Kelly Motta: Awesome. Thank you so much for the color Tim. I will step back.
Tim Laney: Alright. Thanks Kelly.
Operator: Our next question is coming from Andrew Liesch with Piper Sandler. Your line is open.
Tim Laney: Good morning.
Andrew Liesch: Good morning guys. Thanks for taking the questions. Just a question on the Cambr deposits that came in, in the quarter, just curious what the funding difference might be between those and the FHLB borrowings that you paid off.
Aldis Birkans: Yes. Again, we don’t necessarily talk to specific pricing, but I will just say that if these deposit balances persisted at the same cost versus what we paid FHLB, it would be – the difference would be a couple of million dollar benefit annualized to our bottom line.
Andrew Liesch: Got it. Alright. That’s helpful. And then, Tim, what’s the thought process on additional M&A right now? How are conversations with prospective targets going? The Cambr deal last year, the other deals not too far in the distant past, but just curious on your outlook for additional M&A right now.
Tim Laney: Well, activity has certainly been high. And we have been clear in what we are targeting, which would be institutions in that $1 billion to $3 billion range in growth markets, ideally in growth markets that we know and understand, and that’s where we have been spending our time.
Andrew Liesch: Got it. Alright. Thanks for taking my questions. I will step back.
Tim Laney: You bet. Thanks.
Operator: And our next question is coming from Jeff Rulis with D.A. Davidson.
Jeff Rulis: Thanks. I was hoping to get a little more color on the flows of non-performing loans linked-quarter, what kind of came in and the characteristics of those loans?
Tim Laney: Yes. Thanks for asking because I do want to make the point that we don’t believe this increase in NPAs over the quarter represents anything like a negative trend. In fact, we believe NPAs will be down below 50 basis points by year-end. There were just a couple of, I will call them, stagnant nonperformers that our special assets group has not moved out of the bank as quickly as, quite frankly, we expected and they are receiving an intense amount of focus. I will also point out that we believe that these NPAs are very well preserved for and no concern on that front.
Jeff Rulis: And that’s a percent of loans, Tim, the 50 basis points?
Tim Laney: Yes.
Jeff Rulis: Okay. Great. And then one more follow-up, just the – you touched on it briefly, but the service and card revenues linked-quarter down the card makes some sense, but I just wanted to see what was potentially – that’s been kind of a hard charging line item and just wanted to see what those – within those two, if there were any changes or seasonality impacts that I hope to see those come back.
Aldis Birkans: Yes. That’s – first quarter is all seasonality for us for both of those line items. So, yes…
Tim Laney: If you compare it quarter – first quarter last year to first quarter of this year, you would see that dip. We have seen it for years.
Aldis Birkans: Right. So, we do expect that to come back here in the second quarter and already seeing good activity in bank card starting month of March into here in April.
Tim Laney: It prompts another thought we should share because a lot of our card activity relates to personal banking relationships. And another encouraging point around deposits is we started to see a nice positive movement in personal banking deposits as we closed out the quarter and moved into the second quarter. So, that was certainly refreshing to see and that will contribute to additional fee income over time as well.
Jeff Rulis: I guess while we are in the weeds, the mortgage banking had a nice sequential uptick. I don’t know if you want to update sort of the outlook for the year in that line item.
Aldis Birkans: Not specifically. Again, it’s embedded in our total fee guidance, but I will say the market’s changed, right. Even this morning, the rates are up quite a bit, given the GDP numbers. But I would say that what we guided, what we embedded in our plan for gain on sale for mortgage business has been somewhat conservative, have been at or better each month this year to our planned numbers. And again, if the markets don’t really change that dramatically, we should be able to meet our planned numbers in that line item.
Jeff Rulis: Yes. The full year non-interest income guide is great, so I appreciate it.
Aldis Birkans: Yes, of course. Thank you.
Operator: Our next question is coming from Kelly Motta with KBW.
Kelly Motta: Hi. Thank you so much for letting me jump back into the queue. I appreciate the color on M&A and understanding that maybe you want to keep some dry powder for that as well as some of the other initiatives you are working on. I did see that capital did build very nicely, and you guys have been active on the buyback in the past. Just wondering how you guys are approaching that method of capital deployment.
Tim Laney: We are probably discussing buyback action at as high frequency as I can recall. We do believe there could be some interesting opportunity there. We have an authorized buyback, and we will watch the market and pull the trigger if we think we are in the right place. I will also point out that with the kind of capital growth that we are realizing, it gives us confidence that we will continue to increase our dividend twice each year. And we are also frankly talking about whether or not a higher dividend at this point might be appropriate. So, that’s another consideration.
