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So long growth has been a key driver for regional bank's earnings in recent quarters and it's no different for old national bank core.
Bob Jones old national -- -- CEO and president who is the town of fox this exclusive from Bloomington.
Indiana admit that the dividend what up you looks like the -- loans are getting blocked.
Is credit quality finally that that's wrong bet that we've turned that corner in your opinion.
Oh I think credit quality is you know -- -- -- -- -- seventeen basis point charge -- the lowest since 1999.
So I think credit quality is just very very strong for all banks.
You know do you think that the growth is coming from the small business customer -- -- the growth is coming for you.
From the recovery in housing I mean worsen the economic -- -- you're in your region.
Well it's really old fashioned banking which means small business lending we're seeing a lot of our clients that once they've gotten past.
The challenges coming out of Washington -- said you know I've got to grow my business how many go out and borrow some money and expand so.
It's just old fashioned small business folks coming back to -- banks and try to contribute to the growth of the economy.
You know -- as we've been going through the -- regional banks in their earnings in margin compression is certainly -- An issue for many banks and I'm curious were you are with regards to that I mean you've got deposits higher.
But but but loan requests are lower where does that mean for you.
Whether chalice for the -- -- -- is really the rate environment we've got a historically low short end of the yield curve and historically low.
Long and it makes it very difficult to you make -- margin and now we have small compression our core margin for the quarter.
But you know I think it's you know moderate over time but really it's the interest rates of the biggest challenge force.
Do you see the yield curve steepening -- think the shares on the possibility.
Well we sure hope so but unfortunately as we set our quarterly call we don't see that happening I think with that the Fed's policy for the short and and then.
We saw a little bit of increase in the long end of the yield curve but I think that's gonna moderate down and we really think rates will stay where they are for the balance of year unfortunately for banks.
Do you think that we're gonna see more M and a activity in the regional sector and I -- us because we do seem to be seeing more acquisitions being made.
A medium sized banks -- going is whipping up in buying may -- just a few couple hundred branches.
In the region -- us have been that you see happening for your institution this year and do you think -- we're gonna see more of that.
Sure absolutely you know just two weeks ago we announced the acquisition of 24 branches from Bank of America and northern Indiana and southwest Michigan.
As you think about our industry you know you go back to what I said about interest rates you think about all the regulatory pressure.
You know as you think in the boardrooms you -- -- budgets to very interesting discussion and we think all of that leads to increased level about mergers and acquisitions over the next twelve months.
The you know you -- -- your loan loss reserves and and that I've come out of curiosity considering it was an attorney and at the corner on loan demand overall.
At the same time now I'm wondering if you're.
Concerned about the quality of loans out there in the quality of borrowers out there if you're a few hours a regulatory decision on your part.
It really was a management decision you know we're from that old school that you increase your loan reserves when you make more money and it's really more for prudent step -- -- us word old fashioned conservative boring bank and when you can increase your reserve you do it and that's really not any indication of any we see and they affect the economy or the future.
I think that.
That got some great -- -- -- -- conservative I think sounds like a great plan for your shareholders -- -- strategy.
Actually I've been very positive on the stock and a but the stock was up more than 6% over the last year I'm curious what you think that -- drivers going to be for the share price.
For this year it's NBA analysts are coming album positive on you words I think if the CEO sometimes -- a little bit extra added pressure.
Perhaps it is added pressure but you know it comes with the territory.
I really believe show we're moving back to old fashioned.
Core earnings is the drivers -- the stock price you know historically for the last couple years it's really been.
Based on tangible book values and my opinion -- you're gonna go back to see the winners -- our equity markets in stocks could be in those banks have the old fashioned core earnings that come from loan growth deposit growth.
Moderating expenses in working on your margin and you know it's an old fashioned business.
Let me ask you this I know that that the dividend increase was up by 11%.
Ones that dividend great.
Talk to me about the rest of the year and a bigger shareholders -- to hear you say that you are considering a more dividend increases as if you say.
You're making money the old fashioned way which is great but -- like to get the payoff is -- -- I agree in -- aren't really arts capital strategy focuses on three things first and foremost is emanate.
We do believe that mergers and acquisitions as we've shown over our last four acquisitions.
Really provide the greatest value to our shareholders.
Should that market begin to -- soft to a continue to look at the dividend and as I said earlier will continue look at that dividends -- earnings increase and then our board does just reaffirm a two million share buyback as well so.
We've got a lot of components and -- a reward our shareholders and we understand every day that's who we work -- All right solid banking and financial worlds we like that Bob Jones old national bank rcn president Bob thank you very much.
Thank you -- have a great day tip.
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