Q1 2025 Southside Bancshares Inc Earnings Call
Okay.
Speaker Change: Good day and thank you for standing by welcome to the South side Bancshares, Inc. First quarter 2025 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during this session.
Speaker Change: You'll need to press star one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one again.
Speaker Change: Please be advised that today's conference is being recorded I would now like to turn the conference over to Lindsey Bailes, Vice President Investor Relations. Please go ahead.
Speaker Change: Thank you Lisa good morning, everyone and welcome to Southside Bancshares' first quarter 'twenty 'twenty earnings call a transcript of today's call will be posted on Southside Dot com under Investor Relations during today's call and another disclosures and presentations I'll remind you that any forward looking.
Speaker Change: Statements are subject to risks and uncertainties factors that could materially change. Our current forward looking assumptions are described in our earnings release and our Form 10-K.
Speaker Change: Joining me today are CEO, Lee Gibson, President, He's donohoe and CFO, Julie Shamburger, Firstly, it will start us off with his comments on the quarter Didnt, Keith will discuss loans and credit and then Julie will give an overview of our financial results I will now turn the call over to Lee.
Speaker Change: Lindsey and welcome to today's call overall, we had a solid first quarter with net income of $21 5 million, resulting in diluted earnings per share of <unk> 71 cents and annualized return on average assets of one point out of 3% and an annualized return on average.
Speaker Change: Tangible common equity of $14 one 4%.
Speaker Change: Linked quarter, we experienced a $94 4 million or 2% reduction in loans due to payoff activity primarily in our CRE portfolio.
Speaker Change: And that exceeded our original expectations.
Speaker Change: We do not believe the first quarter is indicative of where we will end 2025, as we still anticipate mid single digit loan growth this year.
Speaker Change: Keith will provide additional details related to the first quarter loan activity, our current loan pipeline and perform nonperforming assets.
Speaker Change: Linked quarter declines in loans and securities a restructuring of $120 million in securities early in the first quarter combined with an increase in deposits of $91 9 million net of brokered and public fund deposits.
Speaker Change: So it isn't a three basis point increase in our net interest margin to 286% and an increase in our net interest income of $145000.
Speaker Change: Our ability to lower our overall funding costs more than offset the yen.
Speaker Change: Impact on the $160 million in cash flow swaps that matured in the first quarter that had an average weighted rate of 78 basis points.
Speaker Change: Based on discussions with our customers related to the recent uncertainty in the market surrounding tariff announcements and the ongoing.
Speaker Change: Related negotiations overall, we are optimistic while it is too early to discern the likely outcome of these negotiations we will remain vigilant.
Speaker Change: Currently the markets, we serve remain healthy and the Texas economy is anticipated to grow at a faster pace than the overall projected U S growth rate.
Speaker Change: I look forward to answering your questions I will now turn the call over to Keith.
Keith: Thank you Lee our first quarter commercial loan production totaled approximately $142 million.
Speaker Change: Representing a 46% increase over first quarter of 'twenty four.
Speaker Change: New loan production on a 52 million during the quarter.
Speaker Change: Expect the remaining portion of that fund over the next nine quarters.
Speaker Change: First quarter payoffs exceeded our original expectations, mostly related to the C. R. C. R E portfolio and included 25 loans secured by a variety of commercial properties, including retail multifamily skilled nursing and one hotel.
Speaker Change: Rather than a skilled nursing facilities, which were sold most of the remaining properties were refinanced by traditional long term lenders, including agencies conduit lenders and life insurance companies with lower spreads and leverage above our typical thresholds.
Speaker Change: Despite first quarter payoffs, we remain positive about loan growth currently our loan pipeline exceeds $1 $9 billion and represents our largest pipeline in the last 24 to 36 months.
Speaker Change: Pipeline is well balanced with approximately 45% term loans and 55% construction loans historically, we've close between 25 and 30% of our pipeline.
Speaker Change: Based on lines in the pipeline identified as one but not yet closed fewer projected pay offs and families on existing construction loans, we expect loan growth to exceed payoffs in the second quarter.
Speaker Change: Additionally, we're making progress on our C&I initiative, which now represents approximately 25% of our total pipeline.
Speaker Change: The expansion of our C&I efforts in Houston, that's contributed to the increase and is gaining momentum.
Speaker Change: The Houston C&I team expanded by two individuals during the first quarter, where the budgeted expansion of two additional team members in the second half of 2025.
Speaker Change: The overall credit quality remains strong despite the first quarter increase in nonperforming assets and classified loans.
Speaker Change: The increase in nonperforming assets was specifically related to a negotiated extension of one large construction loans triggering a modified loan status.
Speaker Change: I am a secured by newly built multifamily project with positive leasing activity and our sponsor that has demonstrated a willingness and financial capabilities to support.
Speaker Change: While a meaningful increase our nonperforming assets remained low at zero point, 39%.
Our classified loans totaled $67 million on March 31, compared to 48 million on December 31 <unk>.
Speaker Change: D J, a downgrade of a $17 9 million CRE loan in the first quarter that loan subsequently paid off on April four 2025.
Julie Shamburger: I look forward to answering questions I will now turn the call over to Julie.
Julie Shamburger: Thank you Keith good morning, everyone and welcome to our first quarter call. We started the year with first quarter net income of $21 5 million a decrease of 279000 or one 3% compared to the fourth quarter and diluted earnings per share of <unk> 71 for the first quarter of 2020.
Julie Shamburger: The same as the linked quarter.
Julie Shamburger: As of March 31st lien structures, Bob stepping down.
Julie Shamburger: Our linked quarter decreased to 94 4 million or 2%.
Julie Shamburger: The linked quarter decrease was primarily driven by a decrease of $79 7 million in construction loans and $19 7 million in municipal loans, partially offset by an increase of eight and a half million dollars in commercial loans.
Julie Shamburger: The average rate of loans funded during the first quarter was approximately seven 3%.
Julie Shamburger: As of March 31st our loans with oil and gas industry exposure $111 million or two 4% of total loans.
Julie Shamburger: Nonperforming assets remained low at three 9% of total assets as of March 31.
Julie Shamburger: Our allowance for credit losses increased to $48 5 million for the linked quarter from 48 million on December 31st and our allowance for loan losses as a percentage of total loans increased to 90% compared to nine 6% at December 31.
Julie Shamburger: Our securities portfolio was $2 7 billion at March 31st the decrease of $76 9 million or two 7% from $2 eight 1 billion last quarter.
Julie Shamburger: The decrease was driven primarily by maturities and principal payments.
Julie Shamburger: So in an effort to reduce prepayment risk we sold $120 million of mortgage backed securities was 7% coupons and recorded a net realized loss of $554000.
Julie Shamburger: We replaced the mortgage backed security sold with $121 million of low premium, 6% coupon mortgage backed securities with less prepayment risks should rates decrease.
Julie Shamburger: As of March 31, we had a net unrealized loss in the securities portfolio at $51 2 million a decrease of $2 3 million compared to 53 5 million last quarter.
Julie Shamburger: There are no transfers in ISS securities during the first quarter.
On March 31st the unrealized gain on the fair value hedges on municipal and mortgage backed securities was approximately $8 6 million compared to $16 6 million linked quarter. This unrealized gain partially offset the unrealized losses in the <unk>.
Julie Shamburger: Our securities portfolio.
Julie Shamburger: As of March 31, the duration of the total securities portfolio was nine years and the duration of the <unk> portfolio with seven years, an increase from $8 <unk> and five seven years, respectively as of December 31st.
Julie Shamburger: At quarter end, our mix of loans and securities.
Julie Shamburger: <unk>, 3% and 37%, respectively, as slight shift from 62% and 38% last quarter.
Julie Shamburger: Deposits decreased $63 4 million or 1% on a linked quarter basis, primarily due to a decrease in broker deposits.
Julie Shamburger: $196 7 million or 26, 5%, partially offset by an increase in public fund commercial and retail deposits.
Julie Shamburger: Our capital ratios remained strong with all capital ratios.
Julie Shamburger: And then the thresholds for capital adequacy and well capitalized.
Julie Shamburger: Quiddity resources remains solid with 229 billion in liquidity lines available as of March 31.
Julie Shamburger: We did not purchase any shares of our common stock during the first quarter after quarter end and through April 25th we have repurchased 196419 shares at an average price of $26 82 per share.
Julie Shamburger: We have approximately 387000 shares remaining in the current repurchase authorization.
Julie Shamburger: Our tax equivalent net interest margin increased three basis points on a linked quarter basis to 2.86% from $2 eight 3%.
Julie Shamburger: The tax equivalent net interest.
Julie Shamburger: Brad increase for the same period by eight basis points to 228 up from $2 12.
Julie Shamburger: For the three months ended March 31, we had a slight increase in net interest income of $145000 or 3% compared to the linked quarter.
Julie Shamburger: Noninterest income excluding net loss on the sales in the U S Securities decreased $1 5 million or 12, 2% for the linked quarter, primarily due to a decrease in swap fee income and mortgage servicing fee income.
Julie Shamburger: Noninterest expense decreased $1 1 million or two 8% on a linked quarter basis to 37 1 million driven primarily by a decrease in salaries and employee benefits net occupancy professional fees and other noninterest expense.
Julie Shamburger: During the call last quarter I reported that we had budgeted five 7% increase in noninterest expense in 2025 over 2024, actual primarily related to salary and employee benefits retirement related expense software expense and a one time charge of $1 million related to.
Julie Shamburger: Demolition of that currently occupy branch after completion of the new branch.
Julie Shamburger: This increase in terms of an expected run rate was approximately $38 4 million for the first quarter and approximately $39 million for the remaining quarters.
Julie Shamburger: We came in lower than our budget during the first quarter, primarily due to lower salary and employee benefits net occupancy and software expenses.
At this time, we are expecting to recognize the $1 million charge on the old branch in the second quarter.
Julie Shamburger: This will likely result in noninterest expense of approximately $39 million in the second quarter.
Julie Shamburger: Also as certain items in our budget materialize later in the year, we expect to move closer to 39 million for the remaining quarters as well.
Julie Shamburger: Our fully taxable equivalent efficiency ratio increased to 55% as of March 31 from 54% as of December 31, due to a decrease in total revenue.
Julie Shamburger: We recorded income tax expense of $4 7 million, a slight increase of $62000 compared to the fourth quarter.
Julie Shamburger: Our effective tax rate was 18% for the first quarter, an increase compared to $17 six last quarter.
Julie Shamburger: We are currently estimating an annual effective tax rate of 18% for 2025.
Julie Shamburger: Thank you for joining US today. This concludes our comments and we will open the line for your questions.
Julie Shamburger: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone you had an automated message advising your hand is raised we also ask that you. Please wait for your name and company to be announced before you proceed with your question one moment, while we compile the Q&A roster.
Speaker Change: The first question today will be coming from the line of Brett Robinson of Hardy and overlapping.
Brian: Hey, good morning, it's Brian will have the group one correct.
Julie Shamburger: Hey.
Julie Shamburger: Wanted to start off.
Julie Shamburger: On the.
Julie Shamburger: Loans, and if I heard correct $1 9 billion pipeline sounded like Thats. The biggest it's been in two years.
Julie Shamburger: Can you guys just talk about the pull through from that pipeline and then does the guidance for mid single digit loan growth does that.
Julie Shamburger: Absolutely.
Julie Shamburger: Hum.
Julie Shamburger: Portion of the longer end of the curve.
Julie Shamburger: Being as low as it is and maybe impacting the CRE book further from here.
Julie Shamburger: Yes, so on the pipeline itself today is the largest we've seen in a while.
Julie Shamburger: Part of that.
Julie Shamburger: Seen a tremendous amount of activity.
Julie Shamburger: A lot of it in the CRE space, but we are picking up some.
Julie Shamburger: Some new opportunities in the C&I space, which we're really excited about as far as what they expect.
Julie Shamburger: Historically in these things ebb and flow of that 25% to 30% is what we've historically backroom coming out of our pipeline.
Speaker Change: Yes as borrowers.
How it affects the CRE portfolio, we're hopeful that we continue to see some momentum in the C&I business. So that we can moderate.
Speaker Change: The heavy weight in our CRE portfolio, but a lot of the term staff our investment real estate opportunities at this point in time.
Keith: Okay and Keith.
Keith: Two lenders that you added in Houston on the C&I side.
Keith: Any any color on their books that they might be able to bring over.
Keith: Their background.
Keith: Yes predominantly.
Keith: <unk> business bankers there.
Keith: Small and middle market.
Keith: I would guess right now those are.
Keith: I felt like Greenfield for us.
Keith: Based on the <unk>, we're anticipating that they do have works that they managed at other organizations that it'll take a little bit of time to move that but we do anticipate that to happen.
Keith: And then.
Keith: The two that we have budgeted in the future a rollover pricing two former lenders that we had that last one at the end of last year. So we're loading a backfill those and then in the future.
Keith: And they are looking at other metro markets to expand C&I presence there through <unk>.
Keith: Hiring or lifting teams out of other markets, but other organizations, that's our long term strategy.
Keith: Okay, Great and then just.
Keith: Maybe one last one on the margin.
Keith: Looking at the CD portfolio of $1 3 billion cost $4 37.
Keith: With seem like as that re prices the margin could move higher.
Keith: Any thoughts on the margin.
Keith: From here, how you guys see it playing out.
Keith: In the near term in particular.
Keith: Yes.
Keith: CD book, we have a little less than 300 million that matures.
Keith: Over the next three months and it has an average rate of four.
Keith: Sure.
Keith: Or so we anticipate that that will re price down at least 40 basis points, if not 45%.
Keith: So that should have a positive impact on the margin.
Keith: There'll be a little little pull through residual of.
Keith: The swaps that rolled off in the first quarter, but we did put some new swaps on.
Early in the second quarter about 125 million that should also have a positive impact that combined with the anticipated.
Keith: Home growth that we're expecting to see in the second quarter.
Keith: Sure should have an overall.
Keith: Positive impact on the margin. So overall, we're optimistic I think we said we felt like we had reached a trough.
Keith: Most definitely we would reach the trial first quarter.
Keith: We feel good about the margin moving forward.
Keith: Okay, Great appreciate all the color.
Keith: Thank you one moment for the next question.
Speaker Change: And our next question will come from the line of Woody lay.
Speaker Change: <unk> of <unk> Your line is open.
Speaker Change: Hey, good morning, guys.
Speaker Change: Good morning.
Speaker Change: Maybe just a follow up on margin real quick and with some of the swaps.
Speaker Change: <unk> recently added how do you view your current.
Speaker Change: How do you view your profile sensitivity to rates right now.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: A lot of it depends on what the fed does that lets say the fed stays on hold.
Speaker Change: I think overall, we're going to see funding costs drift a little lower.
Speaker Change: And.
Speaker Change: On the asset side I think I think we can see the overall asset.
Speaker Change: Spread aimed for are not spread in that overall yield increase.
Speaker Change: Obviously, if the fed cuts rates.
Speaker Change: Which right now it appears there's a possibility they might do it in June.
Speaker Change: That will we will see some.
Speaker Change: Some shifting on both sides of the balance sheet, but overall I think.
Speaker Change: <unk>.
Speaker Change: We are in a position where it'll be it'll be positive.
Speaker Change: With rates going down we can do.
Speaker Change: <unk> put some swaps on to protect us should should that short term rates, especially move the other direction.
Speaker Change: Got it that's helpful.
Maybe you wanted to.
Speaker Change: Follow up on expenses and expenses came in better this quarter, where there any targeted reductions or can you just.
Speaker Change: Help provide some context on what.
Speaker Change: What allowed you to come under budget.
Speaker Change: No I would not say there were any targeted reductions.
Speaker Change: Usually first quarter following oven budget preparation so we didn't have anything specifically targeted.
Speaker Change: Link hold on many and.
Speaker Change: We did see the decrease in salaries and employee benefits that was about $578000 and we had some additional.
Speaker Change: Expense in the fourth quarter, four insane and that did not repeat itself. This mismatch.
Speaker Change: This quarter and then also submit our share base states area.
Speaker Change: Share based equity expense for equity awards that actually we had a decrease in that for the first quarter linked quarter, a little bit over $100000.
Speaker Change: So those are some of the main things that drove it down and this quarter again net occupancy that was a function of a decrease in our depreciation expense, which that's going to that's going to change here and there based on assets rolling off and I think our budget for depreciation.
Speaker Change: Jason This year is a little bit is slightly higher just anticipating putting on the new branch in Cleveland that we're going to be putting on later in the year.
Speaker Change: Things of that nature, but that that is the primary.
Speaker Change: And you can for those decreases.
Speaker Change: Got it and then maybe last for me just following up on credit just any color you can give on the restructured CRE credit.
Speaker Change: I'm, assuming it is it a multifamily loan in any.
Speaker Change: Any color you can give on the geographic location of the credit.
Speaker Change: Yes.
Speaker Change: In Austin, Texas.
Speaker Change: Again.
Speaker Change: It was.
Speaker Change: Negotiated extension that we picked up some credit enhancements, but the nature in which we extended that resulted in us needing to move it into a nonperforming asset borrower has not missed any payments, we don't anticipate them to miss any payments.
Speaker Change: And the lease up activity is as positive.
Speaker Change: Slower than.
Speaker Change: Jewelry budgeted and so we're.
Speaker Change: Just like with all of our real estate assets, we're monitoring olive oil.
Speaker Change: Quite bases, where we're constantly looking at these and getting updates and we still feel good about the.
Speaker Change: The performance of that asset in spite of having to put it into the nonperforming category.
Speaker Change: Alright, thanks for taking my questions.
Speaker Change: Okay.
Speaker Change: Thank you one moment, if you would like to ask a question. Please press star one on your telephone.
Speaker Change: And our next question will be coming from the line of Sam Mitchell of Raymond James Your line is open.
Sam Mitchell: Hey, good morning, everyone. Thanks for taking my question good morning.
Speaker Change: Two if I can just give any color I know last quarter, you talked about lower swap income this quarter.
Sam Mitchell: Still solid growth in Boston, and I understand obviously that the.
Speaker Change: The market has given a lot of pressure there, but just any outlook for <unk>.
Speaker Change: Our fee revenue for the rest of the year.
Sam Mitchell: Yes.
Sam Mitchell: I don't know if you recall and I'm pretty sure. We said that we had like $1 $4 million in swap fee income in the fourth quarter, which was.
Sam Mitchell: Thanks sure extraordinary at the time it was higher than some of the previous quarters and we did have some swap income this month.
Sam Mitchell: I think around $98000 this quarter I keep saying that.
Sam Mitchell: And we typically don't budget for swap fee income, but we actually named budget. Some this year I think around $600000.
Sam Mitchell: Because at the time during the budget, we had some loans in the pipeline that there were discussions around some of that a few of those loans that we.
Sam Mitchell: We felt like we can reasonably expect swap fee income on those and I think I believe that is still the case that we're expecting some upcoming swap fee income, although first quarter was only about $100000 in the non east.
Sam Mitchell: So we are expecting that we did see an increase in our brokerage services income for the quarter.
Sam Mitchell: And also I think our trust fees were pretty level with fourth quarter and they were up quite a bit over first quarter last year and I point that out because we did do some fee adjustments in our trust fee area.
Sam Mitchell: In the later part of last year.
Sam Mitchell: So with.
With the new team that we have there and and those.
Sam Mitchell: Increases in fees I think we will continue to see grow.
Sam Mitchell: Both in the trust fee area throughout the year.
Sam Mitchell: At some point in third or fourth quarter, we may not see as a day goodbye increase year over year.
Sam Mitchell: And we are budgeting around $7 million for trust fees this year so.
Speaker Change: That would be about a 16% increase over our trust fees in 2024.
Sam Mitchell: So that is the main color with respect to brokerage and trust.
Sam Mitchell: And as Julie mentioned, we have loans in the process of <unk>.
Closing.
Speaker Change: Getting the final legal docs, together and things of that nature and the projected were for.
Sam Mitchell: Rejecting that.
Swap fee income.
Sam Mitchell: The mud.
Sam Mitchell: Much greater is not going to be a $1 4 million, but it'll be it'll it'll be at least.
Sam Mitchell: A few times.
Sam Mitchell: Mount of swap income that we had in the first quarter. So we are anticipating additional swap income in the second quarter.
Sam Mitchell: Okay. Thanks for all the color there.
Sam Mitchell: And then just last for me on the buyback it looks like you guys leaned in a little bit.
Sam Mitchell: Earlier this month, just with the selloff and everything and you still have I think around 400000 shares left under the program just any color on your appetite to continue leaning into that.
Sam Mitchell: We had put a plan in place before.
Sam Mitchell: Before.
Sam Mitchell: We went into our quiet period.
Sam Mitchell: And at rates that targeted level to where we repurchased those shares.
Sam Mitchell: We're going to be looking at that in the next next few days to determine.
Sam Mitchell: What if any repurchasing we're going to do at current prices.
Sam Mitchell: But it is something we're closely looking at.
Sam Mitchell: And then really in all bank stocks as a result.
Sam Mitchell: Uncertainty that's out there.
Sam Mitchell: Okay.
Sam Mitchell: Thanks for taking my questions.
Sam Mitchell: Thank you one moment for the next question.
Speaker Change: And our next question will be coming from the line of Matt Olney of Stephens. Your line is open.
Matt Olney: Hey, Thanks. Good morning, guys, just just kind of on that last question around capital and the buyback.
Speaker Change: Just curious how you weigh it.
Speaker Change: Stock repurchase activity along with that.
Matt Olney: Sub debt.
Matt Olney: Security that becomes callable in REIT prices higher in the fourth quarter.
Matt Olney: Any updated thoughts around around that.
Matt Olney: Okay.
Matt Olney: We definitely are considering both of those things.
Matt Olney: We want to we want to maintain we want to have enough.
Matt Olney: Lease pay down.
Matt Olney: On the call probably half of what's out there.
Matt Olney: There is $92 million left so we like to be able to pay off at least 45% to $46 million without impacting capital too much. We believe we will be able to do that and so we're going to look at that in line with what we have available.
Matt Olney: To purchase stock.
Matt Olney: Around around the levels that we purchased previously.
Matt Olney: Without impacting our.
Matt Olney: Capital.
Matt Olney: Our ability to grow.
Matt Olney: Okay, great. Thanks.
Matt Olney: Thanks for that and then.
Matt Olney: Going back to loan growth.
Matt Olney: You gave some really good color around the paydowns in the first quarter.
Matt Olney: I'm just trying to appreciate where those paydowns that were generally expected later in the year and they were pulled forward a few months.
Matt Olney: And this is a timing issue.
Matt Olney: And that's why kind of the guidance is maintained or is it something more than just timing as far as the pay downs.
Matt Olney: And the answer is yes and no.
Matt Olney: Some that paid off earlier than we had anticipated we have there and then our payoff forecast coming into the year and the des occurred we thought it may occur in the second and third quarter and that happened in the first.
Matt Olney: The skilled nursing facilities I've mentioned those were a little bit of a surprise.
Matt Olney: There are two separate operators that actually sold.
Matt Olney: Their operating business that.
Matt Olney: Pad collateral of skilled nursing facilities. So those operators so that we weren't anticipating that.
Matt Olney: It's a mixed bag.
Matt Olney: What do you do continue to expect some payoffs throughout the rest of the year.
Matt Olney: Second quarter is going to be lighter than at least what we're expecting is going to be lighter than what occurred in the first quarter, which will help us.
Matt Olney: Claw back some of the some of the loan reduction that happened in the first quarter.
Speaker Change: Okay I appreciate that Keith and just I guess kind of going back to the full year guidance kind of maintain that mid single digit.
Speaker Change: Are there any offsets we should think about it if some of these loan paydowns were surprised and obviously not all of them are but some of them were <unk>.
Speaker Change: <unk> do you keep that kind of mid single digit guidance.
Speaker Change: Did the pipeline build more than expected or was the original guidance in January was it overly conservative just trying to appreciate it.
Speaker Change: The bank maintaining that same pull your guidance for the year.
Speaker Change: I think the quick answer just for comparison coming into December our pipeline was somewhere around one point to $1 3 billion.
So we've seen a pretty significant inquiries just in the first quarter to get us up to about $1 9 billion. So we are anticipating to see continued activity.
Speaker Change: NAMIC.
Speaker Change: Pipeline, so it's not.
Speaker Change: This is not style information is pretty dynamic. So we're encouraged by that we also.
Speaker Change: No.
Speaker Change: There are a number of loans that we have already run through our credit process of approval on and the customer has accepted them and they are in the process of being documented so was that combined with the fundings on our existing construction loans, we feel pretty good about.
Speaker Change: <unk>.
Speaker Change: Showing low positive loan growth in the second quarter, therefore recapture everything.
Speaker Change: As yet to be seen some of its timing and we do anticipate a large portion of those to close in the second quarter again, sometimes lonely negotiations can stretch out a couple of weeks and that may make or break year, whether you close it on before June 30, or July yes, the second week of July so.
Speaker Change: Yes.
Speaker Change: You have to see but we're pretty confident.
Speaker Change: Okay. Thank you guys.
Speaker Change: Thank you that does conclude today's Q&A session I would like to turn the call over to Lee Gibson Chief Executive Officer for closing remarks. Please go ahead.
Speaker Change: Thank you everyone for joining us today, we appreciate your interest in SaaS side Bancshares, along with the opportunity to answer your questions. We are optimistic about 2025 and look forward to reporting second quarter results to you during our next earnings call in July This concludes the call.
Speaker Change: Thank you again.
Speaker Change: Thank you all for participating in today's conference call you may now disconnect.
Speaker Change: Okay.
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