Cadence Bank (CADE) 24 Oct 232023 Q3 Earnings call transcript

Good day, and welcome to the Cadence Bank Third Quarter 2023 Webcast and Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Will Fisackerly, Director of Finance. Please go ahead.

Good morning, and thank you for joining the Cadence Bank Third Quarter 2023 Earnings Conference Call.

our Rollins; team Hank Chris Billy from this with Holmes members Bradd. Dan morning, Bagley, have Executive here Management us and We Valerie Toalson,

prepared will during referring speakers to Our the be discussion. slides

at documents our the webcast filed slides opening to the in I the the release are forward-looking section on And today. to that would Relations comments. find find metrics The contained his can yesterday remind can the turn apply you our I'll slides Investor ir.cadencebank.com, any to view now those also these and our by you'll our You where link presentation, exhibit we afternoon. that to around to along you of disclosures our our These regarding Dan with be X-K going for website. Presentations Investor that page discussed. statements disclosures or earnings the at them presentation them customary may it non-GAAP contain forward-looking statements in Relations

Good quarter Cadence Thank time Gallagher our agreement announcement sell to our during like Arthur this to call morning us. take third joining morning, of We & you earnings also discuss Company. some conference to to the everyone. J. Insurance XXXX would for

our Following questions. will our prepared executive be remarks, team management available for

today Aimee their tremendous executive of to Insurance of Cadence Markham last the several Chris of X.Xx revenue. nearly value deal leadership of months some is first represents of our Kilpatrick detail entire multiple agency. deck of growth slides the under total The our provide $X The The achievement and in accomplishments and regarding multiple Boone, insurance the sale XX a billion testament team. this the a McKnight,

them huge We this insurance like win the for of with the to our win size tremendous for levels repeatedly we've value and business our with look teammates clients continuing a insurance is offerings product of we've agency these an monetize teammates, scale with access and business, While and It's historically work a shareholders. high built to with additional Gallagher. the at also valuation we to the said, to opportunity resources and we forward shareholder relationships Bank. are Gallagher significantly efforts Valerie will some a more on metrics as the core just we the forma business. able of on a as enhance of of in uses our roles color value well the From their and focusing growing will and supporting transaction the preferred insurance proceeds perspective, banking Cadence our per to our impact as pro partner book in new share while tangible capital be planned moment. provide

move to we of and adjusted financial net we As $X.XX shareholders $XX.X net to quarter, the or common income per quarterly diluted million results available available to share reported income for the associated $X.XX common second call. being largely primary expenses our with common $XXX.X we've nonroutine of efficiency million share, with diluted shareholders on initiatives our quarter that per or difference discussed

CD balances the The was in balance as funds. sheet reduction for included in $XXX deposit decline as the for stable seasonal reported well while decline our Our brokered public declined deposits Loans essentially at quarter flat $XX.X were million. quarter. billion, intentional a relatively

mix Banking was ago. X quarter. X.XX% third a Before or as deposits. our annualized. trends net of deposits at for shift deposit Deposit recent the slower X% environment the core noninterest-bearing compared ongoing to interest customer contributed represented to impact the These for of in total deposits the margin, XX.X% competitive end quarters growth reflected months also of to third just stability sheet success balance most and quarter our actually in deposits those, over the compared $XXX XX.X% which pace This Corporate increased total of Community trends the million reflected particularly both given segments,

loan we quality credit increase quarters slowed the quarter quality We costs compared deposit the metrics standpoint, credit expectations our in volatility of to for the fourth to credit credits asset radar this were our the of of the XXXX. the second our during credit year. now. slower for been in elevated working in result stable. experienced We and and in increase well impaired. a quarter were process stability losses this Otherwise, were identified Overall, X third reported continue charge-off and driven well anticipate is rom representing These half of quarter, provision well. net of margin each both despite as The quarters first considerably, for previously as environment, our charge-offs have risk as stable of credit as reflected expectations the on C&I X X outlook. a of credits classified criticized quarter as that several non-performing identification the repayment a remain $XX million and macro by our totals roughly

make FTEs have to continue head quarter evidenced third the XXX progress on year. This XXX the decline. count Total since we and over Finally, declined end initiatives. last progress our in over our of during efficiency is

a this expect end to prior additional year. We count decline head the of XX of

of efforts numbers the quarter fourth more part the and fruits be the expect first to these XXXX. of during We our visible in

Before comments. impact, these working holding Valerie efforts.I'll to turn Valerie? over other factoring her the in for our toward insurance through XXXX sale and we expenses call are hard the now flat

of of to making additional result additional to which we million, in the Slides of transaction anticipate before to would completion factoring upon a XXXX, for we XX% you, XXX Further, to paydown X.X% XXX The related Slide be the CETX financial efficiency and impact proceeds generated at EPS value in transaction $X.X XX ratio of impressive. would highlighted represents of sale, a associated financial securities securities book is yielding wholesale forma proceeds $XXX on the pro We net in higher points. funds of X on million, the accretion. repositioning net a approximately of this we of Thank approximately the the on are X. likely and of pickup borrowings, attractive. rates whereby the building any the start metrics earnings of tangible an market sell loss basis and billion capital which the $XXX of cash gain use estimate net of use generated XX% the including Referencing executing net and an is by still on pro reinvest CETX to securities a interest transaction, Dan. pro margin earnings to After points The proceeds of approximately applying basis that the Insurance Using comments transaction addition brief basis these extremely XXX securities, in capital the Cadence earning with with simply book estimate the to by securities. over the expected accretion of few X, are portion will consensus under improvement estimates paydown points use nearly towards of we value of and portfolio, of at least capital. assets neutral the actions margin like incremental estimate sold through impact basis the and impact forma in points. I our uses forma estimate

management. the gain occur the from both in also securities the transaction loss sales same a We efficient in the period from support and to subsequent tax anticipate reporting insurance of

securities, and value. believe forms that whether flexibility, remaining I restructuring, maintain capital or has it we meaningful to is we This additional share strength ultimately various I future a growth. shareholder sound On generated capital, portfolio unique in If the excited, of be aim buyback other am. opportunity

for results financial our the to on Moving quarter.

income Looking XXXX. at our margin Slide balance the $XXX decline net quarter, to for of quarter of highlights second interest $X.X the and beginning on sheet third of reported We million a compared million XX.

was the third X of quarter, our Our net second basis points margin X.X%. down from interest quarter for margin X.XX%

total of quarter, in XX X to of year. increased Our of second the of the experienced first we the roughly from X.XX%, which each points cost increase half quarters the is deposits basis up

seems the have moderated it's clearly balances several very pricing competitive, deposit last pressure While to still over months. and on

balances the quarter. noninterest-bearing deposits XX.X% interest-bearing a the third of of at quarter represented second saw also at end compared the end total from of the in XX.X% We migration to products. of reduction products the to Noninterest-bearing pace

was to million up basis in compared as from net for XX to originations points Noninterest the quarter was prior loans, Our accretion, reported quarters. a slowing reduction quarter, $XXX yield X.XX% basis. on contributed highlighted increases the of in XX on yield the new third prior loan revenue on excluding pace Slide a

sources, third in of the was facility branch Excluding during associated income reflected the Total driven purchase a banking line is with servicing fees including in $X as noninterest About income, revenue with the income. was $X.X item. decline million, combination prior mortgage quarter, this closures brokerage banking result million decline of by activity. signage revenue the million by production quarter. $X.X being a $XXX.X which driven slowed of other in and a Mortgage and million, adjusted remainder write-downs declined and primarily by half credit-related the other

asset $X.X the MSR positive million with adjustment quarter. for million the for quarter was negative compared a the a third Additionally, $X.X second

certain merit that an last increase our expense insurance are highlighted down most loan end July XXX we changes Dan to to compared the for briefly million driven mentioned stay but that reported XX in reduction Xst the on total expect Slides which be compensation metrics quarter was stability for by categories. to assessment an on or X% and declines of on second spoke impact expense of allowed headcount in Total excluding as deposits, FTE benefits to second to assessment. relatively flat We in the noninterest $X.X increases. the adjusted our a by increase credit year date across since the million on reflecting the the major quality $X.X was increased despite over earlier, and million progress balances Moving expense, quarter expenses, which initiatives, of and quarter, the XX. recap, Salaries annual insurance. higher us employee deposit efficiency uninsured to the $XXX Dan expense effective

in reducing course, the impact factoring these positive impact of will a company. our also in other merger. performance pending the efficiency. branch third of We before meaningful by our combination all on the this efforts XX% of the provide sale total believe quarter, count and We the XX is closed of insurance since And and of branches

an $XX.X reserved X.XX% on of quarter the $XX this to for XX. from Dan in in Net quarter speaking Dan Finally, the were that the million and identified due or average million slightly credit in as Slide to of impaired charge-offs of up on $XX for to increased this prior quarters, million, quarter the was second loans annualized most addressed basis, mentioned. as year. provision primarily third provision quality credits X

nonperforming loans and loans linked totals were and X.XX% of stable Our of X.XX% nonperforming asset respectively. assets, at quarter

to the classified higher loans loans. quarter, of compared We stable Our result total substandard, to and criticized also second while some loan loan to inflationary X.XX% mention rates totals migration were saw primarily increased of rates. pressures slightly on our special from interest the

continue very borrowers, rates stable. We monitor to credit on outlook closely factors and other have remains higher macro our clearly near-term impacted credit certain quality while

is we and as coverage again been I simply are we deposit at our our diversification margin to appreciate of in book, solid In progressing and franchise and nice our type It highlighting balance geography. the the allowance see can't word quarter, initiatives value this both excited has stabilization help loan in of but Our closing, sheet efficiency X.XX%, to because our planned. and are. continue the the use core

step insurance pending the the we value. transformative our like our enhance open Operator, questions. importantly, and efforts performance call would and to transaction sale to shareholder is a improve now Finally, in to

question now first Stanley. The question-and-answer We [Operator comes being session. Morgan today Manan Instructions] will with Gosalia from the

through that? wondering now? breakeven of deal insurance much rationale I a point economics better you talk you? of are further originally have year? Maybe at through say, Or Why the rates of a reaching got, the it start for think would was Was the you rising can than us sale? and for the function the the help

Sure.

there. the liked knew to for talked the just last of the we produced on The when that our we big did think and thought premier agency quarters business. premier And was that we're net call valuation we've number. we we at the we out received, take, it think of numbers or the insurance The of that multiples about of business. about can that the be process and that. bank-owned proves out We've this I like to agency insurance agency continued to here couple we that give value we have partners show always the there income. talk insurance potential the our a out out We the X%, represents total agency as what had I bank-owned cap publishing market were the XX% it continue look

to So the we work just shareholder shareholders, disconnect be shareholders. the that big and focused. there brings got benefit too our our it was We've to for

look we know pleased not at and As We're performance. us to opportunity we we our got continue we've are, our benefit this is our performance, an with improve to for shareholders. where to

benefits, of through of XXX capital you're And generating deal. pretty basis capital the meaningful points in terms the a

hold, You're a to of certain more of of quarter any constraints how But level think of et over thinking might yield that of for resets, using upside that up that you high and time. that hold about as doing you a think time? want you freed can and about asset there the you us Or help you're there's liquidity over you're you that, to cetera. have CETX a I to some want is that sensitivity level So use securities suggesting gap there? more the is there if instance, to

So as maybe think that help well. us through

Yes. securities lots is repositioning of We've this to something in options. going that that morning, published do. we examples gives deck got that That and think the us I the we're some

need I a worried benefit we're us, to have in think we This we us. that a about. today, it don't front options is capital a We have tremendous that puts don't number number the all of and hit. to

any do not are there more? constraints But why is it like

certainly We can.

no the constraints. that that make good want we decisions. before I know, information to sure all have As far take make as we that are there We

Raymond next with question James. The from Michael Rose comes

a could And it just if or out lenders associated Valerie, just but but is revenues, business? not better proceeds is. the all yet, use expected get of run through a to I just look to separately, or a had obviously, that sense the insurance were the in buyback? the franchise Maybe, wanted some for just at haven't forecast expenses the then for in ways? break year I for for maybe chance Next the the a using the what appetite you discuss numbers other explicitly what potentially annual maybe expenses, to Or investing in. we

then take Valerie I'll you of half the second side. numbers and give that can expenses the one, on some

all we think tools have to I want the in toolkit. our

doing to say would we're that interested buybacks. we so want not in And not

but in to that we want option I make make smart we've want that to think sure decisions. got front us, of we

market to where have buyback been think about be the against think not us talk to we on if us the game, able wanted I Valerie, expenses? I want gives So in a this opportunity, move execute you we buyback should to the to.

Yes, sure.

income updated the that. earnings adjusted the months. So deck has the net X to for And updated not headquarter, Mike, X that that at and on insurance you saw the slides core XX slides that also adjusted of some at we the deck beginning on but there's discussion too, there of side, want sure, revenue Page our last the only that sent out release make include I different the

look the you back XX total at were if about million. last $XXX months, So expenses the

you missed the separately, Thanks Maybe I give I came Sorry, appreciate on how that restructuring, little there. just you. transaction up the for out. process that. securities amount, just provides with the could more that benefit that just pointing certainly detail maybe a the if you

today. estimate our is this think I Well,

closed. in quarter. the make time opportunity We take tax sure transaction. this take front closed the some we the haven't certainly We advantage offset of to that the It's to to of to same us get going loss in transaction want

this can can in make execute would sure then. we and between quarter, so the that and now this which move then want we market can we when expect currently upon depending that And quarter, do to we we close,

there's you've of a here. So an built last we're as payback the look yielding was lowest question no just from that and that bunch see could got whole we a do ifs securities example right and the in this. we shown here And size do. This what we've to was else can quickest do, into is what could committed we repositioning. then Manan What

for Thanks back. step my taking I'll Helpful. question.

was up. deck new the out Yes, it pick this if didn't morning you posted

The Fitzsimmons D.A. comes with Davidson. from Kevin next question

the Maybe shifting at gears, funding looking side.

deposits. be that a down reduction brokered could proactive So just in reductions there? proactive curious you'll or you you to level it further guys probably keep if got I'm highlighted that there

I'm not a fan of brokered any or CDs form in fashion.

whole The I think the well. I'm the corporate community the bank, what we focused team team here that is proud in growing knows the really deposits. on in of deposits. quarter last did bank,

You pull public $XXX the proud seasonal deposits quarter. the heard that. up customer really million core brokered and of back in of the comments, in We're was my decline CDs loss funds, if in you

think flat those clearly competitive team And brokered deposit to us to play win this we've it loans. on gain. desk, the on much would quarter. continue continue I really in, like do the there, in I'm is funding proud dependent got and grow deposits? That it's Chris like loans I Hank, deposits side, seeing you but to and or intend slower is jump see of in loan the deposits we our what before. continue team were to customer do out was We clearly I'd to saw ability to upon can those you opportunities want on a down. than what further see to highly But to move doing. We're the

deposit man. the on add to Nothing side,

it you I think well. explained

And year-to-date opportunities, those focused opportunities growth. have as assessing still we we're we're I loan the definitely impacts the good of that still deposits the think think moderated now. out economic part on that clearly loan seeing And also but there some opportunities. on side, rates of I right have are we're

the we've engine. think got I So

and bit we're a -- of picking Hank? right now. think I a choosing just it's been

loan I moderate deposit on especially the down, pipeline, little is the at would community say, a side on both call that when the certainly, the you I on really the bank, would they're build deposits. bit. focus gathering and active and activity activity. in But just very I drive it look and corporate

as deposit obviously, had good optimistic. So in or a growth well. I'm loan we And quarter

I would brokered on just intend And would from add the that borrowings. we cash of that our sale, do CDs. bringing include down the proceeds insurance

case, base that in That's Right. Valerie?

Yes, fourth of in that $XXX about mature million got the exactly. brokered quarter January. in CDs We've

curious one credit a I'm both, can national or One dollars in what percentage with lumpy number of you shared is which it helped that just follow-up loans just now, handy your credit quick if of a have issue, banks. hopefully. exposure or

you that? on jump do Billy, want in to Valerie?

Well, then I'll give in you little running. Can any portfolio we've a consistent that? in to our at Billycan where numbers jump and add billion with credit color. shared the We've national pretty got you XX%. That's more color been with $X.X

our Yes. shared follow-on multibank clubby lead. smaller actually is almost exposure. is bulk And of piece one XX% add we're I The national usually, is, one the how are that color is The deals those, those national within our exposure And multibank of credit. of active would credits we we? shared just aren't

have our of a multibank outside of lot that deals credit that fall So a exposure. we basis in controlling national shared

Next Mealor from question Catherine KBW. comes with

One to keep here comments Appreciate question year-over-year. expenses expenses. the on flat

fourth see think Just the quarter, think about the assume, more, initiatives of cost as through. going of closures we're range put the we and you've I to that the I

expenses land where should fourth think near-term the range? any quarter the So within you guidance

insurance can I we're be to you. the going noise going that assure in quarter, it's a the noisy create world, With to

So talk things the let's that you've already through just seen.

with be this headcount in reduction change. the headcount insurance seeing lower benefit take headcount the that of So the reduction will We've we're quarter. quarter, still outside and the third place end more this quarter of should Salaries benefits off. of that that the you got at saw

XQ, So of people the we we'll see piece the of get full as to that puzzle. benefit

think. side, I On closed those the branches on branch all July XX,

And so the into that's baked fourth run quarter fully altogether. rate

there. So there's to do no more

you've there. want talk do Valerie, pressure numbers? So got some to you down

No.

And to fourth going the those down drive quarter. is the will I a point, expenses in it think you're noisy core quarter. right. be Dan's To exactly

some That's that fourth much, first expect does really quarter quarter So first as at the us, anticipate in XX%. the with bear insurance just we quarter that much be and transaction we the cleaner. close should

hub? And impact, out the that insurance on million then $XXX classification with the goodwill that one gain taking does sales, capital insurance associated $XX of capital million include from the

I number. includes think that that

And just you via then capital, target, capital capital a I the great that CETX back accretive there just mean you or that event. this on to is circle TCE -- a is ratio

that so into don't that all you And a to ratios our we capital that restructuring feel get we've those think next just about, bottom better want as levels now got you I in ratios below back of think buybacks either year? to there really is about bond and up

No.

X points want we decisions. we I X good to basis intelligent be think think want to ratio. some make And don't time. make point at decisions trapped I to We good smart on by want basis the or

The next Brody UBS. comes question from Preston with

you repricing if closer the could a Valerie, ask now. the moving on spoken about where to I just talk forward? previously loan you quarter cycle you're NII. wanted I about I And at going XX% also, We deposits end? was beta on expect wondering to could that parts the think were bit interest-bearing running but date, spot talk you maybe XX% to a about loan little had rate

appreciate. around can give you any commentary those X I'd items, So

Yes, sure.

see down little only the XX% over where little quarter, our in second did came third in mix meaningfully quarter. we noninterest-bearing quarter, So during noninterest-bearing pretty the XX% over moderate a the a really

And And obviously went also we of as of basis in mentioned, quarters. cost was is of done that XX it impact. had prior at positive what the couple points deposits a the half so up

is that all So of meaningful.

obviously things in in and months, helps that floating are margin where and yield. that the that you our to talked things take and category improve then about that are the where the loan flows next Slide look repricing into If a X at XX, shows we've standard and XX

yield net of or impact moderated have that the the from of increase loans. lack of we because with One was that moderated was the -- anyway, things saw of loan we was pace didn't new loan down growth, that this because quarter

down loans, The direct quarter XX% our third assumptions is so And the at accretion, bringing beta flat the as we second go forward. quarter. was to excluding for beta that The compared was flat.

we towards on think, it's it that probably, to of the saw that year-end, along a up but this some volume bit. X, percent be will And will this look be of loan I inch point at a from As sub-XX, But again, it what little couple up going depends line. probably growth. we X of probably, quarter,

deposit beta it side, X, On probably or move now. and will XX% again, percentage was that the little slowed between the think thing on quarter, But second year-end. it basis a a I bit points. cumulative in of XX% basis points now X kind Similarly,

You got Brody? that,

Yes, just talked to And Dan, think -- we restructure. talked you that's about wanted we I securities, helpful. about about do buybacks, then, how ask

talked M&A bank haven't whole all. We about at

MOE. a banks saw I prolific an of bank you'd one think at buyer been did then At the buy we BXS, smaller in proceeds that of least use Northeast. up to and the other bank insurance sale another you

using So any about how And at term. drive those medium over proceeds you'd think thoughts then profitability of the around transaction? where about thoughts levels secondly, your bigger some did to I like overall you inorganic to some and point get X want of or the a

X.X% deal, ROA. was think when I you the like MOE target the the a did ROE

I think to it this back you with X. gets transaction,

that trajectory to before. So get term longer do how of you about laid just out kind had think that back trying you to

Yes.

room we're to front continue we think clearly through improve. that. the us, to one need to still improve, that. we'll working first. need consolidate we've There's to We focus take have opportunities advantage of continue and that working we eliminate to about that initiatives to question no That's expenses and of been in through there I why to take branches, to on

at out we the had the put when the the any I you Nobody at improve. on pro look things look We that. be. a allow time this targets. And is to Those from got going We've in not think think numbers economic you target. the environment to market, We've I what And think want us had we're changed at to we've what to I some you toolkit to at to word hide at But going in since to were we transaction gives got want our the compare upon I we the then. never when based willing we and Obviously, what's at tools us us forma targets. in merger. look saw of time. be, that anything out not Those upon some based use were time we little when where again, future, not we improve. where continue have knocking out out about cost you When activity M&A certainly can down that's activity this nobody headway the there, think make our we and we're There's no to door that. point. there. at talk on there's chasing us

home. we've the got at we of think of business here probably best And what we front us of our today. think care in that's right we think take need I to use

And regulators And That's then there's portfolio. guys lead been some on? to around that squeeze very you just of just agent wanted that ask industry has morning this in. about I helpful. percent SNC reviewed SNC lately, the by of I are any reviews if I the just appreciate could one that. discussion the taking more place. around been What

We're like know all we're don't are given bank looking those. have time. we leading. what was has on in them number I Absolutely. the that Billy no The regulators than anybody at some at overall out that and every loan at of a I that's getting other we're look different But our else portfolio, It's ago. there. few you minutes information every when think looked that a day.

with from King Brandon question next comes Securities. Truist The

as how mentioned more far you're have rational. So Recently, get were as what behaved. commentary to versus sense last bank, corporate I flows wish just you the I to things wanted seeing get those how you on of some call, trends deposit know within a community

So just up sense wanted I how between get of things sides. a X to are shaping the

the as Community I billion from deposits the core the we that customer quarter, fact and in minute a Bank both Corporate think Well, ago, said in $X.X that the I grew in Bank. and came

depositors are down. here. for happy in think I'm jump I to guys Chris, Hank, the you calming

Yes.

On year. those rates, attractive we've continuing left improving borrowers. is reversal. many get in seen our set. there's the rates earlier the But and We're to a categorize corporate certainly would of corporate we side, it the the it's growth to way deposits definitely in back on We're stabilized deposit have for and focus the a I that able really

improving. good. and Stabilized That's

we the I the the with bankers the agree relationship what mean across that I field. think in bank. in consider I would difference our whole sauce is secret

So great we've have and they're them focused footprint, go and that bankers is those They complete deposits on calling they're know got on opportunities in there deposits out and everybody clients across XXX%. to our the communities.

management all way executive That's Yes. down. the

is executive of for management time. not Some from all the asking deposits our customers team

works way and down it up all So the line. the

And just mix deposit that we how success the this quarter, you've deposits? next noninterest-bearing given the year, particularly your talk when does for about seen inform expectations

pretty we've on dollar. on think Well, I open look been our forward noninterest-bearing deposits

about time we're You've got been we've model we going. for some as out where numbers talking

Yes.

factors. pressure there deposit out environmental significant today just end modeling. in gradual that be we we slowed that based what That's quarter, by little macro just a what's a saw continues south to industry probably on assumption XX% that this next are pace. year. some So based projecting of our That's the given that's modeling the on in of an the on pace the to of be But we're

stay next rates year stable And is points? at assuming that

We for declines We in year on latter are half forward rely next the primarily on based use the the curves curves. of forward in modeling. our projecting some

from with next Stephen Scouten question Piper Sandler. The comes

want I stripping I expenses, million the a or business just that. target, about guess, the to expenses So then to a the that don't and insurance misconstrue on like way some but think I And the from that, is basis best just flat year-over-year? sounded is to, wanted flat thinking out about goal $XXX clarity

think good flat Yes, that. a to drive to insurance. expense that's is do excluding I expenses way hold the

want to good at to Valerie, I yes, that. think tag in? look So a you that's way do

Yes.

I think well. you said it

that. our keep adjusted XXXX. And flat to hard insurance be for again, at expenses Looking and those all working excluding We'll XXXX.

lending. is other And then question finance my franchise only around

of around that somewhat curious maybe book or of gives in you're up that just around had business. that if any or consider seeing I you bit anything little peer that the your a a a bank of segment weakness degradation I'm reserves pause took business? Another

Hank?

interest a And higher industry, were, Well, certainly, we have little where when you have with seen some moving pressure. rates that they typically, leverage. it's

through worked issues But as they've think able in I bank. of far most the that some expense of pricing. have also to yes, some pressure their increase seen we and as area are

the guess, Any to reserves accordingly? major loans, in changes related those I

change No those in material reserves.

in and the them process Just looking that through we're reserves need we that at indicated to going throughout doing where active earlier, we're bank. increase our we

The Instructions] [Operator Jon with Markets. Capital next from Arfstrom question comes RBC

your ratio how don't business impacts forward. going you to insurance about Dan, have efficiency the talk

I've heard I think XX that about times.

The this you deck for morning, numbers the are John. in

that. appreciate I Yes,

it on the a out, on had in of C&I? are you the C&I. just... questions. couple balances little Is Is down moved that the bit. you Just One that follow-up quarter I market? big going but identified What's loan understand it last a still

then There about couple we've the years talk were off And got Hank, we of about that talked and both actually, X that moved where out. charged are for production-wise. credits last

it's I John. an mentioned I And the but active appreciate active. Yes, portfolio, I have we question. say, would earlier, moderately as

funding are obviously, we based the growth have. We there, outlook that on managing the

out there very And competitive. there, so it's are deals

as the We well. are obviously deposit side working through

I So down going growth. but or well. is And we're liability at have from a activity as any is looking would mean, anything with we're the peak clearly. there, managing say it I it's to associated our But the credit new

We a managers just on to the focus the build existing that So me to we have they do that let that. too, capacity, on and with have, bit. little relationships plenty relationship of add continue to

don't new itself going obviously, teams, grow area that that and in this that in. we see we So at active point, meeting be additional out could presents it in, we but unless something would as an

probably category, So better a other than little in outlook that it's C&I.

market there to great the good. out Yes, markets is to production every where you the see are healthy serve which why in we team. We been, going the for growth slowed is But questions, didn't and think we've great are and brag certainly to But team. up I day. quarter. us down business and people all a more has opportunities. give making that's The They're asking team I pulled would and back that had quarter want from the it continue every day. got on down We've producing a

than to be pricing able well. where better the we're credits And may way get in terms into are some been historically it has certainly as that

asked Stephen question. segment hear. to Good a commercial

dynamic but What's the And ask well. like company, it's what as So like I X% seems there? are it and right on a energy of now. pricing pretty your like in it's environment I'll energy? appetite terms mean

better. and pricing are Terms

they would really, Yes, say I are.

piece extend can certainly, not to If And existing going we're build credit as you're get of pricing. service an in active that continue base have credit, willing in energy in client much terms alternatives and We're and terms we but upstream. decent on. these to you to

are there. So I there opportunities think

your in one. just Last quarter? Or it last reserve largely or overlays as economic your assumptions the is Any in quarter? changes same this

same the as the it's think I Valerie, past.

little there's call I say I to nothing of but mean movement, notable there's out on always a bit would that.

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

up. you for proved the And said we All to able the we time, winner. us to shareholders. a was know for pass earnings our were with efficiency manage good improve just valuation The bank-owned achieve. that and our we improve ability and had too again right. our everyone for position, Thank improve company unique I've obviously insurance this some all is true today. agency, joining our multiple to where position premier opportunity as We capital This our

clients we teammates our win, win. our win, communities serve insurance insurance shareholders the Our win,

to forward, we're As committed look our improving we performance.

this the obviously bond Thanks allow visiting planned you and We our shareholders. will look benefit reward fast-forward us options to a Our us as transaction improvement to all to with some soon. will today. joining our provides restructuring plans of be for forward again

now The attending for Thank presentation. you has today's conference concluded.

disconnect. You may now