Financial Data and Key Metrics Changes - Adjusted earnings per share was $0.63, with a return on assets of 1.33% and a return on tangible common equity of 17.8% [7] - Net interest margin was strong at 3.88%, a decline of six basis points from the previous quarter [17][24] - Non-interest expenses decreased by 3.3% due to lower incentive compensation and fraud losses [10][31] - Tangible book value per share increased to $14.80, representing a 5% increase from the linked quarter and 18% year-over-year [13][35] Business Line Data and Key Metrics Changes - Loan balances were stable, with first-quarter loan production being seasonally lower [8] - Fee income was $61 million, a decline from the linked quarter due to seasonal fluctuations and less foreign exchange income [9][19] - Average deposit balances decreased by $99 million, primarily due to a seasonal decline in public funds [18][28] Market Data and Key Metrics Changes - The company maintained 21% of total balances in non-interest-bearing accounts and focused on growing lower-cost deposit balances [18] - Non-performing assets declined by 9.5%, indicating improvements in asset quality metrics [11] Company Strategy and Development Direction - The company is focused on growing tangible book value, which has increased by 35% over the last three years [13] - The company received the Gallup Exceptional Workplace Award for Associate Engagement, reflecting its commitment to employee engagement [14] - The company is in discussions regarding potential M&A opportunities, although current uncertainty may prolong these discussions [52] Management's Comments on Operating Environment and Future Outlook - Management expects modest loan growth in the second quarter, with healthy pipelines in consumer, C&I, and ICRE lines of business [8][37] - The company anticipates net interest margin to expand to a range between 3.95% and 4.05% in the next quarter, assuming a 25 basis point rate cut [39] - Management remains optimistic about the year overall despite economic uncertainties [41] Other Important Information - The company’s capital ratios are strong, with all regulatory ratios well above minimums [12][35] - The company is closely monitoring the impact of tariffs on clients and their operations [12][86] Q&A Session Summary Question: Steps to reduce asset sensitivity on the balance sheet - Management indicated that the balance sheet is asset sensitive and discussed the impact of rate cuts on deposit costs and net interest margin [46][48] Question: Changes in view toward capital deployment amid tariff uncertainty - Management noted increased M&A discussions but acknowledged that current uncertainty may slow down these discussions [51][52] Question: Review process for C&I credits and specific trends - Management highlighted a significant charge-off related to a specific industry and noted healthy workouts of classified loans [60][61] Question: Outlook for loan growth in the back half of the year - Management adjusted loan growth expectations for the year to 4% to 5% due to elevated payoffs [73][78] Question: Credit charge-offs and normalized expectations - Management expects charge-offs to stabilize in the range of 25 to 30 basis points, with improving trends in asset quality [81][82] Question: Exposure to tariffs and portfolio monitoring - Management is actively engaging with clients to understand the impact of tariffs and is monitoring specific sectors for potential risks [86][88]

Financial Data and Key Metrics Changes - Pre-tax pre-provision adjusted earnings increased by 23% year-over-year, with earnings per share rising by 27% to $1.32 [6][12] - Tangible book value per share grew by 14% [6] - Net interest margin for the first quarter was 3.69%, reflecting strong balance sheet management [17][18] - Total deposits grew by $488 million, or 18%, compared to the same quarter last year [9] - Loan balances increased by approximately $275 million, or nearly 10% year-over-year [8] Business Line Data and Key Metrics Changes - Core deposits grew by $66 million, or over 11% [9] - Commercial and Industrial (C&I) loans led growth with balances expanding by $77 million, or 27% annualized [10] - Private wealth management assets and fees also saw growth [6] Market Data and Key Metrics Changes - Non-performing assets (NPAs) declined by $4.3 million from the linked quarter [13] - The weighted average risk rating of the portfolio remained stable, indicating no significant deterioration [14] Company Strategy and Development Direction - The company aims for 10% annual growth, focusing on relationship-based deposit growth and loan expansion [5][24] - The strategic plan emphasizes controlling the controllable and delivering shareholder returns that exceed peers [24][25] - The company is optimistic about 2025 and believes its strategic initiatives will support future growth [25] Management's Comments on Operating Environment and Future Outlook - Management noted rising uncertainty related to U.S. trade policy and potential economic recession but remains confident in outperforming peers [15][16] - The company is positioned to capture growth opportunities in countercyclical lending areas, such as asset-based lending [10][11] Other Important Information - Total expenses increased by $1.6 million compared to the fourth quarter, primarily due to workforce-related costs [21] - The effective tax rate for the first quarter returned to a normalized level of 17% [22] Q&A Session Summary Question: Inquiry about new loan yields and spread tightening - Management indicated that new loan yields were consistent with the prior quarter, with slight narrowing of spreads for competitive credits [29][30] Question: Impact of tariffs on clients - Management reported no significant impact from tariffs on clients, although there is ongoing uncertainty [38][40] Question: Equipment finance losses and charge-offs - Management confirmed that the increase in net charge-offs was a one-quarter anomaly, with expectations of continued credit costs in the equipment finance portfolio [42][43] Question: Provision expectations related to loan growth - Management acknowledged a correlation between increased provisions and charge-offs, with expectations for provisions to remain in line with recent quarters [46][48] Question: Cash and securities balances strategy - Management stated that the high cash and securities balances were intentional but temporary, aimed at maintaining liquidity [49][50] Question: SBA lending changes and revenue impact - Management does not foresee significant changes in volume due to recent SBA underwriting changes, attributing volume growth to the sales team [64][65] Question: Credit quality and migration trends - Management reported benign trends in credit quality with little change quarter-over-quarter [69][70] Question: Loan deposit ratio target - Management indicated a focus on maintaining a loan-to-deposit ratio below 100, with a target of 75% core funding to total bank funding [75][77]

Financial Data and Key Metrics Changes - WSFS Financial Corporation reported core earnings per share of $1.13, core return on assets (ROA) of 1.29%, core pre-provision net revenue (PPNR) of $104.6 million, and core return on tangible common equity of 16.97%, all showing improvements from the prior quarter [5][6][14] - The core net interest margin expanded by 8 basis points to 3.88%, with total funding costs reduced by 15 basis points to 1.77% [6][7] - Year-over-year, net interest margin increased by 4 basis points despite absorbing 100 basis points of interest rate cuts [7] Business Line Data and Key Metrics Changes - Core fee revenue grew by 6% year-over-year, driven by a 19% increase in Wealth and Trust services [7] - Institutional Services and Bryn Mawr Trust Company of Delaware showed strong year-over-year growth, increasing deal flow and market share [8] - Client deposits declined by 1% linked quarter but increased by 4% year-over-year, with non-interest bearing deposits up 6% year-over-year [11][12] Market Data and Key Metrics Changes - The loan to deposit ratio remained stable at 77%, providing flexibility for future growth [12] - Total net credit costs increased to $17.6 million, with net charge-offs at $24.6 million, primarily due to a charge-off of a non-performing loan [12][13] Company Strategy and Development Direction - The company announced a 13% increase in the quarterly dividend to $0.17 per share and an additional share repurchase authorization of 10% of outstanding shares [15] - A medium-term target CET1 ratio of 12% was established, with a gradual glide path over two to three years [15][66] - The company aims to manage net interest margin through various tools, including optimizing wholesale funding and hedging programs [58][60] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are cautious about expansion due to macroeconomic uncertainties, leading to postponed investments [40][42] - The overall credit quality remains stable, with no significant red flags identified in delinquency metrics [45] - Management expressed confidence in the ability to navigate the current environment and indicated that an update on full-year outlook will be provided in the second quarter [16][68] Other Important Information - The company returned $62.6 million of capital in the first quarter, including $53.8 million in buybacks and $8.8 million in dividends [14] - The capital ratios remain strong, with a CET1 of 14.1% and TCE of 8.63%, significantly above regulatory targets [14] Q&A Session Summary Question: Why was there no updated guidance in the presentation? - Management stated that it is typical not to provide updated guidance until mid-year due to the volatility of the environment [22][23] Question: What is the outlook for net charge-offs? - Management indicated that the increase in charge-offs was due to a one-off item and that the rest of the portfolio is performing as expected [26][28] Question: How should expenses be viewed going forward? - Management noted that the first quarter expenses were lower than the run rate and provided insights into one-time items affecting the expense line [33] Question: What is the outlook for commercial growth? - Management observed that clients are cautious about expansion due to market volatility, but the pipeline remains consistent [40][42] Question: How are deposit beta expectations evolving? - Management exceeded their deposit beta goal of 40% and plans to continue pushing for higher rates [56][63] Question: What is the medium-term plan for the CET1 target? - Management outlined a two to three-year glide path to reach a CET1 target of 12%, depending on macroeconomic conditions [66][68]

Financial Data and Key Metrics Changes - Adjusted earnings per share was $0.63, with a return on assets of 1.33% and a return on tangible common equity of 17.8% [7] - Net interest margin was strong at 3.88%, a decline of six basis points from the previous quarter [17][24] - Non-interest expenses decreased by 3.3% due to lower incentive compensation and fraud losses [10][31] - Tangible book value per share increased to $14.80, representing a 5% increase from the linked quarter and 18% year-over-year [13][35] Business Line Data and Key Metrics Changes - Loan balances were stable, with first-quarter loan production being seasonally lower [8] - Fee income was $61 million, a decline from the linked quarter due to seasonal fluctuations and less foreign exchange income [9][31] - Average deposit balances decreased by $99 million, primarily due to a seasonal decline in public funds [19] Market Data and Key Metrics Changes - The company maintained 21% of total balances in non-interest-bearing accounts and focused on growing lower-cost deposit balances [19] - Non-performing assets as a percentage of assets declined slightly, while net charge-offs were 36 basis points on an annualized basis [21][34] Company Strategy and Development Direction - The company is focused on growing tangible book value, with a 35% increase in tangible book value per share over the last three years [13] - The company received the Gallup Exceptional Workplace Award for Associate Engagement, reflecting its commitment to employee engagement [14] - The company is actively managing expenses and expects additional benefits from efficiency efforts [10] Management's Comments on Operating Environment and Future Outlook - Management expects modest loan growth in the second quarter, with healthy pipelines in consumer, C&I, and ICRE lines of business [8][37] - The company anticipates net interest margin to expand to a range between 3.95% and 4.05% over the next quarter [39] - Management remains optimistic about the year overall despite economic uncertainties [41] Other Important Information - Capital ratios are strong, with all regulatory ratios well in excess of minimums [12][35] - The company is closely monitoring the impact of tariffs on clients and their businesses [11][86] Q&A Session Summary Question: Steps to reduce asset sensitivity on the balance sheet - Management indicated that the balance sheet is asset sensitive and discussed the impact of rate cuts on deposit costs and net interest margin [46][48] Question: Changes in view toward capital deployment amid tariff uncertainty - Management noted increased M&A discussions but acknowledged that current uncertainty may prolong these discussions [51][52] Question: Review process for C&I credits and specific trends - Management highlighted a significant charge-off related to a flooring manufacturer affected by industry-specific issues, with no systemic concerns [60][61] Question: Outlook for loan growth in the back half of the year - Management adjusted loan growth expectations to 4% to 5% for the full year, down from earlier estimates [73] Question: Credit charge-offs and expectations for the rest of the year - Management expects charge-offs to normalize between 25 to 30 basis points, with improving trends in asset quality [81][82] Question: Exposure to tariffs and specific portfolio concerns - Management is monitoring client exposure to tariffs, with no specific business identified as more susceptible [87][88]

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 [9] - Tangible book value per share increased by 1.6% this quarter [9] - Gross revenue increased by 3.4% from the prior quarter, driven by increases in both net interest income and noninterest income [14] 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 [11] - The average rate on new loan production was 6.89%, higher than the average rate on loan payoffs, contributing positively to the loan portfolio yield [11] - Total deposits were up slightly from the end of the prior quarter, with inflows of noninterest bearing deposits from existing clients and new relationships [12] 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 [13] - The company maintained a conservative approach to new loan production, focusing on disciplined underwriting and pricing criteria [6] Company Strategy and Development Direction - The company aims to grow its Trust Investment Management business, having added a new Head of Wealth Planning from Goldman Sachs [21] - The management is focused on improving profitability and operational efficiency, with expectations for continued positive trends in asset quality and net interest margin [20] Management Comments on Operating Environment and Future Outlook - Management expressed that while profitability is improving, they are not satisfied with the current performance level and are focused on further enhancements [20] - There is uncertainty regarding the macroeconomic outlook, which could impact loan demand later in the year [20] Other Important Information - The company successfully resolved its two largest OREO properties, resulting in a net gain [9] - Noninterest expense decreased by $1,000,000 from the prior quarter, primarily due to a write-down recorded in the previous quarter [17] 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 [26][27] Question: What is the spot rate on deposits and average margin in March? - The spot cost of deposits was 2.98%, and the cost of funds was approximately 3.05% [29] Question: What is the outlook for nonperforming loans? - Management expects to sell one remaining OREO property this year and anticipates collecting on a substantial nonperforming loan through collateral sale [31][32] 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 [73] Question: What is the target for return on assets (ROA)? - The target is to return to a 1% ROA, with expectations for improved profitability as the company grows [42][43]

Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) Q3 2025 Results Conference Call April 22, 2025 8:30 AM ET Company Participants Stefan Chkautovich - Chief Financial Officer Matthew Funke - President & Chief Administrative Officer Greg Steffens - Chairman & Chief Executive Officer Conference Call Participants Andrew Liesch - Piper Sandler Matt Olney - Stephens Kelly Motta - KBW Operator Hello, everyone, and thank you for joining the Southern Missouri Bancorp Earnings Conference Call. My name is Sammy, and I'll ...

Financial Data and Key Metrics Changes - Hilltop reported net income of $42 million or $0.65 per diluted share for Q1 2025, with a return on average assets of 1.1% and return on average equity of 7.8% [5][16] - The common equity Tier one capital ratio stood at 21%, and tangible book value per share increased from year-end 2024 by $0.53 to $30 per share [14][15] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $40 million of pretax income on $13 billion of average assets, representing a return on average assets of 0.96% [6] - PrimeLending reported a pretax loss of $8 million, with origination volume increasing year-over-year to $1.7 billion, but faced a decline in mortgage origination fees [10][11] - Hilltop Securities generated pretax income of $9 million on net revenue of $109 million, with Public Finance Services seeing a 34% year-over-year increase in net revenues [11][12] Market Data and Key Metrics Changes - Average total deposit balances at PlainsCapital Bank decreased by approximately $89 million or 1% compared to Q4 2024, but increased by nearly $300 million year-over-year [8][21] - The bank experienced a one basis point compression in net interest margin to 2.97% [9] Company Strategy and Development Direction - The company plans to continue investing in its merchant banking platform and maintain a focus on growing customer deposits while managing deposit costs [13][15] - Management is actively monitoring operating expenses at PrimeLending and has reduced the fixed expense base by 12% year-over-year [10] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about the ongoing volatility in the mortgage origination market and the impact of interest rates on affordability for homebuyers [10][11] - The company expects to see a modest improvement in economic conditions but acknowledges potential volatility due to inflation and tariffs [19][29] Other Important Information - Hilltop recognized a preliminary gain of $23.6 million from the sale of its investment in Mosier Energy Solutions, impacting net income positively [13][16] - The company returned $12 million to stockholders through dividends and repurchased $33 million in shares during the quarter [15] Q&A Session Summary Question: What was the size of the downgraded office credit? - The downgraded office credit was approximately $18 million, with positive migration in classified loans driven by smaller credits [32] Question: Can deposit costs move lower and improve NIM? - Management indicated that deposit costs have been reduced significantly, and while further reductions are possible, NIM has stabilized [33][34] Question: Should we expect a reversal of seasonal deposit outflows in Q2? - Management expects core customer deposits to rebuild after the tax season, leading to growth in deposits through the remainder of the year [44][45] Question: How were businesses impacted by bond market volatility? - The municipal portfolio was most impacted by volatility, but management is working to recover from the trading challenges faced [52] Question: What is the outlook for mortgage business and loan growth? - Management anticipates a slow and steady improvement in the mortgage business, while also focusing on right-sizing operations for the current market [55][56] Question: How much of the expense improvement was due to the insurance recovery? - The insurance recovery had a limited impact on overall expense guidance, which remains stable due to ongoing optimization efforts [63][64]

Financial Data and Key Metrics Changes - The company reported a solid Return on Assets (ROA) of 1.64% and a pre-provision income growth of 7%, reaching $125 million during the quarter [7] - Net income for the quarter was $77 million, translating to $0.47 per share, compared to $76 million and $0.46 per share in the previous quarter [19] - Net interest income increased to $212 million, up $3 million from the prior quarter, with a net interest margin expansion of 19 basis points to 4.52% [22][26] Business Line Data and Key Metrics Changes - Total loans were slightly down, but core deposit loans remained stable, with a $70 million increase in non-interest bearing deposits [8][10] - Credit performance was stable, with early delinquency down compared to the prior quarter, indicating normalization in consumer credit trends [11][38] - The allowance for credit losses increased by $3.4 million to $247.3 million, reflecting higher qualitative adjustments due to economic uncertainty [39] Market Data and Key Metrics Changes - Year-to-date fiscal government tax collection increased by 3%, and the unemployment rate reached a low not seen in a long time [15] - The company noted a healthy pipeline for loans, sustaining mid-single-digit growth expectations for the year despite market uncertainties [9][18] Company Strategy and Development Direction - The company aims to continue deploying capital opportunistically to improve franchise and shareholder value, with a focus on growing the balance sheet and enhancing product offerings [42][44] - Management emphasized the importance of maintaining disciplined underwriting guidelines while exploring growth opportunities in both commercial and residential sectors [63][71] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth in the second half of the year, citing a better pipeline compared to the beginning of the year [76][78] - The company remains committed to its mid-single-digit growth guidance, despite acknowledging the unpredictable nature of the economic environment [18][79] Other Important Information - The company resumed its stock purchase program, repurchasing $22 million in the first quarter and planning to complete another $28 million in April [12][43] - The tangible book value per share increased by 7% to $10.64, with the tangible common equity ratio expanding to 9.1% [43] Q&A Session Summary Question: What are the expected yields for the second half of the year? - The expected yields for the second half of the year are projected to be around 1.35% to 1.40% [48] Question: What is the anticipated margin expansion? - The company anticipates a margin expansion of five to seven basis points, assuming a blended rate of new originations between 150 to 300 basis points [49][50] Question: How does the company view loan origination growth? - Management believes both construction and commercial loans will grow, while consumer loans are expected to grow at a slower pace [63] Question: What is the outlook on consumer charge-offs? - The company expects an improvement in consumer charge-off rates year over year, with older vintages that behaved worse being cleared out [81][84] Question: What is the status of the stock buyback program? - The company plans to complete a $50 million buyback by the end of April and retains flexibility for further buybacks if unique opportunities arise [98]

Financial Data and Key Metrics Changes - Net income for Q1 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 14.70% [6] - 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% [8] - The tax equivalent efficiency ratio was 55.48%, reflecting strong profitability despite various impacts on earnings [22] Business Line Data and Key Metrics Changes - Net interest income increased by $1.3 million, or 2.1%, to $62.9 million compared to the previous quarter, and up $3.1 million, or 5.2%, from the same quarter last year [25] - Total loans decreased by $41.1 million from the prior linked quarter, primarily due to net paydowns in commercial real estate and multifamily portfolios [10] - Noninterest income grew by $528,000, or 20.6%, in wealth management fees and $304,000, or 12.6%, in service charges on deposits compared to the prior year [21] Market Data and Key Metrics Changes - The total cost of deposits was 82 basis points for Q1 2025, down from 89 basis points in the previous quarter and 71 basis points a year ago [12] - The loan-to-deposit ratio was 81.2% as of March 31, 2025, compared to 83.5% last quarter and 86.1% a year ago [13] - Criticized loans decreased by 42% year-over-year to $116.7 million, marking the lowest levels in three years [16] Company Strategy and Development Direction - The company aims to manage liquidity and capital while building commercial loan origination capabilities for long-term stability [22] - There is a focus on creating a more stable long-term balance sheet mix featuring more loans and less securities [22] - The company is optimistic about future growth opportunities, particularly with the pending merger with Evergreen Bank Group [32] 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 [37] - The outlook for loan demand is cautious, with expectations for modest growth in the second half of the year [71] - Management remains optimistic about credit quality improvements and believes that future quarters will show positive trends [74] Other Important Information - The company recorded $4.4 million in gross loan charge-offs in Q1 2025, primarily related to one C&I loan that was downgraded [14] - Noninterest expense increased by $183,000 compared to the previous quarter, primarily due to salary and employee benefit increases [34] - The efficiency ratio adjusted to exclude certain costs was 55.48%, indicating strong expense discipline [22] Q&A Session Summary Question: Comments on margin performance and future rate cuts - Management indicated that they do not expect three rate cuts and believe inflation is stickier, suggesting a more stable margin outlook [43][44] Question: Loan book outlook and participation loans - Management is working to exit approximately $200 million in participation loans over the next 24 months and is optimistic about the repositioning of the loan book [48] Question: Trends in commercial clients' sentiment - Management noted a "wait and see" approach among commercial clients, with expectations for loan demand to improve in the second half of the year [71] Question: Reserve levels and credit quality outlook - Management expressed confidence in their credit outlook, stating that criticized and classified loans have been trending down significantly [73] Question: Expectations for expense growth - Management aims to keep expense growth in the 4% range for the year, despite some noise in the first quarter [36]

Financial Data and Key Metrics Changes - The company reported net income of $10.2 million, or $0.66 per diluted share, representing a $3.8 million or 60% increase compared to the previous February and a $275,000 increase over the linked quarter [5] - Pre-provision net revenue increased by $4.3 million or 47% over Q1 2024 and $1.4 million or 11.9% over the linked quarter [5] - Net interest income for the quarter was $32.8 million, an increase of $1.4 million or 4.5% compared to the linked quarter [6] - The return on assets (ROA) for the quarter was 1%, and the return on equity (ROE) was 10.39% [11] Business Line Data and Key Metrics Changes - The loan and lease portfolio grew at an annualized rate of 2.8% during the first quarter, with total loans and leases increasing by $22.8 million [18] - Noninterest income declined by $1.2 million or 12.8% compared to the linked quarter, primarily due to a decrease in gains on the sale of loans and other fees [16] - Noninterest expense was $27.1 million, a decline of $1.2 million or 4.1% from the linked quarter, attributed to reductions in compensation-related expenses [14] Market Data and Key Metrics Changes - Total deposits increased by $27 million or an annualized growth rate of 3.2%, with organic deposit funding (excluding broker deposits) growing by over $67 million [21][22] - The loan-to-deposit ratio at quarter-end was 95.8% [24] - The company’s security portfolio was $648.5 million, representing 15.6% of the balance sheet, with $60 million of unrealized losses [25] Company Strategy and Development Direction - The company announced the renewal of its stock repurchase program, authorizing the repurchase of up to $13.5 million of outstanding shares [12] - The focus remains on increasing tangible common equity and maintaining a disciplined approach to pricing deposits and loans [5][11] - The company aims to balance dividend payments and stock repurchases with capital growth to support future growth [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to manage loan and deposit pricing amid economic uncertainties, anticipating low to mid-single-digit loan growth for the remainder of 2025 [31] - The economic environment in Ohio and Southeastern Indiana shows no signs of deterioration, with strong credit quality maintained [30] - Management noted a cautious sentiment among borrowers regarding capital expenditures due to macroeconomic uncertainties [78] Other Important Information - The company made a $1.6 million provision for credit losses, with charge-offs of $976,000 [29] - The allowance for credit losses to total loans ratio was 1.30% at March 31, 2025, consistent with the previous quarter [30] Q&A Session Summary Question: Margin inputs and funding costs - Management indicated there is still opportunity for margin expansion, expecting a four to five basis points increase in the second quarter [38][39] Question: Expense normalization and future investments - Management expects expenses to remain flat in the second half of the year, with some increases due to merit raises and investments in technology [48][49] Question: Fee income outlook - Management anticipates a bounce back in fee income in the second quarter, particularly in mortgage and leasing [60] Question: Loan yield increase - The increase in loan yield was attributed to new loans repricing higher, with no unusual recoveries contributing to the increase [68] Question: Commercial borrowers' sentiment - Management noted a cautious "wait and see" attitude among borrowers regarding capital expenditures due to economic uncertainties [78] Question: Current pipeline and growth guidance - Management indicated that the current loan pipeline remains strong, with ongoing economic activity supporting growth [85][90]