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01/10 16:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: strong year-over-year financial performance with increased EPS and revenues, but challenges include decreased loan growth, increased credit losses, and competitive pressures in auto lending. The Q&A highlights uncertainties, like unclear impacts of de novo branch expansions and competitive pricing pressures. No share repurchase or dividend program was mentioned, which could concern investors. Given the market cap, the stock is likely to see a neutral movement as the positive financial metrics are offset by these uncertainties and lack of shareholder return initiatives.
GAAP earnings per share $0.93, up $0.17 or 22% year-over-year, down $0.01 or 1% from the previous quarter.
Operating earnings per share $0.98, up from $0.82 year-over-year.
Operating PPNR per share $1.40, up $0.22 or 18.6% year-over-year, consistent with the previous quarter.
Total operating revenues $196,000,000, up $18,700,000 or 10.6% year-over-year, consistent with the previous quarter.
Net interest income $120,200,000, up $13,200,000 or 12% year-over-year, and up $200,000 from the previous quarter.
Cost of deposits 1.17%, down six basis points from the previous two quarters.
Total non-interest expenses $125,300,000, up $7,200,000 or 6.1% year-over-year.
Provision for credit losses $6,700,000, up from $6,100,000 year-over-year.
Ending loans $11,200,000 decrease or 0.1% from the previous quarter, up $537,600,000 or 5.4% year-over-year.
Ending total deposits $453,300,000 increase or 3.4% from the previous quarter, up $540,000,000 or 4% year-over-year.
Non-performing loans $75,000,000, up $1,600,000 from the previous quarter.
Net charge offs $3,200,000 or 13 basis points of average loans annualized, up from $2,800,000 or 12 basis points year-over-year.
Allowance for credit losses $82,800,000, up $3,700,000 during the quarter and up $12,700,000 year-over-year.
Tier one leverage ratio 9.29%, significantly exceeding the regulatory well-capitalized standard of 5%.
Loan to deposit ratio 75%.
Effective tax rate 22.8%, down slightly from 22.9% year-over-year.
Municipal Deposits Growth: Municipal deposits increased to $2,341,000,000, up $408,500,000 from one year prior.
Loan Growth: Ending loans decreased by $11,200,000 or 0.1% during the first quarter, primarily due to a net decrease in the consumer indirect lending portfolio.
Insurance Services Revenue Growth: Insurance services revenues were up $3,100,000 or 27.8% over the prior year’s first quarter.
Wealth Management Services Growth: Wealth management services revenues were up $700,000 or 7.1% reflective of more favorable market conditions.
Operating Return on Assets: Operating return on assets was 1.28%.
Operating PPNR per Share: Operating PPNR per share was up 18.6% year over year.
Total Operating Revenues: Total operating revenues were $196,000,000, up 10.6% from the prior year.
Net Interest Income: Net interest income was $120,200,000, marking the fourth consecutive quarter of expansion.
De Novo Branch Expansion: The company opened a new branch in Buffalo and plans to open more branches in Syracuse and Albany.
Talent Acquisition: The company had one of its best quarters in talent acquisition across all units.
Economic Uncertainty: The current economic uncertainty is at a high level, impacting client decision-making and overall market conditions.
Competitive Pressures: Increased aggressiveness by competitors in both credit quality and pricing is noted, particularly in the auto lending sector.
Supply Chain Challenges: Clients are facing difficulties in pricing their products due to uncertainty in the cost of goods, particularly for those who import materials.
Loan Growth: The company experienced a decrease in loan growth, ending a streak of fourteen consecutive quarters of growth, primarily due to a decline in the consumer indirect lending portfolio.
Credit Losses: A provision for credit losses was recorded, reflecting increased reserves for a specific non-owner occupied commercial real estate loan.
De Novo Branch Expansion Costs: Anticipated expenses related to de novo branch expansions are expected to impact the expense base, particularly in Q3.
Regulatory Issues: The company’s regulatory capital ratios exceed well-capitalized standards, but ongoing regulatory scrutiny remains a consideration.
Market Sensitivity: The company’s wealth management and employee benefit services may face revenue headwinds tied to asset values.
Employee Benefit Services Growth: The Employee Benefit Services business had a solid quarter with strong business momentum, although revenue headwinds are expected tied to asset values.
Insurance Services Performance: The insurance services business experienced significant revenue growth, leading to sizable margin expansion, and is expected to deliver meaningful operating leverage through the rest of the year.
Talent Acquisition: The company had one of its best quarters in talent acquisition across all units, indicating a strong ability to attract talent.
De Novo Branch Expansion: The company is on track to open several new branches by the end of the year, with expected startup costs of $3-4 million in Q3.
Diversified Revenue Profile: The company’s diversified business model is designed to grow revenues regardless of economic conditions, with banking and insurance expected to drive performance this year.
Revenue Growth Outlook: The company expects mid single-digit growth for commercial and mortgage portfolios, with potential for lower end of the range depending on economic activity.
Net Interest Income Expansion: The outlook remains positive for continued net interest income expansion in 2025, with expectations of 2-7 basis points increase in net interest margin per quarter.
Operating Expenses: Operating expenses are expected to increase in the mid single-digit range due to investments in the franchise and de novo costs.
Loan Growth Expectations: The company anticipates continued expansion into under-tapped markets, despite a slight decrease in loans during the first quarter.
Credit Loss Provisioning: The company recorded a provision for credit losses of $6.7 million, reflecting increased reserves for specific loans.
Share Repurchase Program: The company did not mention any share repurchase program during the call.
Dividend Program: The company did not discuss any dividend program during the call.
The earnings call shows strong financial performance with record revenues and net interest income growth. The Q&A session supports a positive outlook, with high loan growth expectations and stable margins. Despite some unclear responses, the overall sentiment from analysts is positive. The company's market cap suggests moderate stock price movement, leading to a positive prediction.
The earnings call presents a mixed picture. Basic financial performance shows growth in deposits and a decrease in nonperforming loans, but there's pressure on loan yields and net charge-offs increased. Product development sees progress in branch expansion, but competition remains tough. Market strategy and expenses are stable, with no major changes expected. Shareholder returns are supported by acquired deposits boosting liquidity. The Q&A highlights competitive pressures and management's optimism, but lacks specific guidance, resulting in a neutral sentiment.
The earnings call showed mixed signals: positive financial metrics with increased EPS and revenue, but rising nonperforming loans and expenses. The Q&A highlighted uncertainties, especially in loan pipelines and competitive pressures, but also potential growth in branch expansion. The lack of a share repurchase program and higher expenses offset positives like revenue growth, leading to a neutral outlook. With a market cap of $2.4 billion, the stock is likely to show a moderate reaction.
The earnings call reveals mixed signals: strong year-over-year financial performance with increased EPS and revenues, but challenges include decreased loan growth, increased credit losses, and competitive pressures in auto lending. The Q&A highlights uncertainties, like unclear impacts of de novo branch expansions and competitive pricing pressures. No share repurchase or dividend program was mentioned, which could concern investors. Given the market cap, the stock is likely to see a neutral movement as the positive financial metrics are offset by these uncertainties and lack of shareholder return initiatives.
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