QCR (QCRH)2025-04-23 23:17Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income and adjusted net income of 1.52 and 17 million, including 5 million in revenue for Q1, reflecting a 14% annualized increase from the prior quarter [35][36] - Non-interest expenses decreased by 47 million, well below the guidance range of 55 million [13][37] - Total loans held for investment grew by 332 million [40][43] Market Data and Key Metrics Changes - Total core deposit growth was robust at 20% annualized, enhancing liquidity and reducing reliance on wholesale funding [10][43] - The company experienced strong deposit betas, actively managing deposit costs as the Federal Reserve reduced interest rates [32][33] Company Strategy and Development Direction - The company is focused on the growth potential of its wealth management business, expecting continued long-term growth fueled by strategic investments [12][36] - The long-term securitization strategy supports the ongoing success of the LIHTC business and drives substantial capital market revenue [42][110] - The company aims to maintain a CET1 ratio above 10% while optimizing the mix and quality of its capital as it grows [52][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term resilience of markets and the financial health of clients despite macroeconomic uncertainties [16][23] - The company suspended its full-year loan growth guidance due to heightened uncertainty, providing a revised guidance of 4% to 6% for Q2 2025 [9][61] - Management noted that the LIHTC lending business is beginning to normalize as clients adjust to the current environment [11][82] Other Important Information - The company’s allowance for credit losses as a percent of total loans held for investment stood at 1.32% at the end of Q1 [15][48] - The tangible common equity to tangible assets ratio increased by 15 basis points to 9.70% at quarter-end, driven by strong earnings [50] Q&A Session Summary Question: Loan growth outlook and guidance reconciliation - Management acknowledged modest loan growth in Q1 due to elevated payoffs but expressed confidence in achieving 4% to 6% growth in Q2 [61][62] Question: Provision for credit losses expectations - Management indicated that a lower provision is likely if loan growth remains muted, aligning with the lower guidance [63][64] Question: Fixed-rate loans repricing cadence - Management confirmed success in rolling up rates on new fundings, with a weighted average rate of 7.21% for the quarter [66][67] Question: Expectations for non-capital markets revenue - Management expects non-interest income to grow at 6% or better, with strong performance in wealth management [76][77] Question: LIHTC business and project timing - Management noted that uncertainty in Washington had previously slowed LIHTC projects, but activity is starting to pick up again [100][101] Question: Securitization plans and timing - Management indicated that the timing of the next securitization will depend on the pace of LIHTC growth, with a potential large securitization planned [110][112] Question: Credit quality and tariff exposure - Management conducted a credit analysis and identified minimal high-risk exposure related to tariffs, with most clients having shifted imports away from China [126][130]