong start to 2025 [25] - The sentiment among commercial clients is cautious, with a "wait and see" approach due to market uncertainties, particularly regarding tariffs [50] - Management does not foresee a significant increase in loan demand in the second quarter but is hopeful for an uptick in the second half of the year [51] Other Important Information - The efficiency ratio adjusted to exclude certain costs was 55.48%, slightly higher than the previous quarter [15] - The allowance for credit losses on loans decreased to 1.05% of total loans, reflecting a reduction in criticized loans [12] Q&A Session Summary Question: Comments on margin performance and future rate cuts - Management indicated that while there may be expectations for rate cuts, they do not foresee significant declines in margins due to strong deposit flows and the upcoming merger [27][28] Question: Status of noncore loans and credit quality - The company is actively working to exit a significant portion of its purchase participation portfolio and has made progress in addressing credit quality [30][32] Question: Trends among lower balance deposit customers - There has been a significant slowdown in card transactions and a decrease in average balances among lower balance deposit customers, a trend that has been ongoing for about a year [42][43] Question: Loan demand expectations and economic sentiment - Management noted that commercial real estate activity is cautious, with clients waiting for clarity on tariffs before proceeding with new deals [50][51] Question: Charge-off trajectory and credit outlook - The company is optimistic about future credit quality, with a focus on maintaining low charge-offs and addressing any potential weaknesses proactively [56][58]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $11.3 million or 67 cents per diluted share, reflecting strong performance [10] - Tangible book value increased to $23.61 per share, representing over 9% annualized growth quarter over quarter [11] - Total revenue reached $46.8 million, with net interest income expanding as anticipated [15] Business Line Data and Key Metrics Changes - Loan growth was at a 9% annualized pace for Q1, meeting expectations, while deposit growth was 10% quarter over quarter annualized [13] - Non-interest income for the quarter totaled $8.6 million, exceeding guidance due to strong insurance and mortgage banking revenues [28] - Operating expenses remained flat at just over $32 million, indicating effective cost management [29] Market Data and Key Metrics Changes - The loan to deposit ratio held steady at 83%, providing flexibility for future growth [20] - The weighted average cost of non-broker deposits was 3.39%, with total interest-bearing costs decreasing by 10 basis points to 0.92% [22] - Net interest margin was 3.21%, slightly down from the previous quarter but in line with guidance [24] Company Strategy and Development Direction - The company is focused on organic growth, with plans to leverage its strong market position and experienced team [33][39] - Talent acquisition remains a priority, with recent hires aimed at enhancing private banking and treasury management [36] - The company is optimistic about maintaining growth in EPS and achieving near-term revenue targets [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of their markets and customer sentiment, despite economic uncertainties [45][46] - The company anticipates continued loan growth and margin expansion, driven by new loan production and favorable market conditions [26][39] - Management remains cautious about potential impacts from tariffs but reports positive feedback from clients regarding order volumes [49][50] Other Important Information - The effective corporate tax rate for the quarter was approximately 17%, with expectations to stabilize between 18% to 19% going forward [30] - The company's consolidated TCE ratio increased to 6%, and total risk-based capital ratio remained well above regulatory standards at 11.2% [31] - The company welcomed a new board member, Kelly Showmaker, enhancing its governance and regional perspective [40] Q&A Session Summary Question: Customer sentiment and loan growth outlook - Management noted strong customer sentiment and confidence in maintaining loan growth despite market volatility [45][46] Question: Balance sheet leverage and deposit ratios - Management indicated room for prudent growth in the balance sheet while maintaining a strong loan to deposit ratio [53][58] Question: Share repurchases and capital actions - The company has $1.5 million left for share repurchases and is considering actions based on stock valuation [60][63] Question: Margin expectations and Fed rate cuts - Management expects two to three basis points of margin expansion quarterly, benefiting slightly from Fed rate cuts [68][70] Question: Fee income trends and investment services - Management anticipates low to mid $8 million range for non-interest income in Q2, with strong performance in insurance and mortgage banking [28][113] Question: Equipment financing and leasing business line - Management expressed satisfaction with the growth and performance of the equipment financing segment, indicating plans for further development [146][148]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company aims to achieve an average tangible equity return of approximately 15% over the three-year period from 2025 to 2027, excluding the impact of notable items. The forecast for net interest income from banking operations in 2025 is approximately $42 billion, with expected credit loss provisions ranging from 30 to 40 basis points of average loans [4][5] - The company plans to maintain a common equity tier 1 capital ratio between 14% and 14.5% and a target payout ratio of 50% for 2025. A share buyback plan of up to $2 billion is expected to be completed before the announcement of Q1 2025 results [4][5] - The company has repurchased a total of $20 billion in shares between 2023 and 2024, representing about 11% of shares outstanding as of the end of 2022 [4][5] Financial Performance Summary - For the fiscal year 2024, total revenue is projected to be $65.9 billion, with a year-on-year growth of -0.3%. The net profit attributable to ordinary shareholders is expected to be $22.9 billion, reflecting a 2.2% increase year-on-year [5][6] - The diluted earnings per share (EPS) for 2024 is estimated at $1.24, with dividends per share projected at $0.87 [5][6] - The company reported a net interest margin of 1.56% for 2024, a decrease of 10 basis points compared to 2023, with net interest income of $43.7 billion, down $4 billion year-on-year [4][5]