Core Viewpoint - Coca-Cola's Q1 results indicate that the company is largely unaffected by the current trade war, projecting manageable impacts on its business operations [1][6]. Financial Performance - Coca-Cola reported net revenue of $11.1 billion for Q1, a decrease of 2% year-over-year, while global case unit volume rose by the same percentage [2]. - The company's adjusted net earnings increased by 1% to $0.73 per share, aligning closely with analyst estimates [2][3]. - The company anticipates a currency headwind of 2% to 3% on net revenue, an improvement from previous guidance of 3% to 4% [9]. Regional Performance - Unit case volume grew by 3% in the EMEA region and 6% in the Asia Pacific, while Latin America remained flat and North America saw a 3% decline [4]. Trade War Impact - Coca-Cola's management expressed confidence in managing the effects of tariffs, noting that their operations primarily source inputs locally [6][7]. - CEO James Quincey highlighted that the company's exposure to tariff-related costs is minimal compared to its overall operations [7]. Future Guidance - The company maintained its forecasts for adjusted earnings-per-share growth of 2% to 3% over the $2.88 of 2024 and projected adjusted cash flow of approximately $9.5 billion [8]. - Coca-Cola's dividend was raised by 5%, reflecting its strong cash flow and consistent dividend history, with a current yield of 2.8% [12]. Investment Appeal - Given its limited exposure to trade disruptions and attractive dividend growth, Coca-Cola is viewed as a favorable investment during the ongoing trade war [13][14].

Financial Data and Key Metrics Changes - Operating earnings were reported at $0.59 per share, with an operating return on assets of 1.04%, both showing solid improvements from the previous year [4] - Loans grew at an annualized pace of just over 5%, while deposits also grew at an annualized rate of 5% [4] - The net interest margin increased by 10 basis points over the fourth quarter, driven by lower deposit costs [4][13] Business Line Data and Key Metrics Changes - The loan portfolio saw a 7% annualized growth in commercial and industrial (C&I) loans, including owner-occupied commercial real estate [10] - The Navitas book experienced a 15% annualized growth, while home equity line of credit (HELOC) loans grew by 13% annualized [10] - Non-interest income decreased by $4.8 million from the previous quarter, but the run rate of fee income remained flat when excluding notable items from the last quarter [14] Market Data and Key Metrics Changes - Deposit growth was strong, with $309 million in deposits or 5.3% annualized growth, despite approximately $85 million in seasonal public fund outflows [8] - The cost of total deposits improved by 15 basis points during the quarter, with a total deposit beta of 30% [9] Company Strategy and Development Direction - The company is well-positioned to succeed despite economic uncertainties, with a focus on maintaining strong client relationships and adapting to market changes [7] - The acquisition of American National Bank is set to close on May 1, marking a strategic expansion into South Florida [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, noting that consumer spending and employment in their markets remain strong [7] - There are concerns regarding potential impacts from tariffs, but management believes that clients are adapting quickly to maintain margins [7][29] Other Important Information - The Common Equity Tier 1 (CET1) ratio increased to 13.3%, indicating a strong capital position [12] - The total capital ratios remain above peers, allowing the company to be opportunistic in capital use [12] Q&A Session Summary Question: Margin expectations going forward - Management expects margins to increase by 5 to 10 basis points next quarter, driven by lower deposit costs and a shift in the mix between loans and securities [23][24] Question: Borrower behavior and pipelines - There has not been a negative impact on pipelines, with Q2 expected to be similar to Q1 [38] Question: SBA and fee income challenges - The company is a preferred lender for SBA loans, which mitigates potential headwinds in gaining approvals [40] Question: Operating expenses outlook - Operating expenses are expected to remain in the low single-digit growth range, with some seasonal increases anticipated [41] Question: Capital priorities and share repurchase - Management indicated a preference for share buybacks over M&A at current stock prices, viewing it as a low-risk investment [46] Question: Loan loss reserves and economic scenarios - The company uses Moody's scenarios for loan loss reserves, balancing economic forecasts with actual portfolio performance [51][52] Question: Deposit growth drivers - Strong deposit growth was attributed to the maturity of CDs and a focus on money market accounts [60][61] Question: M&A environment outlook - Conversations regarding M&A continue, but management does not expect significant activity in the next 12 to 18 months due to market conditions [66] Question: Navitas loan sales outlook - Management indicated that they may not sell Navitas loans in the second quarter, focusing on maintaining high-quality credit on the balance sheet [72]