Hancock Whitney Corp Q1 FY2026 Earnings Call

Thank you and good afternoon. During today's call, we may make forward-looking statements. We would like to remind everyone to carefully review the Safe Harbor language that was published with the earnings release and presentation and in the company's most recent 10-K and 10-Q, including the risks and uncertainties identified therein. You should keep in mind that any forward-looking statements made by Hancock-Whitney speak only as of the date on which they were made. As everyone understands, the current economic environment is rapidly evolving and changing. Hancock-Binney's ability to accurately project results or predict the effects of future plans or strategies or predict market or economic developments is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions but are not guarantees of performance or results and are actual results and performance could differ materially from those set forth in our forward-looking statements. Hancock-Whitney undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. Some of the remarks contain non-GAAP financial measures. You can find reconciliations to the most comparable GAAP measures in our earnings release and financial tables. The presentation slides included in our 8K are also posted with the conference call webcast link on the Investor Relations website. We will reference some of these slides in today's call. Participating in today's call are John Harrison, President and CEO, Mike Ackery, CFO, Chris Saluca, Chief Credit Officer, and Shane Loper, Chief Operating Officer. I will now turn the call over to John Harrison.

Thank you, Kathryn, and thanks to everyone for joining us this afternoon. We are pleased to report a solid start to 2026. Our adjusted ROA was 1.43 percent, our OTCE was 14.64 percent, and EPS was $1.52, all improved from prior quarter. Adjusted EPS, compared to the same quarter last year, increased over 10 percent. We are very excited to welcome 27 net new revenue producers to our strong banking team, and we expect to build on the momentum we have to generate meaningful balance sheet growth and profitability improvement over the rest of 2026. We achieved another quarter of solid earnings with NIM expansion, an efficiency ratio of about 55%, consistent strong fee income, and well-managed expenses. Net interest margin expanded seven basis points this quarter due to higher securities yields following our bond portfolio restructuring and lower costs of funds that outpaced the impacts of lower loan yields in this rate environment. Loans grew $33 million or 1% annualized. Loan production totaled $1.2 billion, down from last quarter, but up $365 million compared to the same quarter last year. Historically, first quarter loan growth is seasonally softer, but average balances were up $250 million over fourth quarter. We anticipate average growth to improve as the year progresses with a strong pipeline and continued success in adding bankers. Our guidance of mid-single digits for the year for loan growth is unchanged. Deposits were down $198 million, or 3% annualized, due to seasonal public funds outflows. Interest-bearing public funds decreased $280 million, and public fund DBAs decreased $75 million. Excluding the impact of public fund DDA outflows, DDAs would actually have been up $45 million. DDA mix ended the quarter at a very strong 36%. Interest-bearing transaction and savings accounts were up $261 million, with higher balances driven by competitive products and pricing. Retail time deposits were down $149 million due to maturities during the quarter. We continued to enjoy a healthy CD renewal rate of about 85%. We have not changed our guidance on deposits, as we still expect balances to be at low single digits from 2025 levels. This quarter, we continue to proactively return capital to shareholders through repurchasing 1.4 million shares of our common stock and increasing our quarterly cash dividend 11%, now standing at $0.50 per share. Additionally, we deployed capital through the previously announced bond restructuring effort, which was completed in January. We ended the quarter with a solid TCE of 9.93% and a common equity Tier 1 ratio of 13.3%. Despite market volatility and an emerging scenario of flat rates, we remain optimistic and confident for our growth prospects for the rest of 2026. We're closely monitoring macroeconomic trends and indicators, including both nationally and within our footprint. While the environment remains dynamic, our ample liquidity, solid allowance for credit losses of 1.43%, and very strong capital keep us well-positioned to navigate challenges and support our clients in really any economic scenario. With that, I'll invite Mike to add additional comments.

Thanks, John. Good afternoon, everyone. As John said at the onset, the company's performance in the first quarter was exceptional. Adjusted to the net loss in the bond portfolio restructuring, net income for the first quarter was $125 million, or $1.52 per share, compared to $126 million, or $1.49 per share, in the fourth quarter. As shown on slide 20 of the investor deck, we remain confident in the guidance provided at the beginning of the year and have not made any changes this quarter. We are, however, now assuming no rate cuts throughout 2026, with no significant impact to NII or our NIM. PPNR for the company was down slightly from the prior quarter, or about 1%, to $173 million, expressed as a return on average assets that continues to be a solid 1.98%. Net interest income increased 1% this quarter. our fee-income business continues to perform exceptionally, and expenses were up but remained well-controlled. Fee-income adjusted for the net loss on the bond portfolio restructuring was essentially flat with last quarter, down only $1 million. The slight decrease was driven by lower specialty income, which tends to be somewhat unpredictable quarter to quarter. Expenses remained well-controlled, only up 1% from last quarter. Much of this increase was from seasonal increases in payroll taxes and related benefits. We remain focused on making thoughtful investments in revenue-generating activities while balancing expense growth with top-line revenue creation. As expected, our NIM was up seven basis points this quarter to 3.55%, driven by a reduction in our cost of deposits and a higher yield on our bond portfolio, partly offset by lower loan yields following two rate cuts in the fourth quarter of last year. Our overall cost of funds was down eight basis points to 1.44% due to a lower cost of deposits and a better funding mix. Our cost of deposits was down 10 basis points to 1.47% for the quarter, with the cost of deposits down to 1.46% in the month of March. During the quarter, we reduced promotional rate pricing on our interest-bearing transaction accounts and retail CDs. In 2026, we expect CDs will continue to mature and renew at lower rates, although the rate advantage will diminish over the year in a flat rate environment. Our earning asset yield was down one basis point, with loan yields down 13 basis points following the rate cuts in the fourth quarter. Our bond yields were up 25 basis points related to the quarter's restructuring transaction. Average earning assets were up $100 million, driven by higher average loans partly offset by a lower level of average of bonds. The yield in the bond portfolio, as mentioned, was up 25 basis points to 3.23 related to the quarter's restructuring transaction. The transaction contributed four basis points to our NIM expansion this quarter. As a reminder, the first quarter did not include a full quarter's impact from the transaction. We expect a full quarterly increase in bond yields will approach 32 basis points, and the annual contribution to NIM will be about seven basis points. Aside from the restructuring transaction, we reinvested $181 million back into the bond portfolio at higher yields. Loan yields, as mentioned, were down 13 basis points following the rate cuts in the fourth quarter of 2025. The total fixed rate was unchanged from last quarter at 5.28%, and the total variable rate was down about 14 basis points. Total new loan rates were down 10 basis points, quarter over quarter, but that was partly offset by an increase in average loans of about $250 million late quarter. For the fifth consecutive quarter, our criticized commercial loans improved, decreasing $13 million to $522 million. Nonaccrual loans increased $6 million to $113 million. Net charge-offs came in at 19 basis points, so down from the prior quarter's 22 basis points. Our loan loss reserves are solid and unchanged at 1.43% of loans. We expect net charge-offs at average loans will come in at about 15 to 25 basis points for the full year. Lastly, a comment on capital. Our capital ratios remain remarkably strong, even with the proactive capital deployment we completed during the quarter through the bond restructuring transaction, share repurchases, and an increase in our common cash dividend. We expect that share repurchases will continue at similar levels throughout the year. Changes in the growth dynamics of our balance sheet economic conditions and share valuation could impact that view. I will now turn the call back to John.

Thanks, Mike. Let's open the call for questions.

Thank you. We'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is star one if you would like to join the queue. And our first question comes from the line of Michael Rose with Raymond James. Your line is open.

Hey, good afternoon, everyone. Thanks for taking my questions. Maybe we can just start on loan growth. I think that's the one piece of the story that investors are really looking forward to seeing pick up here as we move through the year. Certainly understand the elevated paydowns look originations, though, were still pretty good in what is typically a seasonally week or quarter. But it does look like a lot of the growth was maybe driven this quarter by higher spending balances. So maybe, John, is there a way to kind of map out what we should expect for long growth in the back half of the year? I know you have the guidance, but more specifically, what gives you confidence that you can actually begin to see some real net growth and for it to pick up here? Because I think that's a big lunch bin for investors. Thanks. MR. Sure, Michael. Thanks for the question. I'm going to let Shane tackle that question.

Thanks, Michael. So our first quarter loan growth was $33 million, and that, I believe, reflects solid underlying momentum. You know, we produced about $1.2 billion in loans, and that's up from $850 from a year ago and really saw strength across business banking, commercial, middle market, health care, commercial finance, and CRE. That net growth, as you articulated, was moderated, though, by some normal portfolio dynamics. So we had mortgage and consumer amortization and some planned pay-downs in some of our larger credits across CRE, healthcare, and our specialty lines. That all was anticipated, and from the outset, we've talked about indicating growth would be more weighted towards the mid and back half of the year. So if you look forward, I think we're positioned to deliver the mid-single-digit full-year growth. Geographic markets are continuing to build momentum. Our CRE production is ahead of plan. Business banking is growing consistently, and health care and commercial finance pipelines remain strong. You know, really importantly, though, you know, we've hired 27 net new bankers, as John mentioned, with more coming in the second quarter. and our prior year hires are now ramping up to create a flywheel for production and growth. So, I think if you take that together, the production, funding timing, banker productivity puts us in a good position for the balance of the year. And, you know, we're starting this first quarter in a positive place, even though it's not a significant number, but compared to last year, we were in a deficit in the first quarter. So we feel like we're in a really good position to be able to leverage production and new banker hires as we go through the back half of the year.

Michael, this is my thing from a seasonal perspective. You're right. The first quarter is usually the lowest quarter for production in terms of seasonal impacts. But, again, as a reminder, as we go through the year, that production tends to pick up from a seasonal perspective. And the fourth quarter is usually our best growth quarter. So we have that momentum that was started this quarter, and certainly the intent is to build on that as we go through the year.

Okay, that's helpful. I appreciate it. And then maybe just as my follow-up, Mike, certainly hear you on the pace of buybacks here, at least in the nearer term. Obviously, there's some E3 endgame and G-CID reforms that are out there for the larger banks, but I think a lot of banks are, you know, smaller banks are talking about, you know, maybe lower CET1 ratios than they might have contemplated before. Can you just give us an update on, you know, what the, you know, what your ultimate target is for CET1 and how we should think about, you know, maybe a year-end number as we balance repurchases and growth?

The way we think about it is if you look at the slide that we have in there around our guidance, and specifically the CSOs, you know, we give some targets around certain profitability metrics, but as importantly, TCE. And as a reminder, the CSOs are styled toward achievement in fourth quarter of 28. So for TCE, we think that somewhere between 9 and 9.5 percent, you know, is a target that we can achieve at that point. And then if we look at CET1, that companion number is probably between 12 and 12.5 or somewhere in that range. But those are the levels that, you know, we think we can kind of aspire to by the end of 28. As you know, I mean, we're accruing a lot of capital as we kind of go through each quarter. But we are doing things to proactively manage that capital. You know, last year we bought Sable Trust Company for cash. We affected the bond restructure this past quarter. You know, we've consistently increased the common dividend. As John mentioned on the opening comments, we increased by a nickel per share per quarter, so 11%. So those kinds of efforts, especially around, you know, buybacks and addressing the common dividend, will certainly continue going forward. And, you know, certainly last but not least, the first and best use of capital is to provide for organic balance sheet growth. So as we grow our balance sheet going forward, you know, we think we can have a pretty good shot at hitting the capital targets I mentioned.

I appreciate the call. I'll step back.

The question comes from the line of Matt Olney with Stevens. Your line is open.

Hey, thanks for taking the question, guys. Just want to follow up on the commentary around adding the new bankers. I think you mentioned there were 27 net new bankers. would love to hear more about these new hires and their backgrounds and what type of lending they'll be focused on and what geographies.

Sure, Matt. This is Shane. I'll give you some commentary on that. So, you know, based on what we consider from an internal benchmarking, these new bankers will typically begin contributing loan growth within kind of their first 12 months, and and they're really meaningfully additive in 12 to 24, and then strong productivity in 24 to 36. So this really is something that matters in two ways. You know, the 27 net new bankers in the first quarter with additional hires planned in the second quarter, you know, supports incremental production as the year progresses. The bankers hired in 24 and 25 are now entering their prime growth years, so we feel like that's going to be a really nice compounding effect as the new hires ramp up. So when you think about where we've hired bankers from, it's really from all different types of entities. We've hired a number of bankers in Texas. Probably the majority of the bankers are hired there. I think on the fourth quarter call, I talked about hiring or our target to be 60% business bankers and 40% being commercial and middle market. We've actually exceeded that. 70% of these new bankers are in our business banking area, which is the much more granular and higher spreads, more deposits segment in our portfolio, and 30% in commercial and middle market. So, I feel like this gives us a real good flywheel as we go into 26 with bankers hired in 24 and 25, producing more significantly as the new bankers are coming on in 26. You know, our process is strong. It's leader-driven. We began that new process in the fourth quarter of 25. It's paid big dividends. And we're going to continue to add bankers, you know, looking towards that 50 net new for 26.

Okay, that's helpful. Appreciate all the color there, and it's great to see some good progress there. Follow-up question, I guess, more for Mike on the net interest margin. We saw some good expansion this quarter. You noted the securities restructuring, you know, a big driver there. Any more color on the margin from here as we go throughout the year?

Yeah, thank you, Matt. So as we kind of talked about on last quarter's call for the year, we had talked a little bit about margin expansion in the range of 12 to 15 basis points, and that would be from fourth quarter of last year to the fourth quarter of this year. So based on where we are now and what we achieved in the first quarter and what we know we can for the last three quarters of the year, remaining three quarters, you know, we're pretty confident about hitting that target and maybe even some upsides toward the upper end of that range. You know, certainly that, you know, is very dependent upon us hitting our targets around loan growth, so the mid-single-digit growth, you know, year over year. You know, we also have, obviously, a head start, if you will, with the bond restructure. In addition to that, we have just under a billion dollars of principal cash flow yet to come from the bond portfolio that'll come off at about 376 and go back on at, you know, let's just say 425 or better. So, you know, year over year, we're looking at about a 51 basis point improvement in the yield on the bond portfolio. And again, that's fourth quarter of last year to fourth quarter of this year. And then finally, you know, we still have some ability to reprice CDs lower across this year. We kind of talked last quarter about year over year about a 16 basis point drop in our cost of deposits. We were down 10 basis points in the first quarter, so six over the remaining three quarters. It certainly seems doable, even without the benefit of any Fed rate cuts. So in the CD front, we have, over the course of the year, about $7 billion maturing, $5 billion for the last three quarters, coming off at around $3.48, going back on at about $3.10 or so. Now, the benefit of repricing those CDs will diminish as we kind of go through the year. And as we move into next year, again, without any benefit related to any rate cuts, you know, that option of continuing to reprice CDs lower will largely have kind of played out. But, you know, certainly as we think about our balance sheet and the things we're doing to organically grow it, you know, that's where the benefit of loan growth will kind of replace the benefit that we had from repricing CDs over the last couple of years.

Okay. That's great. Thank you for that. I will step back.

This question comes from the line of Catherine Mueller with KBW. Your line is open.

Hey, just as a follow-up on the margin, And as we think about loan yields, do you feel like loan yields from this 561 level should be increasing as we move through the year? Just getting where new loan pricing is and some backup repricing opportunities, or is competition leaving that more flat and really the upset in your margins coming from the CD and the bond piece that you just talked about?

Yeah, the benefit that we talked about, Captain, related to the NIM is really coming from, you know, the three things I mentioned. So, the loan growth, the bond portfolio contribution, and then lower cost of deposits. Without any rate cuts or increases for next year, you know, we're looking at the yield on the loan portfolio to largely remain kind of where it is right now. So, in that 560 to 562 range. You know, certainly we have to deal with competition, but certainly our ability to grow loans and maybe improve the mix of the loans that we're growing, we think is enough to kind of keep that loan yield more or less where it is now.

And then what you say, it was interesting to me that with taking rate cuts out, you didn't increase your NIM guide, but it feels like you're more just comfortable in hitting perhaps the height of the range without any cuts. Is that a fair way to think about it? And did anything change?

Right. And it really is, Catherine, and that's a great observation. And, you know, as we think about the guidance for this year, you know, again, we're not changing any of the guidance, but, you know, I would certainly give a little bit of a bias toward the upper end of the ranges, certainly on the revenue components of NII and fees and in expenses as well. So we're thrilled to hire the 27 net new revenue producers for this year. The goal for the year, as Shane mentioned, is still around 50. But certainly hiring those folks sooner rather than later, you know, probably puts us in a position where the guidance for expenses is also kind of in the upper end of that range.

Great.

Thank you. And our next question comes from the line of Christopher Maranach with Green Research. Your line is open.

Tate, good afternoon. I wanted to ask about the new loan yield. I know you disclosed the figure in the back of the deck. I was curious if that yield may, in fact, get higher given how race had acted and perhaps a little bit of movement in spreads, you know, late in the quarter. Just thinking about where 2Q is going to go.

Yeah, Chris, again, without, you know, any rate action contemplated, I mean, you know, certainly I think the new loan yield more or less should stay in the neighborhood of where it is right now. You know, that's certainly going to be impacted by any changes in NICS and any changes between, you know, the contribution of fixed loans versus variable loans. So, you know, kind of quarter over quarter, that total new loan rate was down about 10 basis points. The rate on fixed rate loans was up around 25. The rate on variable rate loans was down about that same level. And that was obviously because of the two rate cuts that happened in the fourth quarter of last year. So I think somewhere going forward in that same neighborhood is probably, you know, good territory for modeling.

And then if we think about sort of possible upgrades from the criticized book, do you see some of that playing out? Could that be a further tailwind this quarter and next quarter?

Yeah, thanks, Chris. You know, what we've been seeing is, you know, a little bit less in the way of inflows, which has been really nice to see. And so, as I think I mentioned on some earlier calls, it usually takes four to five quarters on average for a credit to kind of get to a point where either it refinances away or improves such that we can kind of upgrade it. And, you know, one of the things that I've been kind of watching is some of our lower pass categories, and what we're seeing is a little less inflow in the lower pass category, especially what we consider kind of watch credits. So, I think what we'll see is probably a little bit more of a flattening of our criticized loans rather than, you know, continued improvement. I'd like to think that we can make some headway there, but we are still operating at a pretty low level in criticized loans. So, you know, I'm really pleased with the progress that we've made over the past several years in that regard.

Chris, thank you very much, and, Mike, thank you as well.

Thank you.

The next question is from Casey Hare, Economist Research.

Great, thanks. Good afternoon, everyone. I want to touch on the loan growth. Sorry, I may have missed this. But so slide nine, I understand that the guide is that loan growth builds from this pace in the first quarter here. I was just wondering, the prepayments of 820 in the first quarter, I'm not sure if I heard you guys talk about what you assume for prepayments going forward.

Casey, in terms of unexpected prepayments or just planned?

Right. So you've got, like, unexpected, right? that that uh you have the scheduled payments and maturities of 473 to 820 is what really hurt the the loan growth this quarter and i'm just i i don't know if i heard you say what you expect that to be going forward to deliver your mid single digit loan growth yeah we you know we have our our production numbers kind of um detailed out for you know the rest of the year And in those production numbers, we have, you know, some contras in terms of what is expected in terms of payoffs.

And I think I've said a number of times, you know, we have a number that we kind of factor in for unexpected payoffs in terms of additional production. So, you know, we really kind of saw some payoffs at the end of the quarter, and we saw a little bit of production. actually pushed to the second quarter. So we've got a really good start here in the second quarter, and that kind of impacted our numbers a little bit in the first quarter. But, you know, I don't have a specific number to give you, but I can tell you that it's planned into our overall production reconciliation.

This is John. I'll add a little bit more color. The horsepower behind the mid-single-digits low growth number for the year is really production improvement. The unscheduled payments could certainly bounce around a little bit, but the expectation would be that they don't, you know, swiftly go way up or way down. So to be very clear, the expectation is all those factors, Shane and Mike commented on earlier, leading to production going up in the range of the types of numbers we talked about mid-last year when we discussed what to expect for 26. Did we answer your question, or would you like to redirect?

No, that's good. Yeah, that's great. Thank you.

The next question is from Brett Rabatin from Stonet.

Hey, good afternoon, everyone. Wanted to ask on the fee income guide, I know that syndication fees and FBA and FBIC, I know those are somewhat hard to predict, but just thinking about the guidance for the full year of, you know, kind of that 5% range, that's fairly flat from the first quarter. So I was just curious if you could maybe walk through what you guys see as the drivers on the fee side this year, you know, as you're thinking about that, and if there's any additional momentum maybe to be gained on the trust and wealth management side.

Yeah, thank you. You know, fee income is performing in line with our expectations, and I do believe that it supports that 4% to 5% growth for the full year of 26. You know, fees in the first quarter were treasury and business service charges were strong merchant. We had one of our best months in merchant, and I think that ties out to our business banking focus and the leadership and sales activities there. SBA continues to be strong. Syndication fees I think will have opportunities throughout the year to continue producing and we've got a great team that's focused on that. And you mentioned wealth management. I just see continued momentum there. I mean, that's now 35% of our total non-interest income. We've got a lot of the pivots that we've made over the last number of years are really paying We've got some enhanced leadership in a couple of different areas that we believe are really gonna make a difference as we go into the to the back half of the year you know you gotta you gotta look at the market you know wealth management fees we have a significant part of our wealth management fees are earned every month on assets under management so you know if we get a good stable market or an upward tilted market then we're going to see you know some additional fee income growth if we get you know some downward tilt to that market it's going to put a a little pressure on wealth management annuitas fee income.

Brad, this is Mike. The thing I would add to that and just call a little bit of attention to is, so while the guide is up four to five percent, it's safe to say that the guidance is really toward, or the bias is really toward the upper end of that range. And if you look at our performance against guidance and fee income over the years, You know, we do tend to overperform, I think, a little bit. So you could call that guidance a little bit on the conservative side. So it would not surprise us if, you know, we came in maybe even a little bit above that range, but certainly not prepared right now to change the guidance as of yet. That's something we'll address as we go through the year. The other thing to call out is, and I think we said this or called attention to it in the open comments, you know, is this notion of specialty income being, you know, somewhat difficult to predict and can be, you know, can vary a little bit quarter to quarter. And for us, specialty income is things like syndication fees, BOLI, some mortality gains there, derivative fees, and SBIC income. So, for example, last quarter we had a pretty sizable gain in FDIC fees. sorry. And, you know, obviously that didn't repeat in the first quarter, but as we go through the year, we'd certainly expect SBIC fees to contribute to the overall growth. So that's just an example of something that can kind of create a little bit of volatility and unpredictability as we go through the year. So hopefully that was helpful.

Yeah, that was very helpful.

And then maybe just housekeeping or maybe just a fun question around just the bond restructuring.

One, just making sure that the guidance excludes or includes the bond of structuring for the full year. And then just thinking about the rationality going through it, it's a little more than a four-year payback, but it seems like that's where a lot of these things end up in terms of the payback. So I was just curious on your thought process. I know a lot of banks look at that quite every week to think about. So I just wanted to hear your thoughts on it. Thanks.

Yeah, so obviously the binary structure is part of the guidance for the full year, you know, and a bit of a driver. So we were thrilled to be able to execute that transaction in the middle of January. And certainly, as I mentioned before, I think on one of the earlier questions, you know, it's a great use of capital. So it is something that we look at from time to time. We did one a couple of years ago that did, admittedly, have a little bit of a shorter payback period. And it's just the fact now that the bonds that populate our portfolio are such that executing a transaction like this does, you know, give you a little bit longer payback. But, you know, we still think it's a smart use of capital. And, you know, we're glad to have executed the transaction, certainly.

Appreciate all the color. Thank you.

The question comes from the line of Gary Tenner with DA Davidson. Your line is open.

Good afternoon. I had a couple of questions. Michael, I was curious on the CD repricing or the CD rolls, you know, as they renew. When we were going through the easing cycle initially, I know you were very focused on keeping those CD maturities pretty short and kind of six-month focus so you could turn them pretty quick. Has that ever changed at all in terms of, you know, given the unknown, whether, you know, which direction the rates might go at some point?

Yeah, great question, Gary, and it absolutely has. So what we're doing now or the way we're kind of modifying those tactics or strategy is to the extent we can begin to kind of lengthen out, you know, some of those. So, for example, the best rate we have right now in terms of our promotional rates on CDs is 3.5% for 11 months. So the intent there, obviously, is to bend the duration of those a little bit going forward.

Great. Appreciate that. And then just to clarify your comment on expecting a similar pace of buyback, so you used about a third of your authorization in the first quarter earlier and then either just do nothing, let's say in the fourth quarter, or eventually approve and usually do?

Yeah, so a great question, and I hate to say it, but kind of all of the above, kind of. So what I mean by that is if you look at the authority that we have in total for the year, that was about 4.1 million shares, and we did, you know, lean into the buyback pretty heavily this quarter. We saw an opportunity at some point during the quarter when the stock had pulled back a little bit and, again, leaned in and bought the 1.4 million shares. So the intent absolutely is to exhaust the buyback as we go through this year. Whether we do that early or whether we affect the buyback, you know, a little bit more on a pro rata basis for the remaining three quarters really remains to be seen. And I think more than anything else, we want to give ourselves some optionality and flexibility, you know, to react to what's going on in the market. You know, so the catch-all caveat to that really is what's going on in the environment, our own valuation, and then how much we're growing our own balance sheet. And, again, the intent always is going to be, you know, to deploy capital to support organic balance sheet growth and then, you know, lean into buybacks and common dividend increases would come after that. But so, again, I think the pertinent point is the intent to exhaust the authority as we go through the year. If we do exhaust it early, then that'll be a decision that we make with our board, whether to re-up early or wait to maybe re-up at the beginning of next year.

I appreciate the thoughts on that.

The question comes from the line of Jared Shaw with Barclays. Your line is open.

Hi, this is John Rahn, I'm for Jared. I guess first maybe just thinking about the conflict in the Middle East and higher oil prices. I know you're not a big direct energy lender, but just wondering how that dynamic impacts borrowers and, I guess, sentiment in the market.

Well, we'll start with sentiment, and then we'll – maybe Chris can mop up if there's any credit time for the question. Shane, you want to begin?

Yeah, we do a regular client survey. a couple of times a year and, you know, really try to understand what's going on with clients, you know, what are they thinking in terms of investments and those kind of things. You know, at this point, I think the word is cautious. They are optimistic. I think that at this point, the Iran conflict and war has really kind of crept into energy costs, but on top of energy costs, you know, folks are looking at labor costs, insurance costs across the markets that we serve as kind of, you know, some of the guideposts of when they're going to invest and how much they're going to invest. I would say at this point, we don't have clients that are giving us very specific reasons of why they will or won't invest that are centered around the current war.

Yeah, Chris. I mean, I think that's spot on. I mean, it's probably early to tell. I'm sure if it, you know, persists for a long time, I mean, it'll probably start to show up from a credit standpoint in various areas, especially those that don't have the ability to pass on some of those cost increases. Some have them built into their contracts if they have a contract in place. So it's probably easier to at least pass it on. But I think it's just too early to tell. It's certainly something that we're watching and we're mindful of. You know, I think overall operating costs for companies and individuals have risen probably faster than their income has. So there's probably a little bit of a squeeze going on, but it hasn't really shown up dramatically at this stage.

And then just thinking about attracting new commercial customers and maintaining a competitive product, are there any capabilities in, like, treasury management or payments or anything that customers are asking for that has led to any thought around for their, like, investments in that platform?

Yeah, thank you. This is Shane. Look, we aspire to be the best bank for privately owned businesses and business owners in the country, and we feel like we're on that path. And that really ties back to, you know, certainty of execution and quick credit decisions, great treasury and deposit products, and then a sophisticated wealth management capability. So when it comes to treasury, we are, you know, continually updating our systems, continuing to interface with more third parties such that clients that are using accounting systems and other types of systems to manage their business that ties directly into our treasury products. We're continually investing in card products. We feel like we've got one of the best purchasing card programs in the country. And on top of that, we're working on real-time payments and new payment capabilities that will help facilitate and hopefully reduce costs and complexity for clients.

Okay, perfect, that's helpful. And then, sorry, just one last one from you. Could you, do you have the total revenue producer number at the bank today to help get some context around the signs of the new hires?

The revenue producers, let's call it north of 200.

Yeah, this is John, I think the number you're fishing for is a quarter or two ago we suggested that we were going to raise the expectation for compounded annual revenue producers to go maybe towards 15% annualized versus the 10% we talked about a year ago. And the first quarter success with landing bankers certainly supports that thought process. Is that what you're looking for?

Great. Thanks, Michael.

That concludes our question and answer session. I will now turn the conference back over to Mr. John Harrison for closing remarks.

Thanks, Abby, for moderating the call. Everything went well. Thanks, everyone, for your interest, and we look forward to seeing you on the road very soon. Have a great afternoon.

Ladies and gentlemen, this concludes today's call, and we thank you for your participation.

You may now disconnect.