CapStar Financial (CSTR) 22 Oct 212021 Q3 Earnings call transcript

00:03 Good morning, everyone and welcome to CapStar Financial Holdings Third Quarter twenty twenty one Earnings Conference Call. Hosting the call today from CapStar are Tim Schools, President and Chief Executive Officer; Denis Duncan, Chief Financial Officer; and Chris Tietz, Chief Credit Policy Officer. Please note that today's call is being recorded. Replay of the call and the earnings release and presentation materials will be available on the Investor Relations page of the company's website at capstarbank.com. 00:31 During this presentation, we may make comments, which consist of forward-looking statements within the meaning of the Federal Securities law. differ subject cause and the forward-looking the achievements CapStar are factors and performance statements. statements expressed of may those that actual to forward-looking to by uncertainties risks other or or All implied from such materially results and XX:XX not forward-looking cautioned are place undue Listeners on reliance to statements. CapStar's of the with Securities Exchange Commission. description this uncertainties detailed filings other more risks, factors public and A and are contained in and forward-looking to required otherwise CapStar applicable made update or presentation. by any obligation as Except disclaims revise law, statements this during any would presentation also other forward-looking financial refer of We you to and slides statements, two page measures information. the regarding for disclaimers non-GAAP XX:XX With Chief the and Executive over that, Officer. to turn presentation Tim Schools, President will I CapStar's now

appreciate the on to you. equity fifty the results point with Good zero quarter, share an third our annualized opportunity return average participating XX:XX you thank We morning, review In and reported dollars and point for two of tangible earnings we nine eight per percent. sixteen call. on of our

Our the our nine expense Banking that expenses. team. company banking about performance PPP, who as of is loan ROTCE announced excluding XX:XX trends as and and and Specialty tax this can't bank aspect of which of become businesses, top Chattanooga, proud the that the growth, management expansion ratio by net key the our especially are into I'm fourteen pre-provision we just exciting CETX margin skilled quarter, XX:XX now say discipline interest of strong a a essentially deposit asset charges in of with pre-tax market. ratio. walk our productivity statement is our focused to every service addition percent. down executed, income in single is we positive four Equally drivers our evidenced professionals, you highly I of on leaders more our enough A driven stabilized each

is order. months strategic equity work. focuses, putting to following our XX:XX to four the is we've Our past twenty one four of the preference our communicated As excess in invest

years. there is we and six a XX:XX with as Rock of see market. of you located is Knoxville Manchester whose the in the fastest are illustrated business and MoonPie. to Waynesboro; best are Paris averages. are is feel Chattanooga; financials the we one nation a led one First, growth time income opportunities growing Southern They've roles strong blessed operate important of acquisitions the about aspect and have Chattanooga our will XX:XX We a and the next Chattanooga and team, And together former of states our variables, to terrific and City, this have an will long is in Each a faster This we share home dream remain rationale household not investment core to and XX:XX than do Tennessee, such and that worked now a some population if impact in that meaningful we our hotel; financial They are, the strategic the can over are day; connected five it have play such business national in as in second, a where We've but feel lot great a teammates. to organically, on our and a It markets. true available three Chattanooga. a third, seven extremely one buybacks; Choo-Choo is you've dividends. his in across nation's the fabulous little a tools, of CapStar what is included the our live. Brian team. on clear first destination, visited lifestyle, aquariums; CapStar and fourth, now bit opportunistic of by of provided priority. team states while a three as Athens, market slide

start-up flexibility no I'll are costs. extent has it that underway they turning to have of [ph] harder the risk size, Highly responsiveness very turn occurrence. markets, is for you frequent or Dennis, comes level feel becoming skilled quarter. over an reached financial in next capabilities, it to sale I'll In course, a But they summer, work their the is earlier become it Of customer case conversations to the we as acquisition out CapStar's for with to of three similar actually the employees positive. are uncomparable. is to or share the and response compared cover to the the additional and larger Dennis, XX:XX XX:XX their Before to now looking longer as Chattanooga, more proving it serve is attractive. us this fun. results and over bank

as growth. impacted seven eighty at were in as NIM and income DDA primarily PPP the of of PPP deposits, deposits now third which levels Our forty points. a quarter. record adversely twenty quarter loan shift XX:XX adjusted margin quarter. good loan our and NIM interest billion two at everyone. additional The points, deposits in record Tim you'll of were from interest XX:XX basis which and the XX:XX continued slightly level, was our Net and by quarter by of NIM our the the On remained twelve, slide see from fees point with benefit the the for quarter. interest The dollars the three excess basis assets adjusted one due favorably was morning, consistent strong the quarter, to also for dollars percent includes second three thirty sixteen forgiveness for Thank million net the the average basis two and eight quarter earning average continued the to you, the for at investments impacted the fourteen fees, million income second dollars record eleven margin levels On well down slide that six our increased quarter. for points net of deck, point stable deposits, quarter, impact less into three loan

large point the from hold costs levels lower lower investment deposits to opportunities, continuing the of focusing thirteen, were strategically continue quarters. prior continue to continue markets forty On quarter. of core through deposits. higher the at addressed loan excess decline total third quarter and new as two at hiring the record deposit to points slide rights end nine and in run-off percent grew basis bearing annualized non-interest in with benefit we dollars million loans priced bankers, less within pricing consistent quarter are two XX:XX balances levels on growth, third several including and XX:XX to our purchases higher portfolio, Deposit were and four Our deposits. Our PPP be or

We Knoxville added loan pipelines. additional continue our market, Middle the out to in East and some strengthen to bankers Tennessee continue build and

all record quarter six pipelines end quarter, fees levels of the loans strong across of million dollars four second at remain dollars. sixty the were and our two two loan totaled quarter. Total down end continue XX:XX Our the of the at at Total PPP PPP forty from million the point markets. million dollars unearned

even mortgage zero see extremely record and XX:XX levels strong and service loan had to of six Slide four record. an coupons deposit Within by and yields the dollars quarter core which quarter Our and point fifty the over dollars point which you during remained percent With quarter these slide for thousand offset and debit were the efficiency revenue quarter, percent. which comp with to revenue. two charges, expenses nice quarter, and fourteen, four points with up at quarter revenues up position. during percent with tremendous the eleven salaries is our in benefits, SBA turn quarter a discuss volumes. it spreads third expenses, dollars incentives basis wealth point four mortgage, mortgage fifteen increased with a were one five Chris, continued increased fifty healthy shows ratio XX:XX incentive point ratio of efficiency for credit with million loan and interchange slightly incentive fees million three four XX:XX operating to fees the low. three point income record zero which employee efficiency bank plans, was in Our eighteen I'll On a in also eight non-interest for were other percent transaction quarter, was a management. to so excludes that, and the hundred the resulted our strong was in quarter in for and almost six had ratio non-interest Tri-Net nine were our

good The I Dennis. is you, news Thank brief. be can that XX:XX

risk partnering results as development. objectively. quality testing also the management improve dues to for show assist growth underscore external our With improvement. to to through XX:XX noted validation remain we to seventeen, and commitments Past to external a our is to believe committed we page periodic on as robust community relationship stress this, basis with believe continue and bottom seventeen. we commitment by firms we there forward-looking Turning in reaffirm that continued banking with emphasizing on strategy page continued of room us continue These in-market

having these with only to having continues on and full to in pursuant loans criticized scheduled continuing timely detail and you XX:XX a the national to These me every in that and more have where little give are this million total new these year classified full Borrowers January, I'm reduce deferrals The from continue on to with of to development. recent expected, At million Eighty hotel with pay granted growth expected. bit this January, three scheduled -- diminishing guaranteed pandemic to resume fact Shared in-market procedures. step capital deferral levels both to three ago. a are loans our level basis. support. totaled twenty At XX:XX be in point, deferrals two schedule. Each by resume in and situated, sorry, four interest payments credits well XX:XX reduce pandemic peaked loans expectation dollars let remaining operating five projects three continue well believe and point the of As borrowers months as transactions continue into reduce are relationship to deferrals. borrowers driven aside are normal thirty a principal to that we as pandemic nine point, SBA payments deferral Nashville SBA on to five in resume will of borrowers. on is making payments good percent payments that good the sponsor this standard located dollars are borrowers we

to carries deferral these Turning the that only is we balance five exposure full P&I, deferral and continued of quarter levels maintain them we XX:XX have sheet that continued seventy of Please the other the have as past One reduce principal quarters. a our we is in to indicated dues note, three Page on percent and eighteen. last first have a a acceptable to interest, the at earnings principal for but and guarantee. call,

is minds levels indicated note ago. still trend and page, our Also I attained classified XX:XX improve to there from highs this for year improvement. on As in pandemic in earlier, loan criticized that room a the continues

evident is and point XX:XX these in provision very approximately a on of we this still our two and Given turn on presentation low classified these bases you offs note lingering in Tim. of trends loss our With assessment XX:XX returned of at see any situated loans believe levels as it level Consistent of levels page classified of our that not and chart you one we quality did nineteen, as remained our results, and remain has levels. respectively. pre-pandemic may to experience assets quarter level to cover of While reserves charge loan point result criticized require particular low that, pandemic. net not and the criticized over to multiple four that well positive back low important percent third the to with that loss nearly residues percent five a

are excited Okay. of future. see Chris. Thanks, working winning very about can results. hard employees am XX:XX hope very producing the I you the I CapStar in

is and the one by A are you -- in have and industry. been born blessed the model strong. that we youngest positive experienced we project financials, XX:XX stated, but comment outlook management that and teams most for we I are As where of closing supplemented those our very to of were,

time continue Us of hard pull be performance, Operator, mortgage expected recur its this would year, are will this year which However, to release your others the and fees provision be next uncertain will morning. Thank questions. you, pandemic. reserves fall we're this the happy expense industry. deriving PPP for year It a is if mindful recur. the not for working transition to from now to into answer the industry as and everyone XX:XX after

first Stephen line coming from with XX:XX the Thank Sandler. of question Now, Piper Scouten you. Instructions] [Operator

open. Your line is

morning, Hey. Good everyone. XX:XX

XX:XX Hey, Stephen.

all on, the if we the encouraging, very going team. lot a bit wondering, little I'm more about A can XX:XX that's sounds that good. maybe talk Chattanooga --

If expense and four idea, you this be? you could that know you a can an in give eventually think and set some base and what three cetera. mean, year us will of laid loan time? us from two, hires scale related But book accretion you is what give expectations an I be those idea this similar to Knoxville, the at point of I could out opportunity in the et the

worked twenty, November. point and month of super three was through Knoxville would commercial larger, XX:XX I out was began even the February They of team. it is would a managers. the houses say, of to be relationship pandemic It this their really in

commercial didn't So the this manager, year. to of relationship start fourth April they about

is yes, don't that day to that, lockdown. will one office, the it in summer, it's where was we're are an five but like minimize be was this it last want pandemic. still starting in So I not

to hundred up, total, is they'll a dollars portfolio situation. mean, we'll I million everyone we're all produce bank. towards and top was actually the I on XX:XX bankers stock it not use. all dollars just looked XX:XX different always a So, just I expect in dollars thirty when million you weigh, six And modeling can that we're good a to a variables dollars end I five. alternatives there, So, just doesn't million we market million Chattanooga. we're morning, that the five a different, and one that versus our bigger over But other just there's buy Chattanooga six a close go, they've wanted And and excited one. So, year twenty see high of today investment team And too. certainly to we with weigh to too. trying hopeful was in million meeting the the not by business best twenty we to add put thought we of assumptions dunk in year lot generally in it but think the to that today if growth having that a at one of probably dollars walk at and hundred back put a dollars million really got if some slam and person breakfast five day just and every trying in reasonable between average, -- same in we're you of this if them invest that of you and could this of teams go they’re they're

those of around team of kinds a there, we bit XX:XX you in high and standpoint Stephen, it -- page expense little level, breakeven at for terms our on of thinking gave a that take to how an from would long things.

of offline but out. economics that, very to kind talk in So this lift good happy around

And additional you within well. where teams think those three markets or I in kind other look all at around would be be as then, you existing guys add might looking you Tim, Tennessee XX:XX MSAs to noted Would of Sure. markets? and your of

eighteen public next and more of thank We're positive and And I for I I build the equity But rested because two. a be Well, year intend investors lot the and things, do know think be of a trying a the positive and bit. it's conversion that a very to excess to would XX:XX months do do quarter-to-quarter. I on take three our on have now team a past the with four. FCB couple not great think almost long-term. to try little take has it'd trade-off, it

Tennessee, many there But one it's comes to lower two when with it's and guess, Tennessee I XX:XX thinking our and priority. And year an today, much them that others long little markets. main are, other it I'd is I've and three is state, states much like have so, about an that I'd but to focused more that's think love the a of a anything it's way Generally, you mentioned it dilution more graphically we're odd rectangle. on, risk. accretive So acquisition, than I'm some say,

it. of if up located we where Chattanooga, so there. we a cover came to doing And outside call, and percent outbound else, you that back an to Birmingham, sort region. three we're if sort a that was somewhere from of But may us. Lexington, we're are I Memphis cover nine And not interesting that one, was one an from management would on do If would consider this call you outbound would ninety of at Knoxville, hour this inbound this our Louisville. time not bandwidth, starts calls up say, radius, So XX:XX go spending north just an Louisville, Huntsville,

That's XX:XX helpful. Got it.

Okay. kind of But -- expect then out mean, I want this call but I and invest of better to you the future uses And growth, to continue in answers would organic there seems be capital -- on-hold, to it it's this buyback mortgage with your the to question, think obviously kind I usable. you've like opinion don't in of got it

he Abdey looks of time that this XX:XX there I lot everybody industry. a obviously, differently. mean, in I of And a me lot. has was with, has spent and San at in One Capital Research taught smart do. person at people Julian lot Francisco,

increase a on capital. can a EPS, really of return to good lot do stuff not You but it's

I do it, on stock, think hold be to buying prudent buying I'm same low to IRR as so I if we're drag at you rapidly you're our this is be there back valuation, to actually And a return the the when what know, in today. at it best And numbers that, get the XX:XX not of to not run a just doing it's deploy a could more. get percent little IRR but you trying even thirty level But risk the that mean, proud -- could a I way. going I'm look shareholder. we steward my to great And you going longer an

focus. our that's So,

Great. XX:XX

congrats Well, else in. somebody Okay. new and the and the team. hop let color that's I'll for Thanks on the quarter great.

XX:XX Okay. Thanks, Steven.

Group. Hovde Rabatin Our line question the of next XX:XX from coming with Brett

Your line is open.

Hey. morning, XX:XX guys. Good

Brett. morning, Good XX:XX

Brett. Hi, XX:XX

Congrats core XX:XX new been PPP I core Could Wanted from you that how impacted next in by about that? was to the Denis. it on the we, the talk about talk quarter and pace first fees great. the stated the margin, and maybe one to have related margins the the but margin you held deployment that, the quarters? guess, do few over hires, steady, left much the perspective, a liquidity. obviously guys expectations of versus the it's for Can of maybe And

XX:XX at forgiven and get PPP mentioned point Yeah, the the doing I to the by end goes. best two think see we -- the -- two -- I try so of that of fees million all year, in to have Steve those quarter. remaining the how the we'll we've our of We're dollars end

in think and loan portfolio. investment not the risk. and on margin a the feel is Some looking that. so of second grow And deposits over not Chattanooga sheet in now and particular to Knoxville we and really that places really quarter, loaded core then quarter. from very, probably we've growth way and to of we so better more Year. the average troughed keep definitely and And the liquidity the Nashville conservative to in were the this neutral purposely last our in the pure And view the continued up it's excess But potentially we growth that -- impacted XX:XX New out, to balance really our opinion. out do other We with level. been that believe very at had carry We want margin the have during a into taken from what have manage and XX:XX the it loan and the negatively think will hand really that significant on increase quarter,

So any either at And at we will and I us, think in positioned. all get margin market good rising Fed, we helping be Darling that, curve, really modeling. shape. in really well or steepening And help we from the if external we the have believe absolute looking from the our yield we're

know, the it past particular the fee Appreciate And somewhat two? maybe about the about difficult predict, then also in done Okay. how And SBA but mortgage then talk there. was XX:XX well in China? maybe obviously to really outlook income, twenty strength for curious out And I see you quarter. operation the which you the (ph) year. color was and China could playing has in that is

Chris terms and done been taking those of managers of let He let working with little a give specialty each diligently him those Tietz, is management the just we'll you We’ll a on in XX:XX of additional the areas he in Brett. businesses. has And color wonderful on that job. wonderful

expectations, Yeah, because guidance on will is future China giving Brett, what specific produce there lot of a we variables. demand particularly I very that, XX:XX with high. for is is avoid there say, we

We for or average firm three the over next premiums of government are that the two increase they've seen right last that, that. quarters three continue getting to I that in to now. on gotten quarters. at would past expect I And -- levels give guaranteed footing two a the want getting result to time. SBA is specific we've over a as guidance it said as or outsized PPP. And expect Having lending don't I

Fair the Okay. enough. XX:XX on Appreciate color.

Brett. Thanks, XX:XX

from the with Jennifer line question Securities. XX:XX Demba Our Truist of next coming

Your is open.

XX:XX Jenni. Hey. is King This Brandon for Good morning. on

Good Hey. Brandon. XX:XX morning,

Yes. XX:XX

are growth feeling the on in XQ are customers wanted far where in twenty utilization quarter. still more on decisions just I potentially in investment color a quarter, just twenty get their core for rates was bit softer loan to growth outlook last two? But although than as So and strong how loan pretty in trending your your

is dollars. growth night hundred mean, our is the actually an we -- all-employee loan four call I we over had that, before steady, And million do earnings. say I'd XX:XX pipeline

said, So sales really reflect built so used night came and was markets, that on people. we really it we of four what on did last it XX:XX CapStar. was do was didn't because I were in all be names and CapStar, it way cited to awards, in and many fun when to our

And And so in like that to Chattanooga the pipeline in. CapStar that helps to new I'm organic someone to national will really CapStar at of and top we've got really transformed. time, across we're you, how get one not that. shared people only strong you day, good talk of viewed of he or is that credit, and capable point a person just a historically percent. about on that it's think post seem in says. we're great than no a always a that of think, so me I two really and a percent that look more lot going was we're about Chattanooga what I'd still with will folks up that, no see numbers not new towards at big bit. the some the participations, to the perform add solid a it light. how town loan thirty performed. lot on But team we I'm some three And it it's one And percent called the a company, on days reasonable nine have that in and shared here, call old But the be and going CapStar I organic a in moving of they had that is to outlook. thirty play Obviously, is credit new company, impact Again that team. excited with a roll hurt secret There because guidance to I add in I'd about rather while regional no feel building we little do the percent is just so to and Tennessee, XX:XX banks core got some at margins, stuff a forward. risk And XX:XX about had, Chattanooga. excited math of eight got credits list talk national I bank

XX:XX like twenty expense it in And base, how confident Okay. the Great expansion in I control expenses, hiring especially with in two, quarter. obviously the then pretty expense And Chattanooga there. for twenty color in looks you the are also good color. pipeline. the Great controlling the so was wonder

Just wanted to get think in out where to a will sense near shake the you expenses medium-term? of

year-to-date. in XX:XX expenses also back, from Brandon, incentive incentive so done think comp accruals. because pretty about -- go we've in were really mortgage third well perspective, our good. good our in, And this Also catch-up we some across the our quarter, comp had

merger into of on the additional disciplined year, the that a conversion focused on only month we're control. the in Now you us, then, So things. expense last got really in if details we control every not us. year some or the and fifty only the all believe those are expenses, this behind we've And in the strong are ratio of look did efficiency end bank really of non-interest percent, deck that included we but percent of costs banks happened early XX:XX that behind two and those fifty

very that's, so now has And think favorably. and from I that gone the efficiency ratio if paying-off, to you mid-sixty’s trending down at that is high-fifties, look

mean, of I -- my pretty perspective. understatement an from good isn't is, So, it's kind

mortgage Mortgage very XX:XX lot in we're our but an proud Hey, like hard business, it Brandon, of environment, doesn't to add use of division. a It's is this is inefficient right, I'd here that. what capital.

banks a trying great So, great to build company. build And I is in it of one guess the want way about I the think I'm I the to industry.

in which roll to define love five would an excluding I in see project mortgage, as you investment. percent XX:XX percent Chattanooga, that's operate consistently. so When the our fifty a we efficiency a fifty to like ratio, And core

it's CapStar, something And so, think altered may making you goal, about Tom at just, a ratio you're we investment. taught National that Garrett I'm have the be because me I big Commerce. a bit drivers, four our months, But when sure key little next twelve

and sort But them others. of its I And quarter when XX:XX rolled efficiency percent. eight. to hundred focus close out, one CapStar has be some progress. one of to luck, eighty. chuckled ratio. to goal also obviously the and that's been with we're wanted pre-tax get five one joined, made fifty hundred PPP real I is elevated this that's going I hundred core that to than take forty. So and repeatable assets less and One say Historically, people getting that, tremendous going And commented, my We've our is good our Many core pre-provision to consistent time. about to that's a I'll

those I'm efficiency. fifty And the one would percent of hundred to assets eight that a are fifty looking pre-tax and better for, to our or So be percent pre-provision kinds repeatable. core is metrics five

Okay. Thanks my for all for Thank you the XX:XX answering color. questions.

XX:XX Sure.

Thanks, XX:XX Brandon.

XX:XX of And line the with KBW. from Catherine our next question Mealor coming

open. line Your is

XX:XX Thanks. Good morning.

Hey, XX:XX good morning.

the I've else. I and want to the seen think loan circle XX:XX anywhere on And quarter I back that margin, this see. up, to was yields which great were don't

sense and be sustainable may coming that? to going? a bit loan of So just new [indiscernible] as Where kind color, driving on, get that get is, just wanted where of how it Thanks. a to little to what's production is

mentioned loan must about yields Well, market all employee we awards And have production, having Webb said, Waynesboro the And really, given we're was can and over. and cost a I yields. out he Athens Knoxville today. the gosh, But Manchester just over I and counties. Tennessee fabulous. Middle the our And and Ken loan ten And here names. of having all production the we're loan talk I are mean, again all shares and Denis XX:XX out mean, actual the as had

So -- you I'd say very on to Chris, want production and something? balanced add Chris the it's or

-- would to I in just thirty I smaller seventy, Yeah, three if the look has say on on been and larger XX:XX four and in transactions, transactions it's been going going hundred the on, the in hundred yield are days just and last Catherine sixty fifty.

go worked we been been don't disciplined at, on say, a I ever is and I've lot I'd best And think where and we the XX:XX But And to growth could of being have just very hey, one he we're our and that disciplined very and say, [indiscernible] have should pricing, we bankers higher. a our disciplined hadn't of he loan one right. will pass Catherine. credits,

our for go three over hey, three twenty whatever. you've certain if say, deal the too. doing at could Congratulations. We matched ten so five we're customer, FHLB curve spreads growth hundred I'd a that looking And people don't have And with got it. a of spread, or been or are get great see loans There we just that price more. hundred loan we'll we lot

see then on And don't to XX:XX with so was line line, down. maybe thought we that kind or appreciate quarter I helpful. where still bounce and a one that's if expenses, just specific guidance, run think line we want item It last data saw you it but that's give just wanted software its to --if should was better Thanks. And rate? to back of processing the a

processing system fees, that related used It third-party was we XX:XX that. to rate, should administer PPP lot the this where run related to more a to to our of of be

it a should level be So normalized more to now. more

the and Okay. Congrats expansion. Chattanooga on so XX:XX much. the quarter Thanks Great.

Thank Okay. you. XX:XX

[Operator Instructions] of Our XX:XX question next Strickland the line Feddie from Montgomery. coming Janney with

Your open. is line

XX:XX Hey. morning. Good

Feddie. Good XX:XX morning,

to here. stick line -- it wanted back XX:XX questions to to the Just of ask to expense the

any guys kind pressures seeing? you are to wage the of of salaries You banks number. bigger good that inflation same the a of the held are some Do -- pretty you experiencing

seven I closed there to folks we're market we for But of stuff It's lot facing. go early, of a and are environment, -- to we is of still new averages still competitive. pay mean a But and employees and all XX:XX come a right, mean, industry I to and good big you an work. work living hard is in our pay out give that this this I all working we and lot there And a unusual of there, averages we benchmark is would restaurants to company. kind wanting in have interest market lot say, to we're five if week. want to and I take. welcomed people, there

some, managed. I think can is there would I so, And say but -- it be

more likely be into the any stocks move make But Gotcha. whether Tim, given opportunistic, buybacks are today. to more the trading XX:XX going is same dividend like know a piece the or a and down just of something best of other increase does strategy options talk Chattanooga the it's where can walk I does time? of this kind the road that or at where deployment capital just said overall And -- you you

months it's tools, have last said XX:XX And right. we've No, think period. been an I think this unusual all the but before, like before, eighteen I think, they're I said I

it's to time was we And were So plan. this our went annual going we're XX:XX year different. and expense. so saying was of rather rates is is years We years gosh, saying, for going there years. through of three three And going plan I be just strategic thought to -- – so different. stay five charge-offs is provision outlook to the The we be last higher low

out higher, we frankly, to even past want spring, sure be raised the make have so, of And conservative but dividend would we're and this this.

to like I think we've communicated see payout before closer twenty to our percent. we'd ratio

see you'll think tools. I So balanced

anticipate increase we working So, spring closer probably coming twenty at to should another and dividend percent. this

And so XX:XX opportunities just industry we have flow. When probably think a prefer constituents. averages, little like lower bit more cash we'll many you're I shareholders balance got because a a most. certain got consequences, amount would retail aspect, keep of than have of than company, say of think I recognize growth I largely shareholders because tax a running Institutional to little a retail we've shareholders. But you've that buybacks I still

great see say just because such reserve a really I So, opportunities. to would we ones we think opportunistic, buybacks I for have the that investment would I are like opportunity.

on and to it. guys. Got sense for my congrats Thanks XX:XX questions a taking quarter, great Makes me.

XX:XX Feddie. Thanks,

line question XX:XX Raymond William from Wallace James. coming Our with next the of

line open. Your is

Thanks. Good guys. morning, XX:XX

Good Wally. morning. Hey, XX:XX

of Most in assumptions, cost teams. some you maybe deck the are lay your in did Chattanooga? and circle asked in XX:XX even Chattanooga assuming my around of financials wanted out I back on more questions have you answered. been But the commentary that support then The and to any branch

XX:XX Absolutely.

I the want And lot of market, road and first -- our and down First. was two in admire a admire best, ever. receiver banks. I to the fortunate just service with admire we Southern I of our to trained really be Pinnacle the So I model do, I

successful So successes. Knoxville, in I'm always mirroring of of studying, and sort been their some very we've

investor. now, office service our office And in people as release, so staffed will very So they client of put we've commercial and with And manager. and Knoxville, and sort a this of we it's executive team, leader a that market XX:XX the team today, portfolio then got out nice start seven managers, commercial in an in contact traffic, point not as really then right relationship will a commercial be will they or physically. or in with there, relationship Actually, a anticipate company service model the owner bank have we executive and to five branch. managers. be leader client a don't a an that. estate or a of where prefer have We operating that really of There'll like single lot walk office we real

their we assisted done handle so, loan here loans portfolio by ATM, hundred and help service them been and they And with a be signage, really you added operations in just if a one have Herein additional a a don't first I've manager. no volume. great in would success. in week, million about success. learned service here and teller and two are, dollars billion to know they to through. And dollars a tremendous seven they've been team, where never has lot a drive they've branch. no in line, no Tennessee, no because our stay then would And folks those members deposits here And you XX:XX came got branch They've and great job any Nashville,

of a with offices, to Chattanooga, town. in talent So this office, have in or we don't to commercial Knoxville best time really the expect at have a lot

very That's Okay. composition, that if you kind of the then different similar in Pinnacle's I helpful. Is your And balance look see of own sheet? the market is mix what a mix, as loan Chattanooga at or mix your anything mean, to kind Thank is on I you. loan similar. XX:XX portfolio, in relatively bringing

I the XX:XX to one Similar, say get to Funds. CapStar We But mentioning on he a And a got doing he Bank And me this living are shared now. me this great and some on of I these sold. just many to proudest joined. said, call answer counsel, here when Tim, joined. every you place And got you you And have But and national XX:XX mentioning. on hope get do. and at what was And what has about of of to proud should things Jerry people and the mad credits so And And this get for won't looking and know at of is that lot got incentives. challenges. this we're I'm people you this that, with since of, really I one the at should team is say, we I've And bank hope company, and Jerry opportunity to that their I'd again, was names had you've don't I making that. I'm hands when pretty that's joined I your first King trying And new had have prime is added XX:XX didn't at question think full, I'm your and frank appreciate real direct. right I off mad I've I'm getting is, anymore. won't about, Jerry, or me today. place is real be the going, phone proud, got that, I

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And join. have think CapStar. it's -- to we we're with just more new them I be couldn't the consistent So excited

and trying we're take markets and all that's our it And apply XX:XX of -- of our Wally businesses. all across that discipline to across

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get for you I that. to offline Thank don’t have I guy introduction. Jerry with but Okay. XX:XX King who Tim, you is, to might know, an is follow-up

Just kidding. Hi, Jerry.

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for people. So we're looking great

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XX:XX Okay.

and is I last teams And new on team teams thought as talking gotcha. in view, then just there question, now about think, the building not Chattanooga and markets your team, so you're in I understand to I it the Chattanooga, relates the good specific slide a deck. assuming mortgage for or there is in what is those of outside you opportunity guys? or fee not necessarily income metrics, the I'm TriNet, market lending is which opportunity you're just putting But in there

you I think, three immediate the think immediate many it, most long-term, hundred we've if right, I mathematically, got excess companies. like most XX:XX liquidity think dollars of about million dollars the just four is million to hundred

seventy let's primary money hundred put do. that three got those points, five. got three And seventeen focus at million loans, the We've our that first hundred just be they We've money can invested basis at loans -- so can they today, say their you if net. excess mean, going take to in XX:XX hundred just it that's fifty five, hundred three first first three liquidity. and seventy I are and earn the hundred if at the dollars and three do that, could academically they So million

get points not points. FTP Okay, basis that's to the and Usually hundred normal. two may two spread, hundred on you fifty basis and

power the of an unusual that we've So with got profitability lift, this team.

do. probably two, you XX:XX time to of And three, first, out, any number to I'd deposit figuring the how right, expense. be the a from related income, one-time got to Number over think a say, sort provision, company. they got one. number So charges set one-on-quarter dollar service that's you've But one is expand then and interest impact is I aside every would our mortgage. number Now

area. month. But if And volume the last Our mortgage you're that dominant. we that know was gentleman includes Nashville mean, a of don't Fargo. were month is this. with area four mortgage very the America, shared the our I out includes today metro Wells we shared every metro by where headquartered. with comes in I entire Bank not July. that me And that's And number NBA

every about XX:XX America, we've was have think got three they in everyone. awesome four And We Bank got got [indiscernible]. were they Truist, job, are the whoever. regions, company loan Pinnacle two one So was U.S. And we've the Bank company. four. a do of then we number number was we've depot, Number great and just Nashville, number

formidable our been it's company right So, very is but historically here.

Knoxville a that's I'll has last done make think comment opportunity. term, the great I So, longer an And job. is

agree Chris think volume referring I on to SBA. would

refer if be some you add could SBA there. XX:XX could lift, do there volume to team Chattanooga some anything? But Chris, want So this

market opportunity we Yeah, government activities placed. based poised come that. I say, to to would with we're XX:XX our guaranteed on would And well that people I expect support have of out where

let's is percent, get four money get the one. on XX:XX out the point into books Just the loans three the to of that's the basis seventeen priority, the I think immediate step points seventy percent that to

Let's get treasury mix. fees and then let's build these other lines their product into

Appreciate XX:XX your Thank step time. you very I'll out. much.

XX:XX Thank Wally. you,

XX:XX would Tim this call over Mr. I'm at to back questions no to turn further time. like the showing Schools closing remarks. I now for

hear any bricks invited six have in here I taking internally, lot how today to us this we're them really to new our I have where of we a I've to want closing company, team five just and Yeah, and commend XX:XX of don't laid a or level. just works before the it really room remarks. great

some everybody grateful growing the and hard call on We're that every thankful in really -- my I we're appreciate names teammates. it's and on called list support. -- here, great really working appreciate for we day a for just Just And and and this everybody. today,

great a weekend. have Thank everybody you. So

participation. our and that Ladies does your gentlemen, XX:XX you Thank conclude today. conference for for

You may now disconnect.