This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk04: Ladies and gentlemen, thank you for standing by. Your conference call shall begin momentarily. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you for standing by, and welcome to the Glacier Bancorp First Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentations, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to your host, Mr. Randy Chesler, President and CEO. Sir, you may begin.
spk06: Randy Chesler Great. Thank you, Valerie. Well, good morning and thank you for joining us today. With me here in Kalispell this morning is Ron Cofer, our Chief Financial Officer, Angela Dosey, our Chief Accounting Officer, Byron Pollin, our Treasurer, Tom Dolan, our Chief Credit Administrator, and Don Sherry. our chief administrative officer. So we ended the quarter very encouraged by our strong results across the business that are evident in many of the key performance metrics that we'll cover today. Results were better than what we expected given some of the economic uncertainty caused by the biggest quarterly increase in interest rates in decades and steadily increasing inflation. Our leadership position in some of the best high-growth markets in the country continues to be a strong tailwind for the company as we build one of the premier community banks in the western United States. According to Forbes, the top five states in the U.S. for GDP growth in 2021 were all in our eight-state footprint. Utah, Washington, Idaho, Colorado, and Arizona. I'll touch on the business highlights first and then provide some additional thoughts on the quarter. Net income for the quarter was $67.8 million, an increase of $17.1 million, or 34% from the prior quarter net income of $50.7 million. Pre-tax, pre-provision net revenue was $88.8 million versus prior quarter of $87.9 million. an increase of $900,000, or 1%. The loan portfolio, excluding Triple P loans, had very strong organic growth during the quarter of $407 million, or 12% annualized. This is a very strong first quarter. Historically, our first quarters have been a bit more subdued. Net interest income in the quarter, on a tax equivalent basis, was $190 million. excluding payroll protection program loans or triple P loans, net interest income was 187 million, an increase of 3.2 million or 2% from the prior quarter of 184 million. Net interest margin for the quarter as a percentage of earning assets on a tax equivalent basis was 3.2% compared to 3.21 in the prior quarter. The core net interest margin for the current quarter of 3.07% increased three basis points from 3.04% in the prior quarter. Non-interest expense of $130 million decreased $3.7 million or 3% from the prior quarter. Excluding the $6.2 million of acquisition-related expenses Non-interest expense was $124 million during the quarter. Core deposits continued to flow into the divisions, growing organically by $383 million, or 7% during the quarter. The cost of core deposits remained steady at seven basis points. Earnings per share for the quarter was 61 cents versus 46 cents in the prior quarter. Credit quality continued to improve and show strength in most all measures. We kept our allowance for credit loss reserves flat to the prior quarter at 1.28% of total loans, reflecting our strong credit metrics and our view of the economic outlook. We declared a regular dividend for the quarter of 33 cents per share, an increase of a penny per share or 3% over the prior quarter dividend. The company has declared 148 consecutive quarterly regular dividends and has increased the regular dividend 49 times. We completed the core conversion of the Alta Bank division with assets of $4.1 billion, the largest and most complex conversion in the company's history. So core deposit growth continues to be surprisingly strong across our footprint. This is a good example of the value of our long-term focus on core relationship accounts. This quarter, core deposits increased by $383 million, or 7% annualized. Excluding the ALTA acquisition, core deposits increased $2.4 billion, or 15% from the prior first year quarter. Non-interest bearing deposits increased $211 million or 11% annualized during the quarter and now account for 37% of core deposits. Total debt securities of $10.1 billion decreased $257 million or 2% from the prior quarter and increased $3.7 billion or 57% from the prior year first quarter. We're pleased to invest more of our excess deposits into loans this quarter, and we continue to purchase debt securities with our excess liquidity. Debt securities represented 39% of total assets at the end of the quarter, compared to 40 at the end of 2021. Despite our strong loan growth, our loan-to-deposit ratio remains low at 64%. giving us plenty of fuel for future growth. Credit quality improved during the quarter with non-performing assets improving to 24 basis points from 26 in the prior quarter. Early stage delinquencies as a percentage of loans ended the quarter at 12 basis points, which was a 26 basis point decrease from the prior quarter. The company's net interest margin as a percentage of earning assets on a tax equivalent basis for the quarter was 3.2% compared to 3.21 in the prior quarter. The core net interest margin for the quarter was 3.07% compared to 3.04 in the prior quarter. The growing margin was driven by higher yields on investments. The yield on debt securities ended the quarter at 1.59% compared to 1.5% in the prior quarter. New investments in debt securities were added at 2.25%. The yield on the loan portfolio ended the quarter at 4.59%, down 11 basis points from the prior quarter. We added $1.9 billion in new core loan production with yields around 4.2%, which was an increase of about 20 basis points versus the prior quarter. We saw excellent loan growth in our markets with Wyoming, Montana, and Colorado leading the growth across our eight-state footprint. We're pleased to see the continued strong performance in commercial real estate lending growing organically by $235 million in the quarter. New loan production for the quarter was robust, with $1.9 billion in new loans originated. We continue to focus on responsible growth with a through-the-cycle underwriting lens. We're cautiously optimistic with our low double-digit growth outlook. We've yet to see a material impact of increasing inflation and interest rates on growth outside of the residential mortgage market. Non-interest income of $33.6 million declined 799,000 or 2% from the prior quarter and decreased 6.6 million or 16% from the same quarter last year. due primarily to the reduced gain on sale from residential mortgages. The hot housing market and refinancing slowed down a bit across our footprint, and our biggest concern in the real estate business remains the supply of homes available for sale, increasing interest rates, and the increasing cost of housing. We were very pleased to see effective expense control at the divisions. These results are a tribute to our unique operating model that empowers the divisions to make operating decisions that are right for their markets while still delivering excellent results. We continue to wind down the remnants of the PPP program, receiving $108 million in PPP loan forgiveness during the quarter, with 60.7 million of PPP loans remaining. We recognize 3.3 million of interest income from the PPP loans during the quarter and have 1.9 million of remaining fees to be recognized when the remaining loans are forgiven. Our acquisition of Alta Bank continues to proceed very well. We successfully converted ALTA to our core banking system in March, and we are on track to achieve the targeted cost saves in 2022 that we identified when we announced this transaction in May of 2021. We remain very optimistic about the long-term growth trends in Utah, and we're very pleased that the American Legislative Exchange Council ranked Utah the number one state for its economic outlook for the 15th year in a row. The Glacier team got off to a great start in the first quarter. We completed the core processing platform conversion of AltaBank, the largest and most complex conversion in our history, and the team still achieved record results. We think we are very well positioned to continue to prosperably grow in 2022. So that ends my formal remarks, and I would now like to ask Valerie to open the line for any questions that you may have.
spk04: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star then one on your touch-tone telephone. Again, to ask a question, please press star then one. One moment for our first question. Our first question comes from Matthew Clark of Piper Stanley. Your line is open.
spk02: Hey, good morning. Good morning, Matthew. I wanted to start on expenses. You came in well below your $128 to $130 million guide for the quarter. Can you give us a better sense for what drove most of that, and what your updated thoughts are on the run rate outlook from here.
spk06: Sure.
spk08: Ron, do you want to take that?
spk06: Yes.
spk08: Hi, Matthew. Ron here. So part of it is in the compensation area, it just didn't grow as much as it could have. If you look at our FTE count, we're down to, we only had three more folks there. And then it really is just the extraordinary control that the division represented. And they really did an outstanding job. I want to commend them again for that. So on the guide, I did say $128 to $130 million. And we think that that's really applicable as we trend towards that by the time we get to the fourth quarter. So keep in mind, one of the things we've always said is that we're going to maintain the efficiency ratio 54% to 55%. So we think expenses are well controlled and will just trend up over the next several quarters. I will point out also on the ALTA acquisition, we got some of the cost saves there, but as we said in the last January call, we said that a lot of those expense savings, cost savings will show up in the second and third quarter more towards the back of the year, less in the in the first quarter. So it's coming together nicely.
spk02: Okay, great. And then shifting gears to the loan yields, I think on a core basis, if you exclude PPP, loan yields are down about six basis points to 437 this quarter. Can you give us a sense on where the weighted average rate was on new production this quarter and your thoughts on the loan yield outlook with, I think, 25% of your loan book repricing this year?
spk06: Yeah, I'll, Kevin, on the production and then, you know, on the repricing, maybe, Byron, you want to touch on that. I think that was the second part of your question, Matt.
spk03: Yes.
spk06: But certainly on, you know, new production, you know, there – coming in at about 420, and that's a little, that's about 20 basis points better than where we were at the, you know, in the last quarter. So we're pleased to see that. Byron, do you want to comment on the repricing?
spk08: Sure. On the repricing, about half of what we'll reprice is indexed to prime. And so as the Fed is active this year, you know, we'll see quite a bit of lift from from that activity. So there are some floors that are constraining a little bit of that. We do have about $300 million worth of loans that are constrained. They need about 100 basis points of rate hike before those rates will lift above the floors. And we have about $150 million in loans that need more than 100 basis points of rate hike to lift above those floors. So hopefully that gives you some context there.
spk02: Okay, and then on the securities portfolio, can you remind us how much is truly floating and what the duration is on the portfolio?
spk08: Very little is floating in the securities portfolio. In terms of duration, I have the weighted average life in front of me is close to five years, and so the duration would be just a little bit under that.
spk02: Okay, great. Thank you.
spk04: Thank you. Our next question comes from David Feaster of Raymond James. Your line is open.
spk06: Hey, good morning, everybody. Morning, David.
spk10: I just wanted to touch on organic growth. You know, you guys have posted extremely strong results. Just curious if you could give us some thoughts on, obviously, CRE has been a huge driver, but just what are you hearing from your clients, and how do you think growth is going to shape up going forward? You know, is it primarily still going to be CRE-driven? And then just in the prepared remarks, it was a bit interesting not to hear Utah being highlighted. You know, just curious how growth is trending at Ulta and maybe thoughts on how the pipeline is looking heading into the second quarter.
spk06: Yeah, no, absolutely. I'm going to have Tom comment on that. But, you know, I made a couple comments on Utah. Very strong growth. It was one of our lead states overall. and also noted their recognition as the recognized number one economic outlook state in the country. So we're very, very enthusiastic both on what we see now and the future, very, very bright there. Tom, do you want to comment on the rest?
spk07: Yeah, so I'll give a little color what segments the growth's coming in at. You mentioned CRE. Combination of both CRE construction, which was the predominant growth in the construction in the ADC book, and then on the term side was a very healthy mix between owner and non-owner. The industries that were leading that were industrial, warehouse, and multifamily were our strongest growth. And really, as Randy mentioned, fairly uniform across the footprint with a couple of states outpacing some others. the in-migration that we continue to see, you know, continues to drive the business growth as well. Okay. That's helpful.
spk10: And then maybe just touching on credit more broadly. You know, asset quality remains phenomenal. You've got a conservative approach to credit. curious you know there's a lot of puts and takes in the macro economy just given the inflationary environment this dislocation disruption overseas just curious you know what what keeps you up at night what you're watching closely as you're managing credit and um whether any of the macro issues uh or other trends that you're seeing is starting to lead you to tighten the credit box at all yeah um
spk07: You know, we're certainly in a period of time that I don't think really of us have ever quite seen before. We've seen inflation and rising rates before, but we also haven't seen the level of liquidity on our borrowers' balance sheet to withstand and absorb a lot of that inflation. So, you know, probably if I was to say anything that keeps me up at night, it would probably be portions of the consumer book, which, As you can tell by our portfolio, it's not a large percentage of that, and neither is it a large percentage of our production. I think the consumer book would probably be hit the first in terms of the inflationary pressure. So we continue to watch the entire portfolio very closely. But in terms of how we feel prepared to come into this uncertain market, I'm actually quite comfortable. We tightened up some underwriting guidelines about three years ago when we started to see cap rates drop to a level that, in our opinion, was a little unstable, and that was three years ago. So since then, we've seen a lot more equity into our deals, a lot more cash availability on our borrower's balance sheet that can withstand this, at least for a period of time.
spk08: Okay. That makes sense.
spk10: And then, you know, maybe shifting gears to deposits, you know, following up from your commentary, I mean, core deposit growth has been surprisingly strong. It remains strong. Just curious how you think about deposit growth going forward. Obviously, you've got a huge advantage, as we talked before, about being able to be disciplined with deposit pricing. But, you know, would you expect deposit growth to at least slow or maybe migrate more within the book or even slow? potentially start to flow out as you remain disciplined and just, you know, any, any commentary on your sense of pricing dynamics in the market currently?
spk06: Sure. Um, the number one, I think it starts with the foundation, um, that is very strong. We believe in that, you know, those deposit accounts are spread out over 1500 miles. from Montana down to Arizona. They're mainly small balance accounts. We have almost half a million relationship accounts. And we do focus on getting relationship accounts. These are operating accounts for people, for consumers and businesses across that entire area. So you start with a very, very solid foundation. In terms of what we expect, we expect to see the rate of deposit growth throttle back a little bit. I think we're seeing that already in this quarter. In terms of the beta, though, and the sensitivity of the rates, because of what I described initially, and that is that we really focus on these transaction accounts across the large geographic area, both businesses and consumers, we think they'll be very, very stable. And when you look at our history, we certainly experienced that. The last time rates went up significantly, our deposit really stayed very well. We didn't see a lot of outflow. at very little increase in cost. So we expect the same dynamic here. There is so much excess liquidity among many banks that there's going to be probably a lag effect as well, given how much excess deposits are sitting out there for banks today. That makes sense. Thank you.
spk04: Thank you. Our next question comes from Jeff Williams of DA Davidson. You might want to open it.
spk09: Thank you. Good morning. Morning, Jeff. Ron, I wanted to circle back on the expenses. You know, a core of 124 you mentioned. Well, maybe start with could you quantify the amount of cost saves out of Alta still to come out of maybe against the 124 run rate if you think there's a million or two to come out of that absent any growth? overall?
spk08: Yeah, I think it'll be, I like your million to $2 million range there. I would agree with that. Just knowing that we modeled 17.5% reduction in their non-interest expense, and we'll get 80% of that, say, in this first year. Again, just repeating what I said, the bulk of that will come through more so increasingly in Q2 and a little bit more in Q3 and, you know, level out in Q4. So pretty sustained cost savings in our view. Now that we're past the conversion and, again, everything coming together nicely.
spk09: Okay. Appreciate it, Ron. And I guess if I take, you know, $1 or $2 billion out of $124 and I get to kind of – $122 and change. If we talk about getting back to even the low end of the guidance of getting back to $128 to $130 range, you're still talking about a 5% growth rate after Alta. I'm not going to beat you up on doing well on managing costs. I'm just trying to figure out as that ramps what else is in the expense run rate, maybe it's adding more FTEs. You said that's been down, but where is the expense growth coming from?
spk08: It will be in the people factor. You know, we're having to, you've heard us say we do more with less, but when you only add three FTE, we're at a point now where, you know, we're going to have to, In each of the markets, each market being different, you know, you've got to increase the headcount, particularly where the turnover is at the lower level, not so much in the executive level. So that is primarily where it's going to happen as well. Business development is going to go up. We don't do a lot of travel during that first quarter, so I could see that going up. Amortization of some of the equity we've plowed into our various tax credit projects. You saw that our tax rate went down, and in large measure that's because of the additional tax credit that came into the first quarter. We'll continue to build, and with that comes some amortization of the equity. It runs through non-interest expense for certain tax credits.
spk09: Got it. Thanks, Ron. I guess if I still got you on mid-picking questions, the provision level, I guess $7 million all in, the actual reserve or the provisioning, something inside of that. Any sort of high-low, I know this is a tough question, but just trying to get, given your growth of call it 12% or double-digit growth, Any thoughts on provisioning level as we transition through the year? A lot can change, but just trying to get a sense for, you know, $7 million in the quarter and kind of where that heads.
spk07: Just as Tom here, you know, our provision was largely attributed to the growth we saw in the first quarter. I think as a percent of loans, we feel very comfortable with it based on what we know today. you know, certainly barring any changes in economic forecasts or portfolio quality.
spk09: Okay. Fair enough. Thanks, Tom. And, Randy, a last question on another crystal ball question. Just talking about any real estate concern that you have in your footprint, you know, the fundamentals are fantastic. You've got Low supply, demand is very high in migration trends. You mentioned rising rates. It's got to be monitored on affordability. But any update or thoughts on the real estate kind of within your footprint and any concern there?
spk06: Well, I think there's two broad areas, the residential and the commercial. You know, on the residential, and I think Tom kind of touched on this, we're watching that closely. We're making sure we know exactly the loans that we're putting in our portfolio, the credit quality and the parameters given the increase in value that's occurred across the entire footprint. I think that's an area that we're watching very closely. There is a very, very strong demand. So even with higher interest rates, you know, we see a long way back to an area that we would have to start making other changes. And by that I mean the market is still so frothy that higher interest rates just might bring it back to a normal market as a phase one, and we've yet to see that. So phase one meaning where properties sit on the market for 60, 90 days and selling price is a percentage of asking price. We've yet to see that. So we're watching that, but the supply and the demand characteristics appear to be still very, very tight. That's probably positive. On the commercial side, we start from a basis where a lot of our markets have not been overbuilt in the past. There's a lot of in-migration and demand driving the projects and the use of the projects. We're watching valuations there as well and cap rates, and that's my comment on, you know, viewing credit with a through-the-cycle lens. We continue to do that on both sides.
spk09: Okay. I appreciate it. Thank you.
spk04: Thank you. Our next question comes from Brandon King of Truist Securities. Your line is open.
spk11: Thank you. Good morning. Morning, Brandon. I wanted to touch on CRI paydowns. I know we've heard from other banks saying they're kind of slow this quarter with higher interest rates, and I want to know if that's occurred with your portfolio and kind of how much of that contributed to the strong growth this quarter.
spk06: So, Tom, do you want to take that?
spk07: It's slowed down from a historical average, but it's still a headwind. It's still elevated. Where I would say it has slowed down is maybe refinanced to another institution. It's more the case now that the project developers are taking advantage of the cap rate environment and selling the project, and we may not capture the buyer in terms of financing.
spk11: Okay. And then also kind of in that same theme, with interest rates rising, we're hearing about some banks not raising their or actually lowering their spreads to be more competitive. And just from a competition standpoint, what are you seeing in your markets since the recent Fed rate increase?
spk07: Yes, spreads have compressed over the last, you know, nine months or so. I would say in the last three to four months, though, we've kind of passed that bottomed out, and we're starting to see rates increase, not only from us but also our competitors. And as I've said on prior calls, our pricing competition seems to be more intense in the larger metro areas versus the more rural markets, which are able to set the pricing a lot better. have our average production yield, as Randy mentioned, at 420, which seems to be pretty strong and show some strong growth over the prior quarter.
spk03: Okay.
spk11: And then lastly, with the strong core deposit growth, what are you thinking around deploying that excess equity now? I know that deposit growth kind of keeps a floor on that excess equity getting lower, but With higher rates with securities, are you expecting to buy more securities going forward? Any change in that strategy?
spk06: Would Byron comment on that? Brandon, no, but I think at a very high level, we're going to continue to reinvest those, but I'll let Byron give you a little more color.
spk08: Sure. Our hope is that access liquidity can go into the loan portfolio where Tom is able to achieve some pretty impressive growth rates. To the extent that we do have excess liquidity bills on the balance sheet, our strategy has been to deploy that excess cash, and I think we would continue to do that. We have seen with the recent market rate, it has rather loosed some compelling opportunities to put that money to work at some pretty decent levels. So I would see us continuing the strategy that we've had.
spk11: Thank you very much.
spk04: Thank you. Our next question comes from Kelly Moda of KBW. Your line is open.
spk00: Thanks for the question. It's nice to see ALTA showing through. With that closed and converted, just wondering what the appetite is for M&A. it's a larger deal for you. So you've in the past said it's a later in the year event if you start to look again. But just wondering if there's any changes there as well as the pace of conversations in the market.
spk06: Yeah, no. Good morning, Kelly. No, no change there. Still the same glide path for the next transaction.
spk00: Great. Okay. Ron, just a nitpicky question for you. I saw the tax rate went down. You mentioned some tax credit investments. Do you have what a good tax rate for the year would be?
spk08: I would say it's going to be, just assume it's going to be right between 19% and 20%. I've increased that because I think it's going to be a better year than what we, if you asked me in October last year, I would have said lower rates. But I'm expecting us to do better given all the net interest income growth and et cetera. So somewhere between 19 and 20%.
spk00: Right. That's really helpful. And then lastly, just on the reserve, it held pretty flat at 128 as a percentage of loans. Just wondering if there's – still a large like qualitative adjustment in there if there's conservatism that if things continue to improve and the lost content remains low, if there's additional releases of that that we could see throughout the year.
spk07: Tom, you want to comment on that? You know, there's certainly a qualitative component, but in terms of a large qualitative component, that's not the case, which is why we feel pretty comfortable with the percent of loans that we see today.
spk00: Great. All right, that's all for me. Thanks a lot. I'll step back.
spk04: Okay. Thank you. Our next question comes from Andrew Terrell of Stevens. Your line is open.
spk01: Hey, good morning.
spk04: Good morning.
spk01: Hey, just maybe a more technical question. As we think about kind of given the moving rates, modeling out securities yields throughout 2022, can you just remind us how much cash flow we should expect from the bond book over the next 12 months? Is it fairly kind of ratable throughout that time frame? And then I guess is it fair to think that if the new money yield last quarter was two and a quarter, it's probably moved up from there?
spk08: Sure, Andrew. This is Byron. We get about $450 million of cash flow off of the bond book every quarter. So that is about $1.8 billion a year. And that's fairly steady, fairly consistent. In terms of new investment and the rate that we're getting on that, we're looking at opportunities to reinvest at 375% to 4%. If you look at the rate of the runoff cash flow versus the new opportunities in the market, we're picking up 225 to 250 basis points over that runoff rate, so very, very helpful to the bottom line.
spk01: Yeah, definitely compelling. I appreciate the color. So I guess looking at the 10K, the interest rate sensitivity disclosure, I think you put a note in there regarding the growth in core deposits and then updated deposit pricing assumptions that improve the stated kind of rate sensitivity. Can you just help us out with what exactly you assume in terms of deposit pricing or deposit beta assumptions within that sensitivity analysis? And then I mean, given how great you performed last cycle, just trying to get a sense of maybe how punitive your assumption might be.
spk08: Sure, I can comment on that. So we looked at what our deposit beta was through the last cycle, and it was very, very low. And so we're assuming that that will continue for this rate cycle. So for the first 100 basis points, we have a single-digit beta assumption. For the second 100 basis points, I would say low, low double digit. And then we realize once we get through 200 basis points of rate hike, we will see more traction and our betas will increase and so our modeling does reflect that. But in terms of the first 200 basis points, I think we would expect this rate cycle to be very similar to what we experienced in the last rate cycle. So hopefully Andrew, that addresses your question.
spk01: No, that's perfect. I really appreciate the color, and thank you all for taking my questions.
spk04: You bet. Thank you. Again, if you'd like to ask a question, please press star then 1 on your touchtone telephone. Again, to ask a question, please press star then 1. Our next question comes from Tim Coffey of Janie. Your line is open.
spk05: Great. Thank you. Thanks for taking my questions today. Randy, if I could ask you about kind of the real estate infrastructure in your markets, you know, given that your migration, we've talked about on this call, uh, and the success you'd had in say the commercial real estate industrial warehouse and multifamily, um, is, are there legs to this demand cycle? Um, or do you think you're kind of getting to the point where there is enough real estate infrastructure for the immigration?
spk06: Yeah, no, I, we do believe there's, uh, legs there. Um, the, and, and, you have to go back to the starting point. There has not been historically the infrastructure built out in these western markets. So in many of our markets, different than other parts of the country, the existing stock was not there. And so there is demand. And the in-migration, you know, has been strong. And we've seen, you know, pretty tight supplying most of our markets. And so, you know, a couple, you know, thousands or so of new entrances in the market tends to move the needle. So I think that the trends look very good and we're starting from a point where there wasn't a lot of supply given the amount of inflow and then balanced off against What now is a much longer building cycle to get a project done. You know, we're not seeing an imbalance at this point.
spk05: Okay. Okay. Good call. Thank you. And then I kind of want to understand a little bit more about your inflation expectations in terms of how it impacts the markets, right? Because if I look at your demographics, four of your eight states have a median household income below the national average, yet you don't really expect any change to deposit betas, and you're not really seeing too much in terms of a credit outlook. So how exactly is inflation going to impact your markets, do you think?
spk06: Well, We certainly see wage inflation continuing so that those lower household incomes are going to go up because of the situation with employment where there is a lot more jobs available than there are people to fill them. And that's really acute across all our states. I think we will see that continue to increase. um you know the inflation probably the biggest pain point across our eight states is going to be fuel prices that you know those continue to stay high um that is a that is an expense and given the long expanses we have more that's a bigger factor and and people's expenses than in other parts of the country um so you know i think that um right now Housing and fuel costs are probably the two biggest pain points for people, and we're just keeping an eye on those and what the impact would be or will be.
spk05: But you're not necessarily seeing any slowing in retail spend within your footprint right now? We are not, no. Okay. Well, those are my questions. Thank you very much.
spk06: You're welcome.
spk04: Thank you. I'm showing no further questions at this time. I'll turn the call back over to Randy Chesler for any closing remarks.
spk06: All right. Thank you, Valerie. And I want to thank everybody for dialing in today. Really appreciate it. I know you analysts have a very, very busy season, so we appreciate you joining us today. Have a great Friday and a great weekend, and thank you.
spk04: Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.
Disclaimer