Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide an outlook for the margin this year, considering the recent expansion and deposit cost reduction? A: Nicole Stokes, CFO, explained that while the margin expanded to 3.64% this quarter, 10 basis points of this expansion are expected to reverse due to temporary factors. The margin is anticipated to stabilize around 3.54% to 3.55% for 2025, with potential for accretive growth depending on deposit growth and maintaining a 30% non-interest-bearing deposit mix.
Q: What is the outlook for fee income, particularly SBA levels, for the upcoming year? A: Nicole Stokes noted that fee income, excluding mortgage, is expected to grow in line with loan and deposit growth, around 5% to 7%. The elevated SBA levels seen this quarter are considered a good starting run rate for 2025.
Q: What factors contributed to the strong loan production, and how do you view growth prospects for 2025? A: CEO Palmer Proctor attributed the strong loan production to increased consumer optimism and strategic hiring. He emphasized a focus on controlled growth, leveraging high-growth markets, and maintaining a diversified balance sheet to optimize margin and EPS growth.
Q: How do you plan to manage expenses and drive positive operating leverage in 2025? A: Nicole Stokes indicated that a 4.5% to 5% increase in expenses is expected for the year, with some cyclical payroll increases in the first quarter. The company aims to maintain expense control through strategic hiring and managing overhead.
Q: What is the strategy for capital deployment, considering organic growth, buybacks, and potential acquisitions? A: CEO Palmer Proctor stated that the priority is funding organic growth, followed by selective M&A opportunities that are strategic and culturally aligned. Buybacks are a lower priority compared to these growth strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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