Cadence Bank (CADE) 30 Jan 242023 Q4 Earnings call transcript

Good day, and welcome to the Cadence Bank Fourth Quarter 2023 Webcast and Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today's event is being recorded. I'd now like to turn the conference over to Will Fisackerly, Director of Finance. Please go ahead.

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

Bagley, Holmes We team this Chris here members with Toalson, have from us morning: our Dan Billy Braddock. and executive management Valerie Hank Rollins;

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

we at link them find can that to in slides the or can view page our the These by you'll exhibit find X-K our Investor going of webcast, yesterday You where to them at are to Presentations slides the website. Relations our the afternoon. ir.cadencebank.com, filed on the you Relations Investor also section

The you remind regarding in contained documents forward-looking would release, and forward-looking contain apply along customary those presentation today. to that I discussed. with statements our that earnings disclosures the presentation, metrics any statements around disclosures non-GAAP our our be may

his turn for And now Dan opening I'll comments. to

full comments then financials a detail. We our fourth morning. will I in Good make and XXXX your Bank. appreciate regarding into the both Cadence will dive in year results, few more interest quarter Valerie and

following Our questions be team remarks. will available for executive management our

efforts improving what in the into we XXXX was for team's our company. accomplishments XXXX. our build We our year. Oh, look our on goal I'm performance. extremely XXXX, a And XXXX our of into our and focused specifically came proud to upon industry year for throughout as is

our yield, enhance set we ratio March, lower portfolio back, out lowering Looking efficiency our our capital to our and, improve by improve liquidity. our after expenses ratios,

continued sets results, beyond. these all the our and for hear in our of this year As significant which you about will improvement we certainly progress stage measures, review

the voluntary third completed of we accomplishments, XX branch the closure Insurance, closures of we the year. of including XXX excluding lowering the Cadence branches the by our in in at quarter. sale the from As program headcount, quarter, almost beginning fourth the and our look completed We retirement strategic

completed million. of extraordinary of in This value million, gain for of November, generated Cadence $XXX unlocked capital transaction, $XXX our company Insurance. additional after-tax approximately we the Finally, an including

During over wholesale available-for-sale December, and value will give on increasing margin proceeds portfolio, reinvest half all I'm higher these just reduce a book our and that capital impact operating ratios. while of tangible our to color have positive excited allowing of in the on this meaningfully to us will performance transactions, restructure leveraged our yields securities deposits, more over at we the gain Valerie much restructuring significant and moment forward. about going core but XX%

including our now important at our the our to between results financials it's gain the business of operations. discontinued continuing to operations. that the discontinued financial for And loss restructure. bank, sale financial the operations results prior results the quarter, other for in The sale the all looking insurance are securities note Continuing are on includes specifically from and broken out and related included

detail moment. we purposes, our restructure will, more on items which in comparative in continuing these will loss well focus nonroutine as operations past For as other consistent on of course, the comments securities excludes results, with Valerie her certain of practice. items the a provide adjusted

$X.XX common annual the share. for to reported $X.XX reported includes $XXX.X share, which the share, from continuing for million, of net or share. of common million, per income $X.XX from discontinued which adjusted We GAAP bringing quarter of common million, fourth per annual net both $XXX.X continued results income, We and $X.XX fourth income million, or $XXX.X per operations, per common adjusted in or quarter net $XX.X operations or net continuing operations income

the were X%, for $X.X grew year the sheet balance for flat a billion, From balances quarter. over and perspective, loan or

types, primarily dispersed well as mortgage. growth the was footprint geographic corporate our year loan loan across Our for various as and the within

confident rearview team that am and ‘XX business the I in be our stresses economic the relatively and the sheet balance bankers of XXXX, now are to mirror of footprint will grow into able economy our win Looking our strong. remains within

a our deposits nice increasing demonstrating community We the growth quarter with deposit million. total of business, strength from banking perspective, over had another $XXX

Excluding the growth seasonal in we half X.X% deposit the driven reduction or in from this annualized. $XXX of planned million, continued deposits, growth About with balances. and fund public remainder broker increases came customer of growth reported by core

XXXX. of teams deposits just in corporate full X%, experienced or quarter. were offset momentum in able growth we of over to year, the sheet public net community for our on interest the be margin essentially deposits activity an core increase and fund X.XX% fourth half I'm flat, confident the the balance For while in our latter $X.X build This in the will the bank to decline to contributed billion, balances.

Valerie both up. into reprice to and will dive details, the further our earning but continue assets, securities, loans

securities on efforts. improvement In accelerates pressure interest-bearing repositioning addition, The as the margin deposit migration slowed to our costs products. has from obviously noninterest has

of positive bond timing we anticipate impact December the margin. from our first additional the in repositioning Given this restructure, quarter

drove year, for Moving were increase did million Net for our charge-offs X.XX% remained negative at migration our increase year and in the within credit for criticized XX quarter. handful migration points another ended with total experience previously provision stable line on in an of credit, for X.XX% net nonperforming in of $XX We a is at to credits the loans quarter criticized healthy population of the loans the our and the This fourth our assets. in the of leases that allowance basis expectations, quarter. coverage loans. to a reflected

compared total transactions. net XX.X%, XX.X% securities both improved improved significantly and at deployment capital respect and XXXX points and metrics third management result capital the which and of beyond. 'XX. improvement tremendous Finally, of in flexibility XXX to to over our of with basis year-end was provides was CETX the insurance with us a quarter as capital This

now call her I turn comments. the will to for Valerie over Valerie?

all noisy a But promised down, quarter in quarter, believe you transformative XXXX. positive we we the setting we into momentum and a recall this was it I I you Dan. outperformed stage for there. break think you, Thank when

both included Slide about securities $XX items expense well up These activities $XXX in as the fourth by the slides assessment. a the the X we industry-wide well per quarter X earnings of nonroutine our On quarters everything million million as adjusted $XX pretax operations in available and a prior continuing key few The Dan earnings for the on the bottom current as continued for Dan few these that FDIC $XX these Slides driven move on settlement We year. and from operations. my full adjusted million incremental or highlights dynamics. income $X.X will on a additional early merger-related retirements, common, as charge reconcile restructure includes we results combines legal net Slide variances. I adjusted of in $X.XX special results this as touch morning routine share. exclude I variances operations loss described items basis, the include financials. as to million wrapped major pension a million our of this comments $XX on. to that expense, and of most continuing focus X and X to million added the discontinued through the commented quarter GAAP expenses expense, some will

summarize agencies To capital into at value December for an transactions strategic color and after-tax an duration We of quarter. company in $XXX billion sale XX, municipal securities insurance and around of add yielding that gain average was during of minute securities, were over million. par X $XXX November leveraged dive mortgage-backed then would X.XX% little available details, like first the the of by we just million. bonds, on These selling a the Before years. mix enhancing $X.X to the loss I the summarize, with fourth a more executed in take to sale a by

yielding in of we in of As of an the proceeds billion duration years. $X.X a $X average approximately reinvested with X billion year-end, sale X.X% securities have

million was remaining anticipate reduced Fed X.XX% in at million The investing first to $XXX in year-end that another securities earning $XXX temporarily quarter. in a at X.X%, with costing that January. are Another the of lower proceeds we X.X% and were the us portion broker deposits used in cash

from the X.XX% program actually $X.X Finally, able billion borrowings and X.XX% bank today. to to we of refinance X.XX% were as term funding

this reminder, repaid be any at without can penalty. time a funding As

per efforts, interest income net effect in of results, combined share resulted points combined these rates, all years the improvement us an of in to value on all, all of incremental will and, increase with quarter XX%, over million of quarter static XXX is X Tier tangible using $XXX an benefit fourth in So, common great of that impact in book estimated results positive fourth and in the come. annual basis equity an

of income an $X.X on to quarter. financials for fourth detailed Moving the XX, net on the the to compared million we Slide increase beginning interest reported quarter, quarter, for of million prior the $XXX

basis up margin Our net was X points. quarter, interest the X.XX% for fourth

Our total Slide pace cost reflected X.XX%, at points XX. as increased on the to all year, up deposits XX of slowest basis

balances the the Noninterest-bearing at end from of quarter. the of total deposit just year slightly XX.X% at deposits, down ended XX% third

in XXXX, yield pressure expect the on the as pricing improve to we we through Given curve forecast year. deposit move

basis X.XX% Our higher quarter, than coming fourth up portfolio. on renewed new of at for the accretion, prior excluding the the net points yields yield and loans, reflective balance XX quarter, the sheet was on loans from

in the was to due up Finally, fourth in points the to short-term activity yield investment December. our securities and XX basis restructuring quarter X.XX%

fourth as the net further Given in the activity, anticipate net of improve quarter quarter timing interest as interest first throughout XXXX. margin late income we that to and well

are highlighted rights loss, adjusted $XX.X items: two, result result the million to on decline the income was fees in servicing million securities million $XX.X the million XXXX. fee variance certain and as valuation our third on negative in fourth revenue, compared million; service which of a of mortgage in a approximately charge Slide X reduction an by changes. to $X.X on These quarter annually expected driven in a of changes decline $X Noninterest The $X service excludes quarter. one, XX, restructuring was in basis, for an deposit charge

items, other fees categories. all $X.X increased other management, revenue fee X wealth these from including about Aside card million, and

we anticipate at growth Looking total to XXXX. mid-single-digit increase a rate forward, for revenue

to Slides million. linked XX, adjusted reflecting XX noninterest $X.X quarter total of on $XXX.X the Moving quarter, highlighted increase a expenses and on was million for expense

XXXX. increases focus driven inflationary million, as increases a $X.X result by finally, of timing. million, products, in the to settlement with due with processing and work including $X.X items, salaries million, advertising technology primarily This our increased as in million declined expected, public an $X.X compared the And to smaller several continued in well to decline of matter. quarter quarter data which offset costs the being benefits certain line a efficiency service done Legal line legal was in portion related relations, other employee typical on software accrual the fourth and by increases. increased As increased seasonal and and third $X.X vendor

the As we XXXX expenses to compared last XXXX results. we continue quarter, anticipate to operating full commented year adjusted for flat

look Finally, at let's credit quality take XX on a and Slides XX.

criticized totals remaining increased to some classified provision, result continue further total including our remain X.X% credits of as classified a deterioration totals in this impaired charge-offs flat credit or at quarter. declining the that to of the Importantly, net quarter, Other and metrics loan and prior of criticized and criticized linked nonperforming stable quarters. were were number in loans identified small totals with X.XX%

at year-end. charge-offs annualized XX X.XX% points. loans basis, Net coverage Our to on nonperforming X.XX% for allowance declined totals and $XX full was assets, in resulting basis to the quarter fourth quarter an a X.XX% asset loans increased of XX bringing provision the or $XX respectively. in of net charge-offs to points of million, basis average The solid linked the quarter our year loans nonperforming and of million,

increased, improving. issues or certain be to for there the may While identify continue macroenvironmental our to credit of metrics indications timely well work are quarter that and our factors processes stabilizing

relatively we forward, XXXX now, year we based we'd on expect to totals. look be see net within what a charge-offs to our comparable As range full XXXX

standpoint. management to the at and improved ratios on previously, XX% flexibility X.XX% meaningfully, common a tangible providing and Our XX, all us Slide capital Dan to as noted Tangible shown from improved strength assets also year-end. equity capital is

all a we forward. for fourth quarter were of shareholder in all future benefit value There and of and moving XXXX of enhancing in as lot driving for matter, but look parts the momentum the that

have importantly, year just was Looking the into further systems branch staffing sale BancorpSouth and back, it we Bank Since and have on expanded spoke network of the and transformative merged materially X. portfolio, highly capital we to expectations levels, of and our ago our XXXX, for one. a out teams liquidity and of refined completed Cadence meaningfully and technology, securities for a our and loans We brands insurance we profitable customer our then, our that company, converted integrated also laid over you restructuring executed deposits. improved of our a those some and, our Slide core

and are excited remain about the energized Bank. future of We and focused Cadence

Operator, like open the we call to would questions, please. to

question from [Operator comes Mealor KBW. Catherine Today's first Instructions] with

your you is that. X%. I kind talked slides the have on want you following start you're that forward and said you revenue say that in guide, to curve to was you digit, X% slide, of I mid-single your -- noticed, in with Valerie, the

revenue And -- includes so number assuming how growth, X just does cuts of one, this the year. curious, forward within that, much expectations I'm curve

within then, so And that...

It does.

-- How much okay.

what in cuts, a influencing would revenue be some where And of guide? growth? that the then get actually to if sensitivity And perhaps we so of then that less we're that scenario growth how much is

a the pace like, higher And than the for the model and but said cuts time, we number like We've we cuts curve. of certainly, for longer. we off of the long higher is would forward

And Yes, the that's that you and something to what forward many guys us we've curve understand always particularly out doing. be lately. because doing better hopefully, there's can to different consistent so we're do chosen variations there, allows just

range in to asset That XXX But impact of, were, were net your million, neutral really positively now to said, right few give income the they we've time. sensitive, we a we're don't basis, X.X%. million. quite but on stay it $XX if it's closer rates by would take been where question, if shock say, decline, plus are a being Plus interest than slightly to some they or actually our

be side for perhaps to move would were interest [ it have others the rates if slower income positive So us on ]. net than

Than stuff. other

Right.

far. Slower, not as

great. That's

so us we're about And a up, give Okay. think big have kind had can said you margin? are many you restructure has parts. any I be that you've got That's then to you into the where starting But the range still -- loans up. any we going the you you repricing first kind of think on I margin know bond where but and going you as helpful. moving know do of quarter,

us So get kind point quarter. just curious if of first the help starting you a the in could margin for

the as positive look rest Yes. we're quarter we about but No, definitely, out next only not of really the first year. throughout

say improved quarter, basis fourth the For X margin back-end was net loaded. interest I'd points, and that

and expect So, for to double of would interest the quarter, both that income. the plus first rate double in of we improvement net net interest margin

Okay.

first So the at quarter, bps least see. XX we'll and another just in

I reasonable think yes. that's a expectation,

our comes And with question Sandler. next from Scouten Piper Stephen

clarifying the million service one think annual the $X working $XX quarter? you an I on and $XX million How do off million, about think do we a feed. the number, basis? question this charge, are mean, charge reduction around $X a or it this quarter about Just we million

year and But worked as forward The with. the from last the is on issues $X $X basis, we deal a fees. annualized is $X was an cleaned lower The we through annual reduction million onetime to number. need reduction look million million an up

Okay.

year... of kind $XX So the million the take for

[indiscernible]

...and million think $X about less?

that wouldn't the be kind Yes, is off $X million Stephen, of reduction. isolated item of million on $X its an own. really

Right, it. Got Great. right. Perfect.

million. To the add back be and direct, $X then $X subtract more million

Yes. Yes. Understood.

year maturities rates might we the will about side, help that And decline? throughout or improvement on thinking expedite large of come of could some should of the just be that of kind Okay. see then do are benefit kind there that when aware any CD that we deposit the that otherwise

maturities in half third. in the have as first the a of pace Yes, of as year do particularly so well coming, the CD solid we

about next of we've billion just CDs maturing. got Looking that $X are at quarter,

product pushing that fast. roll the in an Remember, they is product, biggest the we're field X-month pretty so and

Yes. That's right. That's right.

that real have And there a so those portion rate some but for a a into roll portion kind of still just of large then those, of over we levels. out of also routine promotional CDs,

you from average look rollovers. some at improvement anticipate we those CD So year, do as the

nicely just insurance Obviously, the thing Great. capital repurchase. for you’ve with extremely about sale. I'm curious last built share And me. then the

you of percentage it's a of think about, kind that kind think opportunistic you just Just how the potential around thoughts if moving if of payout kind return? capital total forward, it's or about

past, the an we in that way. have used in Yes, opportunistic

I we with where I today, in we've got look all tools think, as at capital we're think sit them. ready all we the to toolkit, and use the of

and did the a from us however I and capital lets in So execute standpoint, beyond. it feel think we what in we to good quarter really want about go we XXXX fourth

comes Casey And our from Haire with question Jefferies. next

model mentioned Dan, towards couple curve. the you you a questions. NIM -- so So of forward

where you XX% are cuts, you that versus Just declining. wondering when and when cume rates 'XX then, to what do peak level, kind beta of for beta you the expect these have get

so have was Yes, quarter. to for rate coming of back We peaking year compared began first the in quarter deposit forward in costs deposit actually We total actually now beta the our those down. March. next right fourth XX% the the in as modeling -- before of curve, cuts XX% because quarter last

in And I a expect the slightly, beta we lowest but perspective, this deposit so, increase the very as I like you, a well. a and to would that we further just quarter, number fourth don't from pace decline have first at pace for said, saw costs, quarter little specific bit

Got you.

double on starting just securities Okay. the have rate And first I and just digits the least. appreciate at borrowing just you provide quarter can better spot NIM we point? But so the up guide guys yield a

bank -- loan in if asking what you're today the borrowing Borrowing about. we're fund, rates that's are term

think you're what that's I asking about.

yes. yes, Yes,

yield, to at $XXX goes XX/XX? million spot said I So you the that and securities yield, think securities so the -- then

Yes.

where are. close that book the given overall changes securities So is the at to $XXX I million, think XX/XX,

great. Slide is one, And XX just Great. last Okay. so

You your guys trying repricing have so margin you’ve to How billion get yield bond at you of then that -- a book, you rate average the much a on $X billion that the the got with little within you X.XX% a weighted year. this average the weighted of for coming got Do is Just year? you. back tailwinds have like real it for mentioned yield. less that? fixed And this asset sense opportunity $X.X fixed looks loans matures

Yes.

flow bond part don't So is cash on average of off the because of of a we book, weighted some that longer-term the have ones. yield

I the as a think -- you just probably So those. get It’s field whole. factor going off about overall in far just kind some security too really of of would not to on

And your of loan are on then those some question, maturities.

Some of new generate as those those are simply on there. are of rates obviously, some combined in at loans But we They're higher that repricing. as those changes, offset actually coming well.

Okay. year? comes color that how much billion of as no to $X this But

-- guess you When I'm confused. I

very So, on at the -- are if the X a first floating rates, take look on columns the Slide the first year. yes, XX, basically repricing within you

reprice XX% loans So, we've total Sorry, the that is? got what next I our question [indiscernible]. of your year. that Is within actually

which way is if X.XX% your is the over real right? it comes matures to at right, but Yes, wondering 'XX? the reprices I'm -- And all that rates, point, or like, looks - I'm to billion X.XX% is pretty much less $X $X X.XX%. opportunity all just market of the about like, -- months billion within the much the how right, to way look the That's actually and looking you the is the or X

close maturing doesn't that. early $X you. billion, take refinancing, or to that reflect anything actually It's like that Yes. that's payoffs, year. of a But little probably bit this give Got

higher always it's than So that.

And Stanley. from with Manan question Gosalia next comes Morgan our

I on wanted start to credit.

improvement could that in X rates credit here? X cuts through credit there still expand limited the deterioration. flat signs cuts NCOs that? an bit get Your you're you essentially on Fed come new versus guide rate that in And of little you versus includes XXXX guess a I implies Can is XXXX. only once any part of what deterioration if or credit seeing for

is This Billy.

say has nice, So standpoint. a a what has last remained manageable criticized but population the portfolio The little, turned population I would a is we've over just bulk quarters of our that criticized of seen in the several percentage category. that level stable, from

year anticipate stability real But the over seen The seen deterioration. But as So, as has the the later year last independent corporate ‘XX. quarters. within that just we has would see processes improvement slightly that -- been goes that idiosyncratic, what handful our since several now level, have nothing we expect improvement, that half bulk would identified of deterioration we've that portfolio It's I a remains. We favorable there's is been that pressure to but of that for the of we're like within capturing comes. keep assuming if population. credits, this down manageable stay the I the of very so QX towards name-basis

it. Got

additional also that that some the as charge-offs come from does don't and too down goes of you through see ACL those deterioration? So mean here much ratio

assumptions, Under would say, I those yes, accurate that's statement. an

it. Got

as Okay. we then follow-up, rates but you move macroeconomic well clarity separately the to have much capital trajectory ratio? clear how that lower CETX do from mean, it it just as side, of that I now you'd as target the a outlook, And here, have a where that maintain seems should like lower? on just on for more

The And like clarity stable. a curve them again, more I'd to out we're but on with have hoping don't says. CETX today. what there. I CETX you. little that's We agree would the healthy for stay to a rates, we we forward not is them have for Yes, do target that like

comes our Hovde And next Group. question Rabatin with Brett from

on any that? funding to with bank do you might $X I Valerie, from thoughts replacing have wanted for you what kind the billion that $X.X yield reinvest, And how just, think about remaining the program, balance Dan $X term the then you a to sheet, on and to the ask maybe, billion of what Valerie, duration or perspective? billion you're or replace looking that

I'll with that one. start

growth proud challenged doing perspective continue couple and a really of in the think we're over team of the we've we've to last from the that. bank I been deposit quarters, do what able community to

will grow us those core can that there, deposits allow to reduce we wholesale if that customer out continue continue are funding. to to So

was question? I'm the What your Yes, other -- sorry.

what Yes, was question? the first

remaining $X billion. The

about We X% first We've are that. ] a where securities able or X% half. average given distracted. been ] right rates There now. is We'll and billion $X probably little bit more in in [ left to so, Okay. [ the got of purchases to do

You unrealistic probably know that. that's not for expectation an some of

other The really is could It or in in various give could say, half, -- take, be it funding. securities. be

a from quarter most with first of really what of make kind by for the our public that some sheet bit it us going of of volatility deposits. and some ear the The fund has we’re bank perspective. little what's It program. could Borrowings, to lowering be benefit funding a on playing yield term does balance

Okay. earlier. secondly, NPAs Billy And on the and then I formation, the heard

it guess, industries presume care, is like in been Is but to there's nonperforming. health fairly anything it be so some are that? going And speak? underlying just to I’m to through other is the that's seems which there migration -- any through that my question credit but criticized is, So pipeline, might stable, my there is moving

been flat for I quarters. think multiple criticized has now the Yes, basically

it you think, today higher on we I was back go actually criticized. to X/XX, are than

very perspective, really been stable. it's across well spread multiple industries, multiple that from It's geographies. So

that's have said, of the I interesting any Like kind follow-through some the in care, any it's credits. I one area-- geography. pretty that's say It's The would would and is. is other that not care for brands. we've impact. credit but -- cases, not by couple health and one you some It's about specific health stability. this If I widespread, we've piece are seeing are industry. quarters those It Otherwise, continues they but a that much what living. Otherwise, we're of to again, We're then not restaurant of senior specific talking where something is health highlighted care, that agree. several seen industry mean

Yes.

levels move creation? the Okay. you customer getting in just average those stabilize and maybe, accounts from maybe is balances on If where with [ Are could checking accounts. of they one Valerie, sizes commercial think not the and new to as the to those I sneak going here size drain and one DDA much impact to consumer ] of balance last higher

We big haven't average size. a seen change balance in

I Yes, about noninterest-bearing you're think deposits. Right. talking

Right, right.

don't accounts. a I big think change in average But

little a accounts, not a a X% Right, in continued for we've about row bit a slower average Yes, movement of kind movement. in pace, so now. consistent the of It's X but between two. quarters been

Our conservative forecast, in do little be to we bit a continue that.

Our those noninterest-bearing bring deposits teams the of the forecast has obviously, to total community XX% focus sales to to But down year. and banks, is big some products the operating accounts flowed -- flowed those in out. they our going flow noninterest-bearing actually those back and XXXX. They that in a our end most bring here of deposits that's out for in higher-yielding by didn’t the part into for

there. yes, is opportunity some there So

helpful. really That's

Brandon next Securities. from question our Truist King from comes And today

a betas yields stay in actually loan scenario see could from event and of the ] you loan betas, cuts loan and on about think where So here? you just [ stable rate how yields Valerie, Fed

the went from prior the accretion, So or quarter. quarter, in up yes, the loan beta, XX% excluding XX% from up -- down to in

As on forwarding next I sheet we coming year of the they're the half higher significantly, loan, than couple first balance as that on of stabilizing a XX have that forward through like because overall we we before continue into off. well that's impact growth improve of of things. rate curve, at or we actually really as, of includes of -- the of portfolio. is said, higher that our course, And to as One, next have the yields likewise being -- showed we're the which slightly Slide level that year, repricing forecasting loans look earning because that loan we're assets, yield kind and of

that. there to changes environment, are a on impact So we going there Once a basis, in net-net But drive that rate positive on NIM. that will to it's believe continue is the interest the up. be some all moderating to

strongest your landing about far the you optimism your and growth and could you're Okay. that areas And you hitting how starting seeing investing may the their the be as what in year, loan a own growth most just now soft as if feel to potentially expectations then there's more are talk customers of for with kind opportunities and businesses?

This it is Chris. I'll kick off.

view be Our will it broad-based. is that

in loan in excitement We teams as all be the that's we to to going all would they're grow the and great and they do our in there, some if do, geographies generating aspects, look forward. have activity going what areas, we generate rates in all out view borrowing say Especially can world.

we is is CRE with construction thing Yes, in Hank. our multifamily continued This I completely portfolio agree the advancing have loans. One Chris. of

modest there. And as see And mentioned encouraged we and reviewing broad-based, what have and the pretty place calendar the our XXXX in You'll the we Dan mentioned. we're by excited changed as that seeing. into footprint, about opening in start I'm We're pretty Chris as pipelines, some bankers remarks. growth it's

optimism, full And of I’m so definitely.

question next from our with today comes Joe Raymond Yanchunis And James.

the when are at announced. the you quarter $X.X that was a the drove buying out a number? securities with on So was in kind larger And duration yield? of restructuring sale fourth X bit years' you decision the that billion billion land the little What X.X% $X.X minimum than to what laid

Good questions.

of so what weren't were at -- you our weren't sale that to in be. us rates sure be when number were back out in opportunities when the we were, the where going at of sure what happened came a and looking think look close. the going our I gave time Insurance we presentation. of with minimum announcement we we where we were to We We to at Cadence November,

favor. As forward, we moved rates our look in actually

came what do And a portion lower actually that have to portion allowed so loss, thought at in than and looking bonds offset the that much against would, could a a that as loss us the on we of we we we we low of yield. gain larger were

to question? answer So return, eliminate are we to buying, was able billion that thought next at a ] we be the for is [ What Valerie, $X.X us. X.XX% good

the that CMOs, our different The of all liquidity front-end flow portfolio, focusing there, of variety product floaters flow. to products, cash products the and flexibility is on characteristics. loan laddered few on treasuries, on us focusing again, a well, Yes, that some important SBA growth really off with focusing cash shorter, but out duration coming is adequate the Ginnie a the ensure laddering and, [indiscernible] again, securities Mae, sequential,

The restructure shortened flow. duration, weighting, lowered cash improved risk

you every way slice a just it. It’s win

appreciate I that. absolutely. No,

for me a here. more Just couple

and the So deposit comfortable guidance range of kind your for, would XX% looking ratio you of the are loan What little at XX/XX. a range range? be kind ticking from loan or that your implies up deposit what balance you level sheet in you're managing bit at

and we're said towards XX% moving is we've us. long up for where certainly Yes, are, comfortable a we for very comfortable time

then last the me... one for And

[indiscernible].

your Yes, the revenue what's growth? income income guidance, net it Within did. fee split between interest and

Say that one time. more

income split guidance? your growth NII What revenue is in and fee the between

that. I don’t have

within points, a and the amount. mean, variability provide Yes, percentage is I of because really percentage category. Obviously, the it's between two. we a the didn't from of going it's just materially that But on income interest standpoint, way But much dollar to be I think. it couple larger net not different a each

you fees rates do And fall, way I 'XX. opportunity in look in I hurt mortgage real big mean, 'XX think, in if as they're clearly, and was there's talking, a 'XX, when at there.

sure. For

Our from from next Olney Matt Stephens. comes question today

why quarter, quarter? you more balance Any it like moderate of like in think but color, sounds liquidity is the that it but comments the that's asset us moderated. that think think fourth help you the last seems now that heard result increased can restructuring in appreciate kind fairly you and it you more of the sensitivity I now than overnight neutral, sheet build would

over as the out Yes, XX it's months. we next really look

there the short out more and say, So it's really of XX normalized kind a the over next that, would look as you state, little of neutral. more in but is a on months, end sensitivity I yes,

So, we in definitely have cash now. some upside with the right place

Okay, no that restructuring beyond movements migrations already so on the other balance we've covered? that sheet or

No, note. else of nothing

where growth single-digit more this costs outlook, then recently? I products? expectations of any come from, for think on hear the on low more love And to which funding incremental I guidance deposit And the calls the could color about growth. the just would

that on that there to consensus piece in was it -- today. had I specifically, financial expectations ability quarter And think funding the shape We are we're page desire behind front. out fourth Yes, at increased in think to of good is that you cost that on that. was a deposits the confidence some put look been. our Page the slower numbers overall X, grow than When

on team. I been think growing certainly It's bank community the side. that's the interest-bearing deposit

We a in continue know discussion, morning, customer winning loan the our there on business in, This enhance in out and improve there front. there. to team some the good treasury was coming and management product, that I so is

to good we think where really continue I So are. feel we about

at of in broker The end About the include Matt, shy other of down of that million the deposits of note January. $XXX just thing year there, of the came half already is deposits.

reduction that And in number included growth deposits. a is broker of so

reduction, yes. further For

Our Gerlinger Citi. from today with Ben question next comes

I a point of kind was curious, of really. just clarification

throughout outlook. does entire rid flex assume in So, is static Because you there's if the getting it, guidance, your the some have that BTFP the NII I of year? in

guess fixed I that Yes, product. That's depends that rates. I think on with happens a rate what

I we if to don't there fall, a rates begin so, product. know that out rate fixed to And that leave in want

I in could as drop advantage change. questions good If funding happens there there that price it's when begin some some curve are are, funding early to to of what that sources as rates happens. So would us. other Today, we and then says to lose as you'd of and find want they the it for think

we is the what the Yes, become exactly that rates would assuming that's that, that's that right. model inopportune, And is pay exactly once down.

a the teams, speak of political to management for, other seeing or bit you some know . Why for just not model market very but I are a strictly Is you December, what in are And Dan, for on looking the it's dynamic in that think do election rate is nature, can't you outcome looking today? we so Okay, M&A one. philosophical for then cuts? start? it M&A much

piece think that a I the politics of Yes, that. is

they're would helpful. approval speed clarity be some on to get some the what for bodies and looking think I from regulatory

there's think I so And just some unknowns that there. out are

capacity. -- there's to of a continue there's get think there's but marks a on. lot talking, There's a X Scale scale got of been We lot a perspective. question, to years. a a still proud still think bigger. There's really ability. the discussion do plays. We're of desire to we've I over We We lot know a -- lot of going think I is able play. of people got benefit we've we've from our think the last what team can

holding marks back. the think are and still regulatory I questions unknown the things

M&A had fair. if in, did That's one you wheelhouse kind all sneak then if those an be size? marks I kind of do you could you. for what question Got opportune and answered, And of would the

be Yes, continue I think we opportunistic. want to to

grow to know our footprint. like that we don't need I like We our think I to growth go to that we dynamic We share serve. footprints markets within the existing footprint. So of outside continue we serve. would like we market the

wanting big get to footprint, a So that certainly, clearly, existing from would be at needs to, the those Nashville, in more as footprint difference, be several our look Dallas, you is Atlanta, billion we're dollars Houston, Austin, it bigger make within you'd up. market our But would us. to markets to share anywhere Tampa, in, markets beneficial us. be be to enough And target what for a so

Got you. That's helpful.

comes question UBS. from next our with Preston Brody And

back. Valerie, I circle to just wanted

and it range X.XXs%? me are on this the What that's spot more versus a well. X.X% on be X.XX%-ish basis. kind of looks it And in versus kind into we of for kind missing guess, like taken kind put the said it the be I as more of when a from book of question like the try just off, making kind And that would I to the in spot yield on I'm to you of where few think X.X%. investors it securities I the the range you do should was getting back securities back-of-the-envelope math in

Yes, -- that that $X we mean you're I'm amount I reinvested net billion that or -- sure $X.X we've not securities. of sold, considering. and entirely the billion we into

it's I'm [indiscernible]. of We little pay more tracking not deposits, broker We entire detail high, used so through to et sure the say billion. sounds with quite can I'm cetera. The a it number in some go not $X.X it so you And down you.

to to granular be pretty that's to get here. able No,

Okay. then rate But X.X% a is is the for what to number good spot saying? off you're work

Yes, think that's yes, I reasonable, yes. pretty

Cool.

securities if front so And terms purchases any you a you guess the in incrementally of that do cash kind -- be at purchases, accretion. might Is on I in kind but is securities earnings versus X.X% it, necessarily here mild about to feels anything at what might that Fed of ALCO consider have from a benefit I to the more it any like point? of me than fair

to I'm there's have look that tracking that cash you. not sure I further we with held I'm opportunity the definitely as believe further to some completely we mean, forward. benefit our invest and margin we

difference I'm so earnings not between [indiscernible]. guess there's X.X% the pickup much that I saying a redeploying X.X% that of and and from

a absolutely. Yes, improvement. yes. going incremental point, No, this to That's be fair at point, it's

versus some you that. thank the regulated, y’all but like NPR OCC ask it of head to OCC for the feels had Dan, comments M&A yesterday. on think I out then, know I I And you, Okay, wanted of and an way stance just they aren't they're put an little bit FDIC vetting acquiring terms about one consider firmer think each you that in a institution? the When make of an future in M&A, versus of taking you does terms transaction. OCC a institution leaning individual other

enough don't guidance know that to think who a make no, yesterday's you're I that’s difference. acquiring No, I'm really about. don't that But institution, The familiar approval. I there's with talking has

be want damaging getting it's clarity difficult. on faster approval a is things on merger So the really as And of get a on, where it's not to I is things clarity, on very said important. impactful I decision think minutes delay. ago, from few process. coming some process very for usually going the and to if But and both to inside institutions It's use go regulators what some when getting in that

But me closer million security, $XXX tax you probably apologize that $XXX equivalent. actually, you , equivalent the And on million. to back is about I tax in if get actually, come not I go the and back that. adjustment, mean, it's let

I last appreciate for I one you... had follow-up. that Awesome. The

clarify. helps [indiscernible] asking. That you

I you're guidance. forward basis beta, total within you you for assuming your might had what as I the an some one you're for a or basis just, was assuming deposit if last down hoping was give The either interest-bearing us insight a of kind curve, on to

forward given quarter the again, repositioning, the redeployment of anticipating combined have, available, simply growth, we loan ‘XX. the peaking costs that cash in the like show the first I gradually then to positive have Yes, repricings net starting I quarterly come But don't beta and flows that we interest obviously, down. into securities loans, with, but throughout margin deposit loan do, said, the

Yes.

If the time have come a that, back and majority look the that, that of share of at XXXX you lion’s at X huge in, and deposits is months. growth you the look

into back how fast that can off. you so And can roll

comes next today Our question Tenner with from Gary Davidson. D.A.

moving where number I reinvesting Once sheet to do proceeds you year, reinvestment sale cash the book first course flows, had the get the securities flat trend through is a and year? the forward. otherwise here questions the or just might the of you’re over there pretty bond of rest the couple is just a of that, that balance the quarter, of for in you additional expect

and within opportunities of deposit growth of and Yes, the pace our growth that. kind loan it really depends on the

total so just may the asset probably a to we XX% kind liquidity purposes, like purposes, to on total I for would assets securities keep of pledging -- a bounce is it bit. cetera. say a floor a hard that little would range and portfolio but a as around our And not range et floor,

then even balance kind you year we're on And What's I'm the the that the or is, earlier repayment, about minimum Great. comes the out end whether on the to in year, of of cash. available that 'XX the out target as part of as to the balance at end of sheet some sheet level into cash thinking sometime cash your liquidity? 'XX, of assuming think BTFP follow-up it's

last year. after that's Yes, March of changed

billion right and as a always that $X.X just base so is activity do some than a fairly there our probably that of and extent. look we or some kind as cash There's level. said, cash There's would be maintaining Yes. in of of level to forward. That customer going being lot a probably stable have opportunity so we anticipated volatility be now, of more to is there

And Federal prior Loan large we funding BTFP. the which were is availability at where to the Bank, Home

absolutely. Yes,

[indiscernible]

measuring variable. now little a level time it -- again, to We’re time that target below

our today Arfstrom question comes RBC Jon from with Capital next Markets. And

I forward? FTE just for what being the Where to What's you the XX, questions. level And had going a referenced the you left there, by XXX in down be? Dan? efficiency do the is you Slide excluding sale. few right want XQ, do company think to do

hearing to ask so you. I more time. I'm sure one want Yes, make that question

do Yes. going on adding, to forward, what where And level trimming? you What's are for you left and efficiency do is the right FTE where ratio? company think are the you efficiency

the Well, XXX in clearly, system out people less came the the efficiency Insurance numbers that with came down sale of or XXXX. and XXX of with the

look to for opportunities to more be continue efficient. We

turns combat that's of that's can restructuring today, on, where a more there's we some think consolidate hand-to-hand lot that's to going on whether in another together. move areas into I that investment technology efficiency, consolidate whether efficiency

excited to The headcount hiring would probably not about. would I anticipate get be on reduction side. is other the we anything that from here

franchise. our invest to in continue we So,

for can help continue to that us people We look grow.

in we that's headcount place. reduce coming another one as so, And can place, back in

So, I from don't people here. big know a drop there's that in

looking do efficiency at efficiency, to when drive the I you're think, can we continue believe we down.

revenue. through is that part of And

point number from Valerie, And first the fourth quarter? is jumping-off expense quarter is good the the for that -- a adjusted

Remember, path those things. first I quarter in and Yes, right. kind quarter. see first second trend XXX(k) the can that matching But all the expense other and and of the think FICA that's between all you our the has Yes. Yes.

Yes, on that's Page X.

big be looks Page X. there, here do you that as you going but a out well, initiatives here, want but will I Alec on clean about quick Are X? that smart from one like to a ask forward? year, Slide to have or do a there like trying be things you any what relatively feel not X I'm Page in think

XXXX we're a in I lot were. hope we than cleaner

noisiness hard of muddy As noise the we the We guys. worked to you you and promised really we for Valerie on said, the water outperformed quarter. up

number number And it, get we things but And year could But to that were we of were that needed ago. of over converted just said knew there really I that do, a step. Jon, we past a we a there things. that

really this improving past we're the on sure Dan year on that But said, efficient. continue the driving performance, what making front. so And to going we're on active to on was all working revenue,

always. incrementally, year... size going But say of from I'd past the are did so this to there what And the we be things,

We won't have that.

comparable we'll year. this doubt year I a have that

Yes.

year. we're the none that of can think look on, a forward, looks a working I to continue come to laundry as close out from what list at in them but got we the past what we've of anywhere done items strategic execute we've on team

quarter, big-picture I question good is, out? last you've much where outlook in me are How cuts my laid or And And how your about scrub I think I think confident compared for X guess is did guidance for Slide okay you question better. variables outlook on you outlook, this? items cuts? the then are bad of are that it? you this when And the bigger of some in little some said but to X, note, in the X my a bit And

I Yes, X, at when several asked think questions looking we're Page you've in there.

about in front. Page where we good We X, consensus us has pretty the Street the for overall earnings just where that feel on think, of XXXX. look we're I confident with are

process be XXXX. a I us. us. to top. a Valerie? be right reprice for allow benefit big cut us That's for rate rate cut to perspective, benefit loans Higher preference for a now for the for longer That think, my to from continues continues in no be a would would win at the us,

well. it that there's the that's beneficial. pieces. do? question, the does continue side. for is said detrimental mean, et a incremental, to the to is moving better longer you parts I'd definitely if expense net rate ability Overall, think I costs, at The say cetera? of loans income higher some the interest that higher different be Could to anything. net-net reprice on in I the There's No, the all obviously what

-- lot we something about, changes, we project moved and overhauls that, in of XXXX. our talking this, been in changes, Stability else. you've through Stability. did what process lot And a a in

fantastic of in business I can real day just think as being footprint there into a we're doing us stability, our what Hank who in across the doing every some in stability a got every team. we're stability out what -- in turn rates, company. our bankers for team about are we day. winning We've talked And operations, growth think stability stable

concludes this to to our session. gentlemen, and closing Ladies back turn question-and-answer I'd like management the conference the team over remarks. for

us laid Once today. that you, Thank again, deposits improved taking performance. has had loan 'XX. time a the put very made of progress while to in foundation everyone, holding right. obvious from It's environment. competitive stable growth our very the again, work very -- in for proud am in team All organic perspective growth XXXX during we deposit join We year the very also nice I for a

our efforts will restructure performance. portfolio subsequent finally, operating the securities further enhance improve And transaction the to Insurance and

While excited to of beyond. we impact are these on path about and to positive accomplishments, in performance continuing the our are improve committed we XXXX

you forward Thank to joining all with us We again you look today. soon. for visiting

all conference today's today's This presentation. We for attending you. concludes thank call. Thank you

your and disconnect a You lines may now have wonderful day.