Q1 2025 Cadence Bank Earnings Call
Good day, and welcome to the Cadence Bank First Quarter 2025 Webcast and Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions. To ask a question you may press star, then one on the Touchdown Phone. To destroy your question, please press star then two.
Please note that this event is being recorded.
We have members from our Executive Management team here with us this morning, Dan Rollins, Chris Bagley, Valerie Toalson, and Billy Braddock.
Our speakers will be referring to prepared slides during the discussion. You can find the slides by going to our Investor Relations page at dot r dot cadence bank dot com where you'll find them on the link to our webcast or you can view them to the exhibit today, K that we follow yesterday afternoon.
I would remind you that the presentation, along with our earnings release, contain our customary disclosures around forward-looking statements and any non-GAAP metrics that may be discussed. The disclosures regarding forward-looking statements contained in those documents and the support of our presentation today, and now turn to Dan for his opening comments.
Dan: Good morning. Thank you all for joining us to discuss our first quarter results. After I cover a few highlights and Valerie provides additional detail on our financials, our Executive Management team will be available for questions.
Dan: First, during the court will receive all regulatory approvals to complete our acquisition of First Channel Bank, and we plan to close May 1st.
Speaker Change: As a reminder, we announced this transaction the last time we had an earnings call, so to be able to get approval and close in under 100 days is fantastic.
Dan: Regarding the first quarter results, our financials continue to exhibit strength in a number of areas.
Dan: Gapnet Income increased to 130.9 million, or 70 cents per share, adjusted net income from continuing operations and increased to 131.4 million, or 71 cents per share, and ROA was higher at 1.15%.
Dan: Our balance sheet management last fall drove an increase in the interest margin of eight basis points this quarter, and our adjusted efficiency ratio improved by over 100 basis points, as managed expenses offset the impact of fewer days in the quarter on revenue.
Our teams remain focused on supporting our customers.
Dan: which resulted in first quarter of all growth of nearly 4% on a annualized basis.
Dan: With the strongest growth coming out of Georgia, Florida and Texas, as those states continue to do well against the national backdrop, lone pipelines remain solid across most of our regional markets.
Dan: Merchant, commercial estate activity, as is robust as it's been in years.
Dan: Competition for the best transactions has driven yields down somewhat in recent months, but activity
Dan: The positive balances grew nicely on average, but given typical first quarter volatility, we ended the quarter flat with core customer deposits maintaining stability both in balances and in the mix of non-interest bearing deposits. [inaudible]
Dan: Importantly, credit results have been stable overall and we're in line with our expectations for the quarter with net charge offs of 27 basis points analyzed.
Dan: There has certainly been some disruption added to the economy as of late, and while we are alert to the possibility of issues with borrowers, we have not seen any impact yet.
Dan: Our tangible book value continued to expand and increasing to $22.30 per share and regulatory capital levels remained very strong with CET1 growing to 12.4% allowing us the capital flexibility to be opportunistic as we look ahead.
Valerie: I'll turn the call over to Valerie for her highlights on the financials and a few more details, Valerie.
Valerie: Thank you, Dan. To add to Dan's comments, our pre-taxed pre-provision net revenue for the first quarter increased to 190 million, up over 3% from the prior quarter, driven by solid loan growth and lower expenses.
Valerie: Average loans were up just over 482 million in the quarter, while period in loans grew by 310 million, or 3.7% annualized, as pay downs in the construction and energy portfolios impacted the period in balances.
Valerie: The growth primarily resulted from strong performance in our mortgage, private banking, and community bank groups, and a damn noted more happily weighted in our higher growth markets.
Valerie: The quarter's loan growth was right in line also with our expectations of low to mid single budget growth for the year.
Valerie: Average deposits increase 610 million in a quarter, while period-end deposits were essentially flat with a slight decline in broker deposits mostly offset by a pickup in public funds.
Valerie: Our deposit mix at quarter end was stable with our non-intersparing deposits of the percent of total deposits coming in just over 21%. The same level as they were at year end.
Valerie: We also had a billion eight in CD's mature in the quarter than our teams did a great job of retaining as CD balance is also remain stable in the quarter.
Valerie: Referencing slides 9 through 11, our first quarter net interest margin of 3.46% continue to improve of 8 basis points in the quarter largely due to the fourth quarter pay off of our BTFP borrowings.
Valerie: Notions were 6.33% in the quarter, down nine basis points as a result of the full quarters impact of the December interest rate cut.
Valerie: New loans came on the books just shy of 7% in the quarter, which is well-north of the total portfolio yield, and we continue to have variable rate loans repricing over time.
Valerie: These dynamics helped minimize the impact of any interest rate cuts as we look forward through the year.
Valerie: Total cost of deposits kept pace, likewise declining by 9 basis points to 2.35%.
Valerie: New CVs in the quarter came in nearly 20 basis points lower than last quarter at an average rate of just over 410.
Valerie: Archimilitive Total Deposit Beta, excluding brokerage funds, ticked up to 30% through the first quarter.
Valerie: Our total adjusted revenue was down just slightly, less than 1.5% compared to the prior quarter, primarily due to fewer days in the first quarter.
Valerie: Net interest revenue was down 1.4 million or 0.4% into quarter due to day count.
Valerie: Adjusted non-interest revenue on slide 12 was down less than a million or 1% in a quarter as strong mortgage origination income was offset by lower credit-related fees and the impact of market volatility in a number of days on wealth management revenue and deposit service charges respectively.
Valerie: Even so, our adjusted efficiency ratio improved notably to 57.6%, down 150 basis points from the fourth quarter, driven by lower expenses as we detail on slide 13.
Valerie: While first quarter typically has higher expenses, our adjusted managed expense actually decreased by just over 8 million or 3 percent, driven marginally by a 6 million decrease in data processing and software expenses as those expenses normalize for what was an elevated fourth quarter.
Valerie: Total Comp Expense increased just 600,000 as seasonal increases in Employer FICA and 401K contribution costs were partially offset by lower commissions and incentive costs.
Valerie: Turning to credit on slide 7 and 8, net charge off for the first quarter were 23 million, with about two thirds of that due to one previously impaired credit.
Valerie: Non-performing loans declined 11% or 29 million in the first quarter, while criticized loans were up 2% and classified loans were down 2%, so pretty stable overall.
Valerie: Our loan provision was 20 million and increased slightly from the prior quarter due primarily to a bit more conservative macroeconomic outlook.
Valerie: Will you combine our allowance coverage of 1.34% with our strong and growing capital foundation laid out on slide 14? We believe our balance sheet is well positioned should there be economic disruption in the near future.
Valerie: Our 20-25 guidance is on slide 15. We continue to feel comfortable with the ranges we shared last quarter in all categories.
Valerie: and to further clarify, believes that even with the May 1st close of 1st Chatham, that we will still be within these ranges, potentially the higher side of the ranges on the balance sheet side with 1st Chatham incorporated, but the revenue in expenses just won't have a material impact this year given the timing and size of the transaction.
Valerie: We are excited about expanding our presence in Georgia and continue to be optimistic on our footprint for both organic growth and emanate the win opportunities.
Valerie: Operator, we would like to open the calls, questions, please.
Valerie: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone.
Valerie: If you are using a speaker phone, please pick up your hand set before pressing the keys.
Valerie: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
Valerie: We ask that you please them yourself to one question and one follow up. At this time, we will pause momentarily to assemble our roster.
Valerie: And your first question today will come from Manan Gosalia with Morgan Stanley . Please go ahead.
A good morning.
I'm just looking at...
Speaker Change: at the loan pipelines, it feels like you're not really seeing the impact of the April 2nd announcements just yet. You noted that loan pipelines remain solid, and I think you just pointed to the higher end of the loan growth guide.
Valerie: Can you maybe expand on what you're hearing from clients both April 2nd and what gives you the confidence that that level of long growth will continue?
Speaker Change: I'll take a stab at that if I'm coming through on the line. Give me Manan.
I can hear you fine.
Speaker Change: Can't we technically use this morning? Glad to hear that you're there. Good morning. So, yes, we thought we were pleased with what happened with our
Speaker Change: Impact so far of the noise. So like you said, it was, it was April , it was after 1st quarter end. So you know, when you talk about the macro environment, we continue to watch, we continue to listen.
Speaker Change: We continue to pay attention to what our customers are telling us. There's a lot of noise out there. I think today, customers are beginning to sit back a little bit and maybe slow. But in the first quarter, we didn't experience any of that, Billy.
You know we've got
Speaker Change: Competitive factors that are still driving wind rates, but as far as tariffs control, I mean, just anecdotal issues of, hey, we're trying to evaluate how it's going to impact us, you know, if it's going to...
Speaker Change: Some have taken advantage of it. They pulled some sales and deals forward, but as far as immediate impact on pipeline, we're just not seeing it. It's still staying solid.
Got it.
Speaker Change: You noted that there was about 1.8 billion in cities in mature during the quarter. Can you remind us how much in high cost deposits roll over through the next of the year and how much of a benefit you expect to get there?
Speaker Change: Yes, Shermanon. So we've got about another 033 and a half billion of time deposits that mature in the second quarter.
Speaker Change: Those are just north of 420. What we saw, this quarter was really the new CD's, just new to the bank, coming in, just north of 410.
and director of King's Farm.
Speaker Change: So Steve Madness was going to say, we want to fund with the best or lowest possible funding source, and so what you saw in the quarter was.
Speaker Change: Richard CDs were more expensive than wholesale funding for the Hanlon bank, right?
Speaker Change: Yeah, yeah, I think he was asking about the time deposits, but we shall have Grover deposit one down.
Yes!
Speaker Change: Again, just to clarify, Valerie, the numbers you just mentioned include both broker cities and non-broker time deposits.
Speaker Change: As they do, our brokerage came down about, yeah, to your point, 200 million, for the bulk of it was really consumer, core customer time to pause. This is what we're talking about.
Moderator: Your next question today will come from Jared Shaw with Barclays. Please go ahead.
Jared Shaw: Good morning, everybody. Okay. Maybe second with the margin team, you would talk a little bit about...
Moderator: Yield Compression from competition. How should we think about sort of the...
Moderator: The lone yields in the face of growth here and in how that's impacting your view of the margin as we go through the rest of the year.
Moderator: Melonios came on good in the second in the first quarter, six [inaudible]
Speaker Change: Yeah, just right plus 7% where the new loans came up. Yeah, so what we're certainly seeing the competition, Billy, you've been talking about that for weeks now. You want to talk about competition? Yeah, I mean...
Billy: For the larger high quality deals we're seeing 25 basis point yield compression on loans I would say across the board.
You're what we're really nursing is and...
Billy: Kind of our merchant theory, construction portfolio, but more broadly, we're seeing it on completed the yield as well. So I'll say 25, in some cases, even 50%, but out 50 basis points for the most part, they're around 25 basis point compression, over the last three months, I would call it.
Billy: on your question on the margin and what we are seeing a little bit of that compression on the own yields and we would expect.
Billy: You know, with the outlet today, a fairly stable net interest margin as we go to the rest of the year.
Okay, all right, thanks.
How should we think about? [inaudible]
Capital Priorities, from here.
Jared Shaw: Dan, it sounds like you're open to looking at deals with the success of the Georgia deal, but how should we think about it, sort of the dynamic of buybacks and M&A and some other uses of capital?
Jared Shaw: I don't think anything has changed the macro-environment clearly causes us to want to step back a little bit and look and see what's there but I think the same object as we've had all along, organic growth is number one goal for us. We want to continue to grow the company, we want to continue to grow within our footprint.
Jared Shaw: All of the other Toals are there and the toolkit, and I think we will use them when they're appropriate.
Okay, thank you.
and Will Fisackerly. Thank you.
Speaker Change: And your next question today will come from Catherine Mealor with KBW. Please go ahead.
Speaker Change: You know, more balancing growth. And so just, I know this quarter was more of a function of the full quarter of them back of the DPSP, but just kind of curious how you're thinking about just the size of the balancing particular, the bond book and kind of an accessible quantity as we move back half of the year. [inaudible]
Speaker Change: Sure, yeah, specifically to the Bond book, you may have noticed we did add a little bit of
Speaker Change: Burrowings of the Quarter, Federal Home of Bank Burrowings. We added just shy of 800 million of those. And we used that to buy some short-term agency securities.
Speaker Change: at basically about a 120 spread, 115 spread, and so that will add, you know, obviously to the mallet sheet side, but also, as we go through the rest of the year, that's some really nice income. Almost as a hedge, if you will, but potentially...
Speaker Change: You know, while we're seeing good pipelines and good loan growth, you know, there's just a lot of volatility in the economy right now and so, you know, thought that was a prudent way to protect that net interest income stream.
Speaker Change: So, when I talk about a stable margin, I'm really talking about net interest margin, the percentage, but we do anticipate, you know, with the estimates that we've put out there on our guidance.
Speaker Change: You know, to continue to meet those and, you know, seeing a little bit of balance she grows as we go through the year.
Okay, great [inaudible]
Speaker Change: and then that variable rate, we look at, you know, my favorite slide, as you know, the one that breaks out, the variable rate loans by type and maturity and then the rate, as we look at that variable rate loan, that was a lot more stable this quarter at 617, do you still think that even as we get cuts?
Speaker Change: That piece can still move higher or are we around at equilibrium with that piece of your long book today?
Speaker Change: In the near terms, it's fairly stable. If you look out, it's a, you know, one to three-year bucket. You know, that's when there's opportunity for that to improve. But you're right, through the rest of the year, that number, based on average, will be fairly stable. Great. Thank you.
Thanks, Cadence.
Speaker Change: And your next questions day will come from Brett Rabatin with Hobb to Group. Please go ahead.
Brett Rabotin: Hey, good morning everyone. Wanted to ask about the long growth guidance within the context of energy, and just obviously, you guys had some payoffs, and...
Brett Rabotin: The Energy Bucket, one to see if the guidance contemplated that coming back, or if that continues to maybe atrophy a little bit.
I don't know that any one.
Matthew Tablands.
Brett Rabotin: is going to move the overall guys that we've got out there. So when you talk about guidance, I think the footprint that we're serving today, we're really proud of what happened in Texas and Georgia and Florida. We think we continue to have opportunities within our footprint, we think we will continue to be able to grow the lines of business from order quarter can bounce all over the page. Billy, we did see some energy changes. Yeah, I mean...
Brett Rabotin: So, mostly in midstream, Turnmung B, Markett, and some M&A activity created some paydowns, but we also added non-new transactions, and I would suggest that
Activity is creating an opportunity for us as well, so...
I anticipate that that will continue to count. Thank you very much.
Stay level.
Brett Rabotin: It's just when paydowns happen, it wants to take a minute to...
Brett Rabotin: Well, back in that one segment, we've also got a renewable and power segment that's been on a, it's a newer business probably only a couple years old, it continues to see some fantastic inroads those guys are, um,
Brett Rabotin: Making our name out there, well known out there in that sector. And then our C&I teams across the various footprints have had a good quarter and...
Brett Rabotin: We continue to see that just based on our footprint. I mean, Texas is in Georgia specifically. There are really some good momentum. We've seen good momentum in the community back so that I like most about our company is the people we've got out front taking care of customers across the footprint. I think we've got real opportunity to continue to grow.
Jared Shaw: Okay, that's helpful. And then just back on the capital toolkit, Dan, I'm just curious to hear your perspective on the outlook for M&A if you're having any conversations or if it's pretty quiet with the uncertainty at this point.
Jared Shaw: The molecule in the market causes people to sit back and think but you're going to see your transactions are going to continue to happen. Consolidations are going to continue to happen in the marketplace. Just like we were talking about the noise that's out there. There's a lot of noise. We were trying to figure out what the noise is and how that impacts us. We were trying to figure out what's going to happen in the marketplace. We were trying to figure out what's going to happen in the marketplace.
Okay, great for each other, Collar.
Bruh
Speaker Change: And your next question today will come from Jon Arfstrom with RBC Capital Markets. Please go ahead.
Speaker Change: The CRE comment, I think you said it's as robust as it's been in years [inaudible]
Speaker Change: Can you talk a little bit more about what's driving that? And even though it's more competitive, is it acceptable to you guys to put on more CRE?
Speaker Change: There are some great opportunities out there on the CRE side, Billy and Chris can certainly jump in here, but when you look at what the last specifically called out the Merchant CRE said, so you're talking about the...
Big, you know, gold-plated, you know, large.
Speaker Change: A bunch of developers that are out there developing projects that are really good. So what we see is we continue to have some projects that will move off of our balance sheet.
Speaker Change: at some point in the not-too-distant future we believe. And so, you know, when you look back at what's happening, there's still opportunities and it's coming in in the industrial space, it's coming in the multi-family space, it's coming across our footprint because of the in-migration of people.
Yeah, Jon, that's right, so... [inaudible]
We're seeing it, and keep in mind that we're still getting…
Speaker Change: 55-60% loaned a cost on these so we won't see the fundings out of these for 12-18 months.
Speaker Change: and it's backfilling that portfolio that, as they start selling, will work. [inaudible]
Speaker Change: Having to backfill for when that occurs. But yes, it's multi-family, it's in the Delphiro and it's in the market that we're serving, so...
Speaker Change: We're seeing, it's just good road bus activity. It's more than we've seen in just in the last couple of years. I mean, not since the beginning of time, but just in the last couple of years, we're seeing more activity than we had. I would just add the, um, the, um,
Speaker Change: We've got your question, do we have a room? Yes, we've got room both on the CAD and the Total CRE bucket. I don't think we put that in any slides, but we have a room there.
Speaker Change: The, um, it's kind of from the community bank as well, so Billy mentioned the other merchant type, but that's a better product for us across the community bank, so all that real estate activity is just, you know, good bread and butter for us, so we, and it's hanging in there, why is it picking up a little bit, I think?
Speaker Change: B.S.B., the liquidity crisis has put a lot of pause on a lot of deals in pipeline months ago, and so you're seeing some of the more strategic thinkers that are thinking three years out, giving back into the market.
Speaker Change: That helps. Valerie won for you on expenses. You obviously had a pretty strong performance on expenses, but anything to call out to maybe set us up for what the second quarter might look like on expenses given the performance in Q1.
Speaker Change: Yeah, sure, yeah. We were really pleased with our expenses. You know, there were a few things, you know, tweaking some of them long-term.
Speaker Change: and, you know, still, within our guidance of, you know, I believe within 4 to 6% for the year, but I still think we're okay there, that's, you know, and that's got a factor in, you know, continuing to grow in our businesses, you know, we're...
Speaker Change: We're scrolling with good talented people. We're scrolling with good technologies that help our efficiency and effectiveness. So we're looking to continue that as we go through the year. And so that's, you know, at this point what I would expect.
Okay, all right, thank you very much.
I thank you, Jon!
Speaker Change: And your next question today will come from Matt Olney with Stevens. Please go ahead.
Matt Olney: Hey, good morning. Thanks for taking the question, guys. Just want to follow up on the bond purchases and the borrowings behind that that Valerie mentioned. It looks like this probably came later in the quarter in any color on the timing of that trade and any color on just the duration of this trade.
Zero to 20% risk weighted agencies, two-and-a-half duration, getting, you know, about.
Speaker Change: You know, depending on where spreads are and so forth, we may end up doing a little bit more of that in the second quarter. We're kind of see where the rest of the balance sheet falls. But again, just really kind of a little bit of incremental.
Speaker Change: earnings impact for us while we had plenty of capacity on the borrowing side and took advantage of a little bit of spread differential there.
Speaker Change: and just follow up on that Valerie, it sounds like there is...
Speaker Change: You know, potential to do more of this in the future. Should we consider this with respect to long growth? If the long growth slows, if the macro deteriorates, this could become potentially more attractive to you guys in the future.
Speaker Change: It's really about the spread, and so, depending on what that could look like, that is an option.
Tell him about the spread. Yeah.
Speaker Change: We had significantly reduced our securities book, as you know, over the past couple of years. We were down to about 15% and so we're still, you know
Speaker Change: Well, south of 20% and would anticipate that we kind of stay in that range in a foreseeable future, but that there's certainly ability to do a little more mare should we desire to with the rest of the balance sheet mix.
Oka.
Okay, thank you, guys! [inaudible]
Thanks Matt.
Speaker Change: And your next question today will come from Michael Rose with Raymond James. Please go ahead.
Hey, thanks for taking my questions. Just check two quick ones.
Michael Rose: Good morning. Just on the pickup and line utilization, I think that's something we've seen from a bunch of banks across the reporting period so far. Anything to read into that? Are you guys actually adding lines or just looking for some color there? Thanks.
Michael Rose: I don't think there's anything to add into that. What you've seen on ours is up and down, you've got construction draws that fund into that too. I wouldn't read anything into that at all.
Michael Rose: It's really with Anna Abrams, I mean, it's really small, yeah.
Got it. I think some of us are still up.
Michael Rose: You know, reeling from, you know, the liquidity crisis during COVID and the lives of it, that's all I meant. Well, you understand. We all have PTSD for that, yes. Yes, yes, yes.
Speaker Change: The Good Better Way To Put It. Just one follow-up for me, just kind of sticking with that theme.
Speaker Change: You guys obviously with the MOE, you know, work down some of the legacy cadence, you know, restaurant exposure, you have some retail, you laid out really nicely in slides 5 and 6, but you know, any areas that you guys are particularly focused on are that you're seeing some concern expressed from customers, I know some of it's obvious, but
Speaker Change: Just wanted to get a better feel for what you guys are doing internally, assuming this could potentially go on for an extended period. Thanks.
Speaker Change: Having the credit, quality picture continues to look stable for us. I mean, we saw a little bit of improvement in a couple of different categories. We saw a little deterioration in a couple of categories. Our trials were higher off of really just one bigger credit.
Speaker Change: I think we feel good about where we sit today. The macro environment causes everybody to stand back and say, okay, well, let's see if we can figure out where it's going to come from. I don't know that we're seeing any of that today, Chris. It's hard. I mean, I'm trying to conversation going on, it's...
No, that uncertainty definitely creates some anxiousness across.
Speaker Change: Customers said, and that's all of them, right? I mean, it's farmers, builders, developers, manufacturers, retailers, importers, others. We're having a lot of conversations. All of our frontline folks are talking with their clients. We're reporting back up to all of our credit processes and our own approval processes. What the...
Speaker Change: You know, current view of the tear of impact look like, but because of that uncertainty, it's just hard to handicap it, and we haven't seen an impact.
Speaker Change: Credit numbers today. And specifically to your question, we haven't identified any segment or-
Speaker Change: You know, a particular line that's, or that we're overly concerned about, it's really a credit by credit type process that we're going through. And, you know, all of that could temper a little, maybe.
Speaker Change: Non-activity or exuberance, I guess, could be tempered a little bit and tell us some certainty gets into the market.
Speaker Change: It's a mix. Just the handful of customers that I talk to in the manufacturing business. A couple of them are telling me.
Speaker Change: I can see a benefit here that this is going to probably help them...
Speaker Change: Produce more. Other manufacturers are telling us, you know, they're importing most of the inputs and this is going to have to pass along every bit of the cost increase. It could be detrimental to them. So it's a mix bag. When you push on, you know, what happened today. You know, it's going to have to pass along every bit of the cost increase. It's going to have to pass along every bit of the cost increase.
Speaker Change: Still a lot of noise and not a lot of action.
Speaker Change: Totally ghetto, so open your crystal ball, Dan would give us some more answers, but I guess we'll just have to wait. I think sure that's a big question.
I'm with you. Thanks.
Casey Hare: And your next question today will come from Casey Haire with Autonomous Research. Please go ahead.
That's it. Thank you.
Casey, your line may be muted.
Thank you.
Speaker Change: Moving along, we have Stephen Scouting with Piper Sandler. Please go ahead.
DeMorne, I'm very, very curious. I'm very curious.
Speaker Change: I hope you guys are thinking about how to move forward.
Speaker Change: We're not getting used to you, and I don't know if it's your end or our end, but we're not hearing your question.
Okay. Any chance you can hear me out there? Yeah.
Speaker Change: Yes, we can. I'll do better. Okay, I don't know what changed, but so just kind of curious about how you think about the loan to deposit ratio, potentially levering up the balance sheet from here.
Speaker Change: Yeah, I think we continue to look to grow deposits. But, you know, I think when we look about where we sit today, I think we like the position we're in. We would like to continue to grow deposits. We would like to hang out in the neighborhood where we are, up a little bit, down a little bit. But, you know, I think we've got what we're sitting today. That's one of the things we like.
Speaker Change: Got it, great. And maybe, how do you think about incremental M&A? Obviously, the valuations make everything a little more difficult, but given the quick approval timeline, does it change your outlook on how you think about M&A in the years to come? Or maybe the amount of deals you might be able to put together?
Speaker Change: Not relating to you from an M&A perspective, we're looking for culture, we're looking for the right fit, and I don't think that the speed or the valuations change that you're still looking for the right folks for us.
That's it. Got it.
Speaker Change: Yep, makes a lot of sense. And then just lastly, real quick on mortgage income look like a pretty good quarter here. Do you think there's an inflection point anywhere where there's around the 30 year rate or? [inaudible]
Speaker Change: or just lower race in general where we could see a more material pickup in mortgage, more broadly, or kind of how you're thinking about expanding your teams there.
Speaker Change: The fact that the 30 years jumped up in the last week or so certainly is not helping that team at all.
Speaker Change: That's a hard question. I don't know what the rate needs to get to, to see a big change, you know, in some of our markets, you know, it is a tight, height housing market. So that's part of the picture, too, is the inventory is just not there.
Speaker Change: The big builders, you're lying down, raised for first time on bars, which is a positive...
Speaker Change: It's an interesting environment. Donald, do you want to talk about mortgage?
Speaker Change: Yeah, they had a great first quarter, you know, typically first quarter is really good seasonally, but even when you look at it slash.
Speaker Change: You're really up several hundred thousand dollars in origination, so really nice performance fairs. The teams continue to do well. To really gear up some of those, resize them is going to need to drop.
Speaker Change: You know, three fifty basis points from here probably. And at least to start getting that engine running, right? Probably a year ago, one of the things that the mortgage leadership team Scott Dickie and his team did, you know, we...
Speaker Change: We too will upscale our team. So the team that's out there, in front of us today, on the mortgage group, like talking about Billy's team a minute ago, and the community bank team, we're really proud of the folks we've got out taking care of customers.
Speaker Change: Exactly. If we get that done for us. Say another way, when the re-fight boom hits, when it hits, if it hits, we're going to be positioned well to take care of it. It's brought us a lot of different.
Areas, including some expanded footprints that are neat.
Speaker Change: Fantastic. Well, good to order. Thanks for the time, Chris.
Thank you.
Speaker Change: This will conclude our question and answer session. I would like to turn the conference back over to the management team for any closing remarks.
Speaker Change: All right, thanks Nick, it's certainly an exciting and busy time for Cadence Bank and for our industry. We believe we're in an excellent position to be able to continue our path of operating performance improvements.
Speaker Change: I'm extremely proud of our team's efforts and our progress over the past few years and have high confidence that our unique operating model will support our vision of helping people, companies and communities prosper.
Speaker Change: Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.