Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's First Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Following the presentation this morning, there will be a question and answer session. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr.
Joey Raine, Director of Investor Relations at Trustmark. Please go ahead.
Good morning.
I would like to remind everyone that a copy of our Q1 earnings release as well as the slide presentation that will be discussed on our call this morning is available on the Investor Relations section of our website at trustmark.com. During the course of our call, management may make forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We would like to caution you that these forward looking statements may differ materially from actual results due to a number of risks and uncertainties, which are outlined in our earnings release and our other filings with the Securities and Exchange Commission. At this time, I'd like to introduce Duane Dewey, President and CEO of Trustmark Corporation.
Thank you, Joey. Good morning, everyone, and thanks for joining us. With me this morning are Tom Owens, our Chief Financial Officer Barry Harvey, our Chief Credit Officer and Tom Chambers, our Chief Accounting Officer. TrustWorks was pleased to report net income of $52,000,000 or $0.82 per diluted share for the Q1 of 2021. We'll briefly review these financial results by turning to Slide 3.
Loans held for investment excluding PPP loans increased $159,200,000 or 1.6% from the prior quarter and $415,800,000 or 4.3 percent year over year. During the quarter, we originated 4,774 loans through the SBA's Paycheck Protection Program, which totaled 301,500,000 dollars net of $16,500,000 in deferred fees and other costs. Both insurance and wealth management businesses experienced a revenue growth linked quarter with insurance revenue increasing 22.1% and wealth management revenue growing 7.4%. Adjusted non interest expense totaled $120,200,000 for the Q1, a 0.05% increase from the prior quarter. We continue to focus on efficiency enhancements throughout the organization, including investments in technology to gain efficiencies and better serve customers as well as rationalization of the branch network.
Our credit quality remained solid as recoveries exceeded charge offs by $2,400,000 and the provision for credit losses was a negative $10,500,000 dollars driven by decreases in the quantitative reserve resulting from an improving economic forecast. We maintained strong capital levels with a common equity Tier 1 ratio of 11.71 percent and a total risk based capital ratio of 14.07%. During the Q1, Trustmark repurchased $4,200,000 or approximately 145,000 of its outstanding common shares as of March 31. Trustmark had $95,800,000 in remaining authority under its existing repurchase program, which will expire December 31 this year. The Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15 to shareholders of record on June 1.
At this time, I'd like to ask Barry to provide some color on loan growth and credit quality.
I'd be glad to, Duane. Looking over to Slide 4, our loans held for investment excluding PPP loans totaled $10,000,000,000 as of March 31. That's an increase of $159,000,000 from the prior quarter and $416,000,000 from this time last year. Our loan growth came in CRE with both public finance and C and I getting some positive traction. The loan portfolio remains well diversified based on both product type and geography.
Looking on to Slide 5, Trustmark's CRE portfolio is approximately 67% existing and 33% construction land development. Our construction land development book is 79% construction. The bank's owner occupied portfolio has a nice mix between real estate types as well as industries. Looking on to Slide 6, the bank's commercial portfolio is well diversified as you can see across numerous industry segments with no single category exceeding 10%. Typically these loans are well secured, governed by formulaic borrowing basis, and currently we only have one customer totaling $11,000,000 worth of outstandings in that category.
The bank has always underwritten both hotels and retail CRE loans in a conservative manner. Looking at Slide 8, our allowance for funded credit losses decreased $8,100,000 from the prior quarter. Our loan loss reserve levels decreased primarily due our decrease was primarily due to continued improvement in the economic forecast along with some improvement in our COVID-nineteen qualitative factor. At March 31, 2021, the allowance for funded credit losses on loans held for investment was $109,000,000 Looking at Slide 9, you will see we continue to post solid credit quality metrics. At March 31, our allowance for credit losses represented 4 37 percent of non performing loans excluding those that are individually assessed.
Other real estate declined 8.6 percent from the previous quarter and 57% from a 1 year ago level. Recoveries exceeded charge offs this quarter by $2,400,000 Looking on to Slide 10, the bank actively participated, as you know, in the PPP protection programs, both in 2020 as well as 2021. We successfully assisted a significant number of local businesses that have been negatively impacted by the COVID-nineteen pandemic. During the Q1, we originated, as Duane mentioned, 4,774 PPP loans totaling $301,000,000 net of deferred fees and cost. At March 31, 2021, our PPP loans totaled $680,000,000 net of deferred loan fees and cost of $22,000,000 Duane?
Thank you, Barry. Now turning to the liability side of the balance sheet, I'd like to ask Tom Owens to discuss our deposit base and net interest margin.
Thanks, Wayne. Turning to Slide 11. Deposits totaled $14,400,000,000 at March 31, up $335,000,000 or 2.4 percent from the prior quarter and up $2,800,000,000 or 24.3 percent year over year. Average balances increased $600,000,000 or 4.4 percent linked quarter, primarily reflecting additional customer liquidity associated with the PPP loan program and government stimulus payments. Our cost of interest bearing deposits declined 5 basis points from the prior quarter to total 22 basis points.
We continued to maintain a favorable deposit mix with 33% in non interest bearing deposits, and our liquidity remains strong with a loan to deposit ratio of 74%. Turning our attention to revenue on Slide 12. Net interest income FTE totaled $105,200,000 in the Q1, representing a linked quarter decrease of $9,100,000 Interest and fees on PPP loans totaled $9,200,000 which was a decrease of $5,600,000 from the prior quarter, reflecting a linked quarter decline in payoff activity. Core net interest income, FTE, was $96,000,000 which was a decline of $3,500,000 from the prior quarter as a reduction of $3,900,000 in core interest income more than offset a decline of $400,000 in interest expense. About $2,000,000 of the linked quarter decline in interest income was driven by an 8 basis point decline in loans held for investment yield, while the remaining $1,500,000 of the linked quarter decline in interest income was driven by a 22 basis point decline in securities yield, of which about half the decline in securities yield was driven by continuing high residential mortgage prepayment speeds and relatively lower reinvestment yields.
While the remainder was driven by the $301,000,000 increase in the size of the investment portfolio during the quarter. Net interest margin in the Q1 of 2.81 percent decreased by 34 basis points from the 4th quarter, driven by an approximate doubling in other earning assets from $860,000,000 in the 4th quarter to $1,600,000,000 in the 4th of the 1st quarter, resulting from continued strong
deposit growth.
Core NIM, xPPP loans and Fed balances of 2.99% in the 1st quarter declined by 10 basis points from the 4th quarter. I do want to point out that when we refer to core NIM, we're now excluding Fed balances from the calculation. And in Note 5 of our consolidated financial information, we have recast historicals accordingly. I've talked in prior calls about the distortion to our core net interest margin from the excess Fed balances, and we felt that excluding them from calculation of the core NIM is a practice we've seen others in the industry adopt, and we've decided to do so as well. We think this helps clarify for the reader the true fundamental dynamics of our core net interest margin.
And now Duane will continue with an update on non interest income.
Thanks, Tom. We'll now look at non interest income by turning to Slide 13. Non interest income for the Q1 totaled $60,600,000 a $5,500,000 decrease from the prior quarter and a $4,700,000 decrease year over year. The linked quarter change reflects increases in insurance, wealth management and bank card revenues, which were more than offset by decreases in mortgage banking revenue and service charges on deposit accounts. For the quarter, non interest income represented 37.2% of Trustmark's revenue, continuing to demonstrate a solid diversified revenue stream.
Now looking to Slide 14, we'll cover mortgage banking revenue. For the Q1, mortgage banking revenue totaled $20,800,000 a $7,400,000 decrease linked quarter and a $6,700,000 decrease from the prior year. Mortgage loan production had a decline of 2.8% from the prior quarter, although still very strong Q1 production and an increase of 67.7% year over year. For the Q1, retail production represented 75 point 0% of volume $575,000,000 I'll now ask Tom Owens to cover non interest expense and capital management.
Thank you, Duane. So turning to Slide 15, non interest expense is broken out between adjusted, other and total. Adjusted non interest expense totaled $120,200,000 in the first quarter, increase of 0.5 percent from the prior quarter. This increase was mainly due to the $1,500,000 increase in salaries and benefits related to increased payroll taxes and performance based commissions. Credit loss expense related off balance sheet credit exposures was negative $9,400,000 in the Q1.
Other real estate expense totaled $324,000 in the Q1 compared to a negative $812,000 in the prior quarter, reflecting gains on sales of other real estate in the 4th quarter. As noted on Slide 16, Trustmark remains well positioned from a capital perspective with a common equity Tier 1 capital ratio of 11.71 percent and a total risk based capital of 14.07 percent as of March 31. During the Q1, we deployed $4,200,000 via the repurchase of approximately 145,000 common shares. At March 31, we had remaining authorization of $95,800,000 under our existing stock repurchase plan. Dwayne?
Thanks, Tom. I'm hopeful this discussion has been helpful and insightful for everyone. At this time, we'd open the floor to questions.
We will now begin the question and answer Our first question comes from Jennifer Demba with Truist Securities. Please go ahead.
Thank you. Good morning.
Good morning, Jennifer.
Hi. I just wonder if
you could talk about the major levers you feel like you have to offset spread revenue growth challenges and mortgage comparison challenges this year? And what we should expect in terms of kind of near term securities portfolio growth for Trustmark? Thanks.
Jennifer, I'm going to ask you to repeat the question. We got bits and pieces. It was a bit jumbled. It did not hit the first part of your question. I apologize for that.
I'm sorry. Can you hear me better now?
Yes, a little bit. It's still a little bit jumbled.
Okay. I'll talk louder here. Hopefully, it'll work. Can you just talk about the major levers, Trustmark has to kind of offset spread revenue growth challenges and a difficult mortgage lending comparison this year? And how much securities growth you're willing to put on while the industry is waiting for loan demand to get better?
Okay. I think we got most of that and there's a couple of different questions. I'll start out and Tom and others can add in. First of all, as we reported in our last call, we continue to remain very, very focused on expense controls and efficiency measures across the organization. We're doing extensive work in our branch system looking at every opportunity to deploy ITMs and other means to serve customer needs and reduce the overall bridge network as well as headcount.
So continued focus there. I think in our prior call, we guided to 10 to 13 closures in the year. In the Q1, we had a net closure of 5, 7 closures and 2 new adds. The closure level could get as high as 2016, 2017 for the year with several new additions. So that 10 to 14 net closure level is about right for the year, but we're intently focused on the branch system.
We are continuing to invest in technology. We announced a major digital program kicked off actually this month that we think serves customer needs very well, but also is a digital marketing enhancement, which over time will gain significant efficiencies as well as better insight into serving customer needs. And then we are as a leadership and management team, we're intently focused on headcount. We have a program in place of every replacement or new add of headcount. We're focused on reducing headcount across the organization where appropriate.
And we are intently focused on that topic and that issue moving forward. Tom, do you want to pick up from there and share some of the others to mention?
Sure. Good morning, Jennifer. Thank you for the question. So regarding the securities portfolio and the excess
liquidity, so
as we said, during the excess liquidity, so as we said, during the Q1, we averaged about $1,500,000,000 of excess Fed balances. If you think about the driver obviously is the deposit surge. We're up $2,800,000,000 year over year. We're up $300,000,000 just in the Q1 in deposits. We did grow securities by $300,000,000 the investment portfolio by 300,000,000 in the Q1.
And if you think about the $2,800,000,000 in deposit surge year over year, if you look at LHFI growth year over year of about $400,000,000 and securities growth of about $300,000,000 that's about $700,000,000 We've deployed about 25% of that deposit growth year over year. And in terms of managing it going forward, I would think that we will continue to opportunistically increase the size of the portfolio. I think in the second quarter, something in the neighborhood of $150,000,000 or so depending on what happens with deposits. But I'll just say, in terms of managing that liquidity, when you think about what we're trying to do, we're triangulating between assessing what the effective duration of the deposit surge will really end up being And you're trying to balance that against your outlook for the economy and interest rates, while at the same time maintaining a competitive interest rate risk profile. And so you think about Trustmark, we have a very powerful countercyclical non interest revenue engine with mortgage banking, which has kicked in here with historically low interest rates.
We want to make sure that we have a competitively positioned asset sensitivity as we come out of the pandemic and as market interest rates begin to rise and the Fed eventually normalizes monetary policy. And so as we look at it, we think we'll probably underinvested in securities relative to the peer group by a bit. There is the opportunity to do more, but we're trying to balance those things. I mean, if you think about it, $1,500,000,000 sitting at the Fed, if we deployed that and picked up 100 basis points today, that adds about $15,000,000,000 to annual net interest income. But then you think about, well, if you do that, you're putting on 4 to 5 duration assets, the opportunity cost going forward when market interest rates rise and the Fed begins to normalize monetary policy can be enormous.
And we don't want to put ourselves at a competitive disadvantage. So those are our considerations. And again, in summary, I would say that we will continue to opportunistically increase the size of the portfolio.
Jennifer, did we answer every part of your question?
I think so. Is there a limit in terms of securities to assets that you would target?
No, not a limit. I mean, again, historically, we've looked to be in the neighborhood of 20% of earning assets. And I think at this point, that would put us close in round numbers in the neighborhood of $3,000,000,000 We're currently at $2,800,000,000 And as I said, you could absolutely see us increasing the size of the portfolio of something on the order of $200,000,000 here in the second quarter. But again, we when you balance those things out for the time being, our view is that we want to run a little bit light in terms of the securities portfolio. Jennifer, and that could change, right?
I mean, if interest rates are low, the yield curve is flat, spreads are tight. And so those three variables, when you think about it, if they start to move in a direction that becomes more attractive, you could see us deploy some of that liquidity more rapidly. Again, we're also keeping an eye on deposit dynamics. We would have thought and I think a lot of folks in the industry would have thought that by now we would have started to see some rollover. We would hit that inflection point in terms of deposit balances.
Now nobody necessarily anticipated the additional stimulus coming from the American Rescue Plan, so on and so forth. So but as you can imagine, we diligently monitor each month those trends in the balances. And so that's going to be part of the calculation as well is how much do those balances in those products demonstrate an effective duration that looks like something consistent with the back book, so to speak, versus how much of it demonstrates effectively shorter duration. And we want at the end of the day, we want to maintain a competitive asset sensitivity to our interest rate risk profile.
Thank you.
The next question is from Catherine Mealor with KBW. Please go ahead. Ms. Mealor, is your line going?
Good morning. Good morning. Matt, can you hear me? Hi, good morning. I wanted to follow-up on just your loan growth outlook.
It feels like last quarter you were a little bit more cautious on loan growth this year versus last, but had really nice momentum this quarter. And so just curious how you're thinking about what loan growth could look like in 2021? Thanks.
Catherine, this is Barry. I'll go ahead and address that. During Q1, our growth was, as I mentioned, we had a good bit of funding in our other construction book. And some of that was for where we continue to put those type of credits on the books that we felt good about during Q2, Q3 and Q4 of last year. And so we would anticipate that those fundings to continue to be strong throughout the year.
We have seen a little bit of improvement in our growth in the public finance area this quarter. We expect that trend to continue. I think we're really focused on making sure we don't miss those opportunities and making sure we're prudent about how we approach that process. Then on the C and I side, we didn't have a little bit of forward momentum this quarter. It's a very competitive environment, but we are continuing to look at different alternatives.
Going forward, I think we're still our guidance is still low single digits, mainly because of the expected payoffs that we see coming in Q2, Q3 and Q4 on our commercial construction book, which obviously will be coming out of the existing categories as these projects stabilize and move out to the permanent market or sold. If for some reason that is delayed and you could definitely see that being delayed in Q4 as things tend sometimes slide back a quarter, we could see our loan growth being more mid single digits than low single digits, but that would be the reason is because there's a delay that pushes them out of the Q4 into the Q1. Those things that are just moving within the year, I think we would those would all be accounted for within the low single digits guidance. But it's more a function of some scheduled payoffs that we do expect to happen as well as the unexpected, which we are seeing coming through as we've guided forecast much more about that than it is about the production engine because we're still having good activity, looking at a lot of deals, putting them on the books.
As you know, in that particular in the construction mini farm area there, you're getting a nice fee, but it is they are slow to fund typically because of how much equity is going in. And then they'll stay on the books as long as it's attractive to the so once they stabilize, as long as it's attractive to the borrower in terms of what they can do with it in the permanent market or sell the product and cap rates remain low and the permanent market is definitely open and ready for business. So we would expect those projects to leave us as anticipated. But if some reason we're able to allow them to stay with us a little longer for stabilization or something of that nature, then you can see us generate more mid single digit loan growth than the low single digits that we're guiding to.
Got it. Okay, that makes sense. And then maybe just on the reserve, how do you think about where you believe the reserve will bottom? Do you think we're headed toward back towards the day 1 CECL reserve to loan ratio? And could you see that ratio falling below 1?
Or just how do you kind of think about where we're heading towards the bottom?
And this is Barry again, Catherine. Our challenge and I think everybody's challenge is to forecast. I
mean our
forecast continues to improve. As you know, we use Moody's baseline and we forecast 4 quarters and we revert to the mean over 4 quarters, which in today's world, that's a positive because the mean is higher than any of the 4 quarters in our forecast in terms of higher unemployment, whether it be national, southern. So that's actually beginning to work to our advantage. I think we looked at April's numbers coming out of Moody's baseline or their S-one and they did improve slightly with Southern unemployment and national unemployment, which are 2 of our bigger drivers, and but not to the same extent that we've seen them over the past several quarters. So we're cautiously optimistic that continuing improving forecast will continue to be much to a lesser degree than we've seen previously.
That would be a headwind that would help us not be moving back toward where we were day 1, which for Trustmark, just for reference purposes, was 88 basis points on funded debt. So obviously, we're 109 today on funded debt versus the 88. It's not our intention at all to be moving back that direction. Although I will say we also have a qualitative reserve for COVID loans. And as you could imagine, over time, those loans will either get upgraded if they're in a non pass category or we'll decide we don't need the reserves, the additional reserves that were added to the pass category.
And if that does occur, then that will be another headwind we'll need to deal with. But I think that's a little more controllable by Trustmark in terms of how we see the economy unfolding, when we see the vaccine fully distributed to everybody who wants it, availability is unlimited, all those things. And then we can begin to determine, do we think we don't need that COVID reserve. And if we don't, then we can in a systematic manner, we'll begin to release those reserves as we should. I think it's a combination of that as well as the forecast not continuing to have the large improvements in the unemployment, both national and southern that we've seen previously.
Those are the 2 things that are going to drive us lower with our reserving levels. And so as long as we can have some moderation in the forecast from the economic side of it and then be patient, which we intend to be on the releasing of the COVID reserve, on the qualitative side to make sure we really see the whites in their eyes and everything is moving forward and the economic engine has turned back around and the hotels, the restaurants, the retails are all back on solid footing, then we can begin to release some of those reserves that were specifically assigned to those credits that were most impacted by COVID-nineteen.
Okay. Very helpful. Thank you.
The next question is from Brad Milsaps with Piper Sandler. Please go ahead.
Hey, good morning, guys.
Good morning, Brad.
Thanks for taking my questions. Just wanted to quickly go back to the mortgage business. If my calculations are correct, it looks like your gain on loan sale margin was down maybe more than I expected linked quarter. Obviously, I understand there's pressure across the industry, but it doesn't look like your mix in terms of retail wholesale was all that different. Just kind of curious kind of what trends you're seeing?
Are we getting close to a bottom in terms of that gain on loan sale margin? Or if you continue to kind of see weakness as you moved into the Q2?
Yes. Thanks. I'll start. Tom can add if needed. But so first of all, mortgage business, as noted earlier, the production in the business remains very solid, very strong.
Dollars 767,000,000 in the Q1 is 70% higher than any prior Q1 we've ever had. So it's still volumes remain strong. I think in the last call and toward the end of the year, the industry was forecasting volumes to be down 30% -ish to 35% across the industry. We were in that same kind of category. We're seeing more like a 10% decline now over the year in terms of overall volumes.
So that's what we're expecting moving forward, especially in the closing quarters, next quarter and beyond in that 10 ish range of volume decline. We are still seeing the gain on sale margin tighten for sure. That one's much more difficult to forecast, much more dependent on a lot of other factors and the like. And to your point and your question, we've not necessarily seen it stabilize or bottom yet. We do see it continuing to decline, probably down another 25% or more percent in the Q2 from what we're seeing now.
Further into the year, it's much more difficult to see or get any visibility there. So that'd be my any further comments Tom on what you're seeing economically. Is that helpful, Brad?
Yes. No, that's great. And just maybe on the flip side of that, I mean, I know you that mortgage lenders are paid on production and not profitability. So based on your if you think volumes are going to be down 10%, I mean, it doesn't seem like you're going to have maybe a lot of expense leverage even though the revenue is going to come down at a faster clip. Is that a fair assessment?
I'd say that's fair. Yes. I mean, I think that's right on the bottom. We do pay on production. And so if you look at the Q1 expense totals and the 2020 expense totals that was included higher commissions than normal.
And as we see the production come down, they'll come down proportionally in that range. So I think, yes, you hit it right on the expense side.
Yes. And just back to Jennifer's question, I mean, obviously, it sounds like you're working on some things branch related in terms of expense levers. But those but you're still you're looking like you're running at kind of a high single digit kind of expense growth run rate, which seems a little bit higher than maybe what Trustmark's done historically. I mean, is there did you think those brass rationalization efforts are enough to kind of bring that run rate down to something less?
Brad, this is Tom. I'll take a stab at that. It depends on how you look at it in terms of the expenses, right? If you look at adjusted non interest expense, we think we're tracking year over year full year 'twenty one versus 'twenty in the low single digit range. So just to give you an idea, so full year 'twenty adjusted non interest expense was $455,400,000 And so we it very much depends.
The mortgage origination production and commission is a swing factor. We think that excluding that sort of elevated expense, we'll probably be in the 1% to 2% increase year over year in terms of adjusted non interest expense. If mortgage origination volume continues to remain somewhat elevated for the remainder of the year, you'd probably be closer to 3% in terms of that metric for year over year.
Great. That's helpful. I appreciate it.
The next question is from Michael Rose with Raymond James. Please go ahead.
This is Karl Dorvin for Michael Rose. Good morning. I appreciate all the color on the loan growth. Just to take it back off that question, I believe in addition to the CRE roll offs that you had guided to, You also mentioned elevated pay downs were also a factor for the lower loan growth. Just wanted to see you previously I mean, you just noted a pickup in C and I activity.
I wanted to see if where are pay downs relative to what you expected?
And I didn't quite catch the name. Is it Carl?
Yes.
Carl, this is Barry. Let me speak to some of that. It's a funny thing. When you look at what we anticipated for payoffs in Q1, they're pretty close to getting spot on. But I will say that some of the ones that we had scheduled for payoff in Q1 moved down into Q2 or Q3 and some of the ones that probably were slated for 2022 moved into Q1 of 2021.
So it's a fluid situation because of the opportunities our borrowers have from time to time to be able to move a project out to a sale especially where they are getting paid based upon the velocity of lease up as opposed to the stability being achieved. Who slide who slide down to another quarter, probably still in this year for the most part. We do budget a significant amount when we're trying to forecast or plan for when we're trying to forecast a significant number of unexpected payoffs just because of the uncertainty around when things are going to leave us. We do survey our customers quarterly, our relationship managers do to make sure they know exactly when they would expect the project to leave, our relationship managers do a good job of that because they understand that we have limits on things. And if the better we can forecast when things are going to leave us, the better off we are in terms of not shutting off the spigot on something that we're going to have a lot of payoffs on.
If we don't know about it, we can't plan for them. And if we think we're filling up in a bucket, then we will end up stopping or slowing down production when it was unnecessary. We only or slowing down production when it was unnecessary
if we'd only had the best information from the customer.
So our folks do a good job of assessing that on a quarterly basis. We reforecast every quarter our CRE in every category to make sure we're anticipating with the best information possible what's going to transpire. And so the answer to your question, we were about where we expected to be from a payoff standpoint in Q1. We do anticipate the scheduled payoffs for Q2, Q3 and Q4 being heavier. But as I mentioned earlier on Catherine's question, that Q4 is a heavy payoff quarter for us.
Historically, you will see things slide from quarter to quarter either because the things that the stabilization is just not quite where they want it to be or they'd rather wait a couple more months and get the maximum amount of value out of the project when they sell it or they still need to have a little more funding that they can do before they actually move to the permanent market depending on what stage it is, whether it's just out of construction or whether it's just about stabilized. So for all those reasons, it does vary, but I think we feel comfortable with our forecasting process and we feel comfortable that we do have heavier volumes of payoffs coming in the remainder of the year than we experienced in Q1, but Q1 was in line with what we expected.
Got it. Thanks for the color. And then I guess if I can touch on M and A versus buyback. You started using the repurchase program so far in 1Q. Just in terms of M and A, and I know you also previously noted that you are looking to do an M and A.
Just in terms of that, how should we just in terms of the interactions and calls and activity, just can we expect whether you do an M and A to impact how much share you buyback going forward?
Well, this is Duane. I'll start. There's a tremendous amount of activity and discussion in the M and A world going on. There's a whole lot of activity really. We're approached with lots of different opportunities of all different shapes and sizes.
And so there is a lot of talk and discussion out there in the marketplace. Our position really on M and A hasn't changed. We're still very interested in the Southeast region of the U. S. We're looking to be opportunistic.
We're looking for new growth markets. We're looking for expertise and talent that supplements our team as it stands today. We're looking for product or product additions or additional product in categories we know and understand. And we're looking to enhance again our capabilities for growth. And then finally, important to us would be efficiencies that we could gain through addition one way or the other.
We stated and still continue to be thinking in the range of $500,000,000 to $5,000,000,000 in terms of partners that we would look at acquiring. And so that's kind of the view. And then I'll close by saying, yes, it is a very active time right now with lots of different discussions, we have a detailed have a capital planning committee that meets as needed or at least on a regular basis that looks at and considers our opportunities. We still have most of our allocated buyback program in place and we look at that in the same way to be opportunistic and take advantage of market conditions and we'll continue to do so as the market allows. But we do have $98,500,000 of available approved exposure or capital available for buyback at this time.
This concludes our question and answer session. I would like to turn the conference back over to Duane Dewey for any closing remarks.
Thank you again for joining us for our Q1 call. We hope we answered questions and we appreciate you being on the call and look forward to getting back together at the end of the Q2. Have a great rest of the week. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.