This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha
Grew loans by 23%!
“We grew average loans by 23% or $2.1 billion, to $11.5 billion.”
Regulatory burden grows at 50b in assets
“the regulatory burden continues to grow, particularly as we approach $50 billion in assets. But as we have said before, we’ve been preparing for this eventuality, though we expect to have some time before reaching that threshold.”
The loan growth is a bit of an anomaly
“The growth was we’ve seen the spike as we have in prior quarter — Q4s, but this was a more significant jump than we’ve seen in the past. Again, thinking about the utilization rates, kind of going from a 28% to a 38%, that’s substantial across a portfolio like that. We just believe it was a complement [ph] of events where we’ve added new clients over the years and the activity levels at the end of the year was just very strong.
As Mike pointed out though, we did see a — we’ve already seen a decline in those balances so far in the first part of the year, and we could even see period-end, at the end of Q1, period-end balances be lower as we’ve had in some prior years than we did at the end of the year. So it’s somewhat of an anomaly but it also has been an area of focus for us as you pointed out.”
Volatility in equity valuation is different from credit risk
“here’s kind of two aspects when you think about valuations. There’s the credit aspect of it. And I think sometimes people think about that valuations — if a valuation — company goes from $100 million to $250 million or $300 million and it goes back from $300 million back to $100 million, that all of a sudden the credits — there’s a risk to the credit. And for the most part, that’s actually not true. So we look at credit, and as Marc has articulated, we feel very good about where we are from a credit perspective of keeping with our underwriting standards, et cetera.”
Valuations have increased, but growth is strong
“As I said, valuations have absolutely increased. And some of the valuations are, I’ll use the words, very specifically priced for perfection. That being said, we have, in my history, have never seen the growth rates — revenue growth rates of these companies and the market opportunities they’re going after.”