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Home Bancshares Inc (HOMB) Q1 2019 Earnings Call Transcript


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Home Bancshares Inc (NASDAQ: HOMB)
Q1 2019 Earnings Call
April 18, 2019 , 2:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, ladies and gentlemen. Welcome to the Home Bancshares, Inc. First quarter 2019 Earnings Call. The purpose of this call is to discuss the information and data provided in the quarterly earnings release issued this morning. The Company presenters will begin with prepared remarks and then entertain questions. (Operator Instructions).

The Company has asked me to remind everyone to refer to their cautionary note regarding forward-looking statements. You will find this note on Page 3 of their Form 10-K filed with the SEC in February 2019. At this time, all participants are in a listen-only mode and this conference is being recorded. If you need operator assistance during the conference, please press star then zero. It is now my pleasure to turn the call over to Mr. Allison.

John W. Allison -- Chairman of the Board

Thank you, Gary. And welcome everyone to the first quarter 2019 earnings release and conference call. First, I want to thank all of you for your support, many of you have been with us a long time and been through the thick and the thin and the good and the bad. The good economic times and the bad economic times and some of the craziest times. For all of us at Home, we want to say thank you very much. Well thank you very much and please join us in Homes' 20th year celebration this year. Things now are much clearer than they were when we reported in January of the fourth quarter 2018 which turned out to be one of the most bizarre quarters that we've experienced together since the '08 crash when Bear Stearns, Lehman Brothers and the introduction of TARP. The difference was this time, however, the result was an enormous miscalculation of the market of the economic environment that led to a December panic in the stock market. Investors lost hundreds of billions of dollars including IRAs, 401k. Just regular people lost their money and wealthy people as well, all because of incorrect and unclear guidance from the Fed. I recently was visiting one money manager who at the end of September his fund was up $100 million and he was feeling pretty good at that time. He lost the entire $100 million by the end of December. I don't blame Chairman Paul for the bad calls but I blame those who were supposed to be the so-called experts that were advising him. They need to get out of their ivory tower and get in the field and live it like we bankers that run top performing companies do that have their ears to the ground because all the money we have in the world is invested in our banks.

Many of the best banks in America at bank conferences visit with each other and these bank conference was what's going on. Why are process -- bank process disconnected from fundamentals. My business is good but the regulators think it's too good and they see, huge warning signs. We all said together that we don't see it. They said, it's been up, the regulators said it's been a long slog (ph) . The liquidity is going to be a problem. Construction loans are a major problem. What are your deposit betas? Raising rates will continue and risk profiles are increasing. I guess inflation was the so-called main reason for the rate increases. Whatever the misconception was it certainly had a slowing effect on the economy. In addition to the cost of funds and causing bank market -- stock market crash. In my opinion, banks overall are in the best shape they've been in my banking career. Strictly -- that reason is strictly because of the lessons learned in '08 and '09. Loan to values are better than ever. Strong equity in every deal. You know, when you think about the immediate change from rate hike after rate hike, matter of fact, four in a row in '18. And when we were told there's more coming, to stopping a rate hikes suddenly and turning around, making an 180 degree turn. That was a extremely scary and confusion. Although very welcome. Thank god they stopped or we would be in the middle of a severe crisis. All becasue someone was chasing a ghost. Unbelievable. How does a bank or a business manage with that kind of inconsistency and confusion. We had people stop projects or at least postpone them until the sky clears, which is somewhat disappointing growth for this quarter. If business can be (inaudible) the Fed, I think we can get back on solid business ground again very soon. I'm not involved in Fed appointments but it's time for a business man with real life experience, has done something in his life to be appointed, someone with some common sense, someone who has built something that has survived some of the toughest business times since the Great Depression. I bet those who led Chairman, Paul to the last decision will play hell getting him to make that same mistake again. We all learn from our mistakes and there is no substitute for experience. And not all the members were totally on Board with the Fed decision last time but it's probably not time to call names. It's over. Some poor people lost their money and will never recover, but most of us will live to fight another day.

The S&P 500 Total Return was the worst since December 1931 in the middle of the -- excuse me middle or start of the Great Depression. Banks stocks were slaughtered, why? You think about it, credit unions pay no taxes and they've grown beyond their guidelines. The unregulated shadow banking system reaps insurance company, fund managers who thank their lenders now, Amazon, PayPal, person to person payments. It was already tough to be in the banking space and it's even tougher. As one former lender said to me recently, who has now with the fund is lending money from a fund. He said, I won't go back there because this is much easier and I don't have to deal with examiners.

I've told examiners, they continue to push. They may be examining dinosaurs. Enough of this about stuff that's beyond our control. Let's talk about what is within our control. We've all focused on NIM for the entire year of 2018, little particularly the fourth quarter of 2018, the first quarter of 2019, because of the situations that were created. There has been some confusion over time over the Stonegate acquisition, the Shore acquisition, CCFGs extra revenue and legacy NIM.

Hopefully, we'll make this presentation clear today, Brian Davis will start first with us and he'll talk about the margin and present that for us. Followed will be Chris Poulton, who will talk about CCFG, his current business, outlook and margin and then John Marshall, who runs our marine component show premiere finance will give insight on his business, Tracy French, and Steven Tipton are on board to discuss the legacy group and Randy Sims will wrap it all together at the end with report -- combined report on Home BancShares. So before we get on to the reports -- let's talk about the quarter. In my opinion the quarter was a solid and steady quarter. One thing was a pilot was the cost of fund pressure has subsided. We had -- continue to have escalations in January but February and March were only up 1 basis point each and that's positive Margin was flat for the quarter, that's good news that we maintain our margin and hopefully, you'll understand better how we do that. Loan outlook is a little better for this quarter than started out last quarter. Expense control is -- it has been good. We had a couple of one timers on both sides, income and expense. We're seeing good increases in renewals and modifications that average 26 basis points on over 170 million in March. And yields loan continue to expand despite reduction in accretion income. Let me say that again. Yields on loans continue to expand despite reduction in accretion income. Legacy production yields exceeded legacy payouts by 60 basis points in March. And we will say that again, legacy production yields exceeded payouts by 60 basis points. That's all good news. On the stock buyback front, last year we bought back $104 million worth of stock in '18. And so far we stepped it up a little bit the first quarter and bought back $51 million worth of stock.

Last year, we bought back 5,307,000 shares in the first quarter buyback 2,716,000 shares. You add those together and that's almost 5% of the total outstanding stock that we bought back in this period of time. Overall, I think it was a decent quarter and hopefully, we'll have a good year coming on in '19. Brian, would you take and see if you can give us a good explanation of the margin.

Brian S. Davis -- Treasurer and Chief Financial Officer

Well, thank you Mr. Allison. The first quarter was a good quarter for our net interest income and net interest margin. On a tax equivalent basis, we recorded net interest income of $140.8 million for Q1 2019 and $141.7 million for Q4 2018. Our net interest margin was 4.30% for both the fourth quarter of 2018 and the first quarter of 2019. Before I go over our first quarter 2019 numbers, I'd like to remind everyone about a few items from last year. Our CFG division does a great job of being an opportunistic and obtaining additional interest income from pay off of NIMs. Last year these events resulted in our net interest margin being increased by 3, 6, 12 and 0 basis points to the first, second, third and fourth quarters of 2018. The first quarter of 2019 does not include any additional interest income or payoff advance from CFG. Also our acquisition of Shore Premier Financial is dilutive to our historical NIM by 3 basis points. Accretion income for the fair value adjustments recorded in purchase accounting was $9.1 million during Q1 compared to $9.4 million during Q4 for a decrease of $300,000. The decrease of recognized accretion income when compared to the fourth quarter of 2018 is primarily due to normal accretion declines, even though we had a decline in accretion income, we maintained a flat NIM from Q4 to Q1. Another positive was the impact of the change in rates and balances on our net interest income from Q4 2018 to Q1 2019. Those highlights are as follows, first, for the change in rates, the yield on interest earning assets increased 9 basis points, this equates to $2.7 million increase in interest income, the rate on average interest bearing liabilities increased 10 basis points. This equates to $2.6 million increase in interest expense, resulting in a total change from rates resulted in an improvement of $157,000 from Q4 2018 to Q1 2019.

Second, the change in balances. The average balance on interest earning assets increased $212.4 million. This equates to $2.6 million increase in interest income. The average balance on interest bearing liabilities increased $220.2 million, this equates to $578,000 increase in interest expense. The total changed from balances resulted in an improvement of $2 million from Q4 2018 to Q1 2019. Third, because Q1 2019 only has 90 calendar days, this quarter had two less days versus last quarter. The loss of these two days equates to a lower net interest income for Q1 2019 of $3 million.

In conclusion, even though the reported decline in net interest income was $857,000 If you adjust for the $3 million related to the two less days, the change in both rates and balances resulted in an improvement of $2.2 million from Q4 2018 to Q1 2019 or approximately $25,000 of additional net interest income per day.

With that said, I'll turn the call back over to Mr. Allison.

John W. Allison -- Chairman of the Board

Thanks, Brian, that's a good job -- you did a good job explaining that. I think, hopefully everybody gets it. Chris, tell us what's going on in New York, and what you see in your footprint, I guess, not only New York. Everywhere right?

Christopher Poulton -- President

Everywhere. Yes sir. Thank you, Johnny. But first, Q1 marked our fourth anniversary with Centennial Bank and as you may or may not be aware of the traditional Fourth Anniversary to get this fruit. So I'm looking forward to receiving my fruit basket.

John W. Allison -- Chairman of the Board

Do you have any specific that you like in your fruit basket?

Christopher Poulton -- President

I don't like Apples.

John W. Allison -- Chairman of the Board

You don't like it.

Christopher Poulton -- President

Don't like it. (Multiple Speakers).

John W. Allison -- Chairman of the Board

I will make sure we get a fruit basket that there is all fruits.

Christopher Poulton -- President

Exactly. On April 1, 2015, we established Centennial Commercial Finance Group, a temporary office space with a loan portfolio of $290 million. In the short four years that we've been with Centennial, we've transitioned to our permanent office in New York and established two additional LPOs in LA and Dallas. Over that same period of time, we've grown assets by $1.2 billion for an average annual growth of 50%. We've originated over 150 credit totaling $3.5 billion. We generated $275 million in revenue and delivered over $200 million of pre-tax income. We've delivered cumulative net ROAs in the high 2% range and current returns of over 3%. All of this with zero delinquencies and no non-performing loans.

Proud as we are of these accomplishments, I expect our best days remain ahead of us. After all the market turmoil at the end of the year, surprisingly Q1 turned out to be a nice quiet quarter. Transactions were down a bit across our markets as clients caught the breath and reassessed opportunities. This contributed to the delay in closings but by the end of the quarter momentum appeared to pick up again. We showed a slight decline in loans of $26 million for the quarter primarily driven by the repayment of a single larger maturing loan. Along with a quiet quarter came a relatively clean, net interest margin. While our margin was down 16 basis points from Q4 to Q1, the quarter included very little accelerated yield.

Historically, we've seen quarter to quarter margin variation of about 10 basis points or more due to the impact of various items including accelerations related to early repayment of loans and certain minimum interest payments, quarter in and quarter out CCFG's portfolios have continued to deliver above average returns with below average risk. I would highlight that we closed the quarter with a healthy loan pipeline approved but not closed loans do it at an all time high and we're seeing opportunity across several sectors including a pick up in loan facilities.

Competition from nonbank lenders remains. However, it is important to note that while these funds provide competition to us, we also often partner on transactions. We've seen an uptick in these opportunities as well to work together within the capital sec. On the market side, New York remains an attractive market despite real estate value softening. The current market demonstrates the value of a selective, low leverage approach to building a portfolio. Our LA office has become a significant driver and continues to open up new opportunities for us, while our efforts in Dallas are starting to show up in our pipeline.

I hope to share these results -- the results of these efforts with you in the upcoming quarters, until then Johnny, I look forward to enjoying my fruit basket.

John W. Allison -- Chairman of the Board

That's assuming that you get a fruit basket.

Christopher Poulton -- President

It's the traditional gift. The non-traditional gifts is appliances.

John W. Allison -- Chairman of the Board

Appliance, solar range, refrigerator or

Christopher Poulton -- President

Vacuum.

John W. Allison -- Chairman of the Board

Vacuum (multiple speakers)

Christopher Poulton -- President

Or toaster, that's right.

John W. Allison -- Chairman of the Board

Toaster?

Christopher Poulton -- President

I think, I missed out on some gift, so, where do I look? Google that. I want to Google that and see.

John W. Allison -- Chairman of the Board

Well I saw his vestige in and I Googled it, and he is right. Good job, Chris. Thanks for that. And you'll be able to -- after we wrap up here, they will be open for Q&A and you'll be able to ask Chris questions if you'd like to. Now, we have John Marshall from our Marine Division who runs Premier -- Shore Premier Finance. John, you tell us what's going on with your side of the business.

John Marshall -- President

Good afternoon and thank you, Mr. Allison for the invitation to participate in the earnings call . Overall, it was a positive quarter for Shore Premier Finance with acceptable asset growth, improving asset quality metrics and expanding margins. Market volatility and interest rate uncertainty have impacted buyer sentiment in the marine space. The January recovery of the stock market inspired some investors to take the risk off the table and just pay cash for their boat purchase. Also anticipation of a slowing economy and the Fed's new dovish posture toward interest rates motivated some buyers just to defer their purchases altogether. As a result, retail applications and fundings were below expectations. However, attendance at recent boat shows in Miami and Palm Beach exceeded expectations and we're encouraged by a robust retail pipeline for the second quarter.

So let's take a look at the numbers. In terms of soundness during the quarter, our average consumer origination FICO score increased from 770 to 775. We're only originating prime assets into the portfolio. For the existing retail portfolio, credit quality metrics meet expectations for an acceptable operating threshold. Commercial loans have been all freshly underwritten and assigned good quality designations. Only the highest tier manufacturers and their dealer networks are being prospected. We are a lean team with an average efficiency ratio during the quarter close to 30% but of course profitability is driven by our margins. During the quarter, our retail loan average rates grew 51 basis points to 5.52%. That's a significant achievement in a soft market when all banks are clamoring for assets. But is probably not sustainable. As the yield curve flattens out, we'll have to conform to market pricing. The good news is that the commercial side of our business is taking off and offers more attractive asset returns.

Advances on the commercial side were priced 37 basis points higher in the first quarter of '19 than in the fourth quarter of '18 growing to 6.17%. I'm hopeful that any softening rates on the consumer side in the second quarter be offset by commercial advances. So our blended portfolio average rates will be flat to higher. Our combined portfolio closed the quarter at $444 million up just $8 million in the quarter but up $68 million since being purchased by Centennial in July of 2018. We funded $28 million of new loans in the quarter. But in addition to softer demand, we also experienced heavier pay offs of $20 million. After the strong showing at the Miami and Palm Beach shows, our momentum is building under the Centennial umbrella. March retail applications were up 36% by volume, 56% by dollar over February. That will get it roughly $30 million, entering this spring buying season, I anticipate consumer second quarter originations of about $35 million. And commercial advances of around $25 million. As we onboard more manufacturers and the dealers, we further solidify our position as their preferred financing partner with them as a new retail referral source. So on that note of optimism on the quarter to come, I conclude my thoughts on the quarter behind us.

Thank you again, Mr. Allison and turn it back over to you.

John W. Allison -- Chairman of the Board

Thanks, that's a good report. I went down to the Palm Beach boat show and met -- faced with John and that was a kind of -- he had a little reception, a very successful reception, look like they are on their way to another good year ahead. Has it been a year yet since, quite a year, yet. So John, I don't know what the anniversary present -- gift is. Chris keeps us up to date on what the anniversary is so you might update us as well what we should do at year one.

John Marshall -- President

Thank you. I look forward to that.

John W. Allison -- Chairman of the Board

Thank you. John asked Chris last year what -- what he'd like to have this year. He said a bird, a prize. So we've been looking for vultures and those kind of bird for some time to see if we could present him with one of those and I think we may have been successful, Chris, I have been working something up for you. Thanks for that John. Good report. And may ask him questions after we wrap up the presentation. Tracy French, talk about Centennial Bank.

Tracy M. French -- Chief Executive Officer

Yes, Sir. Thank you, Johnny. We're pleased to report another solid quarter of profitability for Centennial Bank. As you've heard from others today, throughout the market chaos, Centennial Bank continues to perform with exceptional numbers.

Our motto has always been, stay the course. Our focus here lately has been on net interest margin. Proud to say that when you take out CFG and Shore, the rest of Centennial Bank's net interest margin was 4.2%. That's up from 4.8% last quarter. The other thing we stay the course on is asset quality.

Our teams continue to show -- improve the efforts in that along with sound underwriting of the loans that we're putting on the books today. Deposit growth has been very positive over the last six months and the overall return to the shareholders have been very good. The quarter ended for Centennial Bank, we had an ROA of 2.11, our efficiency ratio was 36.88, our total revenue was $203 million. So staying the course has proven to be the right thing for Centennial Bank. What is typically a softer quarter for production. We saw over $500 million from the community bank footprint which far exceeds the production of a year ago. This speaks to the completed integration and opportunities from our southern part of Florida along with the steadiness of North Florida, the state of Arkansas and Alabama.

We continue to see strong deposit growth over the past two quarters from all of our regions as our plan, Johnny was still asking for the business continues. I'm going to let Stephen Tipton give a little more detail on the loans and deposits.

Stephen Tipton -- Chief Operating Officer

Thanks Tracy. As you mentioned, the loan production in Q1 for the Community Bank Group was solid. Our President continue to work to increase the yield and we're pleased to see the Q1 production at 5.87% with five of our regions in excess of 6% for the quarter all while maintaining our strict underwriting standards.

Although, overall ending balances were off slightly, we did see end of period growth in the central Arkansas, Northeast Arkansas and North Florida regions. On the deposit side, we saw another strong quarter with total deposits increasing $168 million in Q1 and up $443 million over the past two quarters. The Q1 growth comes primarily from our teams in Little Rock and each of our regions in our Florida footprint. We're encouraged to see the increase in cost of funds flow here recently. And believe, we will see this trend continue as we operate in more of a flat interest rate environment.

In Q1, non-interest bearing deposits increased $118 million, while the first quarter typically has some seasonality, we're excited to see the growth and feel it is a direct correlation to our business development efforts and support from our commercial bankers and treasury services team. With that, Tracy, I'll turn it back over to you.

Tracy M. French -- Chief Executive Officer

Thanks Stephen.

Looking out over the past 12 months, we've had a reduction of accretion income, lost revenue from the Durbin and our expansion of our back office functions at Centennial Bank, net income matched the first quarter of last year. That was a lot to overcome in one year. I must say that I'm pleased with where we stand today, in the direction our Company is going. Before Johnny and Randy get a chance to identify, we did have our regional leaders in yesterday and discussed the quarters and what their stand in their markets and as we do on a regular basis in this Company, the bar has been reset again to get better in all areas.

Everyone is focused and excited to make 2019 another excellent year for Centennial Bank. Thank you, Johnny.

John W. Allison -- Chairman of the Board

Thank you. And the impact on Durbin this year, with last year was, how much in the first quarter?

Tracy M. French -- Chief Executive Officer

It was about $3 million each quarter, so.

John W. Allison -- Chairman of the Board

$3 million? You know when you think about the quarter and you think about money sucked at. The $3 million is taken right out of the income side of the balance sheet and you got, as we know (inaudible) regulatory expenses. And I think, the Company overall is doing really a good job of managing that and swollen those expenses and still maintaining good income with EPS. So pretty pleased with that. Randy, I'll let you have it and take it and kind of wrap up.

C. Randall Sims -- President and Chief Executive Officer

Thank you, Johnny and that's well said about the Durbin cost. Just totally a burden to overcome after you hit that $10 billion mark. As you stated in the beginning, Johnny, we continue to wonder how and why bank prices are so disconnected from the fundamentals. It almost seems like perception rules over performance and consistency. I used this comparison last quarter and I think, it's worth repeating. We have been trading between $18 and $19 but the last time we saw that price was the second quarter of 2015 and our EPS that quarter was $0.25. Try comparing that to our EPS in this first quarter at $0.42. That makes no sense -- no sense at all. But what does make sense is the good quarter we had.

Just to recap. We finished the quarter with total assets of $15,179,501. Income was at $71.4 million on revenue of $203.2 million which resulted in an increase in our ROA to 1.92%. All of which beat the fourth quarter of 2018. More importantly, we were able to maintain our net interest margin at 4.30% and achieve our expectations of $0.42 diluted earnings per share. We are very proud of those numbers given the slowdown of the economy. As you heard in the numbers, we are working very hard on both sides of the balance sheet to maintain and hopefully increase our yields. Once again, our profitability was helped by very strong efficiency ratio of 41.01% as we continue to control our cost. It was a very strong quarter for deposit growth ending at just over $11 billion with a little over $167 million in growth resulting in a loan to deposit ratio of 99%. More importantly, with the pressure of rate hikes off, our cost of funds only went up 1 basis points in both February and March. Loan growth was slow then declined but increased slightly on an average basis providing compness for the second quarter.

Our asset quality has and continues to be solid indicating a very optimistic and secure outlook for 2019. Our intention today was to break out our numbers in a more logical and intentional methodology to provide everyone with more detailed information in our community banking, Centennial CFG and Shore Financial portfolios. You can tell from the reports, we are very confident in each of these areas in our first quarter results and anticipate a very good second quarter. We just turned 20-years-old as a corporation throughout that time, we have remained true to our goal to stable and consistent high performance. I think, the first quarter numbers are a good picture of the makings of a very successful year. And that pretty much wraps things up. I'll turn it back to our Chairman, Mr. Johnny Allison.

John W. Allison -- Chairman of the Board

Thank you. I think it overall was a really good report. I thought when you think about -- a lot of bank stocks were hammered, it went over $10 billion, I see that -- and I didn't really see it back then with the regulatory expenses are much higher and the -- then Durbin. The Durbin was, it's $3 million, you think, but I missed that earlier but still when you think about that you have to overcome that and its accretion has gone down and we've overcome all of that. The company has overcome all of that and I have to say, good job to all, in -- I think we're -- anybody else have anything to mention anybody getting comments, Donna, Kevin anything you got? You good?

Kevin D. Hester -- Chief Lending Officer

Happy 20th.

John W. Allison -- Chairman of the Board

Happy 20th. We ought to have those desserts (ph) here when celebrating the 20th and a bottle of champagne or something.

Kevin D. Hester -- Chief Lending Officer

So what's the gift for 20th anniversary?

John W. Allison -- Chairman of the Board

You know, I don't know. We will have to look that up and see what the gift for 20th is. I just went to forewarn. Chris, I thought we'd spent all this money getting the bird of prey and he turned on us and he is on the fruit basket. So I would just say, it's a blue diamond.

Christopher Poulton -- President

That's good.

John W. Allison -- Chairman of the Board

Just call it a blue diamond.

Christopher Poulton -- President

That's good. I like that.

John W. Allison -- Chairman of the Board

Did you find that on our 20th?

Christopher Poulton -- President

China or platinum?

John W. Allison -- Chairman of the Board

China or platinum? So I guess, maybe a platinum, big platinum bar or something. All right, Jerry, thanks. We're -- I think we are, if -- anybody else have anything else to offer? Jerry, I think we're ready for Q&A.

Questions and Answers:

Operator

We will now begin the question-and-answer session.(Operator Instructions) The first question comes from Brady Gailey with KBW. Please go ahead.

Brady Gailey -- KBW -- Analyst

Hey good afternoon, guys.

John W. Allison -- Chairman of the Board

Hey, Brady.

Brady Gailey -- KBW -- Analyst

Maybe we can start with loan growth. You know if you look, if you take a step back and look at organic loan growth is about 1% in 2017, it's about 3% last year. That was kind of flat this quarter. At this point in the economic cycle, it still feels like you're feeling good about the economy but what do you think is the appropriate way to think about loan growth for you guys going forward?

Kevin D. Hester -- Chief Lending Officer

Hey Brady, this is Kevin Hester. I think you heard Chris's comments about his pipeline being really strong. I think he had a -- fourth quarter was a little slow and I think he talked about all of that. So you got those comments. But overall, if you're looking at our pipeline and you compare it to where we are in the past couple of quarters this point in the same quarter, two quarters ago, pay offs are similar and production is up about 30% of what we're projecting to close to this quarter.

Brady Gailey -- KBW -- Analyst

All right. So maybe on a consolidated basis like low to mid-single digit loan growth figure.

Kevin D. Hester -- Chief Lending Officer

It's early in the quarter and you know pipelines are what they are but it -- the production side is stronger today than it has been the last couple of quarters and payoffs look similar.

John W. Allison -- Chairman of the Board

You know, it's like catching the grease pig. Last quarter we had -- we look like we were going to be down about $400 million early in the quarter what it appeared. This quarter appears to be about flat. But it's -- you think you got a hold of that. It is -- it really moves around but it looks better right now than it did going into the first quarter.

Brady Gailey -- KBW -- Analyst

All right. And then Johnny just some thoughts on buyback versus M&A. I mean, you have been buying back a decent amount of the Company here. On the M&A side, I know it's tougher with your currency trading, how it's trading. But do you think M&A is likely and then you know everybody is talking about MOEs nowadays just given a couple of big MOEs that have been out there. Is that something that you all would ever consider an MOE?

John W. Allison -- Chairman of the Board

Well, you know, we have looked. So you can imagine that there's people that have looked with us and brought us ideas. The problem is that they're not MOEs. Nobody runs at the performance levels that we run at and when you look at these other banks, you think, what are they doing. They're not making any money. So yes if the right partner came along, we're open to what's in the best interest of the shareholder period. So we'll do that. I just hadn't -- I looked at a couple -- I had a couple brought to me, I just didn't -- I couldn't get excited about them. So the egos roll in once in a while and somebody else looks to be the boss and they don't perform at the level we perform at. So you just kind of move on down the road. So it's difficult as you can imagine for us to find a partner that runs at the performance levels that we run at. But we're open to any of that but we will continue buying stock. We bought back $51 million worth the first quarter this year. We bought back in the last five quarters, we bought back almost 5% of the Company. So we think that's a good use of funds right now, we'll continue to do that, maybe not as heavy as we have been but when opportunity comes, we're going to buy. When it's on -- when they won't leave it on sale, we're going to continue to buy it.

C. Randall Sims -- President and Chief Executive Officer

I've never seen an MOE, that doesn't become an acquisition at some point.

John W. Allison -- Chairman of the Board

If you think about it, three years ago, if we mentioned did an MOE on (inaudible) centers and everybody is all exited about MOE . So I guess, we need to see how they work out, these two big ones if we're done to see how they work out. But we're open to M&A, we're open to merger vehicle, we're open to whatever, so we'll continue to look -- do what's in the best interest of the shareholder.

Brady Gailey -- KBW -- Analyst

And then Johnny, so that outside of the MOE, I mean maybe back to the M&A, I think you've done what 40 deals over your career, so when you look at more traditional bank M&A, you guys clearly buying somebody else. Again with the currency trading -- how it's trading, is that still a possibility? Or is that just kind of off the radar right now?

John W. Allison -- Chairman of the Board

You know, it's never off the radar. M&A is never off the radar, even though we just -- it's not as attractive to us as it was. It all depends on the other side, we're swapping two cats for one dog and we're seeing how that works out for us. I mean, that's really the deal. We're in the market. We're trying to figure out where something works for us and where some fits. Even if it fits or doesn't fit. It doesn't fit, we just keep walking. We're in it. One of the guys -- the Senator -- Republican Senator from Louisiana. Say Kennedy, he said -- he said doing nothing and we're not doing, we're busy but he said doing nothing is hard to do because you never know when you're done. On that note, I'll hush about that.

Brady Gailey -- KBW -- Analyst

All right thanks, guys.

Operator

The next question comes from Matt Olney with Stephens. Please go ahead.

Matthew Olney -- Stephens -- Analyst

Hey thanks, guys. Good afternoon.

John W. Allison -- Chairman of the Board

Hi, Matt. How are you?

Matthew Olney -- Stephens -- Analyst

Hey I'm great, thanks. I want to start on the margin. It's impressive that you've maintained that the core margin flat this quarter and it sounds like the core loan yields have some nice upward momentum. I'm curious, what your expectations are for the core margin for the rest of 2019?

John W. Allison -- Chairman of the Board

Well I actually -- was it. I will let Brian tell us a little bit about, actually I was disappointed that the margin didn't increase more. I actually thought it would increase. I mean, we had six of our -- five or six of our regions right over 6%. So we drew a picture of a six and send it out to all our regions, so they can see what one looked like and most of the regions have jumped on it. They have recognized what it is, they haven't seen any sevens yet. But overall, it's been pretty good. I think, if we could control, if we're heading in the right direction on cost of funds, if we're heading in the right direction, I believe we've got a shot at picking up on margin, increase the margin. I thought we would have done it this quarter. But Brian, you got any comment on it?

Brian S. Davis -- Treasurer and Chief Financial Officer

I mean, I've got the comment that it's always better to predict the margins going down because you're always seemed to be wrong and so, you know there's a tradition, I remember, we saw, I said, margins going down and then the margin would go up. Now my personal opinion is that I think we can hold our margin. Chris Poulton here is with me and they have these payoff events, we didn't have any this quarter. It's unlikely that they would have zero every quarter for the rest of the year and so -- some of those could kick in and that's real money, it's not an accrual, it's not an accretion, and it's real cash that comes in and its little impacts to the margin.

We got Steven, sitting down here with me, I know he has got some statistics, I might let him give a little color on the -- the loans yields for production and some of the deposit pricing. I know, he has got lot of numbers down there too.

Stephen Tipton -- Chief Operating Officer

Hey Matt. Yeah you're right on the production of the two yields on what we're putting on the books today. They were better in Q1 than they were in Q4 and all of the quarters prior. And that's really with a little lesser contribution from CCFG as Chris mentioned in Q1 and I would expect that to rebound some this quarter. So we were at 5.87% on new production for the Community Bank segment. Johnny mentioned pay offs, went off at basically five in a quarter, so we are -- we -- I wouldn't expect to continue to see that the core loan yield go in that direction.

John W. Allison -- Chairman of the Board

60 basis, with the 60 basis points up to, that's pretty strong. 62 basis points up production over a payoff. So that's pleasing, the numbers are moving in the right direction. l think, I've told Joe back in August, we started this plan, implement this plan. It takes a while to turn the ship and lot of events happen that you don't expect during the period of time. But we have been focused on it and I think we're winning the game, Matt.

Matthew Olney -- Stephens -- Analyst

Okay. And just to clarify, Steven, you mentioned the 5.87% and the 5.25% just a few minutes ago. Was that just in the Community Bank or is that overall kind of corporate wide?

Stephen Tipton -- Chief Operating Officer

Just in the Community Bank segment. New production for Q1 was at 590 and payoffs at 574. So there is still a positive spread between the two on -- on what's coming on versus what paid off.

Matthew Olney -- Stephens -- Analyst

Okay. Great. That's helpful.

John W. Allison -- Chairman of the Board

Chris, you don't have a comment, OK.

Matthew Olney -- Stephens -- Analyst

Well I was going to ask Chris about. I guess some of the newer offices that are part of CFG, the Los Angeles office and the Dallas office. Just curious kind of what the update on those branches are and are those fully built out and fully staffed or is there still more work to be done there?

Christopher Poulton -- President

So the LA office is a little more established. We're sort of finishing building that out. We actually just took Darren Robinson (ph) who had been one of our Directors in New York and we moved him out there. He's a native of Southern California and we'd always promised him, if he did something, we eventually let him go out there. He's been out there a couple months now, we're already seeing some real benefits from moving him out there and taking some of his clients and things like that.

So you know we -- right now LA ends up representing 15%, 20% of what we do, that's about where it should be and so we're real happy about that. Dallas is really in its infancy. As you may recall, we always start by hiring credit people first and so we've made two hires in Dallas. They're both credit folks, you can get a lot of production when you hire sales person first but no credit people out there but you end up having to hire a lot more credit people after that.

So we go ahead and start with credit folks, get that -- put in place. You know, we've got maybe $100 million, $150 million in our pipeline coming out of Dallas, right now. We'd expect that to be able to extend as we add some staff there. But it's ones and twos, we will add another one or two people in each of those. But -- but it's not going to be significantly higher than that.

Matthew Olney -- Stephens -- Analyst

Okay. Great update guys and I'll see you guys, tonight.

John W. Allison -- Chairman of the Board

You bet, Matt. Thanks.

Operator

The next question comes from Brett Rabatin with Piper Jaffray. Please go ahead.

Brett Rabatin -- Piper Jaffray -- Analyst

Hey good afternoon.

John W. Allison -- Chairman of the Board

Hey Brett.

Brett Rabatin -- Piper Jaffray -- Analyst

I wanted to ask, a lot of banks are continuing to struggle with DDA, and your -- end period (ph) DDA looked pretty nice this quarter. Can you maybe just talk about the deposit trends a little more in 1Q and what kind of effected the DDA in particular and then know any thought on funding the growth in the next few quarters as well.

Stephen Tipton -- Chief Operating Officer

Hey Brett, this is Steven. I'll take the first part of that.

Yeah and I think, really to add a little more positive on that, the non-interest bearing balances were up $118 million and an average balances in those categories were actually down about 20% or 25% (ph). So we really did see a whole lot of benefit on the -- in spread and NIM in Q1 and I would expect that to help out in Q2.

When you look at the mix, really every region in our Florida footprint showed nice increases there. Our Central Arkansas group had some good increases. There's some seasonality, I guess with tax refunds typically but I guess there's some color on those being a little bit less than what they have been in the past. I think, it's really just a -- it's a culmination of the efforts that we put in place over the last year, year and a half kind of post, Stonegate with our Treasury Management Group, our Business Development Officers down in Florida. And just general calling efforts, I think Tracy has used -- use of the phrase that where -- our new plants just asked for business where it has been the case for the past two years and I think you're finally seeing kind of a culmination of those efforts.

Brett Rabatin -- Piper Jaffray -- Analyst

Okay. And then just in terms of funding the growth going forward. Are you guys doing any kind of deposit initiatives. I mean, it seems like the deposit funding costs are getting a little more rational for the industry as rate expectations start to go the other direction. Are you guys seeing any pricing?

John W. Allison -- Chairman of the Board

We're not seeing any ads. Ads are gone. You don't see any ads being run anywhere. We haven't seen any recently. We had a deposit initiative program that we put in place and it, we were -- we were growing deposits but the cost of funds was growing faster than we could get the yield on the loans. So we dropped that deposit program aside -- and issue bonuses on cost of funds and we changed that. And I think it was a good move forward. I don't know if the timing just worked out, February, March where we just had virtually no increase in cost of funds or just it was as a result of dropping the deposit initiatives. We still have initiatives on the cost of funds. We still will bonus and reward our branches for those that have the lowest cost of funds. So that was our initiative and I didn't think it wouldn't work, it would cost us money.

So I stopped, that was my fault. I did it, I put it and I stopped it. We've moved on to cost of funds. When you look at something, you never know until you live it and there is no substitute for experience. And I made some mistakes with that and, but we fixed it. We moved on and hopefully, we're in the right. We're heading in the right direction. Actually, I like it about 100%. We've been about 100%, we run about 100% our entire life, business life for 20 years, we've grown about 100%.

So what we'll do in the future is what we did in the past. If we fund $600 million worth -- winning $600 million worth of funding, we will pull up federal home loan and for $600 million and then we'll go one off that transaction, we will go find the $600 million, we won't panic. We won't run any ads. We'll just take our time and selectively, that's the way we've done it for 20 years, it's worked and we think it will continue to work.

Kevin D. Hester -- Chief Lending Officer

We had our regional President in yesterday visited David Druey out in Southern Florida, was indicating you know the pricing of a deposit -- the deposit can be turned up a little bit, and it's there. But the thing that I continue to see or we all continue to see is our customer base whenever they bring in that loan back in for the second time from our acquisitions, the deposit size are much better. So they're asking for that business and bringing it to us. And we've earned their confidence and support with our creditors, Harvey Suzeria (ph) that has been a big boost for us. We actually have customers out referring us to opportunities for us, so taking it up on that.

Brett Rabatin -- Piper Jaffray -- Analyst

Okay. I appreciate the color there. And then maybe just last -- let me make sure, I'm clear on capital and just if your stock price stays here, is your primary ammo to buy back stock, use the excess capital here in your high profitability level.

John W. Allison -- Chairman of the Board

That's correct. That would be a yes.

Brett Rabatin -- Piper Jaffray -- Analyst

All right. Great. Thanks for the color.

Operator

The next question comes from Jon Arfstrom with RBC Capital Markets. Please go ahead.

Jon Arfstrom -- RBC Capital Markets -- Analyst

Thanks. Good afternoon.

John W. Allison -- Chairman of the Board

Hi Jon.

Jon Arfstrom -- RBC Capital Markets -- Analyst

Hi. Couple of things here. Johnny, you were talking about loan production early on in your prepared comments and you talked about projects stopping in the quarter, because of maybe some of the economic news or the economic mood. How significant was that?

John W. Allison -- Chairman of the Board

Well it was, I don't think it was a major issue. I think it was just a timing issue and confusion to the market, people that were going to do a project delayed. I mean, we didn't see. If you think about it, I think bank stocks had the second or third worst month since the Great Depression. So a lot of people were, a lot of people were scared and didn't know what was happening and what was going on.

So I mean, it's reasonable for a business man to slow down or stop or back up or as Chris said, catch his breath in that market. So I think it's, I think that the world is back, I like the Fed realizes what a mess they created and hopefully, we won't see that kind of action again.

Jon Arfstrom -- RBC Capital Markets -- Analyst

Okay. Good. One for you, Chris, somewhat related. Would you -- you talked about the pipeline in an all time high. And you also said it -- maybe it was a bit of a quiet quarter as well. Would you describe your quarter as a slower than usual quarter. This is the first part and then are you seeing some of this pipeline pull through into Q2 and getting some of these deals booked?

Christopher Poulton -- President

Jon, yes, that's -- that's sort of exactly what happened. We had a lower than normal production quarter. I think, we did it -- maybe $100 million, $150 million in production. We would generally do $800 million for the year. So that's lower than average. In particular, I sort of mentioned that we have kind of approved but not closed transactions that were sort of an all time high for us.

And that was really two transactions I would have expected to close in the first quarter but during the late fourth quarter, early first quarter, they did slow down a little bit because they were in the process of completing their capital stack and that created a maybe a month or so delay, you have a six week delay completing your capital stack and that sort of ends up with more then a six week delay and actually getting your loan done et cetera. So we would expect yeah, maybe a little bit better pull through in the second quarter off of those. That certainly what we're projecting right now and we'll see where that goes for us in terms of what else happens in terms of paydowns et cetera. But yeah, we had less production in the first quarter than we'd expect to have higher production in the second quarter.

Jon Arfstrom -- RBC Capital Markets -- Analyst

Okay, Great. That helps. That's all I had. Thank you.

John W. Allison -- Chairman of the Board

Thanks, Jon.

Operator

The next question comes from Michael Rose with Raymond James. Please go ahead.

Michael Rose -- Raymond James -- Analyst

Hey good afternoon, guys. How are you doing?

John W. Allison -- Chairman of the Board

Good afternoon, how are you, Michael?

Michael Rose -- Raymond James -- Analyst

Good. Maybe just back to Chris. Can you just kind of try to size the opportunity for the Dallas and the LA market specifically. I know, New York may be -- might be under some pressure with some people leaving the state as we look forward. But one of your competitors in the space that obviously does some of largest projects, you know, said that they would expect that their unfunded balance of closed loans actually decline through the year.

I know you guys plan a different size sandbox. So just trying to kind of set the opportunity, what the opportunity set is from your vantage point as we move forward. Thanks.

Christopher Poulton -- President

No worries. Michael, in general, we expect LA to contribute somewhere around 15% to 20% of our volume and I'd expect Dallas at some point to contribute about 10% of our volume. So at some point somewhere between 20% to 30% of our volume should come out of those offices that you assume we do $800 million to $1 billion a year that's a couple of $100 million a year coming out of both of those. I think LA because it covers a larger swath of territory across all the West Coast probably is a little bit bigger opportunity from dollars perspective.

Dallas is a nice fill in for us, we're underpenetrated in that market but that's a tough market. Dallas in particular is a tough market. I'm not sure that most of the volume out of the Dallas office is going to come from Dallas proper.

Michael Rose -- Raymond James -- Analyst

Understood. That's helpful. And I know it's early, so maybe switching gears a little bit. But you know One National Bank actually gave a pretty wide range for their initial day one CSAW expectation. Are you guys willing to put any sort of numbers around what the day one impact could be?

Christopher Poulton -- President

No, not at this point. We are planning on running parallel starting March 31. I was going to give you a couple of food for thought items that are at a pretty high level. You know, we've been pretty acquisitive on the acquisition front and those acquired loans are not really embedded in the ALLL calculation. 25% of the loan balance is from acquired loans. So when you look at it, those loans are being supported by credit discounts and to give a little more color on that we have purchase credit impaired loans that we've acquired and those have non amortizing credit marks associated with it and the non amortizing credit mark as of March 31 was $35.7 million. The way CSAW works is if you have that purchase credit compared discounts that's not amortizing, it will be added to your ALLL on day one. Now that balance will come down as we have some charge offs against it or as we decide we don't need it. But if the impact was today and we were going to say that the CSAW was effective April 1st that would automatically increase our ALLL from $106 million to $142 million and then that would leave $2.6 million of loans out there that aren't being accounted for in the ALLL, they'll have to have some kind of mark against it.

But we don't have a number. I'd joke with Stephen Tipton that if the question came on, I might just say that it's going to be somewhere down between $50 million and up $100 million but with us having purchase accounting, so much of this, it would seem logical that we'll have something a little high but it may not all go through equity because we've got so much of big bounce in the purchase credit impaired.

Michael Rose -- Raymond James -- Analyst

So if I understand correctly, switching from PCI to PCD, you know there will, it sounds like there will be an impact. Do you have a estimate for what the capital impact might be? I assume it's minimal but.

Christopher Poulton -- President

Well I mean, I don't, I mean -- you -- you know if I know the exact answer to that then I'd have the -- not where the ALLL is going to be at the end.

Michael Rose -- Raymond James -- Analyst

Understood.

Christopher Poulton -- President

We're working on it but we're not any prepared today to give a projection of where it would be because it could vary wildly at this point in time.

Michael Rose -- Raymond James -- Analyst

Okay. And then maybe just finally, there is a fair amount of exposure from both SunTrust and BB&T particularly Florida. How do you guys kind of size up the opportunity as we move forward. You know Kelly King today was saying that they've lost very very few people but we're certainly hearing different stories from a lot of the banks within the region. So we'd love to get your viewpoint there as what you think the opportunity is. Thanks.

Christopher Poulton -- President

Well we certainly think there's some opportunity there. We have had the fortunate to bring across a few staff members in the southern part of Florida, David Druey and his team has down there. He is working to put strategies together to be able to do that. I can say that some of our deposit growth has trickled over from that. What you saw is the increase that we've seen so far this year, even I think in the loan committee yesterday, they brought an entire relationship of loans and deposits with the customer, so you know how good and how that will be, I don't know but we are going to -- we will certainly give it our ear but to take caring of our -- our services are ready for it. So and I think our staffs are ready for it. So we're excited about it.

Michael Rose -- Raymond James -- Analyst

Okay. Chris, congrats on your fruit basket. Four years -- that's -- today is my wife's 40th birthday. If I get her a fruit basket, I think you don't let her.

Christopher Poulton -- President

Thanks, Michael.

Operator

The next question comes from Stephen Scouten with Sandler O'Neill and Partners. Please go ahead.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Hey guys, good afternoon.

Christopher Poulton -- President

Good afternoon, Stephen.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Hey Brian, if I could follow up on that CSAW commentary about the PCD loans. Do that -- if I'm understanding it correctly that $35.7 million today like you said, would go into reserves, but that would be money, that would no longer flow through into accretion, is that right? And it would flow through the loan loss reserve as opposed through accretion?

Brian S. Davis -- Treasurer and Chief Financial Officer

First off, that $35.7 million is not part of the part that flows through accretion as it has been today.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Okay.

Brian S. Davis -- Treasurer and Chief Financial Officer

Whatever flow through accretion is that the quality of the loans improvement, we determine that we don't need that much credit. And it would transfer from a non-amortizing purchase and credit impaired mark to an amortizing.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Got you. Okay. Helpful.

Brian S. Davis -- Treasurer and Chief Financial Officer

That's not part of any of our accretion period. All of the other discounts that are out there, that are on our loans, they stay. They continue to amortize into infinity. So seasonal doesn't cancel any of the current accretion that we have going.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Okay, great. Great. And then just going back to the production levels, I think, I heard Kevin you say that originations were maybe expected to be 30% higher relative to a couple of quarters ago. And I think the number given last quarter was around $1.1 billion in originations. So can you give us an idea on where those originations were on a dollar basis maybe in 1Q and kind of what sort of numbers you think potentially could occur in the next couple of quarters?

Kevin D. Hester -- Chief Lending Officer

Let me clarify my comment. The comment was the pipeline today compared to the pipeline at the beginning of each of the last two quarters is about 30%. How much will pull through and how much will add on to that the rest of the quarter will determine what our -- what our production is. I'm just encouraged that the level of the pipeline is higher today, than it has been at the beginning in the last two quarters.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Okay. Yes. Now that makes sense and then in terms of that actual level of originations that you saw in 1Q versus what I think was that $1.1 billion in 4Q?

Stephen Tipton -- Chief Operating Officer

Yes. Hi, Stephen. This is Stephen. I will take part of that. The production in Q1 was $541 million (ph). And you're right. It was $1.1 billion in Q4 it was keep on, change in Q3 if I recall. So yes, I think -- given Kevin's optimism and Chris's kind of backlog on his pipeline, would expect it to trend more toward somewhere in between.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Okay. And have you guys given a number on what the current level of overall unfunded commitments are today?

Stephen Tipton -- Chief Operating Officer

It's about $2.2 billion, Stephen and that's -- it'll bounce around $100 million here and there but it's relatively same as the last quarter or two.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Okay. And Johnny maybe just jumping back on the M&A side of things. I mean, I know your stock isn't where you'd want it to be. But that said, it's still 2.4 times tangible books. Is still much more powerful than most peers quite frankly. So you know, I guess what would it take whether it be in terms of the math around the deal or where your stock would need to be, where you would get maybe a little bit more aggressive as a potential buyer.

John W. Allison -- Chairman of the Board

Well, you know, the seller expectations have to come down. They -- the problem with the private bank sector, nonpublic because if they don't sell 2 times book and that's all it's in their head and they don't realize that their price fluctuates as our price fluctuates. You know what we can pay, there's a limit to what Home can pay. So once that becomes more realistic and they get down to 1.50 times book and we are 2.4 times, 2.5 times that we do a transaction that makes some sense. So it's really -- it's not -- as much the price of our stocks, it's the expectations of the seller.

And as you know we have just -- we're not going to delude our shareholders. We never have, we never will. So that is a factor that prohibits us from doing a transaction. Most transactions in the two time book -- it range because it deludes our shareholder. So we are not going to do that. We are always open now, Stephen. We are always open to a deal, we found the right deal and I looked at the company MOEs. I have done, I mean, I have ran the -- I have never run the numbers on MOE. I run the numbers and looked at them and I actually learn from the process. I didn't, I wouldn't sure had it. Ultimately, somebody got to buy somebody, right in that transaction. Somebody's slots going to prevail at the end of the day and that was the -- we ran it. We run them both ways to see if A bought B and -- or B bought A and to look at them and see how they look. It was an interesting exercise. But we didn't -- as I said earlier, on the MOE, I have -- this bunch has done such a good job not me but this bunch has done such a good job. There's very few people that running the league that a performance that this Company runs in.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Yeah for sure, for sure. Now, that makes sense. Okay. Well congrats on the quarter. Congrats on 20-years and I'm voting for a platinum duck call that you guys can all...

John W. Allison -- Chairman of the Board

I'd tell you, well I'll have one of those made and now wear it around my neck. You come hunt with me next year.

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

There you go, sounds good, sound good. Thanks guys, appreciate it.

John W. Allison -- Chairman of the Board

You bet. Thank you.

Operator

The next question comes from Brian Martin with FIG Partners. Please go ahead

Brian Martin -- FIG Partners -- Analyst

Hi guys.

John W. Allison -- Chairman of the Board

Hi Brian.

Brian Martin -- FIG Partners -- Analyst

Okay, I want to just ask maybe for Kevin. Just going back to your comments, Kevin about the optimism with the last two quarters, the pipeline being higher. Is there anything you can point to that is or maybe I missed it in your comments earlier. But about what's driving that improvement the last couple of quarters?

Brian S. Davis -- Treasurer and Chief Financial Officer

I mean, you got -- you've heard Chris' comment. So there is some there. But in -- within the foot print, we are just seeing lot of good opportunities. The Southeast and South Florida Group, Central Florida there. We have strong loan committees going there talking about lots of loans each week. I mean, the Arkansas guys, Northeast Arkansas got a large pipeline. So I mean, it just -- it comes from several different areas as it has to be able to -- to get productions at high level.

John W. Allison -- Chairman of the Board

You know, Brian, it may have a little overlap from the fourth quarter too. Chris' pipeline is built up. As he said, a couple of big credits he has, they are working on the capital stack and with the disruption it has -- December probably threw some people off and so you may see with the size of that backlog may be result of the situation have been in December in the market.

Brian Martin -- FIG Partners -- Analyst

Got you, OK. That's helpful. And then just your comments, Gen, on the deposit, I guess caused slowing at least particularly in February, March. I mean, I guess, do you guys feel like you are kind of getting near an inflection point with the Fed is on hold that, the deposit cost are close to stabilizing. I guess, it's just relative to the initiatives, I guess, that you may be doing. I know it doesn't sound like there is anything going on right now than just asking for more business but I mean how comfortable do you feel like those trends that you saw in February and March in the deposit side will stick?

John W. Allison -- Chairman of the Board

Actually, some of our banks have had a little reduction. Some of them had -- gone down, self funds are going down a tick or two. So we are optimistic. We are extremely optimistic that this could hold for us.

Brian Martin -- FIG Partners -- Analyst

Okay, so would you.

John W. Allison -- Chairman of the Board

Everybody, you saw billboards and ads and everywhere you went to, you are seeing an ad and people running the press money, everywhere that just -- it's one I like. It is, I mean, I feel it. I feel that it's going away. Hope, I am right.

Brian Martin -- FIG Partners -- Analyst

Yeah, and would you -- do you feel is optimistic Johnny and that you can have at least two or three more quarters of improving loan yields and it sounds like there is at least one or two out there but you know just kind of conversely to the -- on the deposit side.

John W. Allison -- Chairman of the Board

I do. I do.

Brian Martin -- FIG Partners -- Analyst

Okay.

John W. Allison -- Chairman of the Board

Our people are doing really a good job. I mean, we had four of the regions showing, we are 6%. This last quarter that's pretty good stuff. I mean, there -- let me say it. Our guys get it. They get it. They understand it, and they are trying to move the yields up.

Christopher Poulton -- President

The yields -- the loans are maturing and being renewed at. You see where the production is kind of relative to the core yields and up everything is north of where the core loan yields fits today. So it can't do anything but go up.

John W. Allison -- Chairman of the Board

It has been a battle and as I said earlier, I think we will win it.

Brian Martin -- FIG Partners -- Analyst

Yeah. Okay, well it sounds great. And just the last one from me was just on the buyback. What -- remind me, what is left on the authorization you guys have. I know it sounds like maybe a little less aggressive in the near term here but what's left on the buyback and would you expect to complete that within I guess, you stated kind of what your thought is that when you complete that.

Brian S. Davis -- Treasurer and Chief Financial Officer

I mean, the total number of shares authorized by the Board at March 31 was 7.2 million shares that were left as of...

Brian Martin -- FIG Partners -- Analyst

Okay.

Brian S. Davis -- Treasurer and Chief Financial Officer

A considerable amount left

John W. Allison -- Chairman of the Board

Yeah we got a considerable amount left if we need to raise that, I think our Board is in concert, we are raising it. We need to do that. So it -- it still is the best used funds. It is dilutive. But it feel to me is the best used -- use of funds. I mean, we bought back nearly 5% of the stock, that's a pretty good sledge of a stock, so we paid out $104 million in buybacks last year and paid what $76 million in dividend. So it was about $180 million that went with for our shareholders.

Brian Martin -- FIG Partners -- Analyst

Okay. All right, so I guess thought of mind continue to keep something in our outlook but maybe just a little less aggressive than you have been.

John W. Allison -- Chairman of the Board

It depends on the price of the stock. We will move when we need to move and when we think it's an opportunity.

Brian Martin -- FIG Partners -- Analyst

Okay. All right, that's all I had.

John W. Allison -- Chairman of the Board

Brian, they call it, it sounds like.

Kevin D. Hester -- Chief Lending Officer

Police are on their way. We called them and told where you were.

Brian Martin -- FIG Partners -- Analyst

I appreciate it, guys. Thanks.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Mr. Allison for any closing remarks.

Thank you, Jerry. Thank you for joining us again, today. We will talk to you in 90-days from now, hopefully again. Hopefully, the second quarter will be as happy as we were with the first quarter, maybe little better. Maybe margin continue to stay flat or increase a little bit, yields on loans kick up a little bit. We appreciate your support and thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 67 minutes

Call participants:

John W. Allison -- Chairman of the Board

Brian S. Davis -- Treasurer and Chief Financial Officer

Christopher Poulton -- President

John Marshall -- President

Tracy M. French -- Chief Executive Officer

Stephen Tipton -- Chief Operating Officer

C. Randall Sims -- President and Chief Executive Officer

Kevin D. Hester -- Chief Lending Officer

Brady Gailey -- KBW -- Analyst

Matthew Olney -- Stephens -- Analyst

Stephen Tipton -- Chief Operating Officer

Brett Rabatin -- Piper Jaffray -- Analyst

Jon Arfstrom -- RBC Capital Markets -- Analyst

Michael Rose -- Raymond James -- Analyst

Stephen Scouten -- Sandler O'Neill and Partners -- Analyst

Brian Martin -- FIG Partners -- Analyst

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Motley Fool Transcribers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Personal Finance , Stocks
Referenced Symbols: HOMB



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