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. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rein, Director of Investor Relations at Trustmark. Please go ahead.
Good morning. I would like to remind everyone that a copy of our first quarter 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. Trustmark was pleased to report net income of $52 million or $0.82 per diluted share for the first quarter of 2021. We'll briefly review these financial results by turning to slide three. Loans held for investment, excluding PPP loans, increased $159.2 million, or 1.6% from the prior quarter, and $415.8 million or 4.3% year-over-year. During the quarter, we originated 4,774 loans through the SBA's Paycheck Protection Program, which totaled $301.5 million, net of $16.5 million 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 $120.2 million for the first quarter, a 0.5% 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 $2.4 million, and the provision for credit losses was a negative $10.5 million, driven by decreases in the quantitative reserve resulting from an improving economic forecast.
We maintain strong capital levels with a Common Equity Tier 1 ratio of 11.71% and a total risk-based capital ratio of 14.07%. During the first quarter, Trustmark repurchased $4.2 million, or approximately 145,000 of its outstanding common shares. As of March 31, Trustmark had $95.8 million in remaining authority under its existing repurchase program, which will expire December 31 of this year. The board of directors declared a quarterly cash dividend of $0.23 per share payable June 15th to shareholders of record on June 1st. At this time, I'd like to ask Barry to provide some color on loan growth and credit quality.
Be glad to, Duane Dewey. Looking over to slide four, our loans held for investment excluding PPP loans totaled $10 billion as of March 31st. That's an increase of $159 million from the prior quarter and $416 million from this time last year. Our loan growth came in CRE with both public finance and C&I getting some positive traction. The loan portfolio remains well-diversified based on both product type and geography. Looking on to slide five, Trustmark 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 onto slide six, 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 bases, covenanted to protect both the income statement and the balance sheet. On slide seven, you can see we have a minimum exposure to restaurants and energy credits. Trustmark has never been in the higher risk C&I lending business, and currently, we only have one customer totaling $11 million worth of outstandings in that category. The bank has always underwritten both hotels and retail CRE Loans in a conservative manner. Looking at slide eight, our allowance for funded credit losses decreased $8.1 million from the prior quarter. Our loan loss reserve levels decrease was primarily due to continued improvement in the economic forecast, along with some improvement in our COVID-19 qualitative factor. At March 31st, 2021, the allowance for funded credit losses on Loans Held for Investment was $109 million.
Looking at slide nine, you will see we continue to post solid credit quality metrics. At March 31, our allowance for credit losses represented 437% of non-performing loans, excluding those that are individually assessed. Other real estate declined 8.6% from the previous quarter and 57% from a one year ago level. Recoveries exceeded charge-offs this quarter by $2.4 million. Looking onto 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 had been negatively impacted by the COVID-19 pandemic. During the first quarter, we originated, as Duane mentioned, 4,774 PPP loans totaling $301 million, net of deferred fees and costs. At March 31st, 2021, our PPP loans totaled $680 million, net of deferred loan fees and cost of $22 million. 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, Duane. Turning to slide 11, deposits totaled $14.4 billion at March 31st, up $335 million or 2.4% from the prior quarter, and up $2.8 billion or 24.3% year-over-year. Average balances increased $600 million or 4.4% linked quarter, primarily reflecting additional customer liquidity associated with the PPP loan program and government stimulus payments. Our cost of interest-bearing deposits declined five 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. Our liquidity range remains strong with a loan to deposit ratio of 74%. Turning our attention to revenue on slide 12, net interest income FTE totaled $105.2 million in the first quarter, representing a linked quarter decrease of $9.1 million.
Interest and fees on PPP loans totaled $9.2 million, which was a decrease of $5.6 million from the prior quarter, reflecting a linked quarter decline in payoff activity. Core net interest income FTE was $96 million, which was a decline of $3.5 million from the prior quarter as a reduction to $3.9 million in core interest income more than offset a decline of $400,000 in interest expense. About $2 million of the linked quarter decline in interest income was driven by an eight basis point decline in loans held for investment yield, while the remaining $1.5 million 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 the securities yield was driven by continuing high residential mortgage prepayment speeds and relatively lower reinvestment yields.
While the $301 million increase in the size of the investment portfolio drove the remainder during the quarter. net interest margin in the first quarter of 2.81% decreased by 34 basis points from the fourth quarter, driven by an approximate doubling in other earning assets from $860 million in the fourth quarter to $1.6 billion in the first quarter, resulting from continued strong deposit growth. Core NIM, ex-PPP loans and Fed balances of 2.99% in the first quarter declined by 10 basis points from the fourth quarter. I do want to point out that when we refer to core NIM, we're now excluding Fed balances from the calculation. In note 5 of our consolidated financial information, we have recapped 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. 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 first quarter totaled $60.6 million, a $5.5 million decrease from the prior quarter and a $4.7 million 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 first quarter, mortgage banking revenue totaled $20.8 million, a $7.4 million decrease linked quarter, and a $6.7 million decrease from the prior year. Mortgage loan production had a decline of 2.8% from the prior quarter, although still very strong first quarter production, and an increase of 67.7% year-over-year.
For the first quarter, retail production represented 75.0% of volume and $575 million. I'll now ask Tom Owens to cover non-interest expense and capital management.
Thank you, Duane. Turning to slide 15, non-interest expense is broken out between adjusted, other, and total. Adjusted non-interest expense totaled $120.2 million in the first quarter, an increase of 0.5% from the prior quarter. This increase was mainly due to the $1.5 million increase in salaries and benefits related to increased payroll taxes and performance-based commissions. Credit loss expense related to off-balance sheet credit exposures was negative $9.4 million in the first quarter. Other real estate expense totaled $324,000 in the first quarter, compared to a negative $812,000 in the prior quarter, reflecting gains on sales of other real estate in the fourth 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% and a total risk-based capital of 14.07% as of March 31st.
During the first quarter, we deployed $4.2 million via the repurchase of approximately 145,000 common shares. At March 31st, we had remaining authorization of $95.8 million under our existing stock repurchase plan. Duane ?
Thanks, Tom. I'm hopeful this discussion has been helpful and insightful for everyone. At this time, we open the floor to questions.
Our first question comes from Jennifer Demba with Truist Securities. Please go ahead.
Thank you. Good morning.
Morning, Jennifer.
Hi, I'm just wondering 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 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 and did not get the first part of your question. I apologize for that.
I'm sorry. Can you hear me better now?
Yes, a little bit. 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. No, I think we got most of that, there's a couple different questions. I'll start out Tom and others can add in. First of all, as we reported in our last call, we continue to remain 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 branch network as well as headcount. Continued focus there. I think in our prior call, we guided to 10-13 closures in the year. In the first quarter, we had a net closure of five, seven closures and two new adds. The closure level could get as high as 16, 17 for the year with several new additions. That 10-14 net closure level is about right for the year.
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. 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. We are intently focused on that topic and that issue moving forward. Tom, you want to pick up from there and.
Sure
Talk to some of the other metrics?
Sure. Good morning, Jennifer. Thank you for the question. Regarding the securities portfolio and the excess liquidity. As we said, during the first quarter, we averaged about a billion and a half dollars of excess Fed balances. If you think about the driver, obviously, is the deposit surge. We're up $2.8 billion year-over-year. We were up $300 million just in the first quarter in deposits. We did grow securities by $300 million, the investment portfolio by $300 million in the first quarter. If you think about the $2.8 billion in deposit surge year-over-year, if you look at LHFI growth year-over-year of about $400 million and securities growth of about $300 million, that's about $700 million. We've deployed about 25% of that deposit growth year-over-year.
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 million or so, depending on what happens with deposits. 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. You think about Trustmark, we have a very powerful counter-cyclical 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. As we look at it, we think we're probably under-invested in securities relative to the peer group by a bit. There is the opportunity to do more. We're trying to balance those things. If you think about it, a billion and a half sitting at the Fed, if we deployed that and picked up 100 basis points today, that adds about $15 million to annual net interest income.
You think about, well, if you do that, and you're putting on four to five-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. Those are our considerations. 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. Again, historically, we've looked to be in the neighborhood of 20% of earning assets. I think at this point that would put us close to, in round numbers, in the neighborhood of $3 billion. We're currently at $2.8 billion. As I said, you could absolutely see us increasing the size of the portfolio, something on the order of $200 million here in the second quarter. Again, 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, that could change, right? If interest rates are low, the yield curve is flat, spreads are tight.
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. Nobody necessarily anticipated the additional stimulus coming from the American Rescue Plan, so on and so forth. As you can imagine, we diligently monitor each month those trends and the balances.
That's going to be part of the calculation as well is how much do those balances and 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. 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 working?
Thanks. Good morning.
It was. Now, can you hear me? Hi, good morning. I just 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. Just curious how you're thinking about what loan growth could look like in 2021. Thanks.
Hey, 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 continued to put those type of credits on the books that we felt good about during Q2, Q3, and Q4 of last year. 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. On the C&I side, we did have a little bit of forward momentum this quarter.
It's a very competitive environment. We are continuing to look at different alternatives. Going forward, I think 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 are sold. If for some reason that is delayed, and you could definitely see that being delayed in Q4 as things tend to sometimes slide back a quarter, we could see our loan growth being more mid-single digits than low single digits. That would be the reason is because there's a delay that pushes them out of the fourth quarter into the first quarter.
Those things that are just moving within the year, I think those would all be accounted for within the low single-digits guidance. 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 got it 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 the construction and land development area, you're getting a nice fee, but they are slow to fund typically because of how much equity is going in.
They'll stay on the books 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. Cap rates remain low and the permanent market is definitely open and ready for business. We would expect those projects to leave us as anticipated. If for some reason we're able to allow them to stay with us a little longer for stabilization or something of that nature, then you could 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. Maybe just on the reserve, how do you think about where you believe the reserve will bottom? Do you think we're headed back towards the day one CECL reserve to loan ratio? Did you see that ratio falling below one or just how do you kind of think about where we're headed towards the bottom?
This is Barry again, Catherine. Our challenge and I think everybody's challenge is to forecast. Our forecast continues to improve. As you know, we use Moody's baseline and we forecast four quarters, we revert to the mean over four quarters, which in today's world, that's a positive because the mean is higher than any of the four quarters in our forecast in terms of higher unemployment, whether it be national, Southern. 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 S1, they did improve slightly with Southern unemployment and national unemployment, which are two of our bigger drivers. Not to the same extent that we've seen them over the past several quarters.
We're cautiously optimistic that 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 at day one, which for Trustmark, just for reference purposes, was 88 basis points on funded debt. Obviously we're 109 today on funded debt versus the 88. It's not our intention at all to be moving back that direction. I will say we also have a qualitative reserve for COVID-19 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 additional reserves that were added to the pass category. If that does occur, that will be another headwind we'll need to deal with.
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. Then we can begin to determine, do we think we don't need that COVID reserve? 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 two things that are going to drive us lower with our reserving levels.
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 is 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-19.
That's very helpful. Thank you.
The next question is from Brad Milsaps with Piper Sandler. Please go ahead.
Hey, good morning, guys.
Morning, Brad.
Thanks for taking my question. 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 expected linked quarter. Obviously, understand there's pressure across the industry. It doesn't look like your mix in terms of retail, wholesale was all that different. Just kind of curious what trends you're seeing. Are we getting close to a bottom in terms of that gain on loan sale margin? If you've continued to kind of see weakness as you moved into the second quarter?
Yeah, thanks. I'll start. Tom can add if needed. First of all, mortgage banking, as noted earlier, the production in the business remains very solid, very strong. $767 million in the first quarter is 70% higher than any prior first quarter we've ever had. 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. That's what we're expecting moving forward, especially in the close in 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. To your point in your question, we've not necessarily seen it stabilize or bottom yet. We do see it's continuing to decline, probably down another 25% or more in the second quarter from what we're seeing now. Further into the year, it's much more difficult to see or get any visibility there. Any further comments, Tom, on what you're seeing economically? Is that helpful, Brad?
Yeah, no, that's great. Just maybe on the flip side of that, I know that mortgage lenders are paid on production and not profitability. Based on if you think volumes are going to be down 10%, it doesn't seem like you're going to have maybe a lot of expense leverage even though the revenue's going to come down at a faster clip. Is that a fair assessment?
I'd say that's fair. Yes. I think that's right on the button. We do pay on production. If you look at the first quarter expense totals and the 2020 expense totals, that included higher commissions than normal. As we see the production come down, they'll come down proportionally in that range. I think, yeah, you hit it right on the expense side.
Yeah. Just back to Jennifer's question, obviously it sounds like you're working on some things branch related in terms of expense levers. You're still 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. Do you think those branch 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 2021 versus 2020 in the low single digit range. Just to give you an idea, full year 2020 adjusted non-interest expense was $455.4 million. It very much depends. Mortgage origination production and commission is a swing factor. We think that excluding that sort of elevated expense will probably be in the 1%-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.
Again, if you have a question, please press star then one. The next question is from Michael Rose with Raymond James. Please go ahead.
Hi. This is Carl Doirin for Michael Rose. Good morning. I appreciate all the color on the loan growth. Just to piggyback off that question, I believe, in addition to the CRE roll-off that you had guided to. You also mentioned elevated paydowns were also a factor for the lower loan growth. You just noted a pickup in C&I activity. I wanted to see where are paydowns relative to what you expected?
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 being spot on. 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. It's a fluid situation because of the opportunities our borrowers have from time to time to be able to move a project out through a sale, especially where they're getting paid based upon the velocity of lease up as opposed to the stability being achieved.
We do get surprised at every quarter by some that move from one year into this year, and some that were scheduled for this year 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 them, 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 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.
To answer your question, we're about where we expected to be from a payoff standpoint in Q1. We do anticipate the scheduled payoffs for Q2, Q3, and Q 4 being heavier. As I mentioned earlier on Catherine's question, that fourth quarter is a heavy payoff quarter for us. Historically, you will see things slide from quarter to quarter, either because 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.
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. Q1 was in line with what we expected.
Got it. Thanks for the color. If I can touch on M&A versus buybacks. You started using the repurchase program so far in 1Q. Just in terms of M&A, I know you also previously noted that you are looking to do an M&A. Just in terms of that, in terms of the interactions and calls and activity, can we expect whether you do M&A to impact how much share you buy back going forward?
Well, this is Duane. I'll start. There's a tremendous amount of activity and discussion in the M&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&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 and categories we know and understand. We look to enhance, again, our capabilities for growth. 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 million to $5 billion in terms of partners that we would look at acquiring. That's kind of the view. I'll close by saying, yes, it is a very active time right now with lots of different discussions across the industry. In terms of buyback, we 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.
We do have $98.5 million of available approved exposure or capital available for buyback at this time.
All right. Thank you very much. That'll be all for me.
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 first quarter 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 second quarter. Have a great rest of the week. Thank you.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.