Thanks, everybody.Operator Thank you. One moment for our next question. Our next question comes from Kelly Motta from KBW. Your line is open.Kelly Motta Hi, good morning. Thanks for the question.Randy Chesler Good morning, Kelly.Kelly Motta Okay, sorry, my model is kind of spinning on me. You guys got some good loan growth this quarter. So was pretty decent even with the slowdown we’ve been seeing. What’s your pipeline from here and can you talk about which areas you’re seeing the best risk adjusted returns at this stage?Randy Chesler Sure. That’s another area, we spent a lot of time looking at as well, and Tom has studied it very closely. So I’m going to ask Tom to cover your question on growth.Tom Dolan Yes, I would say Kelly, first quarter was a little stronger than expected.
And I think that’s reflective of the strong markets that we operate in through our a [ph] state footprint. And in addition to that, the continued strength on our borrowers balance sheets that we continue to see. I would say though that we would – I think we expect growth to continue to slow in the coming quarters. Both customers and certainly our credit officers and our provision banks are continuing to be cautious. So I would say for the year, we’re probably on the low end of the mid-single digit range.And then in terms of the second part of your question that’s providing us some of the growth drivers and some of the areas where we’re getting some very good pricing. Certainly an industrial warehouse has been a good segment for us in the last, probably last year and a half now.
And that continues to show some strength. Multi-family has been good as well, even though we’ve seen that slow down a little bit. And certainly the agriculture portfolio provides a very healthy return, especially as a lot of the operating lines are prime based structures.Kelly Motta Thanks. And I appreciate all the color as well in the prepared remarks about the granularity of the portfolio and kind of what you’re seeing. Credit continues to be stellar with 120 basis point reserve and where you are? How do you feel from here? What should we be expecting in terms of credit normalization and anything we should be watching as we look to the year ahead?Tom Dolan Sure. Barring any changes in – any significant changes in the economic forecast in the model or changes in portfolio mix or asset quality, I really don’t expect much change as a percent of loans.
So, we keep a close eye on it. We evaluated every quarter. We’re watching the forecast closely. We really haven’t seen material deterioration there yet. And certainly, we’ve got some overlays in the model as well to reflect that. And so, as of now, I don’t expect much in the way of change.Kelly Motta Got it. And then, in your prepared remarks, you had some commentary about M&A, it seems somewhat constructive. Can you provide additional color has – but do you expect the – what’s going on in the banking industry and potential headwinds starting to motivate some activity or is the environment as it stands right now still pretty slow?Randy Chesler Sure, yes, no, you’re absolutely right, Kelly. It is slow right now, and it’s probably a little difficult to see.
But we feel it’s going to be good for certain companies. And with our experience in M&A and our strategy, we feel like it’ll be a very good time for us. Couple things that will and of course you need buyers and sellers to make that happen. But I think that some of these headwinds will weigh on people’s decisions on how long to kind of hold their position and wait for a better time. I think that will bring folks together the ability of scale will be important as some of these headwinds in the industry with expense. And so a little more headwinds in those areas and cost, regulatory expense and then deposit cost. Will I think play to our strengths and present some very good opportunities for us. And so, we’re open for M&A business. We are having some good conversations and we feel like that will be a very positive and a good way for us to continue income growth during a period where there’s some – certainly some headwinds in the industry.Kelly Motta Thanks.
Maybe last question for me. On the margin, and I apologize if I missed it. But at 3.08% and your commentary that you’re going to fund off securities flows, should we be thinking of this as kind of the trough margin and some expansion from here? Or will these funding pressures continue to kind of maybe have some additional downward pressure in the next couple quarters?Randy Chesler Sure. Yes. I mean, margin, obviously that’s really tied to the money cost and where we see that going. And Byron will give you a little more detail update that or color around the margin.Byron Pollan Sure, Kelly. As you saw, our margin in the first quarter came in at 3.08% for the quarter that the best guide I can give you on margin from here would be to look at the March.
If you just isolate March within the quarter, that margin was 2.95%. Now I think that’s going to be close to the trough. And from here, I would think stable. If you had to pin me down on a range, I would think we would end the full year somewhere in the 2.95% to 3% area in terms of net interest margin.Kelly Motta Right. I appreciate all the color. I will step back.Operator Thank you. One moment for our next question. Our next question comes from Jeff Rulis from D.A. Davidson. Your line is open.Jeff Rulis Thanks. Good morning.Randy Chesler Good morning, Jeff.Jeff Rulis I guess it’s a jump off one of that last comment on the margin near 3%. I wanted to understand the assumption of what occurs with the noncore funding sources. Just what is the backdrop in terms of how much you wean off of those sources over the course of the year?Byron Pollan Sure.
So in terms of our wholesale funding balances, we do think that we’ll bring that down some over the course of the year to put a number on it. I don’t have an estimate for you at this point. But I think it would be a modest decline in wholesale funding between now and the end of the year. The good news is with our participation in the BTFP program, a lot of that wholesale funding cost is essentially locked in for the rest of the year. So regardless of rates if the Fed does have some additional hike left, our wholesale funding costs should remain fairly steady from this point on.Jeff Rulis Okay. And just to try to understand the strategy, maybe just to sense for what is it that you need to see to kind of, not that you’ve got it all clear, but you’ve talked about operating in an abundance of caution.
You see real time what your deposit balances have done, really non reactionary to sort of the news of the day. So just trying to get a sense for what would be the hesitation to run that loan deposit ratio up begin to kind of lean into what is a franchise strength, as you know, amongst peers, it – you see outflows, you see ramping costs. Just trying to get a sense for what do you need to see to go maybe quicker off of those wholesale borrowings to maybe prop up the top line a bit?Byron Pollan Back to loan to deposit ratio, clearly it’s on the way up. We’ve talked internally about comfort zone. I could see us going into the end of the high 80s in – with regard to loan and deposit ratio. We’ll just have to see what the lending opportunities look like in order for us to get there and what the funding requirements those lending opportunities present.
And that’ll really determine our funding strategy from there.Randy Chesler Yes, Jeff, I think the deposit flows will be a big driver of that. And there’s going to be a lot of competition for deposits. We talked about our view in terms of seeing some return to more of the lower end of the historic range that’s going to be the bigger determinant as well as on balance sheet liquidity in the form of cash, just how much you know of that. And when they all clear whistle blows, that’s been a moving target. And so, I think we’re feeling that actually good about the second quarter. So we’ll see how – if there’s any other external events that change that. But I think that the answer to your question on that where do the wholesale funding balances go, really going to be driven by deposit flows.Jeff Rulis Okay.
Okay. Thanks. Just one other topic, wanted to hop to the expense run rate, in the release sounds like, kind of please, given the inflation backdrop that keeping that growth managed. Expectations for the – you get through a seasonal Q1, but just expectations for expense management over the course of the year would be helpful.Ron Copher Yes, this is Ron. We appreciate the question. So the guide we gave coming out of the fourth quarter call was 136 and 138, expecting it to be higher towards that 138. I’ll give you the new guidance, but I want to give backdrop to, why it came in lower and credit to our divisions particularly. So the guide will be for the remaining quarters of this year, 135 million to 137 million. And let me focus on components of the current quarter non-interest expense.
