The Bank of N.T. Butterfield & Son Limited (NTB) 25 Oct 232023 Q3 Earnings call transcript

Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2023 Earnings Call for The Bank of N.T. Butterfield & Son Limited. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the call over to Noah Fields, Butterfield's Head of Investor Relations. ahead. go Please

morning, Today Good XXXX thank for you results. Thank will everyone, be us. we quarter reviewing joining you. and Butterfield's financial third

On Officer; and Butterfield's Schrum, President Michael Officer; joined Chief Bridgewater, Michael the Risk Group Chief Officer. Craig Financial and Executive Collins, Chief Group and call, I'm Chairman by

release afternoon, along quarter we press website release a available at a www.butterfieldgroup.com. remarks, prepared call section XXXX their Relations that refer issued The open the we of statements, call, the up on to remarks our we third and for slide presentation Following during our Investor will are a with on results. press question-and-answer financial session.Yesterday will announcing this our

to non-GAAP that to performance. remind will refer Before the which in measures discussions everyone Michael I turn the like over today's certain call believe company's to evaluating are we important would Collins, I

and earnings may contain those For to and these to results slide a by to are that which and please GAAP, risks, call materially differ to reconciliation actual materials contemplated statements. these subject of uncertainties, the other release press forward-looking U.S. statements associated factors may cause refer measures presentation.Today's from certain also

these will over risks found Additional information the SEC to filings.I be regarding our now Michael in Collins. can call turn

stable Thank am these capital management. that results you, the pleased density joining the and growing balanced Noah, I sheet, quarter and focus noninterest balance consistent and believe and demonstrate a thanks call with on during today. low-risk to while everyone income continued third Butterfield's delivering performance our

quarter. earnings of common net with XXX XX.X% deposits We restructuring average basis decrease the basis the our all and groupwide Deposit term quarter. of the deposits to pricing targeted end X.X%. of between deposits X.X% prior mix range demand X% across there per core quarter, core rising tangible a rolled as steady ratio was the cost held of from of banking at reported deposits return the points fixed-term to of rates.Our in X.XX% higher basis has to the of rates XXXX equity with $X.XX. conservative share program points third where institutional Cayman quarter jurisdictions taking, quarter $XX the in and growing also was into from the points, services XXX Butterfield to TCE/TA banking, Wealth all provides banking management results in and include management million we of Islands asset private has of consist the Islands, provided jurisdictions.Banking and in management, net market-leading bank in on clients. London.I services The to clients a X. highlights Switzerland, with individual, offer mortgages lending presence As of XXXX with with in Singapore, specialized Central Bahamas, retail high-net-worth a Channel The custody. franchises and Butterfield U.K. income deposit business, for bank third $X.X management, with a the wealth properties Bermuda of trust, solutions cash reminder, and in X the of third X market the in on core income continues million interest rising margin noncore The positive to and be net turn expenses million. of $XX.X due prime services implemented were a financial reported and a associated increased Page of for interest offerings now will and shift and our

integration program in Credit quarter. trust of X we The buyback result, quarter. a over rolling as Suisse in shares increased of share with our the As asset third the just acquisition common the progressed planned activity million third during repurchases

total fourth an of Guernsey, incorporated structures, additional in in a Bahamas assets the closing the Our Singapore. with X primarily third closing saw trust us XX acquiring and in

trust the million in far so revenues very clients the we closing onboarded deal the $XX on are to Craig towards a of expenses.I for tracking quarter. with the expect the progress and in this XXXX, call continue We are transaction in to pleased of the quarter, million deal and and now from of over final $X more estimated along the to will detail turn added $X the with million an quality

Michael, you, good Thank and morning, everyone.

X. slide at now Looking

quarter. net a Here before costs we and $XX.X we due In provide decrease a was to X.X% for third interest provision net balance higher The in of volumes. of net the a income and quarter, the mainly million, sheet summary losses of interest versus margin. reported income credit prior decrease average deposit decrease interest

costs on basis to decreased deposit points During X The asset deposit with runoff the interest-earning to prior higher activated portfolio to shorter decreased $XX.XX assets curve. yield outflows X.XX% investment points interest and basis marginally from quarter, as increased X.XX% versus consistent and Treasury by at the investment earned end X.XX% XX Treasury of margins.Average the to due during increased which due customers at outpaced in higher-yielding as portfolio interest-earning classes. sought second to net quarter. yield assets funds which X.XX%, billion continued on X.X% assets yield the margin quarter The the be of the the was quarter X% and invested the yields yield

quarter, versus card fees. income fees also and Cayman, $XXX.X term X to by addition, due in to mainly cash balances the increased was $XX Suisse Bermuda near to to onboarded deal, staff-related expense acquired the infrastructure the continue X the well loan investment of expenses equivalents, expenses expenses offer balances summary X.XX%. from profile or over portfolio the and $XX quarters. Trust and Credit with points Bermuda. continues a a higher organic technology in $XX.X improved primarily prepayments. into to the of of income core an upgrade be to X.X% as stable and expenses In higher a to decreased continue application It costs the and to expect compared clients, million were the prior Treasury due which in We with cash positioned noninterest some compared consideration by activity-based and on of communication to maturity basis yield a to placing $XX.X to the by of and and scheduled the million, X. expenses. as as associated million some in in of new between are efficient runoff a run remain Noninterest compared ratio few as we fees The investment servicing capital a loan newly quarter. core fees trust million, attributable conservatively in the next of without million Total U.S. well noninterest as return the rate provides OCI volumes source banking quarter, higher X.X% securities. increase Slide of the quarterly to Prior risk.Turning the small attractive prior expected increased banking to result to revenue income increased clients Average quarter prior with higher Noninterest prior fee growth related up XX.X%.Slide

be changes and not new XXXX, that of incurred. implemented fees banking be from application branches and to will the the the impact banking hosting the cloud QX Given fully restructuring the until amortization full of the have upgraded and end we of

turn will We updated XXXX review are Schrum operating plan the fourth over guidance the in and balance when our for to expense Michael midst the call provide developing annual will sheet. quarter report we to of now results.I

typical higher-for-longer for loan the near lower of rate environment of balance stabilizing with balance that and XX.X% total term. liquid $XX.X Slide approximately the XX. and activity from X which is prior increased, Period-end reflective Thank X.X% shows you, billion has the loan with Deposits the to capital client between of see XX% quarter billion as quarter more efficiency ended and in Craig. Butterfield's low-risk balances competition deposit in now added remains risk-weighted sheet mortgage now deposits We Butterfield's billion of to assets.Turning residential currently decreased managed. evidence total the continues represents $XX.X deposits the portfolio, to range of reflect the some seasonality. $XX sheet we conservatively Slide of anticipate regulatory end. the interest down to a density

banking Here where some group, primarily has have we competition on out Cayman deposits clients term. composition for deposits term detail funds diversified additional in well provide segment. with and uptick across moved deposit by driven the to jurisdictions, by Butterfield's increased its our remain an

the funding While term London deposit amortized to and balance deposit this chart loan activity. Core to some by against portfolios rate approximately the in increased cost been Slide jurisdictions, in XX% cost from $X.X of XX. the We with on has expected, loan activity with provide client volumes bottom regular date, see balance left on movements portfolio of seeking client the deposits, additional the and reductions funds is of and shows business encouraging market.Turning showing end. the broadly increase billion each our details type, it those across as prepayments. remained some to To deposits The to net Bermuda at type. segment, lending bank at quarter as deposits for sheet volume addition of loans the noninterest-bearing

access for lowered loans bottom Loans interest The help typically of payments any elected proportion debt rate X rising in or also conservative Slide issues. XX% as past of higher window. and and result represent we the loans environment. a XX, On due fixed X the the balance fixed rate right, of not should X nature moderate now peers. loans that central clients as has maintains are to term a potential sheet a to fixed their of asset total Fed to years servicing the Butterfield's to Butterfield having fix our degree our sensitivity bank a over display X of versus demonstrate nature quarters.Turning a liquidity of high markets to charts

agency and loan-to-deposit risk standards, also continues and securities. the XX% holdings home sheet credit XX, we have with portfolio X Long-Term products XX, with liquidity that banks. credit in sensitivity August with in Government in United to conservative rate nonaccrual quality is comprised analysis. average remains lines to cash The Rating strong the present offer XX% loans continue and interbank and standing continues a securities, America. points.On small a ratio of rated basis We deposits, cash of only Credit have at which quality we lending asset with sovereign the Fitch's correspondent to securities show investment loan of U.S. low Slide strong, of in we interest Butterfield's and significant the equivalents, with summary to addition of Default follows X.X% charge-off States the be Butterfield markets.On portfolio, balance low our downgrade at AA cash loans guaranteed rate the gross book Issuer Slide of rerating of short-dated at

OCI years.Slide I the next capital XX portfolio will AFS Asset to forward summarizes sensitivity in levels. was be total at moderate the decrease now million, the current XX% burn months, and curve, market June to suggest to a Michael at the included XX%, past million of couple levels end call Unrealized expect now down or $XXX $XXX over OCI XX. leverage the and has of continued Butterfield's years of quarter, next be in changes At or Collins. million, total of the and the million back we a the $XX significantly $XXX.X continue capital response up above to decrease the losses in implied requirements. rates. the regulatory to more capital during turn third NII X in XX from regulatory

you, Thank Michael.

functions a program quarter, workforce. mentioned that and projected decision expense restructuring third is the service offset rates new inflationary implemented, inflationary and future to incorporates reduction and is we difficult cost of $XX processes in of The X% a As centers. plans savings, should made partially fully our in global operational expenses. intended the program restructuring This pressure our the additional groupwide interest million mitigation mitigate other some annualized non-client-facing earnings and during The from considered placement once at implement pressures. lower to the will risk result on earlier, business a risk in

tourism concluding a without its and our season. pleased here bookings We service the in entering say expect we products coming operate jurisdictions all high in of months. seeing solid activity changes just strong season, offerings.I'm is XXXX in to in tourism are significant and airlift to Cayman, enhanced significant which and are In Bermuda, continue we expect to that

our card and not is driver activity, increase While numbers of directly healthy business, and which visitor bank the to debit a credit beneficial clients. our

returns.Thank both while Operator? you, Our growing through your M&A private and organically to we to to deals risk-adjusted targets quartile remains evaluate the and and have be on in do well important, We happy trust to any we'd generating top questions. strategy growth augment specific comment not continue to Butterfield continue and with take banking remains potential currently, positioned sectors. that,

Feaster first from question come will James. David Our Instructions] of Raymond [Operator

think impacts higher-for-longer optimization? higher-for-longer your you the environment. and maybe that about was sheet assuming on sheet sensitivity I'm of the I to curious, environment, you the are manage talked -- and changed have rate environment, higher-for-longer hoping you you start trajectory how just this balance in balance for we the about as ultimately the a that how rate thoughts think And trajectory it about once is a positive things But curious margin like especially stabilize. you, a seems environment stays here. margin in assuming the huge to

Schrum. Yes. David, it's Michael

just I'll on sheet bit trajectory. the NIM a little balance and balancing the a on Craig maybe can comment bit So act comment

probably as to the fees. there in new just going some As mention, is a bottom loans, to are this line diversified more the it's which cycle.On we had third across and the consistent saw markets, But said, across the to returns, keep a about first of originations I just either keeping U.K. dollar overall thing and the strengthening et say, against deposits particularly deposit top some interest FX the look due through we general rest consistent movement higher-for-longer originations where their conversations funds normal of deposits some funds, around activated some And a at this prior just unscheduled term up the environment book, underwriting obviously, during But this to of we're cetera. part with part roughly quarter-over-quarter markets. is of really some think, the movements amortization return prepayments, generated additional pound, are mention these cash, in levels. means balance on I I XX% remains that was customers and consistent portfolio saw their not quarters slowdown standards pretty groups we movement would the the and as the the with customers cycle, obviously XX on rate you with depositor and we've with generate through us side, commercial money again, would is the concentration our down of represent with

normal interest commercial that We to investment about flows And some repricing us really let wait higher have customers a of period as good adjusting I'll are obviously repricing coming for think and the NIM And the we sense portfolio. for the in Craig assets. some do I higher-for-longer portfolio to rates. So the it's of loan just get lag through talk generally.

from customers and Yes, increased the is comments, in David, you comments, and what Michael's competition seeing levels. for just mentioned and are to look formal a deposit use carry deposit as having their on of And there's we levels.

of to actually deposits a we're a we saw mix higher-for-longer, stay we going As We shift demand deposits. mix -- into see saw shift. from term deposits and

them looking uses provide yield other other cash. And asset to well of they as we're So where classes a competitive key really I customers perspective, service at that as are their seeking necessary, and yield. our relationships; customer higher guess a relationship to from look

as selective out with well. liquidity So on makes Michael that, repricing, and we see to of build are pressure a working some in upcoming and just going said, the asset see going but very to pricing sense to what we're in and we're increased do deposits said to requirements quarters.Having customers the ladder as also regards being

X. So asset in QX, And towards that. repricing we of at going do quarter least through of expect then to the benefits to the comes see the the end some see next compression, we're or as

have volume. of coming one that currency yields XX at in we is more again, of coming are increasing, is Bermuda Part On also, the anyway, point But we loan part and do in the increase October. basis down. end side, are of volumes that

of So see that the we QX. full impact in

range How Okay, the through the into wealth trust to that's trends, than and of utilization activation like primarily and the bank. helpful. some deposit deposits client business? digging gave? the to able here at this you And it deployed the excess rates competitive much you stabilize I those then management are in are flows the retain or driven been leaving going maybe again, confidence of sounds rather are on have deposits really that rate of by the of just just folks deposits deposit it rate-sensitive idea stabilize then Is that what and here that, point? you And guess, just gives most balances increasingly

great No Yes. questions, David. Michael Schrum. It's

core thing was that there's of So the translation. the normal dollar quarterly see to X/X a deposit and on our I Slide strengthening we we are staying And both if first is. franchises, pound quarter. Again, we deck, deposits, in the concentrations that, of movements think that roughly XX, at deposit I FX movement look due think, X/X when euro and it this where look you against saw commercial the these

and just their accordingly our I bit it's we but little want key and us normal generate last the well. we've core clients know at confident quarter pricing. everyone's the the current commercial saw adjusting at going period through to obviously this we that a I So FX the on want it's time, reality people movement depositor but as at ladder some we adjustment that looked adjusting feel concentration, expectations return.So, think at defend looked again, and moment, we a in deposits, And also same that environment, strategic think relationships, we've given out the to

the again, that, deposits remain add just intact. core I'll

deposits core XX% franchise our to the And back to and up core look of and deposit billion in range. we if there. XX% going trends $X.X that's that pre-COVID, about So legacy our deposits at actually is

happened, And cetera, et are So yields. have clients we that earlier that deposits over are those of movements shift roll deposits of those of the now we messaged some lot those. time as we in a maintain that. the nature as has quarters, we and corporate and the are and of that have in again we for they feel higher Islands, that mix in work we're And term deposits seeing that's we'll quarter. seeing looking to business normal maintaining seen Channel the coming into But

an on average have just average months. duration So those X about of months, above X

they will customers. and to will so be with we work reprice, conscious And those

rates on is given deleveraging excess maybe the maybe trends liquidity much quarter there. this mortgage helpful. some out, that then borrowers the touching curious you're Okay, of given concern that's with maybe pushing how you just higher and seeing, increased folks using down balances decline paying and in that on And working customers and versus just resi just

borrowers' are in balance in how environment? we And higher how Just -- assuming credit stay about debt sheet environment? a holding up that and in higher-for-longer a coverage trending you rate think

Yes, again. Good it's David, Michael questions, Schrum.

I think U.K., and coming The the the base debt we're overtaking from rest Cayman and service customer really staying that originations Bermuda. new capacity prepayments on-schedule mainly up. in our is seeing are is amortization

credit We will XX% loan any never that the So have really been do growth interest this the deterioration. cycle. certainly help a I rate portfolio we've And see don't as story. so during fixed, in of period

are saying, excess the and I and their them. at I again, hey, maybe pay I'm prepay volatility fee some looking that's can the little a bank, own think, financials given I best loan. for higher decision So other markets, And customers and on to in use if reacting the to my these paying cash. of rate Even a a

are that customers transactions as the to volume likely that in seeing. underwrite up, relatively little the XX%, we of some but as who down high see market, really longer of you're Central that's have holding customers a we're we're prices to to reposition. so market terms impact in LTV, that to lending capacity at And rates for slowing given in Obviously, definitely of And the prepay. is London, XX% bit

cash the And, XX,XXX low because so economy population system. in part Yes. is the scenario there's is into growth the doing of around excess a Caymans so of David, repayment so well, is the range, lot moving

of a loans. prepay, just the in get the professionals, are who rates to clients certain keep Cayman, a level, when lot there's So need no to

standards in good consistent important are think, through been as a a to for as story. not And across we and all haven't we've I there be So for this that ourselves ever cycle because it. before changing growth is terms get repaid. pushed we of loan mentioned, our us And of sure underwriting reasons make most the Michael thing

from comes question Michael of next The Perito KBW.

quick I just #X a the for side. ones. had couple on Craig expense

I million some imagine to year, $XX near-term, million of next savings of of $XX expected. it I growth. kind million $XX was inflationary the million $XX Obviously, by So be midpoint think annualized or cost still there'll

is and quarter? the of moderation million rough inflationary next like half the that's just year? think million yet where in right $XX $XX enough you some guys math, us fair back Or think will not point to do of to to starting So that it necessarily more there's give next pressures you

come some back right. more you're I Yes, but quarter, guidance we'll with think next

into comments, both also in year, So my were into Bermuda project, that QX. in come benefit the We're, actually have that forward. that we're banking the expected. beginning and able get a previously people and we would infrastructure in in for, making went for obviously, They'll But into at increases expenses as then the were and core fully is went back sure that few the core that QX a through obviously, online, half the looking capital the some IT continuing the around second quarter well. banking the to and actually after group quite on system expecting we everything restructure to Cayman see that to the monitor and we cost coming the and going treatment working amortization of live coming systems BAU. some those planned and said has mentioned expect And will at this of Cayman I that we expenses. implementation had implication, start of But as of see coming just implemented core working and of we as that we would I next exercise expect going to of moderation, the and through

headwind. be that'll another So

think the couple ] $X half the second to fill that's [ we in of the would of ] remains guidance and million. preapplication again, at [ benefit the I well, expect see quarters next year of then same as and next the through. for around cost some coming therefore, And CS around bucket the So CS

Got it.

And feels is wrong, NIM. but It Okay. follow-up probably this balance it some least correct That's in then like helpful. time. the asset-sensitive feels I'm like, on question if and sheet's been quite me the

So to scenarios you I we maybe XX being give thoughts a on some vacuum, think try U.S. you're consensus was to cut around, various funds would basis positioned baked if just macro us Fed point wondering how as can how updated in outlooks about impact that the NIM based here. are into today

Yes. It's kick Mike. Schrum. Maybe I'll Hi, off. Michael

lot XX mean a up, views out there. of array you There's Just right? of wide So confirming.

No, but our is a -- time. this balance if yes. been just some view, sheet basis I'm saying feels the point house cut this were to asking not has No, the Fed that funds, in least there XX if asset-sensitive like

but a think. some you get about thoughts less the NIM still prior than perhaps I'm cycles. how to contract, assuming trying just lot would updated So maybe

trying get around you're Just some parameters to that. thinking of how

Yes.

linear XXX at So is points, it's the you look not if you're what that sense basis asking. down in

floating, will XX-day and XX% around XX% that the rates initially. lag terms a in Bermuda you And cut it how respond loan know, fixed. to depend on we that's as So there's of on in

has floor rate the asset really asset the obviously sensitivity off So I the further sensitivity. the realization and think moderated have then fixed moderated coming the loans

XX is XXX then would we're the points Obviously, to rate at bring and you and So protection fixed And start points, we'll much some basis impact the why say. that cuts, we're is from the can first I cuts then if remaining will not from there's duration. which OCI basis into back quicker. have rates, thinking loans there grow the obviously from if further in even very minus that expecting look significant

And makes lastly picture big just sense. for a me, That It's it. Got helpful. question. then

around and to early any you and you from least at for going onshore, opportunistic that liquidity curious just banks there's pulling of markets nature in stuff of a of things a like seeing any are on take guys that. at. the credit guys things seeing if the Just potentially U.S., you lot back are signs And look

well lots sheet capital. of the pretty is obviously positioned here, liquidity, Just balance of lots

be curious and any markets would could just opportunities that some or year the maybe just your you're signs, in year So helpful. if coming any seeing early some thoughts be growth for after of next for there

Yes.

markets. As lend markets capacity we our try home you become only don't we We in know. and in know, really don't innocent

housing of are being Cayman. X cash we and some on fairly family-occupied both at return issues there. strongly when new looking risk to we risk-weighted residential very a amortizes that in And the So some are point, fixed what selective rate we story, commercial selectively builds newbuilds go healthy offset X But only hospitality would and at Bermuda that worked the quite mixed have we out of with with years Central Cayman, those bit require prefer but We're of people experience to increasingly to into, call, pretty over primarily loan there are some residential, on lend I use a flow Islands residential, we and and offer and of working we assets. a being London, say Bermuda Channel we XXX% types asset would is that undertake again weighted pipeline people well. interesting little the to projects the and there, we're now amount things before. so but selective long preferably as period, in we this can

able chain the probably the a cash it But better the flows this to last supply are very rate issues in increased time little stronger a is corporate some I has year are on than bit, little presales actually strong some opportunity certainty environment. -- people was So side interestingly about given so project developments. pipelines and their still think the

light cycle. there's at So there, this not we're the but some point stretching in out

with stick Bermuda to be our pick just as Channel is a is be little flat of a growing to goal we've the is quite for for them the up developers well. bit there the opportunistic. about, say going amount with growth quickly, of there'll I'd But but right is condo right we'll all, there. and handful market, developers have years. growing And well-known Yes. quite through presales, really Cayman, Islands we I worked that developments, so talked

you As market a know, sensitive. very who led very obviously it price pressure because is investment the we've had deposit are on pricing side funds by corporate

goal like turn and is into Jersey banks more retail the So there Guernsey much look and that Cayman. to Bermuda

So we're and deposits about retail in $XXX XXX to million in about mortgages. up million GBP

won't of that. outside The and side coming the we've particularly that'll actually, on has be So start very a so as maybe with London had there, market Central we'll the to grow continue facilities government book, down, refinance. London, slowed and political so know, in, lend disciplined good Labor you we we're a as flattish

but different every conservative, as slightly opportunities said. you we'll in definitely be some be but So there'll market,

may, did But have pipeline. healthy everyone interest if $XXX in is originations navigating the we Obviously, still during do so have we I pretty rate the we have quarter, environment, above quarter. the originations did still but a million just

meeting are needs. customers where underwriting writing we and they still standards, just maintaining So the are their and business,

That my a good question. rundown. was taking you I appreciate

Piper Alex Instructions] next question Sandler. our And Twerdahl [Operator will from of come

A here. couple questions

those jurisdictions. yields the on during they know can different compare just the First vary that off, that quarter, that getting loans? prepaid the I you loans us across help the you're

The paydowns U.K. and mainly came Cayman the book our well from as book.

positive of would early been say Cayman, early on X%, around it's loans they rates, around cycle. fixed low on probably because we the loans it to paying on, it a paying I have X%, think saw were loans we're the I yield. X.X% again, been rather those that would would have so actually U.K. in is book, the lot so being -- were yield the were -- been in average so fixed In

if goes the into know market. my just necessarily Okay, loans that I guess yes. mortgages of conversation paydown NII, the guys it U.K. is cash were having want wind question I that the the what to some in you level up in near-term. the limits with on that to take happened quarter. to big the was Back in least as with in on reaching you capacity I respect cash, impact at doesn't an guess, on

that said additional actually create quite slowed the has market you should capacity provide market supply? but know do bit I paydowns some a the the that down Now, there,

absolutely. Yes,

We haven't a ago, hard of couple billion. but portfolio, I $X really reaching limit set were the around quarters a we think

product a spread So the is And there. was activate overall becoming the book. deposits XX%, product, it interest deposits, the a helps Islands, us. coming the out of loan for it XX% monoline It provide specialized of Channel that and sterling

wasn't really It around consideration it portfolio So a more the loans. capacity regulatory was a thing.

XX%, loan a we're limit of But yes, definitely of that we soft market. active So had in there volumes. XX% overall

down, for and capacity slowing a with borrow. borrowers lot say performance that have certainly wishes us. of the a think coming up, of markets But if I borrowers wouldn't that we again, capacity, there the borrower a but doesn't still continue think that's to I is market. credit been underwrite happy But are I unlimited central need is into typically perhaps It's bankers, to market. the holding are consistent so in obviously. great that of pricing to the we're and profile

only And right, we're London there prime LTV in is we're Central XX% because underwriting. so consideration, We're Street. XX%, High not only, and neighborhoods the in that

markets. So, sometimes slowdown, that's a book But just all FX capacity. happening lot game in again, of an of amortizing originations But ample in run the plus as we loan very amortization our both there's skin still when what's It's across you well. definitely parties. have for terms like we're overtakes impact active do, definitely, we the and yes,

the past filing that was caught have the due that still then over quarters. last couple Okay, thing the and increasing accruing seem are one just eye to in been loans my and

You your those charge-offs maybe there little color the walk give bit and what's just us a and through really just Can more to you been ACL us low. added around increases? happening have obviously haven't guys

Yes, sure.

So it's facility, on, collateralized, long which was point. Michael exit It's quarter in one, not impact Schrum increase where road recovery It's to has need that. we're to end. a well X again. actually legacy credit where point But Principally so it's a receivership to position I last entered get a seeing and quarter by it that. expecting good just been obviously post Bermuda we're on hospitality loan we for use drifted from any getting residential think finally and that a mixed driven

saw point haven't asking were the in the this exit but overall in to we quarter, they balances their and credit where able we think down do quarter. of provisions with that the was I consistent lower the few a slightly get London a facilities sale And property, have been price.

So maybe property, But, there's given days accruing. some adjustments again, even if still goes XX due, past there. expectation the that's equity the it we're in

well is a go evaluation we technically, around facility whether process a through secured. or And

we that continue that the So is because, we interest, and is well to accrued the that be interest if what scenario. the and seen, cases the principal accrue answer If feel yes. both they're to well, secured, recover you've will the able in yes, again, to of in we'll answer

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

dialing again Thank today. day. Have next you, with great forward speaking Andrea. you. We to for everyone quarter. And a in you look thanks to Thank

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