Cirrus Logic Inc
NASDAQ:CRUS
Cirrus Logic Inc
Cirrus Logic Inc., nestled in the bustling heart of Austin, Texas, has etched its name as a pivotal player in the semiconductor industry, particularly in the audio, voice, and haptic technology sectors. The company's origins trace back to 1981, and since then, it has evolved into a powerhouse supplying high-performance, low-power integrated circuits (ICs) that are critical in consumer electronics. If you've ever enjoyed high-quality audio from a smartphone or marveled at the seamless voice interaction with your device, there's a good chance that Cirrus Logic’s technology is operating quietly behind the scenes. Its portfolio boasts an array of products, from audio converters and amplifiers to smart codecs and haptic drivers - all engineered to enhance the auditory and tactile experiences of consumers worldwide.
Cirrus Logic's business model leans heavily on its ability to innovate and closely collaborate with leading consumer electronics giants. By aligning product designs with the specific needs of large-scale customers, often creating custom solutions, Cirrus secures long-term supply agreements, which generate the bulk of its revenue. This symbiotic relationship with tech behemoths, including major smartphone manufacturers, ensures that Cirrus Logic remains at the forefront of technology while continually integrating cutting-edge capabilities into their offerings. Consequently, the company's revenue streams are not only sustained by its robust product pipeline but also through licensing its proprietary technologies, allowing Cirrus Logic to leverage its patents in a highly competitive marketplace.
Earnings Calls
In the fourth quarter, Business First Bancshares showcased robust performance, with total loans increasing by $761.3 million, or 58% annualized. Organic loan growth contributed $62.8 million, primarily in commercial and residential sectors. Deposits surged by $870.4 million, reflecting a 61.4% annualized growth, with noninterest-bearing deposits stable at 20.8%. The net interest margin expanded by 10 basis points to 3.61%, benefiting from improved funding costs. Looking ahead, the company anticipates low to mid-single-digit margin growth and a noninterest income target of $40-50 million for 2025, indicating a favorable outlook for sustained profitability.
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Ladies and gentlemen, my name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to Business First Bancshares Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions].
I would now like to turn the conference over to Matt Sealy, Senior Vice President, Director of Corporate Strategy and FP&A. Matt, you may begin.
Thank you. Good morning, and thank you all for joining. Earlier today, we issued our fourth quarter 2024 earnings press release, a copy of which is available on our website along with the slide presentation that we will reference during today's call. Please refer to Slide 3 of our presentation, which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. For those of you joined by phone, please note the slide presentation is available on our website at www.b1bank.com.
Please also note our safe harbor statements are available on Page 7 of our earnings press release that was filed with the SEC today. All comments made during today's call are subject to the safe harbor statements in our slide presentation and earnings release. This afternoon by Business First Bancshares CEO and President, Jude Melville, Chief Financial Officer; Greg Robinson, Chief Banking Officer, Philip Jordan, and President of B1Bank, [indiscernible]. After the presentation, we'll be happy to address any questions you may have. And with that, I'll turn the call over to you, Jude.
Thanks, Matt. Good afternoon, everybody. I'd like to begin by saying thank you to everyone listening in today or reading the transcript at some future date. We know you have choices to make when it comes to allocating your attention, and we appreciate your prioritizing our company. 2024 was a significant year for us, one in which we not only made but numerically demonstrated material progress towards goals that we've articulated in this forum over past quarters. And the fourth quarter was a particularly nice capstone to our efforts over the course of the year. Over 2024, we grew our client base while exercising disciplined loan and deposit pricing, generating another quarter of double-digit basis point expansion of our net interest margin, which topped off on nearly 30 basis point expansion since our trough in the first quarter, helping us to achieve a sustainable over 3.5% or NIM sooner than expected.
We continued our focus on expense management, leading to greater structural profitability, even while continuing to invest in key technology platforms, and adding seasoned employees as we prepare internally for a responsible approach towards $10 billion in assets over the next few years. We funded our portfolio of increasingly diversified loans with even stronger core deposit growth. Improving the mix of both sides of the balance sheet, reducing CRE and C&D concentrations markedly, while also maintaining strong asset quality, increasing our loan loss reserve to 0.98%, not including our remaining loan discount from previous acquisitions. Even while we diversify by type of credit asset, we also continued to diversify geographically with over 40% of our exposure now in the Dallas and Houston markets. We demonstrated traction in our various noninterest income revenue sources, including building out the infrastructure of our correspondent banking function serving over 100 bank clients, growing income from SBA and interest rate swap provisioning.
In addition to normal organic operations, over the course of the year, we successfully took advantage of opportunities to complete two mergers. On whole bank acquisition of Oakwood Bank in Dallas and on nonbank transaction and SBA loan service provider out of Houston. In both cases, we're either on track or ahead of forecast on earnings impact, employee and client retention earnback periods and minimization of tangible book value dilution. We accomplished both these acquisitions without the need of additional capital and finished the year with a higher TCE ratio, higher TBV per share, higher Tier 1 leverage ratio and a stable total risk-based capital ratio.
It was a solid contributive quarter and a solid constructive year, and I congratulate our team for all the work that went into it. What I'd like to emphasize in closing is that while this was a solid year, it was not a unique year in terms of our priorities, which will continue to be our points of emphasis into 2025 and beyond. Healthy diversified growth within our capacity for capital generation, a focus on liquidity and capital accretion. Continued focus on developing a growing set of robustly served clients in preparation through investments, prioritization of regulatory relationships, reputation and balance sheet structuring so that we may continue seizing opportunities as they present themselves as we're confident they will.
With that, I'll turn it back over to you, Matt.
Great. I'll -- I give you the floor for you to kind of go over and [ answer ] more detail.
Thanks, Matt. Thanks, Jude, and good afternoon, everyone. As Jude mentioned in his remarks, the fourth quarter marked a strong end to a productive year. I'll spend a few minutes reviewing our results, and we'll discuss our updated outlook before we open up for Q&A.
Fourth quarter GAAP net income and EPS available to common shareholders was $15.1 million and included $4.8 million onetime [indiscernible] provision related to the Q4 closing in Oakwood $168,000 merger-related expense, $463,000 core conversion-related expense and a $21,000 gain on sale of securities. Excluding these noncore items, non-GAAP core net income and EPS available to common holders was $19.5 million and $0.66 from our perspective, fourth quarter results were highlighted by solid core margin expansion, disciplined expense management, continued execution on noninterest revenue business segment and disciplined balance sheet growth. Total loans held for investment increased $761.3 million or 58% annualized during the fourth quarter. Excluding acquired Oakwood loans during the quarter, organic growth was $62.8 million or 4.8% annualized.
Loan growth from the linked quarter was largely attributable to net growth in the C&I portfolio of $54.3 million and $20.8 million in the residential 1-4 family portfolio while construction loans declined by $31.9 million linked quarter. Organic production was led by our Southwest Louisiana and Greater New Orleans region, which accounted for all of the net loan growth for the linked quarter. Based on unpaid principal balances, Texas-based loans represent approximately 41% of the overall loan portfolio as of December 31, 2024. Total deposits increased 870.4 million or 61.4% annualized quarter-over-quarter. Excluding acquired deposits from Oakwood, organic deposit growth for the quarter was $156.8 million or 11.1% annualized.
Organic deposit growth for the quarter was highlighted by increases in money market deposits of $51.8 million and $33.3 million net growth in noninterest-bearing deposits with the remainder of the growth being attributed to the bank's seasonal inflow of municipality deposits. Fourth quarter funding costs benefited from a full quarter impact of the Federal Reserve's September rate cut and partial quarter impact of the November and December rate cuts. We are pleased with our ability to manage down our deposit rates while still generating positive deposit growth and lowering our loan-to-deposit ratio. Total interest-bearing deposit costs declined by 29 basis points from the linked quarter, highlighted by a 44 basis point quarter-over-quarter reduction in overall cost of NOW accounts and a 41 basis point reduction in the overall cost of money market accounts.
Notably, the weighted average total cost of deposits for the fourth quarter was 21%, down 13 basis points from the linked [ quarter ] while December -- the December weighted average cost of total deposits was 2.68%. We are encouraged this trajectory be bode well for us as we enter the new year. Total noninterest-bearing deposits represent 20.8% of total deposits as of December 31, 2024, slightly down from 21.1% in the linked quarter but remain in line with our expectations at the end of 2024 and to end 2024 in the low 20% range. We think the composition of noninterest-bearing deposits should hold relatively constant in the low 20% range for the foreseeable future. Our GAAP reported fourth quarter net interest margin expanded 10 basis points linked quarter from 3.51 to 3.61 while the non-GAAP core net interest margin, excluding purchase accounting accretion also increased 10 basis points during the quarter from 3.46% to 3.56% and Fourth quarter net interest income and net interest margin reflect the first full quarter impact of Oak flicks balance sheet.
Both GAAP and core margin for the quarter expanded more than we expected due to the improved funding costs previously mentioned of disciplined pricing on new loan production. I think it's worth noting that our overall deposit beta for the fourth quarter reflecting just the September rate cut was 51%, considering full quarter impact of the late Q4 rate cuts, we would expect deposit costs to continue to decline in the near term, but will be affected by our ability to retain and attract lower cost deposits and noninterest-bearing deposits. I would like to make a note of a few takeaways to Slide 21 in our investor presentation, including Oakwood we continue to see 45% to 55% overall deposit betas as achievable.
I would also like to point out, overall core CD balance retention rates increased from 90% to [ 290% ] during December, up from 83% in September. This impressive statistic reflects our team's continued focus on maintaining and retaining core deposit relationships. As you also see on Slide 22, we have approximately $2.5 billion floating rate loans at approximately 7.75% weighted -- a 7.75% weighted average rate, but also have approximately $600 million fixed rate -- $600 million in fixed rate loans maturing over the next 12 months at a weighted average rate of 6.43%. And which we would expect to reprice in the mid-7% range.
Last thing I would add in our expectations for a discount accretion to average approximately $700,000 to $800,000 per quarter moving forward. Moving on to the income statement. GAAP noninterest expense was $49.6 million and included $168,000 of acquisition-related expense of $463,000 conversion-related expense. Core noninterest expense for the fourth quarter of $48.9 million increased approximately $7.3 million linked quarter due to the full impact of Oakwood expense base and some seasonality around year-end. We would expect a continued increase in our core expenses in the first quarter due to further seasonality around year-end.
We also think that the current consensus outlook for core expenses in the low $50 million per quarter range is reasonable. I would like -- however, would like to remind folks that given the late 2025 conversion of our hopefully franchise, we do not expect material cost savings during the year. Fourth quarter GAAP and core noninterest income was $11.9 million and $11.8 million, respectively. GAAP results did include $21,000 gain on sale of securities. Noninterest income results for the third quarter did come in slightly better than we had expected and was driven by contribution from our newly formed customer swap business line, which generated approximately $1.3 million in revenue during the quarter. Fourth quarter did benefit from a one-off fully debt benefit of $300,000 as well.
We do view Q3 core noninterest income is a good run rate going forward as well as Q4, expect our noninterest income to continue to trend with an upward trajectory that will be bumpy as we've mentioned before. That concludes my prepared remarks, and I'll hand it back over to you.
We're prepared to take questions now. It's been a good solid year that we're proud of, and we're as excited about 2025 as we've ever been.
[Operator Instructions]. Your first question comes from the line of Matt Olney with Stephens.
I'll start on the margin, really good momentum on that core margin in the fourth quarter results both on reported and core. Based on that commentary that Greg provided around deposit costs, competition and loan yield, it feels like this momentum can continue, at least the first few quarters of 2025. But would love to hear any additional thoughts you have around the margin in the next few quarters.
Yes. I think -- Matt, thanks for the question. I think you're right. I think we -- our plan is to continue to grind out low to mid-single-digit margin expansion throughout the year, maybe a little more in the beginning of the year because we probably hadn't , as I mentioned, gotten the full impacts of the last rate cut. But that's the plan. The key, obviously, is to continue to attract and grow deposits organically. If we can do that like we've been in full rate -- loan rates steady we should see some continued expansion.
Okay. And then I guess also looking for any kind of commentary you have around loan yields, loan pricing, just the competition out there, I would think at some point this year, we'll see some other banks get more aggressive on some of their loan pricing. Is that something you're seeing yet any signs of that thus far?
I'll talk about what kind of what we've seen so far and maybe I'll let Phil for Jerry make a comment about what they're seeing with the pipeline. We -- our weighted average for production new and renewed for the fourth quarter was about [ $758 million]. So still holding in line nicely where we think we should be. I would expect you're right. The challenge will be in the competition, some of our competition may decide to get more aggressive, and we'll have to deal with that on a one-off basis. And I don't think that changes our focus on growing relationships and making sure the whole relationship is priced the right way. But I'll let Jerry and Philip.
Yes. I would say, Matt, Obviously, it's always a very competitive environment and now is no different. But I do think that we have been pretty consistent with the year. We have some new software as far as our pricing capabilities where we're able to, as Greg said, take into consideration the entire relationship. So those with significant deposit relationships, et cetera, we're able to be very competitive in retaining those relationships. So our bankers do a good job at [indiscernible].
Yes. I would just add, I think this year was a good illustration of our willingness to exercise discipline when it comes to trade-offs between growth and margin. And we certainly will continue growing and plan to continue growing and want to grow. But we also recognize that over the long term, will create more value by maintaining pricing discipline even while we grow even if it's at a more moderate pace. So it's not just what will the market give us. It's also how we will allocate our capital. And I think I think we are more prepared than ever both in terms of our mindset and in terms of our data availability, given the technological advancements that we've made to be able to think through those choices.
And so we certainly will continue to grow and plan on being a large organization in the future of what we want to do it the right way. And I think this year has been a good transition for us, mindset wise, and we'll look to continue to think through those trade-offs.
Yes. Okay. And then just lastly for me, I guess, on the fee income side. We just saw some really strong growth throughout the year from a several different sources. I think you mentioned this past quarter, it was a customer swap group that contributed nicely. I guess, I just kind of want to look forward to '25. And Greg, in your commentary, I think you said that the third order run rate is the best quarter to kind of consider for our forecast. Did I hear that right? And then any general commentary about what drivers you expect with different groups and teams you expect to drive that fee income growth in 2025.
Matt, I think what we could expect is that I may have said Q3, but I think it's Q3 and the bill at the Q4, $11.8 million in Q4 is what we produced. And I think that's a good run rate to think about how we're going to go forward. I think somewhere you're going to see from 40 to 50 for year-end to '25. As we've mentioned, it might be bumpy getting there because there's going to be different contributors along the way as those build businesses kind of build out and continue to round out. But I think ending the year between 40 and 50, maybe closer to 50 is probably what the noninterest income target would be.
Yes. The important thing for us here is what we're trying to do is build an infrastructure that provides multiple opportunities for that growth. So that no one product set or no one function has to consistently outperform, but we can we can kind of work together on how we get to where we want to go. And I think the SBA platform and the swaps are a good example of maybe even different reactions to interest rate movements. As rates come down a little more and are more stable, maybe the SBA has more of an opportunity to pick up, whereas in a higher rate environment, that begins to limit some of the SBA opportunities. But perhaps the swap opportunities aren't as great in a more comfortable interest rate environment for everybody.
So hopefully, hopefully, we're adding enough different components to our noninterest income that in any given quarter, we'll see continued increase. But as Greg said, it's harder to predict and interest rate margins. And so I might see a little volatility, but we feel really bullish on our opportunity when it comes to noninterest income over the course.
Yes. I would add one thing. I think our markets and our bankers out there really gathered a really good command of the shipping rate environment and a little more normalized yield curve creates new and different opportunities. So I think it's nice to have the tools we've got via SBA swaps kind of driving some opportunities for clients. So it's been nice to watch the strategy kind of take hold as we prepare for a normalized rate.
And on a similar vein with thinking about our bankers that are out there, I think this was a good year in terms of confidence building in the product set. So these are these are new tools and they're not new to the industry, but a focus on them is new to us, and that's really been a 6-, 8-quarter journey. And so I think by the end of 2024, we begin to see bankers think about it more ultimately and begin to recognize that there are incentive opportunities. And there are ways that we can serve clients more robustly than they might have thought 2 or 3 years ago. So partly, it's the yield curve does make a difference, as Jerry pointed out. But I think also our institutional knowledge and our institutional confidence will lead to more business in 2020 regardless.
Your next question comes from the line of Michael Rose with Raymond James.
Just wanted to get a little more color on this quarter's C&I growth. It was really strong on an organic basis. Just trying to understand if that was more kind of line driven or just customer growth. And then if you can kind of shape up the pipelines for us. And maybe, Jude, if you can just discuss kind of competition within the different regions and if there's any hiring plans as we kind of contemplate a 2025 loan growth outlook.
Yes. I would say, Greg mentioned that we had some success in our Southwest and New Orleans market. And actually, volume was a little low. If I heard your first part of your question correctly, I would say that there was a little bit of both. We had some deepening of some existing relationships on C&I, but I think up some new customers, but definitely a focus on that as we transition and down shifted more on the certainly our focus on that C&I, but some really good [indiscernible].
I would just say that I don't know that our C&I has increased as much as it appears so on a relative basis, right? So what we talked about let's say, 6 quarters ago, was downshifting growth a little bit, but we felt like most of the downshifting would come through less of a focus on construction and CRE. And we felt like the C&I core business that we have would continue to perform, and that's really kind of what we see is that -- is that that's been the case. So not necessarily how a later quarter. I think the whole year has been pretty representative of the fact that C&I has been relatively stable in terms of its production, but because of the shift in focus, it's taken all that. Really, the pole position that we wanted -- we've always wanted to. When you think about being a business bank, I think it's important that you're have a robust set of offerings and not just due to real estate, although we, of course, feel very comfortable doing the real estate as well.
But -- so excited about that and see that as a continued opportunity for us. Always, we have we have tried to focus on C&I so that we could get the benefits of a more robust deposit relationship. And so part of our success deposit generation this year, in particular in the fourth quarter has been focused on C&I relationships, not for the types of loans, but for the holistic banking relationship, and we still see -- we think we are a little bit differentiated from other community banks in our ability to conduct that type of business and not just to do it, but to do it right, we have internal auditing capabilities that we've invested in over the years. And we recognize that it has a different risk profile, and I just want to be sure that we're not doing it just for the sake of doing it, but doing it because we're good at it.
I think that's a little bit of a moat again because most community banks are making those same investments. I can remember, it seems like every 3 or 4 years, we all talk about doing C&I lending, but it doesn't really change in general, but we have chosen to make some investment systems that things haven't made and I think that's panel.
Michael, I will say that one other detail that kind of highlights your question is at the end of Q1 of '23, we were about 120% concentrated in C&D as a percentage of capital. And in real time, we finished the fourth quarter at about 78%. So that decline in the C&D bill and the total CRE number from $2.75 to $2.54 over that same time frame, actually kind of highlights what Jude was saying is that I don't know that our focus is any different. It's just that when you're unwinding the C&D book specifically, as we noted in the quarter as well, this is not the first quarter that that's happened. And that was -- that's my design as well.
I would say also, Michael, the second part of your question about hiring, we don't have the wishes hiring goals this year. We feel like we get capacity internally. We'll continue to add bankers when we think they're a good future fit, and we'll continue to have those conversations. But we believe that our growth opportunities exist within our current set of bankers with some incremental additions over the course of the year. But there was a point maybe 3 years ago where we were growing 25, 30 bankers a year and we feel like we've achieved a certain level of platform from which we're able to grow more by adding support staff and making sure that our processes and procedures are adapting as we grow. And so we think we have more institutional capability to grow without necessarily going on the hiring industry in order to do so. But with that said, we're always looking for good partners and certainly, we'll continue to have that we'll do so and when it's right and not just because we need to grow.
I appreciate a lot of color. Sorry, I asked a couple of questions in one there. I think last quarter, you kind of talked about a mid-single-digit loan growth forecast. Any reason that, that would change just given some of the momentum that you mentioned? And, yes, I'll just stop there.
No, no, I think you can still count on that. Again, it's one thing to be able to produce the loans, but it's another thing to think about how that relates to your capital structure and how it relates to your organic core deposit growth, and we want to measure that we maintain balance between all 3 components. So that's still our intention for the year.
Okay. Great. And then maybe just one quick final one for me. Just on the cost savings related to the deal. Any changes in expectations there? Or is it all kind of status quo?
It's all status quo. We won't we're doing our core conversion in May, and then we won't convert them until September. So we're not modeling in any cost saves -- material cost saves for 2025 from the Oakwood acquisition that should set us up for '26 to pull through what we had advertised at announcement.
Your next question comes from the line of Feddie Strickland with Hovde Group.
Just wanted to start on the borrowing. I saw you reduced borrowings by about $10.3 million this quarter. Can you just talk about how you think about those going forward and whether there's any major upcoming maturities that you potentially pay down or kind of how you want to use borrowings and wholesale funding in general over the course of the next year or so?
Yes. I think there's some opportunities with -- I'll start with borrowings and kind of transition from there to other wholesale funding. We think there's an opportunity and a caveat this study with -- as long as we continue to have success growing deposits organically like we have over the last year, I think that's going to present itself an opportunity to pay down about $50 million of FHLB maturities this coming year, which would be at a fairly significant improvement to margin if we execute on that.
I think with broker deposits, we see the same opportunity over the course of 2024, maybe not with as much pickup on from the expense side of those deposits, restructure those a little bit differently where there's maturities coming due every quarter. opportunity in both FHLB and broker deposits to reprice. I think that's all caveated what the current rate environment, if it continues to stay like it is and we continue to be successful. I think if we are -- and you see us do what we did in the fourth quarter is pay down those as the opportunity presents itself.
Got it. And just curious -- I appreciate all the detail on the deck on the loans come up for renewal. But as they come up for renewal, do you have a sense kind of broadly speaking for how much you've been keeping of the loans coming up for renewal versus kind of what's either rolled off on elsewhere? Just trying to get a sense for how much repricing opportunity there is and how much stays with the bank.
Yes, I think it's a good question, no. We experienced about $200 million in loan maturities or renewals in the quarter -- in the fourth quarter. think that was higher than the other 3 quarters in the year. So I would say what we've done has done a good job of the relationships that we want to keep within the quarter. We've done a good job of doing that. I think in reality, there's to pin down an exact number of the $600 million that we would expect to renew to be kind of tough because the market changes day to day almost. But we think we have a good shot at it. And with the weighted average, even from where we are, the pickup would be nice. I know that's not a real direct answer, but that's a tough one to answer.
I guess just -- sorry, go ahead.
Well, I was going to say part of the point of the repricing opportunity is not just repricing loans that stay. It's also the opportunity to reprice with new loans and really where is that been going? Is the funding going to retain older relationships at a new price? Or is the funding going to new relationships at a new price and the new price is the important part. And certainly, it's better to keep a relationship than not, but -- what we want to be sure we try to do is continue to have that discipline on the margin.
Yes. And Feddie, when I think about it from us to bring you to point home I'm thinking about it. If we say we're going to grow 5% or 6% or whatever the number is in loans next year, I'm thinking about the net and the repricing of new and renewed. So the challenge for our bankers is just to make sure that we get to the number. Sometimes that's many different ways of how we get to the number.
Another way to think about that repricing opportunity and the reason we originally started looking at it was thinking through repricing cliff. Would it -- were we facing in a particular quarter, so much repricing and then with tension with rates being higher than they were when the loans were originally built where there be asset quality problems. And it's been interesting to see that, that has not been the case at any bumps that we've had over the course of the year really due to just normal banking credit risk as opposed to interest rate risk.
And so that's the real good news there is that we been working our way through that portfolio, whether it's maintaining the relationship and repricing it or encouraging those clients to find a home somewhere else. I think from a credit perspective and the health of the portfolio, it's been a big positive. And then secondarily, almost, you have the opportunity to reprice at a higher level for income. But really, the reason we began tracking year was more just to think about the credit exposure.
Yes. Feddie, one other -- the way we also think about we're not just thinking about repricing loans. We're thinking about the other side of the balance sheet as well on liability side. So looking at time deposit maturities coming in the next 90 days or 120 days. I mean, that's a material number that almost matches the fixed rate loans that reprice as well. So there's opportunity on that side. So it's the net of the two is kind of the way we think about it and we come out with a better relationship at a better price with an existing one, sometimes we do and sometimes we go to try to maybe use that capital for new relationship as well.
Feddie, one thing that I'd add is, just to put the context of betas in this new down rate environment. Relative to the rising rate environment beta on our new loans. So run rate environment when rates were moving up, we were at around an 85% beta on new and renewed loan yields. That's holding true roughly on new and renewed loan yields in kind of this declining rate environment. So -- and then put that a little bit more in the context, we're getting closer to 100% beta on new offering rates on our interest-bearing deposit account. So there's still that little spread baked in just the asset liability side of it.
But in terms of the actual dollars of loans that are repricing or we can quantify it much easier on the yield side from the beta perspective. But the dollar perspective, I'd say we're close to 100% kind of through and renewal on the dollars.
Got it. Just one last quick one. Just curious, I saw a greater share of the loans came from Louisiana portion of the footprint rather than Texas this quarter ex Oakwood. Should we -- what should we expect sort of going forward in terms of where loans are coming from the footprint? I guess is the pipeline maybe a little heavier Louisiana than it was before? Just kind of curious on that.
I think each quarter, you're going to see a little different mix, and we have a history. That is one of the reasons to have diversified geographies that not only from a credit perspective, but also from a source of production perspective and each we're still at a size where regions having different outcomes affects our overall in different ways and I do think the down shifting or down shifting of the focus on construction over the past few quarters. logically impacts Dallas more because they had more construction than Louisiana for obvious reasons in terms of growth and development. And so -- it's not a surprise that there might be some rebalancing there in terms of our bookings.
I think as we kind of stabilize where we want to be on construction exposure as a concentration, then we shouldn't see as much negative impact to the down shifting away from construction. But we're always going to rotate. I hope we do, and we're continuing to invest in Louisiana, even as we invest in Texas and one robust shifting areas of growth. You want to add [indiscernible].
I was just going to say that the volume that we talk about is the net growth rate to Jude's point, these large C&D loans are paying off. We're doing -- we're making new loans in Dallas is just replace great rate. And then the second part is that acquisition. They have a great got that we'll build on as well.
Yes. And when you think about it, the amount of production that it takes to offset natural amortization that occurs in that book because of that significant growth over the years. It's -- there remains a lot of activity and a lot of production in Dallas, just to keep a little bit moderate growth.
And I think one thing we want to be sure that we do and maybe we can provide more information on this in the future. But I think it's -- we want to remain focused on the granularity of the relationship. And even as we get bigger in terms of our aggregate asset size, we don't want to -- our individual credit perspective to be in a relationship with that overall balance sheet growth, we want to try to continue to serve in our sweet spot, and that means slightly smaller loans, which also be more profitable and long term, healthier from a credit perspective. But it does mean that you got to do more of them to report the same dollar amount, right? But when a vintage is C&I so they tend to be more profitable over time than construction given the totality of the relationship, and we're excited about that, but we'll continue to try to derisk as we grow.
[Operator Instructions]. Your next question comes from the line of Emmanuel Navas with D.A. Davidson.
Good afternoon. I appreciate the quarterly NIM guidance of low single digits to mid-single digits per order growth. What type of rate environment is behind that assumption?
I'm sorry, I didn't hear the last part of that. Could you repeat?
What rate assumptions have you made in terms of further decreases in the Fed funds rate?
Yes. So we're forecasting a flat rate environment we think the work we've done on our balance sheet in more becoming more neutral, that's the most conservative way to approach it.
And what would be -- what would be the impact if there were more cuts? How would that shift that kind of [ projection]?
[indiscernible] if they're for every cut going forward.
Okay. If I take your -- if we stay flat, could you got, let's say, 3 basis points per quarter. Could you get to $375 million in fourth quarter of '25?
I think that's -- that would be optimistic. I think anywhere from the 3.65% to 3.75% range would probably be somewhere we'd be pleased with that. I think it's back to my earlier statement, I think in this environment, it's going to depend on how successful we are in attracting deposits as well as pricing loans the right way. I think the yield curve that we've had lately, especially on the longer end, that is going to make it challenging.
I'll give you a little more color. I think the 370 core by the end of the year isn't completely out of the real possibility. One thing that I would remind you about is our business manager factoring life business that we have, where fees are -- they run through the margin, but they don't come with an actual balance that weighs against the earning asset base. So those -- I think we mentioned last quarter were a little elevated depending on how some of those clients kind of progress over the course of the year, that could influence our core margin more so than you might think simply because of the fact that there was no actual earning assets that will weigh down on the actual margin calculation. But the 370 is not completely out of the realm of possibility.
And then the broker deposit and FHLB borrowing opportunity, is that assumed to happen? Or is that if you get the excess deposit growth you pay those?
I would say also the deposit growth, it would look a lot like what we did in the third and fourth quarter where we were able to pay those down. They would reprice, but you wouldn't get the full benefit of the difference in the repricing from an organic deposit standpoint.
Okay. So that's not necessarily in core NIM guidance, but it is a potential positive?
Correct. Yes. It's an opportunity. Yes.
Got it. Got it. Just was trying to see what's in and what isn't. I like that opportunity. It's a very nice one. Stepping over to net charge-offs, they stepped up a bit just this quarter. Any thoughts on how net charge-offs or provision should extend across the next year? Is it just kind of a modest split and will normalize back down. What are your kind of thoughts of progression across the next year?
Yes. I would say the fourth quarter for us was a little higher. I think it's a cleanup quarter for a few credits that we had outstanding settlement of one, I would call those kind of outliers. I think what we're expecting is to just continue to plod along like we have been in the past quarters. material decline in the book at audio.
We are big enough, though, that we will have an occasional one-off and always try to caveat this conversation with that, then these things are going to happen. But we're not seeing any systemic issues and we're not seeing any blanket degradation. But certainly, our special assets team is on the case and active and working through situations did over the course of 2024 successfully and anticipate continuing that. But we need to stay vigilant because there will be one-off events. But I would actually agree with Greg from a full portfolio point of view is confident in 2025 as we did in 2024.
One thing circling back to the margin. I realize that we have failed to mention the accretion outlook. And so in 2025, it's going to be -- we see around $800,000 a quarter. a little $3 million for the full year, which compares to a little over $4 million for 2024.
What was it in '24? I'm sorry, I didn't hear that.
Little over $4 million, not quite $4.5 million.
In '24. Okay. I appreciate this. I appreciate all the commentary. Just the last thing on the credit. These are really low levels, but on the reserve did step up a bit. Are we likely to kind of stay at that level for now?
We're going to reserve at 120 of every new loan produced. So we think that, that will at least stay at that level and maybe slightly per it takes to move it 1 percentage point in our size, it takes $100,000 more dollars in the model, so almost $1 million more. So I think it's a pretty big needle mover to get it to move up. But I think we're going to try.
We're really pleased, though, with the return to normality essentially of our overall loss provision been almost one there. It's been a while because of our acquisitive history. It's been a while since we've been kind of at one or at peer because, as you all know, we had the loan loss provision and then we had credit marks associated with the acquired assets that don't show up in the provision for off balance sheet. So we've always tried to make the math clear for everybody and show what the effective loan loss reserve was, but -- which is about 20 basis points today more than the loan loss ratio is.
We finally found something positive in the CECL accounting rules. And that meant that with the Oakwood transaction, we were able to actually moved the reserve over to the reserve. And so we'll benefit from a low normalization there, which we're excited about. We definitely want to kind of stay in that range, if not slightly above over the coming year. I appreciate the commentary.
We have no further questions at this time. I will now turn the call back over to Jude Melville for closing remarks.
Okay. Good. Well, thanks, everybody, again, for participating, and thanks to our team for a great year.
I think just in closing, we spend so much time particularly on this call thinking about the metrics and the numbers and they are in the models, and they're certainly very important, but I do like when I can to point out that, first and foremost, we're still a relationship business. And if I think about the work that we did in 2024, and the good things that we accomplished a lot of it really has to do with the building of relationships, whether that be core set of investors that we didn't know before or analyst relationships that we've enjoyed growing over time or our regulatory relationships or our our employees. We have over 800 now, which is a lot compared to the 200 or so that we had 4 or 5 years ago and to be able to manage through that. And feel really good about the culture that's developing here. That's all about the relationships and all those relationships lead to clients, and we have more than we've ever had. And so if I'm thinking about things we're proud of in 2024 and things that we're excited about in 2025. It really comes down to deepening and expanding those relationships, and we appreciate you all being a key component of that. So thank you for your time.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.