Core Viewpoint - Motorola Solutions, Inc. is conducting its Q1 2025 earnings conference call, highlighting its financial performance and strategic direction for the upcoming period [1][2]. Group 1: Company Overview - The conference call features key executives including Greg Brown (Chairman and CEO), Jason Winkler (EVP and CFO), Jack Molloy (EVP and COO), and Mahesh Saptharishi (EVP and CTO) [4]. - The earnings presentation and news release are available on the company's investor relations website, providing detailed financial information [5]. Group 2: Financial Communication - The call is being recorded, and a webcast replay will be accessible on the company's website shortly after the call concludes [2][3]. - Participants in the call include analysts from various financial institutions, indicating a broad interest in the company's performance [1].

Financial Data and Key Metrics Changes - The first quarter earnings were 35% higher than the first quarter of the previous year, with net income reported at $7.8 million compared to $5.8 million in Q1 2024 [6][22]. - Net interest margin increased by 30 basis points compared to the fourth quarter of 2024, with five consecutive quarters of increases in net interest income [24]. - The cost of deposits decreased by 38 basis points this quarter compared to Q4 2024 [24]. Business Line Data and Key Metrics Changes - The loan portfolio was relatively flat at just over $3 billion, with approximately $100 million in payoffs from asset sales and refinance activity [14]. - The refinance activity replaced lower-yielding assets with new quality assets, split evenly between C&I business and commercial real estate transactions [15]. - There was no credit loss expense recorded in the first quarter, indicating strong credit quality [23]. Market Data and Key Metrics Changes - Deposit gathering efforts continue to be emphasized, although deposits decreased slightly due to ordinary cash flow fluctuations rather than loss of relationships [16]. - The Minnesota banks reported cautious customer behavior due to economic uncertainty, but there was success in attracting high-value retail deposits [18][20]. Company Strategy and Development Direction - The company focuses on building comprehensive banking relationships rather than just lending, emphasizing the importance of service and relationship management [44]. - The strategy includes targeting C&I prospects with significant deposit balances and high-value retail deposits [20]. - The company aims to maintain strong credit quality through conservative underwriting practices and a commitment to customer relationships [12]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the loan pipeline, indicating that opportunities exceed planned payoffs [34]. - Concerns were raised about economic uncertainty, tariffs, and potential supply chain issues affecting customers [11][40]. - The company remains committed to its conservative philosophy and expects its credit portfolio to remain strong despite economic challenges [12]. Other Important Information - A dividend of $0.25 per share was declared, payable on May 21 to shareholders of record as of May 7 [7]. - There were no significant one-time items in noninterest income or expense this quarter, and occupancy expenses reflect new building costs [26]. Q&A Session Summary Question: Is there more room to bring deposit costs down? - Management indicated that deposit costs are likely to remain static until market conditions change [29]. Question: What rates were new loans added at compared to those rolling off? - New loans were added at rates starting with six or seven, compared to previous loans starting with three or four [32]. Question: Will growth accelerate in the second quarter? - Management noted that while there are planned payoffs, they expect opportunities to exceed these payoffs [34]. Question: What is the outlook on expenses for the second quarter? - Management expects the first quarter performance to be indicative of future performance, with no significant items anticipated [36]. Question: What is the impact of tariffs on credit metrics? - Concerns were raised about potential cost increases and supply chain issues due to tariffs, but the customer base is considered seasoned and capable of weathering such challenges [40]. Question: How does the company retain core deposits despite low rates? - The company utilizes relationship-based pricing strategies for its commercial deposit base, allowing for negotiation on rates [50].

Financial Data and Key Metrics Changes - The company reported net earnings of $51.1 million or $0.36 per share for Q1 2025, marking the 192nd consecutive quarter of profitability [6] - Return on average tangible common equity was 14.51% and return on average assets was 1.37% for Q1 2025 [6] - Net interest margin expanded by 13 basis points to 3.31% compared to 3.18% in Q4 2024 and 3.10% in Q1 2024 [8] - Total deposits and customer repurchase agreements increased to $12.3 billion, a $56 million increase from Q4 2024 [9] - Non-interest income was $16.2 million for Q1 2025, compared to $13.1 million in Q4 2024 [32] Business Line Data and Key Metrics Changes - Total loans decreased to $8.36 billion, a $173 million decrease from Q4 2024, primarily due to a decline in dairy and livestock loans [12] - Loan originations in Q1 2025 were approximately 13% higher than in Q1 2024, with notable increases in C&I and commercial real estate loans [15] - Nonperforming and delinquent loans decreased to $26.8 million from $47.6 million at the end of Q4 2024 [16] Market Data and Key Metrics Changes - Noninterest-bearing deposits grew by $147 million or 2% compared to the end of 2024 [9] - The cost of deposits and repos was 87 basis points for Q1 2025, down from 97 basis points in Q4 2024 [10] - The company experienced a seasonal decline in average deposits from Q4 2024 to Q1 2025, with a $380 million decline [10] Company Strategy and Development Direction - The company remains focused on banking small to medium-sized businesses and their owners through all economic cycles [131] - The management expressed confidence in continuing share repurchases while also considering potential acquisitions [27][86] - The company is actively looking for opportunities to gain market share from competitors affected by recent disruptions in the banking sector [122][125] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic forecast indicates slower GDP growth and a forecasted unemployment rate of 5% by February 2025 [22] - Customers are generally optimistic despite some concerns about tariffs and economic volatility, with many prepared for potential challenges [108] - The management believes that loan production will begin to outpace payoffs, projecting low single-digit growth by the end of the year [50] Other Important Information - The allowance for credit loss was $78.2 million at the end of Q1 2025, with a recapture of $2 million for the quarter [20] - The company sold $19.3 million of OREO, generating a net gain of $2.2 million [8] - The company’s capital levels allow for continued share repurchases and potential M&A activities [27][86] Q&A Session Summary Question: Impact of tariff policies on the agricultural portfolio - Management indicated it is too early to assess the overall impact, but customers currently feel relatively okay [42][44] Question: Pace of commercial real estate payoff activity - Elevated prepayment penalties were noted, but strong loan activity is expected to continue [46][50] Question: Loan prepayment penalties impact on interest income - The impact was approximately $300,000 quarter over quarter [56] Question: Expectations around deposit cost reduction - Management sees potential for slight reductions in deposit costs, particularly with new money market accounts [60] Question: Focus areas in credit management amid market uncertainty - Management has not changed its disciplined approach to underwriting despite economic volatility [68][71] Question: Competitive landscape for deposits - The majority of deposit growth came from new relationships, with expectations for continued growth in non-interest-bearing deposits [77][81] Question: Appetite for increasing the multifamily portfolio - Management remains open to opportunities in multifamily lending, maintaining a consistent underwriting approach [115] Question: Opportunities for gaining market share - Management sees ongoing opportunities to gain share from disrupted competitors, particularly in specialty banking [122][125]

Financial Data and Key Metrics Changes - In Q4 2024, YUPELRI net sales increased by 10% year-over-year, reaching $66.7 million, marking an all-time high [4] - Full year YUPELRI sales totaled $239 million, with an 8% increase in net sales for 2024 and an 11% growth in demand [11][14] - Collaboration revenue grew by 8% to approximately $19 million in Q4 [32] - Operating expenses, excluding share-based compensation, increased to $22 million due to higher commercial and medical affairs spending [32] Business Line Data and Key Metrics Changes - YUPELRI's hospital performance saw doses increase by 49% year-over-year, with 285,000 redoses pulled through to hospital customers [4][13] - The hospital business accounts for roughly 10% of total YUPELRI volume, with 90% coming from community settings [77] - Ample enrollment in the CYPRESS study for ampreloxetine is on track, with expectations for expedited NDA filing [5][20] Market Data and Key Metrics Changes - TRELEGY reported full year sales of $3.5 billion, up 26% year-over-year, triggering a $50 million milestone payment [15] - The company anticipates achieving an additional $150 million in milestones from TRELEGY in 2025 and 2026 [16] Company Strategy and Development Direction - The company aims to grow YUPELRI revenue while increasing brand profitability, with potential near-term sales milestones in the U.S. and royalties from China [7] - For ampreloxetine, the focus is on completing enrollment in the CYPRESS study and preparing for an expedited NDA filing [8] - The company is committed to maximizing the value of TRELEGY and returning excess capital to shareholders [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the financial position entering 2025, with $88 million in cash and no debt [39] - The company is focused on driving YUPELRI growth through strong demand generation and a patient-centered strategy [40] - Management highlighted the potential impact of ampreloxetine on patients with MSA suffering from nOH symptoms [41] Other Important Information - The company completed market research indicating a significant unmet need for better nOH therapies, with over 70% of surveyed neurologists agreeing [25] - The target product profile for ampreloxetine aligns with physician preferences, suggesting a favorable outlook if approved [28] Q&A Session Summary Question: What drove the success in the hospital channel this quarter? - The success was attributed to effective execution of strategy and wins in larger systems, with therapeutic interchange contributing to increased volume [45][46] Question: What is the trend for the hospital performance into 2025? - Q1 is typically softer, but there is a demonstrated need for YUPELRI, which may provide a tailwind [60] Question: What are the next steps for YUPELRI in China? - The company is waiting for regulatory feedback from Viatris, with a typical two-year window expected from submission to approval [62] Question: What was the nature of the recent FDA feedback on ampreloxetine? - The feedback was from a Type C meeting to clarify filing content and ensure alignment on key requirements for full approval [67] Question: What percentage of YUPELRI sales are non-hospital sales? - The hospital business accounts for roughly 10% of total YUPELRI volume, with the community setting making up the majority [77] Question: What is the bar for success for the CYPRESS readout? - A one-point change in the OHSA composite score is considered clinically meaningful for success [88]