Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the impact of the new deposit verticals on deposit growth this quarter?
A: Luis De La Aguilera, CEO, highlighted the significant contribution of the newly introduced deposit verticals, noting that teams brought in late 2023 and early 2024 have already handled about $315 million in deposits. These teams are focused on transitioning established client relationships, which are expected to be less sensitive to high interest rates due to long-standing banker relationships.
Q: How do you see the margin trending, considering the current deposit growth and loan yields?
A: Robert Anderson, CFO, explained that with the strategic repricing of deposits and robust loan yields above 8%, they anticipate a potential increase in net interest margin (NIM) by 5 to 10 basis points in the next quarter alone, assuming no rate cuts occur. This improvement is expected from both stabilizing deposit costs and increasing loan yields.
Q: What are the expectations for loan growth, particularly in which segments?
A: Luis De La Aguilera, CEO, mentioned that loan growth is expected to remain strong, particularly from non-CRE (Commercial Real Estate) sectors, which currently make up about 40% of new originations. The bank is seeing diversified growth across multiple business verticals, contributing to a healthy loan pipeline.
Q: Can you provide insights into the SBA lending trends and expectations?
A: Luis De La Aguilera, CEO, noted a significant increase in SBA activity, with the largest pipeline ever seen in the first quarter, potentially surpassing the entire previous year's volume. The focus on SBA lending is expected to continue, supported by both digital and traditional banking channels.
Q: How competitive is the market for deposits and loans in your region?
A: Luis De La Aguilera, CEO, described the South Florida market as highly competitive for both deposits and loans. Despite this, the bank maintains a disciplined approach to sourcing relationship-driven rather than transactional deals, which has served them well.
Q: What are the strategic plans for managing the cost of funds and improving margins in the context of potential rate cuts?
A: Robert Anderson, CFO, discussed strategies to manage deposit costs effectively, including replacing higher-cost funds with more cost-effective solutions. He anticipates that these efforts, combined with strong loan yields, will support margin improvement, potentially adding an additional 5 to 10 basis points to the NIM if rate cuts occur.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
