Financial Data and Key Metrics Changes - For Q1 2025, net income was approximately $106 million or $0.18 per diluted share, down from $116 million and $0.20 per diluted share in the previous quarter [5] - Adjusted earnings showed sequential growth due to revenue stability, lower operating expenses, and a smaller loan loss provision [5][6] - The average cost of deposits declined by 29 basis points, contributing to net interest margin improvement [12][14] Business Line Data and Key Metrics Changes - Commercial and industrial (C and I) loan growth was 9% annualized, with expectations for continued growth in this area [13][14] - The commercial real estate (CRE) concentration ratio decreased to 353% from 362% in the previous quarter, with expectations for stabilization in the CRE portfolio [13][19] - Adjusted non-interest expenses were $267 million, 3% lower than the previous quarter, driven by lower technology and consulting expenses [17] Market Data and Key Metrics Changes - Core customer deposits increased by $600 million, allowing for the repayment of $700 million in higher-cost brokered balances [11] - Non-interest deposit balances reached their highest level since September 2023, indicating strong deposit growth [11] - The company anticipates loan growth and net interest income to be at the lower end of their expected range for 2025 [7][15] Company Strategy and Development Direction - The company remains focused on organic customer acquisition in both commercial and consumer areas, aiming for long-term revenue opportunities [9] - The strategic imperative includes optimizing operations and expanding into new business lines and geographies [9][10] - The company is well-positioned to navigate economic uncertainties and execute on its strategic goals [10] Management's Comments on Operating Environment and Future Outlook - Management noted that tariff uncertainty has lowered economic growth estimates, but the company feels well-positioned to improve results despite this backdrop [6] - There is optimism regarding continued C and I growth, with a strong foundation laid over the past few years [27] - The company expects net interest margin to increase throughout the year as funding costs decline [15][69] Other Important Information - The tangible book value has doubled over the last seven years, indicating strong long-term value creation for stakeholders [8] - The allowance coverage ratio increased to 1.22%, the highest level in the past five years, reflecting a stable credit environment [19][20] Q&A Session Summary Question: Update on commercial loan originations - New originations were slightly lower than the 7% level, averaging around 6.8% due to lower benchmark rates and spread compression [24] Question: Long-term target for CRE concentration levels - Management is comfortable with current levels and anticipates stabilization as CRE originations pick up [28] Question: Expense guidance and expectations - The company has been conservative with expense guidance to allow for flexibility in revenue-generating opportunities [31] Question: Deposit growth expectations - Strong core customer deposit growth is expected to continue, with a focus on paying off brokered deposits [35] Question: Impact of tariffs on CRE portfolio - The CRE portfolio is insulated from tariff disruptions, with interest rates and labor being the primary factors affecting development [40] Question: Spread compression and competition - Increased competition is noted, particularly from banks, leading to expectations of further spread compression [43][45] Question: Loan growth expectations for Q2 - The second quarter is expected to be a loan growth quarter, with a strong pipeline in both C and I and CRE [48][49] Question: Update on criticized assets - Criticized assets have seen repayments, and the overall portfolio performance remains strong despite some elevated levels [78][80]