Regions Financial (RF) 21 Oct 222022 Q3 Earnings call transcript

Good morning, and welcome to the Regions Financial Corporation's Quarterly Earnings Call. My name is Christine, and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Dana Nolan to begin.

Thank you, Christine. Welcome to Regions third quarter 2022 earnings call. provide regarding will quarter. David and high-level the commentary John disclaimer our information Relations Earnings website. include statements section and our Investor documents, which the forward-looking non-GAAP on are of available materials, comments presentation our cover disclosures and These Q&A. prepared the turn to now will call I John. over

$X.XX. $XXX We per sustainable Thank our you generated long-term delivered strong performance. call you, commitment share our of Regions joining quarter again, We appreciate underscoring morning, million, Once to Dana, earnings good another and of resulting everyone. in today. generating earnings consistent,

include of incremental matter, million associated resolution results billion the consumer establishment a reserve losses of regulatory Our previously disclosed $X.X loans. and the a potential sale Ian of $XX with of unsecured strategic an Hurricane for

pretax pre-provision regulatory matter income. other the we and adjusted once items, Excluding record adjusted again generated

reflect by loan driven results quarter's higher and operating growth revenue low growth, expenses. strong robust well-controlled cost deposit rates, This

with corporate broadly pre-pandemic about in Asset our both levels. stable customers. have business remains and of in models to environments optimistic cautiously maintain remain adopted Consumers general, customers grow to uncertain than the we liquidity their In opportunities quality in to credit strong levels, feel good operating Many of and and about and footprint continue lows. operating slightly of our expand better our metrics thriving at capable historical businesses. remains unemployment consumer health line

made technology and talent, in strategic results quarter's we to of further are pay continue investments This off. the evidence acquisitions

meet helping are to expertise customer and and capabilities us products, expanded deepen needs As relationships.

process. recovery history responding difficult way to well South our extremely to storm of face the any through the challenges our communities Ian. was powerful helping This wrapping perform all take communities and continue In economic long environment. a strong the they that times of teams of the communities is moment began closing, proud Hurricane positioned meet about and sheet Florida a an balance up, to have customers, a are recovery as Before I and fellow support to will efforts. to we Regions difficult I'm want speak in and incredibly has affected. associates needs in Carolina

and We plan, successful have a proven outstanding execution. strategic track of a an record solid team

While business remains to generally portfolios for continue stress. our monitor we both of positive, will sentiment indicators and consumers across

We interest risk disciplined and approach frameworks long-term have positioned and well risk, management to robust managing credit consistent, performance. continue which deliver and rate concentration to a us dynamic to has sustainable

Now, David will the some provide quarter. highlights regarding

Thank you, John.

impact X% the wholesale balance our sheet. while of utilization the of of multifamily. $X.X prior the versus Let's businesses driven credit clients sale last grew by Average modestly durables, services, Commercial their represents quarter high-quality, and of the loans day quarter. businesses. grew and specifically on loans X%, all loans quarter XX% increased ending the line business to their start reflect billion this the consumer loans XX.X%, lower to capital example rebuild across again with growth financial Approximately during existing information lines reflecting allocation. Average approximately accessing the inventories expanding expand industries, X% and levels services and another of growth strategic the transportation, broad-based at quarter loans approach Ending quarter ended was of disciplined the and

commitments loan growth. up pricing Unfavorable loan production strong linked with remained quarter continues market augment However, to $X.X capital billion.

prime, loan clients grew sheet loans refinancing debt driven through improved off markets. primarily to previously card average primarily mentioned mortgage, by believe prime consumer X%, and our declined will other the declines XX% Average balance other eventually market X%, consumer while the by loans ending we in However, conditions to credit lead and compared prior which consumer, was in grew super quarter. loans, EnerBank offset Growth categories. the other are sale. Within

a slowing growth assumes average XXXX year quarter. compared X%. the third to loan of rate full expect of We growth This approximately

Let's turn deposits. to

As expected, supported with relatively effects. lower consistent pre-pandemic consumer total quarter-over-quarter, deposits and increases Despite were seasonal modestly Average by to wage spending. in largely remained quarter. balances typical stable, have balances prudent the inflationary normalize continued pressures, consumer

customers has been Normalization additional and more commercial corporate quarter-over-quarter. account $X.X are average acquisition remains down evident which new Additionally, billion healthy. and in deposits,

overall billion legacy balances with and our deposit our liquidity for in and approximately deposit the billion of of and movement components resilient bank based of overall $X $XX options. money to between market environment overall billion. full base is expectation checking managed year of the reflected line more However, rising reflecting combination Ending surge and rapidly compared treasury accounts significant is for advantage reduction noninterest-bearing management this balance beta have $X.X declined products expected rate into our A as customer corporate accounts levels, a and by off funds cycle. The sheet to competitive is Regions, year-end the these on balance for off remixing assumptions on some year-to-date, stable deposits. in out sheet to the and the higher-yielding savings is relatively movement of deposit

margin. profile, interest while or Let's net net margin interest points reported shift income to grew asset-sensitive quarter-over-quarter, to and Reflecting XX% XX increased X.XX%. income our million interest net basis $XXX

deposit of date income billion net cycle contributing X%, Our The adjusted average remains X.XX%, combined reflecting to interest at effects balances and margin was the beta of low higher-than-anticipated $XX growth. to cash PPP.

We teens. in expect betas the high year deposit full

In provided higher growth to interest addition further net average income. in support rates, balances for loan

quarter in normalize, Reported is the do surpass interest the fourth runway borrowing we while be to balances than now increase to XX% X.XX% additional XX% fourth do maturities cash to net XXXX. for continue expansion. provides This, to X% quarter. for is wholesale the higher interest expensive Total more multiple markets projected expect anticipate quarter further expected with approximately the we quarter forward, accessing quarters. coupled margin in X% to and first to of to margin income projected in is not fourth Looking hedge net

the normalizing interest risk rate today's during of half profile added higher first rates effective has half years. and a amount represents our total to securities. in the of hedging and swaps expected a billion leverage This three our XXXX period The shifted of have latter interest $XX rates, retained in Through of cycle. this low approximately purposefully the uncertain generally have term we we of XX% While swaps become to XXXX, environment. of and attention XXXX

market to the We finish some modest as growth already program. expect As X.XX% additional previously appropriate profile an and levels will current to and margin quarter, support disclosed, decide of back move the the even changes our our a time to rates $X hedging extending We completed to to made tactical protection. hedges of execute X%. in balanced rate if primarily below risk still third floor billion we some

declined take including Service as a increase impact X% and the of as other let's charges expense. in service a modest increases the treasury policy noninterest in from by Adjusted management. mid-June, revenue fee wealth Now income prior declined enhancements offset in in management implemented categories. was quarter look at charges, declines offset other

implement in a including to activity feature We CVA Results and also the to to grace capital $XX impacted be result sometime XXXX. changes expected period and was grace million service rates expect charges XXXX, in the year a adjustment. million approximately M&A In made deals policy $XXX Overdraft in real date $XXX in of by impact after service of include positive XXXX. capital delay period markets. of to approximately DVA a full feature, are negatively year higher charges full million. are Within markets, estate expected

Wealth inflation. interest drove and rates mortgage the grow costs and ATM markets and of to to declined well expect decline ATM card year-over-year. from despite fees expect CVA ongoing resulting Card partially management card continues perform was with in associated market lower $XX and liability, to offset capital Credit quarter, higher by in and revenue excluding the this but both income a We reward business lower seasonally production Elevated quarter spending and servicing interchange to generate volatility, transaction negatively income while fees higher DVA. was to by incrementally produced impact we the fourth higher during volume due discretionary the million impacted range, lower check income. quarter-over-quarter.

XXXX revenue expect the to of driven partially overdraft full revenue income, adjusted up changes. total policy also be by primarily to and net year interest impact offset PPP-related We lower growth in XX%, XX% by

on of expect this million noninterest a Reported previously charge expense. to and be a professional anticipate expenses will resolution to do quarter. to reflect the legal by let's the $XX of which We charge in related insurance we move announced proceeds, So fourth mitigated regulatory matter. reimbursement receive

associate in to of XXX and compared decrease lines Excluding This increase was headcount compensation taxes. this our full-time quarter. to offset an within one items, quarter. XX% Salaries Over base X%, customer-facing as well primarily the a the increase variable equivalent benefits expenses adjusted the in X% associates noninterest adjusted of as prior by of increase day lower additional and in payroll are business. due three and partially increased other increased

We expect be full noninterest to adjusted expenses XXXX. up X.X% to XXXX X.X% year to compared

includes this the completed as as impacts. inflationary acquisitions of of fourth the in year the well full Importantly, we impact last year quarter

expense operating XXXX. leverage X% changes to adjusted and in the of revenue With positive in expect we guidance, approximately generate

broadly XX basis this Although quarter, performance some charge-offs the creates credit annualized credit increased remains underlying consumer loan sale points. reserve stable. volatility in certain and hurricane-specific Reported metrics net

quarter. basis with However, the a were excluding point net basis sale, X at line expectations the charge-offs impact loan over XX our consumer in of prior the adjusted points, increase

a to by in were seeing in certain was below credit in provision These is levels. increase The are build strong We losses associated expense reserve deterioration a Provision commercial levels nonperforming quarter-over-quarter normalizing quarter $XX million second million growth and the of the primarily but pre-pandemic offset loan increases historically with segments that relative this consumer that quarter. sale. to quarter million increase and to it contributed to important of due was net Ian. some we with remain potential partially associated note loans, Hurricane $XXX another $XX low loans benefit commitments, for a from

point XXX%. Our loans to is loss ratio credit allowance X.XX% nonperforming up basis at of percentage strong the total allowance X while loans, a remained of as for

is loan X.X% basis XXXX adjusted XX generation now common an with remain partially net full solid adjusted a to for strong approximately Tier charge-off estimated X charge-off net through offset capital year-to-date ratio our the Our points. and quarter we continued XX We basis points, earnings, growth. year by ratio ratio ended expect at equity

manage to end upper capital plan economic outlook, our range operating levels Given to the uncertain X.XX% time. of to mid X.XX% over we to the

volatile conditions. So performance we've delivered in year-to-date closing, economic strong despite

also liquidity capital happy continue source are to controlled. to pre-provision Expenses solid. remained take any and respect strong. our market potential Credit to are well stability vigilant with to stable, and remains of your Pretax we're a and questions. of that, contraction. broadly income will We customers be With being indicators

[Operator Instructions].

Our with Bank of Poonawala America first question Ebrahim Lynch. comes from Merrill the line of

mean, obviously, pretty good backdrop, I out, I guess start revenue NII maybe next year. just to heading into looking

of you're both going of us terms using using seeing you're give franchise the about should we a from Just how investments? expense making, invest in sense just franchise? of think in investments revenue here, thinking actually How some growth these to costs and inflationary better backdrop that you're a about towards

Yes, Ebrahim, this is David.

we saw, the year you bit as of acquisitions. last nonbank quarter three investment -- So fourth quite made in through some a

to opportunities We grow three to continue look in for our to continue all lines franchise. business of

a lot of on. have things We going

deck for our systems what we're see We don't total the give making down. do we have over growth to going to have to we're not compound soon. to strong program our while expense we keep three of to costs for business year, in in been and we'll that guidance on improvement related annual putting growth continue appropriate cost under anything our We're to page time, going very to rate control. specific. have opportunities a that going We to has that our we lines in keeping have investments. our you We're our that. you but new continuous And help shows grow the managing leverage and continue next But be look increases do

deals kind And those? similar those, you've done they were of to fintech recently fee or be that essentially it tuck-in deals,

That's correct.

is well it. quick mean, And strategy I your just on understood. one obviously, -- Got question hedging

a forward higher where expectations cost Fed actually curve, what to margin there is world at we but any much run drag cutting, in forward potential where the about think rates not least rates the is As going we the the a see than pricing is. to relative risk to in short overshoot

couple of you Higher of for a for Well, I rates us. is have different type think our franchise things. good

be high, overshoot Clearly, continues higher have we risk than extent Fed some that funds, the if that. that of we'll and you inflation to means end to if keep stays wants, So X.X%, from it there up because up they are X% longer, going. the incremental benefit rates to having credit Fed

have get reason haven't use could to completed rates rate of credit want to trying risk standpoint. incremental I program -- billion hedge The part we again, our you go. and to be of until increase down settle hedging So wanting a partially is might don't the $XX some from figure there we reason where out cash to but

have counting a hedge, a powder. at billion books of about and not that we're foothold. better we dry, bit looking the That's we to have So dry for XX on $X

we be could So patient.

protect Our growing And go rates of material, margin or you show right back NII nicely we below. our to without now that. X% a X.XX is think can in I were we if that to

for us patient, to So be. being I right is the think, thing

comes question line next from with of Our John ISI. Pancari Evercore the

on low could front, a the sold? about types actual And loss on consumer thinking get if expected that side? of or little on any credits of detail the any sales terms front? so, in more credit that And the that on remaining how if Just the on remaining you transactions were are with sale loan you content

Sure, is John. This David.

acquired an consumer It's you year. unsecured about That we EnerBank portfolio that we double quarter industry. at was could grow digits. the told time, We that industry billion last $XXX So fourth in portfolio.

from do about worth consumer also But had allocation year. over not billion or and those book. capital built standpoint the a would invest thought you're $X.X to reduction as by being of that be loans portfolio that to that each And we our us So to thing sell time a to were risk production we this $X we unsecured portfolio a serviced by had other growing we serviced that up talking standpoint continue right party. third in EnerBank billion

see We taking slides, As ended had can we up about the $XX of reserved $XX million. you in charge-offs million.

measure. benefit flowing anticipate we not capital have unsecured other We don't time it's risk this having the $XX this at and We allocation through But had that And So a like provision of runoff. don't million financials any true. that's quarter. small, reduction portfolios it a a that's really worth -- was else. do anything we have

it. Got

commercial you on then also credit, Okay. helpful. NPAs. the us give segments. little the That's know All some more And a But mentioned right. definitely around decrease can in sorry. detail I -- you

know interpret trend And there? what in that indicative what normalization of increase, you're normalization? provisioning influence you're areas you seeing that bps did I higher 'XX, And commercial even that see charge-off mentioned at So credit XX know for you that some anything areas seeing a your expectations could see you then XXXX? for into I though that in are you

is this John, John.

economy, all where of the spend related reflection seeing the as particularly to we not portfolio, changes in office been. are in they seeing some some office, the of as are had So stress choosing a that we're urban businesses of freely consumer back-to-work kinds discretionary consumers

begin inflation, then All Again, and are businesses. XXXX we're levels we I in historically labor healthcare similarly costs the not-for-profit beginnings in currently and basis more labor again, at return credit XX between some XX you to senior for still of levels, in normal quality. the characterize will costs points as for 'XX what to as would normalize from charge-offs technology-related charge-offs, at up the see November projection pre-pandemic to say, inflationary But than we for some points seeing, impacts current XX The as would noted, that in and late is low points and guidance better basis points firm be call in basis we XXXX quarter, our our both NPLs, and rising we January. expect in of levels. or begin softness in XX Some I'd much XX We'll disruption normalization, related housing. beyond, basis a of year. to that somewhere

comes of Our Usdin line with the next question from Ken Jefferies.

your you're to confidence continuing you the have the just could take of making I And side. kind reiterate you're 'XX that for level the changes fee guidance the you fees I next year? of and service just incremental fees settlement focus that see of in and recent service $XXX reiterate to through If in continuing million. on

Ken, thank Yes. you question. the for

patterns we're very made changes. customer what when what are think we we observing I much is expected

customers changed paycheck recall on order. We eliminated cap charging might in the transfers. advance. two that reduced overdraft provided we're you We daily customers days we So access their fees. posting We alerts. We recently, eliminated our NSF. with overdraft for giving charges Most for to protection

better have a also Since their with customers. XXXX, is overdrawing yet implemented almost help the million. period. of customers I point dealt collection manage of And the half that number grace I'd fees. example. trend, which designed a are probably It's we're last not we've would of I And overdraft that grew and reduction period historically who a over XXXX, seen credit to We to changes in And positive customers almost a again, reduction overcame seen impact. fees. we've line an account, an All quarter, second about protection necessarily And very of in the as overdraft a seeing is, also time XX% of in but we'll in thing. to overdraft that about we've We've implement over finances. $XXX noninterest a help same we how their a of revenue talked XX% positive think, fees say

through markets, in a our treasury business in and revenues. have continuing overcome of other growth to history doing in we fee We're change parts management, in our and growth management capital that growth wealth of to So losses evolve business. in

and impact manage believe customers about that we the And so our business. good to to we impact feel the can

it. Got

to the a is wealth really has customer talk business second the you Can just of follow-up, wins overcome just increase continuing tough trend that market natural challenges? new bucked here, And management in terms is more market. really market that adds? than and Okay. And in about

a in a strong bankers annuities. a branch in number works our see closely lot Yes. retail a things. with very combination of and of It's acquiring who we One, customers interested investment we services environment, very have this of business are

source So fee revenue. in seen that growth nice we've of

fee some is increase of the management, new looking as and personal within we've they're to there. we've us this opportunities both customers new business, about move institutional then of where customers, of money to and a Our in XX% seen time during in growing, stability. And more wealth had moving additionally management wealth business result wins revenue business period nice our for

to level approach is And as business the are volatile increase and fiduciary. I their of us. customers choosing a Our times, business with during think uncertain to

So growth contributing those all things income. to fee are wealth in

Our of line from with UBS. next the question comes Najarian Erika

is I'm that first implying point, the off jumping of level rate range we for NII 'XX? $X.XXX in the David. of question that an of David, And My wondering, your for forward you're you a the do grow you based in to about as continue that think can of exit guide. as on midpoint curve NII billion think

I I We still estimates. mean wholesale dry we earlier, mentioned left. access as have -- don't think billion quarters to I cash. of several Yes. our We we based market have on for powder have $XX the have some

environment. taking of do. continue We what our could really margin I if If a to tell that We hedging is and again, little you baked to quarter basis NII it had we all grow rate bit a have in resulting basis points. still and increase XX have over much probably advantage XX then higher. and of help a by higher slight little did would November, on we guidance some a be basis do point -- this repositioning XX past to to followed had I to our point bit

opportunities have So some loan been grow, growth nice. has think we to and I our incremental

in wrapping sheet. strongly a really I get we a We We Again, positioning hitting spectacular tailwind balance January. and deposit to well. the have to I you a as call earnings be when pretty better 'XX our franchise. And the here, we'll you guidance we're up very year can pretty -- solid hopefully leverage good year give think think

it. And follow-up. then Got the

about have XXX give rate the context. of you've clearly, curve regards And than think implies you that fourth trends, search As rate the earnings bank? I'm we Do the the about we of and terminal how How of rate think quarter? of with if been terminal quarter, greater surge wondering of new is the active the deposit you would deposits. forward to in spoken think us this about from growth a within could -- you the out deposit most curve basis type implying? with do how X% third beta deposits a think in points managing -- do we that should beta cumulative or additionally, on sense been you some over driven impact very Fed last the

Yes.

still So in about think we on to surge more deposits happen. we we And saying last deposits holding along thought. all we've decline in the expect -- particular, I to We're X.X $XX to since year-end. than space, to the that billion. year-end been that expected We're corporate that billion $X down of since

perhaps that's to positive so a And us.

mid you at going as around think beta go betas, was the XX%. it's think so our be right to guiding last cycle that been upper about this about higher, XXs. to We've to XX%, I

is into X%. now at beta Our Q

I to bit. you're up that going think linked see quarter next we at move a quarter, XX%. This

even XX% we're to than higher cumulative mid-teens. see the XX We expect get beta time. about to it, going fourth cumulative beta quarter, will And a our about probably in that, which first take to then will call at a it XX%, quarter, in the that our

be lower see upper you're as XXs. value franchise, going our we last is call but our time which our just to continue So mid-XXs than it, peers, of But I hike-up to this beta the believe a like will bit. think to

from of RBC the with Capital line Gerard Our Markets. next Cassidy question comes

And of you Again, charge-offs But follow credit were of it? can how the more there commercial loan some the portfolios we with are can signs as in leverage weakness delinquencies well David, the and are about portfolio? extremely footprint side showing know syndicated that us of your portfolio syndicated portfolio? up today when the of in credit signs you John, just just as is stuff, any on talking share large I your low. levels

Sure, Gerard.

answer Interestingly, a would last First portfolio. the increase no our investment-grade had overall the be over of And we've the the of to last months. XX% portfolio about all, syndicated in represents balances question. XX% XX

so And overall our about portion today. grade investment the portfolio of XX% is

so, Over book improve, in the default the last basis years come And words, three believe. to XX other seen or by points. we've of down probability our the quality continues of we

book is the leverage roughly in $X.X as is about XX% Credit defined, of about exposure. and in National billion Our X/X total that Shared

portfolio So all. think, to any again, not seeing and pretty of high that quality, deterioration we're in speak we at

Gerard, this is David.

have on we investment probability lot grade default was But -- And they it have deck. XX, and in the to of of to. oftentimes Page what of -- terms back really John improvement. improvement a of shows get quite don't the a speaking bit We a our of the

which just Obviously, Great. you. banks following XX deposits. David, course. medium as times are of you falling to guys strength balances these may a Is higher true really what's striking franchises, deposit pointed I just side quantitative from just you consumer have out, why guys remain the sensing seem But for up is dug your that deposits, what so off But Thank healthy. be think easing, the -- call, Have yet? And on the paychecks referenced to it most the those prior on Slide on maybe you don't is of it? that's about keeping customer then balances into balances you few up?

Yes.

that have the has wage the to this happened They -- recipient also group stimulus. of that a they of of So be -- increases. cohort resilient. recipient consumer that bucket particular, we been happened that page, lot In very to on were minimum

Our is X%. below rate unemployment

people So prudent these working being they're where they're are and spending.

just they they have what attributable in too. make. being so just I John mentioned they more down, of overdraft terms not And haven't And to than -- think just it's spent

but and being in expect are with cautious careful more of think inflation, benefited. more I hit this to they disproportionately period you people And this be also adversely time. group would

this the account it account, group make account information the to data which what So from. is where you're doesn't us. seeing sense by that's telling but pretty this granular the why is surface, And gotten that's by we've on we with got you,

of is David, And -- you're or group say XXXs that you to group FICO would is high this about right? XXXs this score low a referring to,

just lower FICOs. has with money. It's how manage It to not lower income, people do their

So balances. it's lower

So this spend make. That that under be they FICOs, customer they was people could $X,XXX. what segment have about just fine

So in have lot their they account. don't a

band. So necessarily FICO lower it's the not

with of question Bill Our comes next from the line Carcache Wolfe Research.

this on hear up Following of going your your of just downturn? rather of to is your tell the that to interpretation better sort Fed XX. does Curious Slide and suggests that to Slide do position are you Or data the comments on a interpretation XX. the to consumers Does have weather more? businesses just in

more doing what talking inflation rates raising of and in what or Fed -- about? The context are from slowing terms you or stimulus

level do the inflation from more and capacity itself sense doing Yes, the that the lead high in of Fed fueling is could Fed perspective? more to to that spend of this that and liquidity and in perhaps that it's

or is segment the -- customer at strong getting certainly for but inflation. -- pretty as think we going just least. this after frankly, businesses, prepared slowdown some our might couple And downturn their Fed we better we have. of next is And whatever -- just better of move Well, this a think to they're result, is be moves

do they we that in patterns strong a that there's fairly will but is happen, be that, recession, this card think customer mild. can But a And case the are our at if we think has but pace think, likelihood base probability we down. were do we saw that Our down. spend quarter-over-quarter, it increased. debit of not the quarter, We transactions think the Fed moves that

think we of are rate so on The that. with tight a labor get hard some. inflation that top goes in already unless people is that to it's unemployment being seeing And prudent up, market, we're from very labor coming

time. over imbalance to to happen moving I And you then going right will demand they're back expectation But that moving bring see commodities, with been that slowdown now inflations by going standpoint. at demand. supply And which what from us driven to would pace supply. a that's really is down. is have see think slow versus I that So -- a the Fed the It's is think the you'll other

And give just on taking outlook a would the X% with helpful. supportable sense the But have say, for we the the on have recession the impact X% a Slide you for is to mild reasonable example? consistent rate, -- extent That's what sensitivity XX. kind level very of of expectation that your reserve unemployment, one could to of purposes, and

give I picking on to things a are item, host know points, data some Yes. start can that one that you go particular of calculation. there the it's into you when important but

everything X% asking going to unemployment for So you're what is or X%. for being else stable except

So response unemployment. to if again, start you rates. -- X% you XX% were from what interest no and the anything, under But means probably into a account bank, other no we're taking that's reserve you changes, do higher have no employment would a

credit And might in. so our NII issues we is likely overwhelming that whatever bake

the still kind through, what think higher We to is parts many Regions positive. nice rates of there think are So out net-net it's net that is. just a too for but thing a figure

That's just very helpful. question final I can, if on Slide XX. clarification, a ask And for

ZIRP I overall was, extend? think protection the How X.X% is hold it Or rates were extreme protection it Sorry, the is the still in place? level only was in still protection a it NIM funds? protection does to in 'XX beyond. take it an Fed does protecting range, your XXXX up an to extreme where of beyond far Slide return, And in that just -- that forgot to but and fall certain if what still commentary the where XX would about slide to

when they're generally, Well, about put duration. in we three years hedges in

So we're and about the talking -- start. middle 'XX if of you 'XX

you're out So years from three that.

protection. 'XX 'XX, you're So

dynamic. for this does day. will a room And every that -- group study hedging extend so got it to it's we still We And we single more have quarter. to those. look We every and

we produce it. as that you And we're is of so date just position a this showing the static

of next the question from with comes Our Stephen Scouten Piper line Sandler.

it deposit maybe makes time be I surge on wanted David, I a sort far? so blending all think so lower Is What this would behavior? really you've your first. far. is liquidity, to the seen in that you just customer it based it be change you with they seen would any higher bit guess actually Is I to what on we've ask, what in of will think based of little around deposits? just betas a these

billion a of we surge did a We for that I coming -- think that's deposits. to the deposits, of And move lot going surge Well, going think we're zero. X/X that's out. $XX one, from have to

where time cycle. But well. as little We I coming be than more expected we've think for XX a to mid-XXs should and that yet. expectations a X to rate last We conservative. XX, a would much we've we a everybody, be from going If missed it bit last We're higher saw environment a a hadn't been bit we the give probably ended it, happened rather you low higher.

And of was. 'XX and in come peaked time think pretty so back I started we it then to down quickly last kind

missed we if it, again, probably it's because little conservative. So a we're

of that deposits just of helpful. no a here of balances for then service the the some That's liquidity cash the Okay. you last out those borrowings. down quarters. times couple we saw Securities of level have have. and more Obviously, in next referenced couple been And you number -- still you referenced

cash you offset -- And guess, lower without just to there, continue So outflows think see all potential have take puts how balances to borrowing? to these you do more and securities I'm I of takes those could go? low you'll

to deposits would run bit we generally of really had billion out. didn't $X take that billion the we're growth care that expect We've And protection. good we because $XX good need with and loan little of $X have we've cash We got to surge we Yes. been but going cash. a to not deploying had securities, and hedging with opportunistic in we to billion run our to

at what was to an opportunity nicely. There that could better missing And which environment, NII, the a our much reason to have risk invest was we're cash of is NII growing generated getting. no we for more -- in us but so

and cash fund is So our we use patient that important, really to being I to think want growth. loan here

FHLB. think put some use see could trying to can in cap do to securities a Yes, may access we still for it book rates hedging? it More think importantly, from at where business have that's versus point. of lot If about first book order our our we of we out, the we securities this incremental that. But -- as borrow we

in soon. wholesale cost to is we group, points now, where access the and see peer the we Our lowest basis right don't need XX total anytime liability

Deutsche Our O'Connor of next the Bank. with line from question comes Matt

my questions of Thanks. been answered. all Actually have

you. Thank

comes Our Raymond final from of question with Rose Michael line the James.

Just questions. quick two

your that of for expectation deposit Just kind within to as XX% from aid I And hit sort things counties some around there that and is it of Ian, like any some it you've material? that. you Hurricane inflows of inflows? of historically, got seen deposits think deposit have relates potential are Is the

-- that, that insurance this at there's here But this those a into there's storms, of still a guidance the dollars Ian you're it, trying any these money. what lot contemplated was reflect in from coming haven't state additional out does point comes any that our Federal to We point, But really our figure and dollars, we uncertainty end. the of sources. hit going out to not don't and best, deposit money rightly oftentimes quarter at to thing, Michael, we lot be. damage estimate did of right deposits

but so I'm -- Okay. range for the bit markets Helpful. little maybe missed -- And sorry moved I if then capital down. this, a was

that expect -- to kind that range obviously, the Is to next of intermediate kind business? degree. into going of the for near some should the softening that in of about the backdrop we're think we term is new we kind year, As

next on particular just to get because right January real of that estate M&A range with more in I That the just seeing off now and sign give we wouldn't we're you really was earnings. better quarter yet year. for next for when what this We'll capital markets.

So don't lock that in for XXXX.

you're to below it, the get. in within it kind and be going not I and range would the prior eyes of Okay. kind I sort et of of takes give broader or cetera? to be any your above totally the puts guidance understand or What

this a we M&A going markets capital this past can I get that get to we acquisitions looking had bolt-on up to think, kind We're open opportunities. real or of for year. track markets just a are you to right if it to We minute. if more added some we on couple bit, add at estate back get activity. capital can where continue least was, The down whole

M&A of going we're see things can't from help lack so to again, that And augment pressure do to feeling and capital some the the real estate markets. having, if we we're

quarter… just not contemplating to be we're clear, So the in acquisitions

Yes.

to …answering question. this

the Have last day. in company. that Well, our your a good Okay. Appreciate for you was interest participating all Thank question. you today.

gentlemen, Ladies and concludes this teleconference. today's

You may Thank disconnect have at for time. your a your participation wonderful day. lines this you and