QCRH - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the QCR Holdings, Inc. Earnings Conference Call for the First Quarter of 2024. Yesterday, after market close, the company distributed its first quarter earnings press release. If there is anyone on the call who has not received a copy, you may access it on the company's website at www.qcrh.com.

With us today from management are Larry Helling, CEO; and Todd Gipple, President and CFO. summary call financial to a we'll and provide the open questions will of results, the then Management from analysts.

I information providing Exchange Commission. begin, some as defined guidelines we would Securities remind statements to Before and the everyone of of forward-looking the falls management today be by will under the like that

results from future As these statements any the projected. guidelines, part statements, and concerning and forward-looking beliefs, materially hopes, expectations made company's could and actual of those predictions during of differ this call

Additional company's included filings, information in the which are these factors on is company's available website. SEC on the

Additionally, management The discussed financial quantitative information may most as to as measures, GAAP company's release refer for comparable and not other to well measures. non-GAAP directly the which the press are supplement, the to today, a contains be substitute intended to reconciliation available non-GAAP measures. of GAAP on but website

being for on starting the at And approximately this to conference website. a over will the completion accessible will is this call. XXXX, now will I Helling X, company's and call Mr. May of It available QCR lastly, also reminder, this hour Larry through after be recorded be the Holdings. X as turn afternoon, replay

Larry Helling

will the Welcome, results and follow quarter, financial operator. Todd some highlights our with you followed on our us for for additional regarding for by joining then I'll you, Thank everyone, priorities. strategic the begin thank details today. by providing quarter. a discussion

fee our and deposit core delivered balances. quarter We by growth continued and strong first both in highlighted income results, loan significant

ratios. and our upon further benefit quality we asset continue to already improved addition, expenses In well-managed strengthened our capital excellent from

lending believe of net per an share. diluted We $XX.X or and ROAE for that the million ROAA quarter, an of In tax X.X% income our and XX.XX% remain an quarter, quarter we of income total adjusted housing the primarily generated the first produced peer X.XX% basis $X.XX by driven We of low high during program. annualized our end both credit loans group. on metrics near the grew

or core We and an deposits also annualized basis, grew significantly, diversified million to strong them adding deposit franchise. by XX.X% on $XXX increasing our

result, first in As deposit The the driven to loans ratio by quarter during exceptional held improved correspondent XX.X%. was growth deposit investment bank deposits. achieved growth a to our our for

Our commitment market success underscores in with deposits within communities establishing expanding we clients our serve. our new growing and share to the existing relationships

Our ratio the during points. asset of historical points assets basis excellent improved XX quality as and below total average quarter by X first to nonperforming at assets remains our basis remains the levels

continues total for credit and for remain of represents our group. the We in asset peer all held reserve losses lines. across investment quality leases near monitor loans high X.XX% business reserves prudent of and disciplined diligently maintain Our and to end underwriting, be our

in loans this our positive quarter continued a and of We loans total trends as criticized see classified and also percentage to total leases.

We the are markets cautiously resilience the of clients. economic of and health optimistic our our in financial

our not are seeing weakness of signs any footprint. across We meaningful

primarily Our total size minimal situated $XXX,XXX. These adjacent to constituting in with billings our loans exposure commercial and are controlled, to locations, average loan or well of properties just office within of either suburban is markets. X%

are they concerns. and repayment line no have Importantly, significant performing expectations collateralized in well we with and

land The declined majority and transferred and and performing Balances completion of permanent reached portfolio our consist land quarter of construction well. in the low high-quality, housing development tax construction sector our addition, credit development prior financing In projects on loans is this from projects. as into income XX% financing.

in this portfolio. solid an industry best affordable track and been in instrumental our over has historical enjoys asset LIHTC the to years. The has recent and loan significant The company been creating LIHTC class record program housing for initiative a consider outstanding strategic lending units our underpinnings. We entire be

overcoming period, pandemic-related In pressures. recent construction years, chain difficulties, a disruptions and inflationary supply we've navigated challenging

quality sector underscores we this It We headwinds, lending. commitment our issues have Given had our practices of from maintained negligible business. the construction the the strength prudent management credit the administration. superior vigilant LIHTC credit also of and risk despite and disciplined to portfolio, of underwriting and

well Our remaining we and and is clients and CRE that with portfolio trust know markets is in performing we understand.

levels we than remain enable Our our to capital dividend believe strong, to that capital earnings modest our solid faster peers. continue us will and and grow

We we crafted and XXXX the driving into financial beyond, our initiative to in our X-X-X delve XXXX strategic priorities it's for with purpose this shareholder to our As of essential highlight value. long-term results enhance strategy.

has financial those on performance delivered goals our have and exceptional. We been overall

core last year. annual X per share rate tangible has of book and XX% compounded per grown per share earnings by XX% diluted years, the Over at a value

ROAA adjusted the was basis group. XX the X.XX% points Our of up our XXXX, quartile near X-year peer top in period and over

financial Our priority this is to sustain outstanding performance.

including our We continuing of strategy. delivering several metrics, growth, core achieve will by the this share increase earnings capital top-tier per value tangible share, committed ROAA, ratios. across per X-X-X retaining book key our We financial performance and to remain to

securitizations. and Additionally, we plan deposit through growth to fund future ongoing core loan growth

and qualitative greater to and support in continuing in which experiences enhancing operate. invest communities we the employee investing and goals client by efficiency Our encompass in for best-in-class technology

now enhance will regarding value further run. Todd to summary, long In financial the that results. to our I detail over sustained will quarter in believe we first commitment turn top-tier call provide shareholder our to performance the

Todd Gipple

balance Good my everyone. during the Larry. start with Thanks our on Thank quarter. comments for joining us you, sheet I'll details performance morning, today.

have loan annualized our million the for end Larry $XXX X.X% quarter. securitization, anticipation as an total of of In loans designated of during million the grew mentioned, at As $XXX the sale our held net growth. or on quarter LIHTC we loans basis of next

the long-term strong discussed, strategy allows us our lending our performance sustain have to we securitization As previously business. of LIHTC

earn within ensuring continue concentration corresponding markets remains all from will portfolio this addition, we In established this to the business, capital while revenue our our that levels. drive

deposits quarter basis. during XX% the Core increased million annualized just on over $XXX or an

us growth on reliance higher reducing wholesale future remains deposits core enables our growing top to our focus strategic a or mentioned, priority. cost while loan This Larry sustain funding. As

During deposits. borrowings quarter, facilitated million a combined the of our in $XXX deposit and first broker exceptional growth reduction overnight

at uncollateralized remain deposits XX% total very low and uninsured deposits. total Our of

the In approximately liquidity immediately of quarter maintained liquidity. billion sources which at available available $X.X includes company $X.X of billion addition, end

Now $XX.X per income delivered million or turning our the net We to share of $X.XX income for diluted statement. quarter.

higher of Our million income was of $X interest per million, adjusted This net was influenced the a first or totaled the decrease by fourth million diluted Net several quarter share. $XX.X decrease $X.XX $XX.X for of income quarter index XXXX. from XXXX contributed million a of nonclient $XX the interest of of to expense. rate, combined conversion factors, maturity and million of subordinated debt floating $XXX additional which million $X.X including interest the our on a rate deposits caps of our

the by which had of had decrease also discount We impact loan in net income. interest accretion an day approximately in lower and one less $XXX,XXX was there quarter, $XXX,XXX

a $X.X However, in activity continued million quarter, first during of and the company's loan expansion approximately by driven the led investment net saw growth core interest income by yields.

declined contributed the of the factors, decrease our Our adjusted of rate subordinated which NIM from X of primarily collectively expiration low of basis and a caps quarter by at tax interest a dilution. of basis was fourth portion by basis points guidance NIM the repricing of was XXXX X including on driven end equivalent and the range. a nonclient debt, The our points combination of

expansion of additional this our core composition. NIM due expected less NIM X partially basis able to impact were we in our with points. Notably, core nonclient expansion deposit than shifts was offset However, to

investing and experienced Specifically, more are noninterest-bearing a the cash our over portfolio operations use has commercial clients year for interest-bearing decline and past excess deposit net deposits. as our cash

baseline our to Looking second quarter. ahead, any which use to yield no interest for rate for continues curve curve rate The our yield NIM. cuts assumptions the continue pressure we the longer as inverted includes forward the

yields do further nonclient assuming any in costs, our will that income. funding in second quarter. loan headwinds to expansion interest have in mix, we and we not new generally offset any However, growth net funding the our a increase leading static anticipate in Therefore, investment

guidance expansion in XXXX, high on X quarter we static of TEY of relatively the points end. and the range low X NIM a a end basis on for adjusted As reaffirming result, the our of points compression second a of with basis are

the a shift has primarily to scenario. in sheet The be is our to positioned funding. In balance our well sensitive. year, continue funding from liability changes firmly to sensitive We beta for due asset past shifted higher rates mix down more to

of million the the fourth income $XX.X which from first our for noninterest our down million to $XX.X quarter XXXX. was quarter Turning in record of

from in fees swap affordable from revenue capital revenue Our demand continues our the LIHTC lending was benefit to the quarter for markets housing. and strong $XX.X as million

next million a million. healthy, business for are Our remains range $XX therefore, months guidance markets and pipeline $XX capital XX reaffirming revenue our in to the be in to we of this

quarter, first the the We million an generated revenue basis quarter. on in of annualized fourth from management wealth XX% $X.X up

to business of of expansion the our Des the charter XXXX, at Guaranty are business market Management to Bank addition Bank pleased management at metropolitan recent in Moines our our announce attractive wealth in the In State Community Iowa charter. launch Wealth our we

anticipate business We of our wealth team successful and in have model. place further growth experienced a highly management already

for quarter fourth primarily related The the decrease performance in to our fourth for $XX.X record year linked to and turning Now quarter. million quarter compensation $XX.X the XXXX. expenses. to due Noninterest employee lower was variable first to expense full totaled quarter compared million our

$XX expect in continue our the of look ahead to quarter, million we to As range be million. second we $XX to the noninterest to expenses

is team creating and in Our and banking ongoing our recurring expenses, benefit management model. technology on best-in-class effective from group we a that supports continue focus our noninterest community multi-charter of investments to operations

quality, asset to shifting Now continues to excellent. be which

was by $X investment $X losses and and to points quarter for to the assets. at static allowance held of fourth During during loans million million static average total points remain our the lows quarter X.XX%. of at credit loans or XX historical the also $XX charge-offs at for just was X quarter-over-quarter to losses declined basis NPAs The were quarter, and total for leases. Net credit provision million basis

up equity common XX at basis quarter the of end points assets X.XX% ratio tangible at X.XX% of December. Our from the end, increased tangible to by

first $X.X only our in million decrease primarily and in The by ratio driven improvement earnings was offset was quarter a partially AOCI. by our TCE strong

Our in to ratios X linked-quarter points, basis improving our by respectively, was quarter on basis improvement strong point end, XX a XX.XX% due common total risk-based capital was and and X The Tier at was capital both earnings. basis. ratio ratio equity X.XX%,

another XX% We pleased share, which quarter. meaningful annualized value $X.XX grew in or just per during tangible our by increase deliver also to book are the over

X% tax rate compared was effective to lower we compared for quarter sequentially our of linked the during as the due the decline capital our prior revenue to to our primarily tax quarter Finally, markets in decreasing exempt mix the earned XX% the quarter, income The was taxable quarter. income.

the in In addition, stronger quarter. on our a benefit tax compensation, elevated which recognized tends be first stock-based we to

from also benefit We bond portfolios. loan continue to and our tax-exempt

helped one result, to effective a lowest rate group. peer this As our in has tax our remain of the

We full tax to be X% of continue for range XXXX. effective in to year to expect rate XX% a the our

that on call the we With first added financial first are context our ready question. quarter results, your for Operator, questions. let's our open for

Operator

our from we which Sandler. time, this with At Race will Instructions]. will [Operator Piper Nathan take first come question,

Nathan Race

to can last terms core securitizations in gain about the think the we want trying revenue. on expect margin to earning you relative that? how I terms of of start assets kind from to the securitization, the that thinking higher impact of about to think some sale to of of LIHTC from some should just about in And what in expect in kind the of maybe and then the also reduction there terms of in terms also you when occur? think impact just margin offset we upcoming had benefit I

Todd Gipple

I'll occur third would the we chime strategy in I little think that Larry quarter, late Nate, to But expect let tell in bit you $XXX our securitizations. do million here not I'll Sure. I the with second. that start, longer-term a on securitization, in

So quarter. in purposes, for that third modeling can the you expect

pricing. us, As the in those loans. therefore, gives benefit it's a And about securitized about us ultimate sale on we've it core talked, less more loss liquidity. of It's for deposit gain or

margin a expect is quarter in securitization net do lift we complete. that when in So the interest third

has feel past in seen that we've actually really a We the take perhaps does our bit see bit, that be eased core funding more like the core cost. in deposit third really Xs pricing because a in in the versus starting generation we're And As we've will pressure securitizations, it help benefit deposit markets seen the off more to Xs. and quarter in past.

and of about the So a liquidity, us combination $XXX margin we'll very going million get, that in that optimistic forward. helping with we're

comments capital markets around keep and the securitization in some a to probably Larry all has engine running and the allowing in to us going. next little We're And then, securitization I of pleased revenue future. got course, benefits have that to the the our strategy on LIHTC know hand. very more

Larry Helling

the do smaller next likely that later loans. that be will Nate third the tax-exempt of year, -- on the we'll one is this securitization taxable one early do quarter in We'll in a the loans.

size want is creating likely is this this efficient So in Again, probably certainly our the of the roughly us. about half late focus we more capacity not -- but year. for execution, one

we've so done And a learned X lot, having securitizations.

think we'll efficient how the these several need the to in marketplace most more ways I efficient out timing and execution. figure to most and we do the to before package the get

few get was the never more to here, some certainly the we'll it intent more that. way probably a expect learn efficient to take will time, Over to get us on and Again, with best sale. gains that

securitizations, on on semiannually. other It the timing kinds annually future we all loan depend something forward. and do we demand, to like, ongoing our liquidity things would or of that as So go then expect those basis will that's looks an what of

little to quarter, third the likely But certainly, another the it's early telegraphed, dispersed hard late securitization one So as in in year. tell. Todd smaller a

Nathan Race

cost you're of saw, the just and And cost that Great. in deposit of in there driver I'm deposit terms in of deposits just in degree seeing back had in over pressures. continued pressure. then and what of point in Todd's terms decline curious terms you helpful. going slowdown quarter. the noninterest terms to the Okay. if quarter in increases Obviously, a Very of terms in you of the

Todd Gipple

for Thanks around great Nate. questions Sure, that.

us First, reduction We margin points that quarter. X noninterest bearing. about cost about $XX of going in I'm a basis talk this to did see that past million noninterest-bearing really

in far only are pleased all so down closely about of very quarter, that we're We to million average. I'm locations. monitoring NIB's terms And say in very, this $X

seems quarter. So to a here bit that stress abated have second the in

points look interest-bearing table, those deposits at interest-bearing costs, deposit basis up bps. went you that the really, that was of if of But caps. of terms -- In our up expiration XX went X NIM

prior And terms more nonsynthetic in slowing XX really really So margin points core from quarters. points XX is or that basis of basis impact.

abating. about CD at X.XX% What do those pricing charters Xs. X.XX% new I will levels. we relationships. and very bring loans, lot a excited the We're you that we're of growing money, not somewhere at the has tell many to and in the versus between starting the getting fact new We to that our see are is not some growing, bit pleased actually on Xs traction we're fact little CDs reprice money very for Think have competition not rates with to X of are that and for a growing the our deposits peers

has been so deposit And edge the our of taken market. some in of off pricing

guiding QX. we're reason another in static So to NIM more a

to we $XXX have average we actually example, of and weighted For expect roughly X.XX%, that rate. of They repricing. them million replace have rate CDs a at

interest-bearing creep we somewhere costs. we're hitting near that of think deposit in end the So

Nathan Race

I Okay. couple -- could on if they charge-offs. of to historical last one your ask to helpful. Super last slightly just are relative levels. And your quarters elevated The

Just normalization what the with charge-offs. or driver first thinking could and additional how curious going levels of there's the that in kind assume you're about quarter some maybe charge-off on kind if was we of

Larry Helling

pandemic kind the have bit suffered sector of liquidity, of are of call larger think what I -- businesses charge-offs there. primarily probably small the big economy our $XXX,XXX the in from of is I'd deals say that's I'd the a in what most that's no the micro It's had. the our charge-offs and didn't charge-offs little and kind business Nate, average really that portion Yes, the coming There's in portfolio.

I'd last Credit still them mean, So nothing clients' in anything? seeing I And -- charge-offs slowly couple say what there's movement in see today. averages. based Officer our expect had Chief and unusual. there's you with our the say XX-year move stabilize days. And are long-term no this well conversations But just here down historical of These portfolio. I and running later from on below I've I go of our year we're to kind

If issues valuations being appraisal little to there normal anything you answer yesterday, talked really. generally. we of businesses, people then our successful not There's and our that cap management I they're on look at and problems. create like review see here And rates? the And spots is

housing. real marketable. of that too. the because think commercial the is things, going our So markets, existing and recession are very really side estate real about on holds estate of the was that in inventory shortage values up all up holding well And supply, of is thing amazingly market the strange holding which on Housing means last I in

of the construction is New the higher inflation more interest expensive because and rates.

properties -- existing our a significant big So when collateral, that of chunk that's helped avoid really it's value, have us and charge-offs.

Operator

will come from KBW. Our next question Damon with DelMonte

Damon Del Monte

regards just with question, First loan to growth.

you said of that securitization into that to XX% sorry, last think you -- feel to still had all? it. growth going with to XX% kind growth? that to has I kind X% without the Do X% that at changed X% confident kind guidance year, X% X% thought quarter, you and Does ex it, for X% without of it of -- Larry,

Larry Helling

first confident right Yes, XX%. X% in numbers. the of so those to line X quarter that good a here, weeks still really off to we that we're in Quarter-to-date, do are the with feel more the start

end slightly was just sometimes the demand of in lower over think that happens quarter things first of year. the loan kind I seasonality, the the

that point still is solid. at feel that, certainly guidance we So this

Damon Del Monte

new rates the you loans and or so some guys you this year are this quarter last What the quarter And on of getting Okay. production? are added far. that

Larry Helling

ahead, -- Todd. depends It certainly go on

Todd Gipple

X.XX%. the off Damon, roll quarter, was loan New for was pricing X.XX%

blended X.XX% the at X.XX% floating a And has fair it of So XX amount in that points basis quarter. also left there. for

So continues getting to grow. the closer X% that blended. an We're to handle optimistic a and X.XX% about closer on

Damon Del Monte

it. Got

to the And that of the and being more rate it and higher impact upcoming you the had this fully caps moving margin? do in expiring, been of into from margin helpful. That's Or headwind the interest the see regards you absorbed a with Okay. then has kind quarter quarter?

Todd Gipple

cooked Damon, in us rate that's That the most now. additional points into into basis QX of but margin, baked X cost interest for the fully and now. million did it's part, expense really run $X.X

any that. expect don't from drag we So further

debt sub to is million basis to $XX full and in that will from and The $XXX,XXX did X.XX% lift us quarter. a $XXX,XXX X cost point floating per X.XX% of X went a that of reprice run first in quarter basis QX. points rate That

that additional X point just there. basis of drag So

said opening expect overpower to with early our margin. we As in we comments, able prepared core to be that

Damon Del Monte

the lastly into Got credit then pretty at has way based level? it. that on that on kind flat net reasonable at just kind The keep X.XX%. as data the been charge-off to look And And reserves to a a you that try stayed recent Is Do it? the provision. to points use of history, of strong. provision, back

Larry Helling

that's I Damon, loan But science to line. think in some some and are in number conservative high. keeping certainly I parameters There's estimation. loss Yes. reserve. a that your art think good in be We tried

Operator

Rulis question come with And our from next will Davidson. Jeff D.A.

Jeff Rulis

points, the the those away. guide for X.XX% X.XX%, hugs to kind nonclient to as if headwinds. back right. -- of I elimination X as make the if plus want Sorry sure to If That's the not factors tax I go around it's with it's equivalent or basis this not non-client minus circle the your X.XX%, of it's was just got margin.

Todd Gipple

question. clarifying Yes. Thanks for the

the NIM. static tax we're on X.XX%, guide equivalent of terms putting in is yes. static, X.XX% Our at in to that That's number

Jeff Rulis

of capital just wealth Des in you're of appreciate but talked nicely, on the like of kind kind Maybe you business. outlook outlook the where I I nicely piece that Okay. a fanfare, and maybe seems And fee obviously, gets a think management little growing income, the wins, further the is the about markets it. it's Moines. there kind and growing seeing rollout

Todd Gipple

for to the that effort Guaranty about off around here Moines. more good asking a to Bank excited very great We're wealth management. It year to for this that us. Des hired very management. spring in Quad really thanks us having for started in in a for had that and Southwest about X can market excited that leverage start the Des at We're last have is Cities getting our Missouri services folks business Des news Moines is great Jeff, business this experienced provides lead Moines. is business. infrastructure shared The wealth we in metro

up really don't a stand client-facing we it. It's folks when folks. Des of operational put lot we that Springfield with whole Moines, have or So to in

excited So very quarter. XX% appreciate you the We're about this up asking. AUM business. was for

the and in charter. with crossed thrilled the brought that. bank new the quarter all in we're We XXX new So clients X actually of XXX AUM of

So us. a good is this very for business

said If it at about and his us, grow to really we continue a relationship Larry business, organically, and expect X-X-X think much. the well, for as you we clip we it like ultimate think comments, business opening X% it, this do it's very in we to and better than

Jeff Rulis

rollout Is just a out company-wide, but you what timing about as you is that X% jumps Des Moines, growth leg-ups -- rate. rolled impactful get in taken Missouri, there But the Southwest you as Trying talk rolled some see you've the the artificial in out? as are considerable into of really that thinking about it the you -- areas. Moines there there some new of to because kind did get are Des

Todd Gipple

come from Moines what and Des expect some you Missouri, to Quad our Southwest the Yes. it new added Cities longest-tenured tell XXX lift came of of in of AUM, Springfield, is in market We XX but the XXX-some relationships. new and certainly to

going, you centers other momentum right for the on the of really radar momentum. it build get business. Once So get you a right the attorneys relationships, is influence can of right momentum you the and in some bit screens a all that good markets,

really our in at the just about really management $XXX we're in Rapids it's and those good to of So time Quad market Quad million we CSB. One deep in Cedar is Cities. both of and growing million each And break base that model, really $XXX keep excited take really, Cities wealth Cedar to I'd expect us Guaranty mention in over going to client both even. to because teams, thing about only in building Bank AUM Rapids,

a quickly. to of breakeven those So lift pretty we've it's big not revenue get producers terms in We that added.

Jeff Rulis

last Great. one Larry. for And

checking on in conversations plate how and landscape on M&A combinations those can a the front? about but all you've Just feeling you're you the got thinking M&A on just organically, eat and

Larry Helling

for have sector think Jeff. business Thanks, us big current Not focus make longer-term Yes. might we we a of some a think our make lot best now. now. doesn't give can We is short that's valuations to a going of a return on the priority as until certainly whole sense some managing in potential right the lot again, as better for shareholders we the partners the little because our us that But sense. effectively our run, gets M&A

Jeff Rulis

in you've cooling, got I either is the of are organically a that kind or rate the beyond M&A think if buyback? reinvestment if to and about were growth what of terms priorities Yes, dividend

Larry Helling

Yes.

first is really call know, the balance Our world. in kinds building of, news, a by you economic it, the could uncertainty. be I'll on if priority events world crazy -- as you the going watch the sheet, given all strong caused the It

would be stock prudent that's capital more kind of Dividend yet, buybacks when capital get a be. After our we that the place So to low and active relative list down it ratios grow get we TCE be group. We our quartile our that, that a approaching of think to is after levels, the M&A. focus like X. in there. which Xs might get top more to little to We'd kind bit is would into peer here, is our initially the

Operator

will question next Tamayo come our Daniel from James. Raymond And with

Daniel Tamayo

I on curious just impact swaps. expense the guess, first, the of

million If $XX aligned kind of assuming swaps. million, million expense impact second in higher on $XX your kind $XX the would towards the $XX is the with what that So the swaps to to that of quarter up guidance. million of the $XX million end end range guidance number for expense have of

Todd Gipple

the still Danny, put within for thanks would Upper guidance of for question. range the ballpark end that us noninterest expense. range

run not to at if the would be even we're that expect, outside $XX million. we rate end of So higher the of

So that still zone. within we'd be strike

Daniel Tamayo

right. reiterate then All I on caps. And guess just the to Okay.

said out you think in not how it, I terms interest of caps. the I'm but sure far rate

did is of there's stay said for environment, would nothing in there longer this into you second of quarter. we the anything think half play? even next kind or come the higher in year year if back I that But into

Todd Gipple

Yes. great Danny, question.

So The synthetic really not anything during XXXX. caps have expired. else

So It's million, of existing the run baked on The into now. with. repricing rate happened our debt that's over $XX sub that's now.

And so X that reprices months with SOFR.

something, have right right But in into 'XX, tranche $XX if 'XX in run into debt will SOFR don't else rate. now. We July. that we to but now. another now our rate to anything at sub derivatives have X.XX% floating baked is control synthetically baked do really of going So nothing That's already the in other million repricing than we choose

out high, debt And next that floating actually, that year, another similar that so into X.XX% XX%. of quarter of and $XX have rate rate we little will And sub over next That's of core the tranche midyear then third from will future to quite would fixed rate. go year. a reprice be very a current million rate

those, those advantage of maybe that's given but well the down obviously, looking to and new probably we'd So be reprice marketplace rates, the take road.

in So 'XX. nothing

Daniel Tamayo

this as from into sheet impact helpful. with just just think rate lastly, Got 'XX it, it. curious for stands that detail where guess, cuts, the And year balance Thanks the Todd, you about I then, just on going that's now.

Larry Helling

of second? rate Dan, The cuts? impact could for just you that out say Cut a again?

Daniel Tamayo

cuts. rate around sorry, The lost impact you, Yes, the of was I yes. question just

Larry Helling

rate last contrarian sentiment a Yes. in that Well, actually that maybe which certainly, lot we here. makes more happened. could me Certainly, likely the that believes think we days would XX has in world if cuts the space happen benefit changed in actually the

we're I well reasonably So well think we think positioned. We're higher longer. positioned. We for also can navigate

We margin additional down. go if some rates do will pick up

Operator

Martin will our come from And Brian question with Janney. next

Brian Martin

Todd to quarter. how especially loan-to-deposit I or here loan just and question see one that. ratio where outpace a the Or be as trying kind growth manage as the lot -- loan just of of kind to do you with better them little late? just Larry, Just kind and bit far flows kind about about as managing to growth a -- given the pricing are about far thinking appears that as just this, the deposit deposit of this you talked of guess, -- But you of growth? strong you expect

Larry Helling

the little to Yes. not Certainly, ratio this over in or move We thing progress the the do spite bit the year interesting of is rates really that still want probably down the starting and it a are to demand, a in liquidity. concerns range. And liquidity in We down loan kind ratio loan-to-deposit like less X comfortable of more. in softened, ago is because higher people's deposits. competition to aggressively. trying And has number loan-to-deposit their good next XX% of during time, Brian, with of local I quarter. We're everybody hanging made that's and impact year bidding up have of memory more market become of other set think new banks running a perception liquid with we'd kind

get week. the X-figure to out price market, from medium last here in So that I bid a municipality to saw market, a in deposit our a sub-X the went

So and everybody market the a chance to buy. that's -- in when the had market

to help that, go we believe forward. going that's us as I So

Brian Martin

Got you.

Okay.

is you'd that as what move be kind eyeing forward? target, So level longer-term you XX% of

Larry Helling

Yes.

Brian Martin

Yes.

could of level about it guess change Okay. in at kind the higher because just the the maybe kind buyback something the as year? concern? Is like. for activity the M&A are of outlook potential given And sounds going in of the moment, quickly, the that that kind for on back But that the look you Or conversations year? a it on share be of X% on of you're with half to the just repurchase you -- -- just weighs half share relatively think longer the rate repurchases I the is then not second in percolating incremental that of kind here some just something credit

Larry Helling

Yes.

if quickly the environment the -- and of securitization does into we're things probably looks second you're those doing on all year TCE continued expected and kind because think given the here that give I get is some be like earnings things good right, us we fairly that's Xs of think appropriate here, the capacity. the it in it today, possible I half if

do if It variables showing the So today really environment all the it X gives an I we'll of yes, from to again, the same doesn't about certainly that's there's that capacity back feel year, the be standpoint. nothing certainly, And now. the today, will us way have think come half depend on the we it, But portfolio same, how economic in that possible. mean pause. from certainly months the will up but in

Brian Martin

you. Got

for maybe And Todd. Okay. one just then

the about securitizations. I you maybe to Todd, you of bit of just margin. margin. you Can can talk benefit a talked know little -- in the terms on impact much Just from recent guess, the you securitization the giving how remind I saw us

one one the in think in what third to you So occur the quarter? if that maybe may the here in or September just parallels

Todd Gipple

Sure, Brian.

of a I again, now with that. about down It optimistic versus that able about funding, money advantage data X. you like time would X and of we're securitization margin on we're cost a X liquidity a something we point quickly to -- from expect will some previously. think bid last that. basis Again, but take a gave Larry the I depend driving on got lift money how handle point

all in be on likely So talk place a about for July to X we have of QX. start. guidance that basis points might We'll more good you some when

Brian Martin

small. you. Got more Todd, just one And housekeeping then

Just in code general the little but kind flows a earlier, that is accretion kind this bit the where here and just shake it on a little of coming ebbs -- being a bit, quarter, quarters? talked of down zip bit the may you out about in

Todd Gipple

Brian, was put and quarter. in way It QX to of per is Yes, is mark rate rest accurate zip XXX scheduled that around that XXX year, the $XXX-some-million code for an it. run this

So consistent. very

Operator

now like call to Helling would And over the any closing to this turn session. for back Larry Mr. concludes question-and-answer remarks. I our

Larry Helling

for with appreciate great interest our forward to today. joining We the connecting of I day. company. our Thanks. would months. your you coming Have We all thank in like to you in call look a

Operator

now attending for The concluded. presentation. today's conference you Thank has

disconnect now You lines. your may

QCR (QCRH) 24 Apr 242024 Q1 Earnings call transcript