May 01, 2018 • 10:00 am ET

Previous

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

Thank you, sir. (Operator Instructions) Our first question comes from Brett Rabatin of Piper Jaffray. Your question please.

Analyst
Brett Rabatin

Hi, good morning, everyone.

Executive
Lee Gibson

Good morning, Brett.

Analyst
Brett Rabatin

Wanted to, I guess, first ask on the one credit that was memory care related. Is the weakness there a function of Medicaid? Or can you give us any color on kind of what happened with that credit?

Executive
Lee Gibson

They basically -- the two facilities just have not leased up as anticipated. They are continuing to lease up, but they're not at the stage where they thought they'd be at this point in time. So we felt it appropriate to go ahead and place them on non-accrual and put some reserve against them. But they are continuing to show some improvement on a quarterly basis, and that's why we said we'd reevaluate that on a quarterly basis.

Analyst
Brett Rabatin

Okay. And then I'm just curious, you obviously had higher payoffs than you expected this quarter and that kind of affected the loan growth. Can you talk maybe a little more, Lee, about the pipeline? And just -- you've been a faster growth bank here the past year, is that still on track? What might you give for guidance for loan growth kind of on an updated basis?

Executive
Lee Gibson

Our pipeline looks healthy. The issue is we continue to see some payoffs that are going to be coming down the road in the next several quarters. Some of the construction projects have completed and some of those are going on the market. So the pipeline is healthy, but we do anticipate some further drag as a result of payoffs.

Analyst
Brett Rabatin

Okay. So if I'm thinking about growth for the year, is mid-single digit appropriate or is that going to be tough given the level of payoffs you're expecting?

Executive
Lee Gibson

I'd like to think that the mid-single digit is still achievable. Instead of 7, it may be closer to 5. But we do have a healthy pipeline. We do have some construction loans that are going to continue -- starting to fund up right now. So there are a lot of positive things that are happening and it really just depends, Brett, on the level of payoffs that we see during the year.

Analyst
Brett Rabatin

Okay. Fair enough. I appreciate all the color.

Executive
Lee Gibson

All right. Thank you.

Operator
Operator

Thank you. Our next question comes from Brad Milsaps of Sandler O'Neill. Your question please.

Analyst
Brad Milsaps

Hi, Good morning.

Executive
Lee Gibson

Good morning, Brad.

Analyst
Brad Milsaps

Hi, Julie, just maybe on the expenses. I know it sounds like there are a lot of moving parts this quarter between the reclass and some of the fees and expenses. Can you kind of just -- you mentioned the additional synergies, maybe in dollars, can you talk about where you think expenses will sort of run over the near term?

Executive
Julie Shamburger

Well, if we look at the reclasses that we had, we had estimated around 32 for the run rate. And if you take all the noise out, we would come out about 30. And with the reclass,