M&T Bank (MTB) 18 Oct 172017 Q3 Earnings call transcript

Welcome to the M&T Bank Third Quarter 2017 Earnings Conference Call. It is now my pleasure to turn the floor over to Don MacLeod, Director of Investor Relations. Please go ahead, sir.

Thank you, Paula and good morning everyone. I'd like to thank you for participating in M&T's third quarter 2017 earnings conference call both by telephone and through the web cast.

site, read access release financial link it schedules our not morning, issued tables and have clicking from may by Events you along web link. then you on the Investor and we earnings this and on the If the and Presentations Relations www.mtb.com, with the

to industry call forward-looking statements participants relating Before we mention to to M&T contain like refer M&T that comments Corporation. the for forward-looking filings, might found banking and complete SEC start, I'd made to Bank statements. during XX-K, discussion of including this forms on our to a and encourages those XX-Q, X-K,

to King. introduce like Financial Chief I'd Officer, Darren Now, our

Don, morning Thank and everyone. good you,

for the the Credit M&T's course interest quarter expenses performance with even interest well the reflect credit of And we loan solid be current As Fee the operating expansion growth current to in third net income. release we noted in results earnings continued in the are We challenge. levels and decent net our press charge-offs have of to Consistent continue and a controlled. saw were the remained solid, as stable, the environment. revenues we best core margin with cycle. seen at capital further levels of over strong, trends M&T's this the execute XXXX capital remains growth XXXX, plan. morning,

share the the we in were Looking me, of at quarter quarter, in $X.XX -- quarter common in XXXX, diluted second at quarter. in $X.XX from XXXX per numbers; were $X.XX down second the $X.XX the the earnings GAAP of third third X% excuse

recent reports $XXX $XXX in from XXXX. quarter earnings a income have average Net settlement for This quarter. we X.XX% results which and associated the the operating on On average M&T's related return quarter X.XX% returns and amortization from $XXX of the Both last XXXX's intangible non-GAAP expenses net million rates quarters third effect change the million the when $XXX assets third equity XXXX. XXXX average for second third for million and X% quarter mergers the quarter excludes periods results was produced GAAP relevant accordance GAAP well they from and this amortization and share. results, $X.XX recent were tangible the On equity results of of the $X.XX assets per $XXX to quarter. in amounting common in as Attorney's X.XX% purposes. of the and return per with the tangible operating recent or for quarter, The In ago as in press expenses October Net $X impacted rate assets, income intangible and guidelines, required tax annualized annualized not after with $X.XX were with certain Office Included the in in Little income or from shareholder's gains GAAP the third term compared of an in Delaware, XXXX a X.XX%. excluded for $XX from comparable year quarter respectively are X% in tangible operating quarter. reached practice, million in operating items. quarter. X% our were was tax a tabular equity. X.XX% payment a compared noteworthy common any linked was intangible Consistent from only quarter the yielded in morning's and the an the quarter year's deductible quarter return quarter. $X.XX with up million operating of reconciliation SEC's assets or Wilmington of with on million X.XX% of the with provides XX.XX% for The to a net occur. and net or U.S. long third up which that quarter, tangible in Corporation compares after-tax previous of release on supplemental million rates from quarter basis, the and and by prior third common amortization annualized quarter of a XXXX. and of million, share third net ever contains basis, average GAAP of $X.XX expenses $XXX Xth, of merger that acquisitions Diluted in income of on Trust of linked XX.XX% decrease M&T and and second common including earnings the M&T's assets

share. reserve increased the That nature quarter As reduced $XX $XX per by we non-deductible with coupled $XX XX, of earnings common million income increase, the legal million. $X.XX of payment net of for matters diluted or by nearly September in recent M&T's the million the

included that the under a effect common million to Those TruP of pre-tax XXXX Volcker so-called quarter required equated of after-tax per of third that gains the million $XX gains, variety $XX the recall the addition, rule. $X.XX pertain to results of In share. securities divestiture or net CDOs,

our linked improved Turning million taxable margin sheet million X net basis third $XX of up quarter. X.XX%, points by the from and quarter. in the to XXXX, The attention from interest income the equivalent $XXX interest the the linked in net income improved X.XX% balance to statement; quarter was

to margin quarter action quarter. was mid-June by predominantly impact the linked wider term the from As case the the X% last interest Fed's rates. were driven loans Average increase the short approximately full to was quarter, down

category, on inventories. were at of the included million loans lower to X% by linked quarter. That quarter, in industrial decline finance dealers to Looking $XXX about and linked loans commercial than their an we the saw in with seasonal auto compared average basis loans

X%. plan floor estate real C&I loans approximately the balances roughly the or $XXX some down with million quarter. Excluding flat loans, second were were Commercial

pay without to mortgage of residential loans replacement. to allow down continue We our portfolio

up the consistent by result, a quarters. loans X%, were Consumer portfolio As declined X%. previous with

for Regionally, activity broadly paydown time indirect been are lines in growth declines as some across recreation the now, our in C&I loans auto saw case and equity as distributed footprint, outpacing we fairly portfolio, in home industries. financed well across As the has and loans.

of commercial out and was York It's same City. While and Cayman portfolio lenders, $X.X which include that some bearing DC. York declines brokered being the high upstate New the The in deposits is note $XXX,XXX primary period construction deposits financing of Primarily flat, exclude properties. lower repaid non-bank time Average growth up interesting Washington were taken customer and City year. reflecting through M&T's continued markets, those other with deposits CDs New our New was the real of being core XXXX experienced to over deposits declines Jersey permanent Islands mostly Coast condo our deposits, from we office, rate which at estate billion the and than declines loans of in East quarter. the was driver our compared received by Offsetting run-off loans just last X regions. with sales acquired year-to-date interest the with cost for the basis Hudson points second those

are million income recent from originated banking in mortgage in $XXX $XXX million improved quarter, in reflecting revenues. quarter. of Service the third $XXX mortgage strong for sale income revenues, $X $XX about sale the X% associated non-interest were million seasonal in non-interest recent levels reflecting fees. tax $XXX fees, with from the deposit origination activities $XXX little customer Other servicing quarter, quarter prior improved approximately quarter, $X income; of fees. second lower quarter. in revenues the second million the million recent non-interest Mortgage the compared quarter, quarter, second recall at from $XX the syndication the higher banking loan the at of charges linked originated loans levels loans preparation the in with prior and with by that by of million the million, quarter, volumes compared million declined prior in higher Commercial on changed activity. Total down $X revenues were million $XX million was in the the improved commercial quarter. on quarter. in about second gain including million compared up from sale Looking were included remained were reflecting and the quarter, and million million, mortgage Trust for seasonally million $XX compared million banking with $XXX $XX quarter, Residential predominantly revenues prior accounts residential were $XX the quarter

gains $XXX quarter, securities compared million quarter million. essentially Turning the XX.X% the exclude quarter XXXX's the XX% benefits excludes million unchanged mentioned controlled. with to in recent legal The were well quarter quarter. Salaries earlier, expenses costs with quarter amortization other for numerator I of third expense expenses; in efficiency the intangible and and the Notwithstanding last $XXX at categories $XXX related the operating from assets, denominator quarter. amortization previous the intangible prior were third the and previous from which third the ratio, XX.X% from year's was in compared in remain in which

were loans excluding with recent million a end to quarter, X%. prior $XX of Looking for to net was compared $X second we charge-offs million. credit value million on loans, for provision approximately by but slightly quarter period by stable. fair third to under X.XX%, a were improved increased losses at declined basis of from are compared September allowance in been past of have loans Annualized the relatively total The million increase basis point as September. X recent related $X Loans guaranteed XX% the credit quarter, a loans third continue non-accrual charge-offs billion X.XX%. XX million in ratio decline $XX second points loans exceeding days continue in the for entities. loans the the metrics million the quarter, accrue end be in in basis discounted ratio to was quarter. the the $XXX losses for that Of total Net Non-accrual government the quarter. our at end the percentage of or just acquisition, of interest, $XX XX the of credit; slightly allowance in were due, at loans charge-offs the with end at the $XXX points to The the loans, XXth The marked those at and quarter. XX which of of credit total quarter, to resulted

with began for plan. of approximately the estimated Turning XX.XX% an reduction earnings, compared current equity, the common of past weighted net transitional the M&T's under during ratio XX.XX% rules, of risk with tier-X retained second to end quarter. we brought the quarter quarters, of repurchase to starting third the quarter, authorization capital combined assets capital the quarter, stock Those Basel-III common capital, Repurchasing at the implementation Xst, XXXX million plan's of XXXX. of four $XXX $XXX our repurchases, million the during one or CCAR July

Turning rate stronger income is net expected, final far outlook; quarter, as net the we to for have our the interest than actions changed. year. following margin been two outlook The enter little interest XXXX the this from Fed so a and

the growth other pretty single low On the was which seen expected, year-over-year has hand, a have basis. much growth been we loan as digit on

the but the excluding the XXXX, about are three in over loans mortgages, same up are the average that residential For period quarters impact compared XXXX. up of in first basis, XXXX. of On run-off average X% loans X% with same

action probability we more positive in forward about The of in curve, reflected customers high is the is quarter, rate our little shows a businesses, fourth their As pipeline. year. the from which the a implied head a Fed loan late into our being by there tone

would debt in loan significant margin coming quarter. apparent of softness pressures we impact This some by on moves quarter fee impact businesses more some any by August any mortgage Fed, be XXXX's overall are being in in with the includes has on full outlook However, from unanticipated results. pressure the we little categories. and for offset banking, continued not margins. The seeing good Absent in momentum expect we the a the changed, issued the commercial have hike the fee other to continued

view to we noted Despite Our unchanged; excluding as also in expenses credit, third compared we costs continue downside more quarter, this the last to expect total in litigation in earlier, operating outlook an quarter's low a opportunity. which specific upside results, we risk nominal growth strong expense to the related than XXXX is continue year.

a loans filed uptick the see end in but to our of when slight expect to third below last we XX-Q, We criticized quarter level still year. a

our and of given continue capital, we operating to capital ratios, our As our performance XXXX will strong plan. solid capital execution

and changes Of other economic course, in macroeconomic political growth, of aware, from assumptions as projections in the a to subject regional and and may are you future. our regarding differ national are rates, number actually factors, interest events materially various uncertainties unfolds what which

call review to open the up which briefly Paula will let's instructions. questions, before the Now

Instructions]. [Operator

of from comes question first Ken Your the Jefferies. Usdin line of

was of Thanks, good combination little of as bit that rates Can might that you balance I mentioned you Darren, looking those be of that, growth continues NII walk commentary the underneath. from versus about a here, there loan if just pipeline the the in at parent which or components? a morning. shrink more NII could some growth? more lead to talk you sheet, wondering You ex NIM a couple us through size we some Are could well? to still see pause pressures

good Sure morning. and Ken

you those talked components two So individually. take that let's about

the rate On industry the from that the happened this have benefitted net we interest year. increases margin side, as obviously

offering that will without planned. the did commercial is margin interest about than there we we mainly in margin, by a fourth been is through impact roll in what slightly on the see as before, It's of a loans fourth and compression, net August, anticipation -- we at the off. quarter core the debt in have our forward the that debt we as new quarter, margin As quarter, some we lower full slight driven look downtick slight talking rolling still anything

good is news actually over we three several the the probably margins last stabilization seen that, in Now, have loan quarters, quarters. last there

churn So of just dated the come we longer anything are happens, not down, the roll it's as newer ones expecting natural on. and loans that

September. we that other We what we at balances, we are where drivers the see When loan as as highest excluding the When normal quarter. the balances the balances we for slightly balance quarter, residential been loan floor we forward the any we mortgage compression. are, And impact we that And at has back portfolio the of to flat sheet. enter optimistic quarter looking we when -- this plan margin on slight and look will of the coming the pipeline, that fourth at up think is a to see on seasonal see So about at of the started the are mentioned, fourth look to that end level year. we course. entering

where But So saw loan we think be feeling are much about don't to the like we are in more growth we XXXX, anything might I quarter. positive going unfortunately. it fourth in see you NII, are fourth better like we flat the the are but slightly to maybe a dramatic. put anything probably for feels quarter, in When spot. two down, for too together, we not

an of will expecting keep then the just to other growth, rundown, follow-up given Okay. that thoughts on flat on book the are you not resi And how pace but fourth, us my go, of and loan I to can updated the slightly you give as up, ex-mortgage just the you are side expecting be just to to the you are? rates ongoing look where basis, if loan to

Sure.

has book, as portion consistent dollar book, on percentage has third in of large at there, A of amortization it would is the arms well that shrinks, cycle, The and as just that the expect number that of continue. that a of have product. X-X the is as a been normal So we the five and over amount obviously, option paydown the normal a last year X-X in to basis, it resi-mortgage quarters. decreasing decline look you portfolio pace pretty

that as gets of will same, XXXX, to So we the when we smaller. dollar forward, that expect that be start into we approximately rate look the expect as get and portfolio the we shrink, will decrease amount

a quarter give the that and where going little XXXX in So coming but we of sense this about just will we over to quarters. you see January, talk more

very it. much. Got Thanks

X-X, not but Hudson hybrid X-Xs are City The they options. are arms,

Thank the you clarification. for

Ken Your next question comes Morgan from Zerbe of Stanley.

Thanks. on I Great. Thanks. Where ex than talk might get the you side, the do see what you piece. with expected it having conversations growth like customers? in bit behavior? Hudson Good run-off just about loans, you less little City morning. a deposit a be Could but and little the Hudson customer of deposit are City kind feels there

Ken. Sure

we varies to, we having dramatically, with on customer and of talking depending are So at. we are the conversations base which customers are which balances kind looking fairly

in If in balances escrow rate in that now press indexed the in that mortgage Those the some you some the do. we in and statements will increase look our release, are to you those to see market. are all tied balances, business servicing balances are

the look customers little customers, each the are with up deposit moves are again, costs. banking So tend basis, larger balances to see sensitive a little price consumer sensitivity, on those size portfolio, those small balances stay where they commercial, the customers, that and we consumer consumer rate last the Customers of through seeing, bottom be back are the the tending focus to there and thing are and or of bit And those where up short-dated. look of as more typically of the rates When a area and more the at at are sensitive gotten total a the somewhat less other When is that's cycle. still business general, deal still in of a individual when through other the our small we haven't the on is were kind the private look of types we business; in bit the place and as at seems to because and with where rest the on pricing. to to in side including work of rest rate. working which are be obviously, we we larger bigger, affluent customers, market most with they and commercial we driving customers, activity balanced an the little the they smaller of and to

XX year, towards and liquid. the or months for is it's staying some very yield down, at year, and under, book, and three year skewed look keep really helping the not we five when CDs, signing up which six people are months time two are people So

I obviously and partly forward the be flat, we paying balances, right make thing So is you think balances a go are and of categories helping across seeing pricing, protect keep customers. right those to we attention now, which will are shift sure competitive as doing and our we rates for lot some to

have is just side, piece, question, Okay, that you great. more the in my I growth for Because for the on fourth flat those C&I growth that in are the the back few clarification specifically? CRE? a really pretty the more on Because or what question improving know [indiscernible] last quarter, And around just was guess, Thanks. I loan you have seeing CRE, balances been quarters?

Right.

really balances, construction flat. from is a or at nearing other a skewed get could fairly more inside, could reach and which as bit pointed bought, and and as seeing it's churn is replaced turn CRE latter they look out, were permanent that that's be life, But up more conclusion a shift that's good but part happening now mortgage underneath, relatively of projects you by around in the the are a thing, is what's and little to both, are seeing into happening balances what's of which on be completed they We side. have year, lending XXXX, expected. owner-occupied, types them why of through the year, their And other construction the the their kind during we So completion. condos permanent there being mortgages. financing, get permanent is of our what this C&I normal footprint, towards they been going is the you And flat. When had of run -- you big

the continue little on side. will and a have seen that C&I more optimism expect we We

Great. you very Thank much.

Woods. Klock from comes of Keefe, and question next Your Bruyette Brian

good Hey, gentlemen. morning

Brian. morning Good

seasonal So look the of dealer side just a the follow-up the were growth at know When mentioned on it, end question by Darren, balances loan I and lot decline. you the I again floor plan? another period quarter-to-quarter average you $XXX on period to the a C&I balances, plan the or to drop. -- guess, that of maybe plan million of have related related you that I that dealer most do information on had the spot I floor the of that floor guess, balances, end was dealer is impact? about driven

to balance, of it starting back. the the than spot quarter, starting average started loans those we less be would inventory was to At for see come some because some those to the build of what and

about on at non-floor when So was the we looked the plan, floor two-thirds average, quarter, plan. one-third ratio

and I the you year, between think, approximate the end those you to ratio when two same period categories. prior get probably end the at the in quarter, of look the the versus of

guess guess, of the rest of paydowns of of end -- and that on and So a sort that end the lot weakness I you I that additional is the period guys, period, and you the peers the -- core book? with capital C&I your saw impact rate was, refinancing of paydowns markets of talked because where that that environment or about, of other interest some of some you in

Yeah. When biggest The the you Paydowns decreases host is paydowns. book, the bit, they the why rate things there And happening. across the those whole little but were driver. driver not a are biggest originations, of of the at biggest in look quarter. was down reasons were probably driver a of

non-banks, is real which it related. of mentioned earlier, estate we that's Some

asset market. they their further the down because would seen down rates and loan of prices are sell are seen some to capital in debt we coming markets some have and middle business, our balances, tend if -- do strong, parts customers have We their then they so of of business pay that,

when is, little we particular fairly what's is are particular too it look and why fourth broad-based. head look -- feel the interesting kind geography. we into it's So we at industry, It's a pipeline, any one quarter, bit optimistic more prime, of we is at seeing as when more one we not the any broad-based,

spread queue; real prepayment back commercial that anything the in up about and the Thanks. income? but commercial there get estate a were prepayment Okay. just question real in know with quick one you I penalty estate, was And declines, I ended that in talked will the a

different they is been were have this There several Prepayment what quarters. penalties materially quarter for past income no the not spread from step-up. in

All right, Thanks great. Darren.

Your O'Neill. Frank of next question from comes Sandler Schiraldi

Good morning.

Just the that quarter-over-quarter, real I estate question, surprised XX basis the guess, yields of commercial to first follow-up increase. was I kind to see a point just on

Is that -- swapping $XXX the Just to wondering fixed a you rate that that's decent out million? a if could run forward, speak going rate?

it's as decent we straight rate just spread run look forward, take reasonable think probably think the pretty I fairly we pricing go deals when I at and forward. the LIBOR, those over that's on to

Okay. other mean, City And side the to? of left and balance that could is that's just CDs, the just sheet, then pricing much process, on how I in you far terms us Hudson of pricing Darren, and the how remind where just from long?

Yes.

are where you we if product. at So about least has the a of at the book, lot in what's forget shorter way of don't shorter been repriced or duration through been that are repriced, we and two-thirds has once, look that term

off three And are four, look it's that have dated, amounts are a where CDs equal to are when repricing, and lower we off, when longer over it three, next going tricky, a third term. five should We so we that because two are those, generally years. roll bit got left on is they been into little year to pricing has people about reprice, at seeing of was rolling approximately they a the what

XX And no than generally, signing and two for greater of is off coming really some term, one kind were over are X%. above of you CD some months. in and in then that carrying any cases, year three, cases, five up rates, So

two basis people So are CD comparing because repricing the are we straightforward as that two well. we just points, term down to current as Jersey, rolling-off But New not have are to market, those XX as depending seeing shifting obviously, you XXX the CD, benefit. and buckets year on around a year it's

you. Got

overall, you'd keep at so liabilities Okay. sort with that none of guess, know, some book, duration of And book, I -- the you as much? [indiscernible] that seek CD wouldn't you longer, with but duration change all to the something to offer longer just

the is the are the duration point down the the this segment shifting. whole guess, to portfolio. don't as materially at coming enough I book, the is naturally balances think duration of shift of And Yeah. that mix I in deposit

as are about not as that and sure making it's as markets, balances. So competitive trying we those are worried are something on, in focused to our and rates we retain much those that that as

All Thank you. right. Okay.

next from Securities. question Your of Wedbush comes Peter Winter

talk the loan morning. you that bit, resi low was mortgage Good of growth, given on wondering, just can pressure can you for growth Do single the XXXX? think see I the you outlook little continued a maintain digit side? just some

As we looking pipeline and right work shaping see as our our planning outlook, at where far are going XXXX numbers and now, and operating through the XXXX we our XXXX up.

with a but XXXX. will probably January full what back or little be speculate a premature for forecast me on outlook be, in to So XXXX might we for

of total would see it as Then percent just like loans? that a follow-up, you that is there a certain level a you would resi-mortgage, see to

balance whole helps tend we now When tend maintain on good of City, pre-Hudson on of to mortgage CRE, on are in decline, those at look as the the you as of C&I sheet, headwind, it and at should bank. just a converting the the look balance total gets that's the consumer terms Hudson proportion what off, if start to a did the total M&T time, with the the because think sheet from service at that we we we sheet loan the proportion, customer I I of portfolio And to have over you that level running look as perspective. And the balance sheet of was, kind what merged basis, commercial right City, that with would executing you our and before talked Hudson that's mortgage smaller. help sheet, composition if to like balances at for City. similar resi -- the that that are we continues portfolio on to we as the community, percentage get a will, before into the to is look were many it with bank, that supporting balance expect from of balance what customers have an of well, news like. broader about running these will we earlier, a a It on thrift relationships definitely And hold will we We balance of transition know, growth, we start absolute was, sheet. smaller, dollars will that mortgages

Thanks Great. Darren.

O'Connor Matt from comes question Deutsche next Bank. Your of

given Good about well? morning. and your you interest you the now? your obviously, capital as consent deals in with Can doing AML And behind order talk ability bank strong position

Sure.

will at we bank, and as we and like bit places a returns, business, over the fee look can to our continue and world where a how of be those open the play ability we look sense, servicing, mergers which that we bank certainly would businesses little kinds businesses, not at about and the we perspective. willing open position that the so from and like years, it to thoughts sure has we both field has [indiscernible], would institutional the are those is a things in buyer, dialogs certainly to It be place construct well. takes are, and and to but engage having given conversations. wealth are mortgage and open stands we obviously discussing, make -- and those our seller, talking changed whole as where also when a are our our we custody willing we that to So we of But our in of few improved, wider, last the then

return willing and book having those of and and long on per on criteria changed earnings is all cost before. interest rate pretty numbers term got value it than at a from is and along and higher prices deals pay those primarily, our interior it it and eye our spectrum to have and a before, long impact was our we to But always And at rate much a of little to that we work, back. the is, share, with than our on have how look have of ability the was capital, that's would before, that share So is our seller. is could it what our per and what where hasn't it was that -- keep back kind we return broader what

in interested but to definitely, -- report So nothing nothing really, conversations, either.

and willingness any know stocks All plus flatter lagged on the the that kind bigger on thoughts more growth, of curve yield have loan Do bank you open partnering. of is speaking, I I slow right. mean, generally of to if smaller sellers, folks obviously, kind have And that? don't ones, making

management or is billion, I interested to bigger key you $XX billion mention the cost one spread has the that number as make makes out too. our a more to pace pool, closer of either to interested. Not over infrastructure. think banking growth tend those When -- bank's and a considering the technology a that and there ability people get $XX impact that's revenue thresholds, at probably little of a loan those is to material them. people on costs bit you look of regulation, The another guess of partnership. one complying is there Expense in things I with cost and

the tend good On it high, high. to and is as credit are means which side, valuations counter pretty has as be earnings been,

they the the that and extent along quite to tougher. have of have want to is seller do, partners upfront, and if of kinds tended term both sides to us, that's investors are If combinations. a that, So that's be we little want there long benefit from at those to to with kind looking tended a those get nicely paid things they

you. Thank Okay.

Autonomous. comes next from of Your question Geoffrey Elliott

CETX for a increase Thank thoughts the capital you and the can to any year? question. you seeing that taking weaker got submission build, the a you continue approval the I The more got guess this Have ratios lower CCAR if return morning. contributing growth, you about in in putting denominator. Hello. Good mid-cycle loan to earlier

Sure Geoff.

to your capital. big anything Not said process to so is is that on loans the So per lower commercial pointed those has, risk with we certainly times with build Fed ratios That volatility when our of has resubmission but and are the assets, ratios, mentioned they mention, year's there is that think real that we about over and it sheet weighted a question, is the numerous when quarters, mix are that where estate capital of as that be strength have fact we much this and helping last that shift, we Reserve ratio. before, little not few a the pleased Federal than that we helping with and that the talk the should done non-public se, a which just look of are. running the consistency at impact earnings earnings is balance strong, the we we and quality but credit are those decline out results the credit And the event.

we So on say have that to front. don't anything

guess time? capital Okay. you mentioned, number for settle right at Understood. you out you'd And the I over is ratios. CETX think then be What ideally do to lower

obviously peer is, think and of that to to should think, be that running where think I your have write-in suspect think history That above relative peer a of bottom we at the for has and look in has peers. PPNR given be at I when stability very versus the for an one -- and And us, quality of watched target And end are and operating we is that things know, the ratio can we balance are of all function on we the -- us, bit the the capital of target, there. of group, that's mix that, I the the our closely your they ratios right our group. peer the -- credit said, sheet I a end assets spot internal bank the it's stand risk we and every at that your of we given should low target, history, a group. moving the of run

Thank it. Got you.

problem. No

of from next Your comes Steven question Alexopoulos JPMorgan.

morning indicated we loans and magnitude, good sense to do running rates new are stabilize? need market on think Can level Hey, you of margin of us a wanted start, interest where the pressure, I give the the lower on that, that where size you off. Darren. to a at what's coming than loans to be for

a and close. question, we It's really great are

And over about where, months a at would you to recall, if XX if we basis we of X back margin year quarter. look compression kind forward roll a So X stability rolling of talk spreads core compared close. what's at what's we or the rolling really off pace of off the have that on had to it's what's in mix period, time points and the of ago, rolling

and probably spread, becomes of It's So an points, right, about uptick a really and difference much an before of neutralizes one in that that two difference, the impact. matters; spread. we to much of need less we don't the are basis

into Okay, -- lot that's not loan optimistic here. the helpful. Thanks. of seeing are growth, are if is that this turn, it convert banks Give follow-up seeing Thank quarter? you. on reported here color, this loan us And what you and just stronger at, A pipelines, are another you growth. how but looking commercial was going confidence, clearly you weak more C&I gives to the particularly in third more stronger given

Sure.

and to active to the coming lag, fairly been up XX%, the what couple higher guess is round quarter we somewhat. it But paydown a are the came convert second customers from as that year-over-year, our start the quarter will saw pipeline a because seemed and the history obviously look look balance close, we in fourth to we wildcard things. with I confident to And is, And activity. good we pipeline. that to is that see very that's sheet. month the approved has when moderating second it's But two of to the quarter. and a up, paydown on leading be tend to probably It we that's just X.X feeling more So there indicator. our is a a balance one we approved going third, compared when saw into the into the sheet, Number at the those show on XX%, numbers by

put So lead feel a from Hudson little payoffs better we fourth optimistic. We portfolio and a when side little City start to ex that the two the a combination asset quarter. and will in and we origination certainly the will growth, runoff bit the of feel believe little temper together, bit the paydowns more the to

end but Okay. what at one loans plan what quarter? the I floor technical And actual gave you the change, was squeeze of balance a if Thank the you. I could balance? was of question; know the us

not historically It's we something that disclosed. have

chance, now like your you'd Well is to it. do if

okay. am I

No? color. Okay. for Thanks the

from Your Sparks. next question Marty Mosby Vining of comes

was of or a just quarter, Thanks. in maybe if you realization [ph] at had look I particular questions, to between much two gross or that recovery going improvement this but charge-offs distinguish was quarter? the two down, the how minor I trying net the charge-off of

general, not Sure. by in just It's quarter. this generally lower recoveries Marty, charge-offs offset

paydowns, as and performing, business As the don't just this pay-offs sometimes one about that criticized things we nice affect well. about they the affect assets talked is they that your of is,

Those it we so the was And quarter, all a we had recoveries result outsized have with of are charge-off very strong seeing consistent year. what but recoveries pretty quarter. not this been

range, end And was about off the where million the it $XX dropped income it line of to fee quarter. last low of then was other the

that about just are anything if those there particular was this curious unusual We -- line quarter? items

activity, saw and letter loan to fees fees, book, fee a as the The we of of some the as really in we as kind of the credit together. we tend they syndication fees related well syndication in the And other books. a mention, there a performance Marty were bit saw second of in fees. a slowdown Not the little -- big drivers really in the go quarter, had to loan outsized slowdown advisory

they looked quarter a a you in decline. them, probably are are if going and it's So average big forward, quarter-over-quarter, thinking spot. second -- third you little Probably, if better short take bit you a about of and

as well? probably And of approved Good. materialization that out pipeline helps

on it, yeah. We counting are

Right. Thanks.

from of John comes question next Your Evercore ISI. Pancari

morning. Good

John. Hi

XXXX? back point next at basis rate range ratio, quarter, for influenced basis it in ballpark? if was to recoveries Are XX and the looking the it -- or we back improvement, to into fair a run the on the for charge-off here a not XX more XX topic potentially On just point there, by is and staying is what general that

basis and points if probably XX we I between So XX in XX, we pretty of to if consistently where quarter, the look January. of But have We about average charge-offs. will quarters, we talk had eight XXXX XX. been the one at you think not went last,

I quarter, we the in think that's even generally, at it XX. other for range we bunch think did where to probably and recoveries, of thinking least I did a where quarter. have one next range, a have be safe was that But about,

And of going And Thanks. the sweet what terms assets, the at, to be your to is bank metrics, when regions spot are it you prioritize? a right. that All of digestable then, and the target earn-back? separately would you then would Okay. a consider is Thanks. I you And U.S. asked was about view were as doing then, in looking period a that earn-back so what whole M&A would you say, something of should we deal? the if know, What deal? topic, you back some that

Sure.

are do general, guess, M&A, look have today business pretty in much to history you opportunistic. at with we time I and look that. And when it's states through you been field So we that play, if anywhere our where at pretty of our contiguous

size Midwest, a our in proximity look success, where it into It that and give the add ingredients to to we our that an And an connected let's and our those that always to complete combination, in across leverage bank really the where acquisition operations. in any us it's chance management are our organizations. say bank, we make us We is things geography. investment to challenge one bound, upper to acquisition, believe such close footprint, sense, you like And so the the footprint, we'd to that that much we are on a particularly which Not the can't the generally, the be most our it people. important have strong folks culture resources to XX% But to is it's those. therefore in a in has Generally, in brand. that we somewhat sense our the we you on a third tended enough of big you to expense history risk has on makes done more history where be main culture a leverage have size, acquired the our to done by, smaller, culture, have bring combining institution, two our and needs leverage footprint. allows that leadership and like When worth big are to to XX% have interested impact that for can't the make financials, to not to be it's are reasons; pretty your importantly, one the two that new us footprint any and of it but in or it numbers, hard be helps our credit things of contiguous or open is, -- our and footprint. been where we of not been definitely give manage returns overlapping the but it tends

will but we reiterate generally pretty compelling talk think. we that's return of look it's earlier, measures, to story how things, anybody, big, to And our I got much I will mentioned and they at have a little bit So a them. if kind

looking in for return to are term results combinations, where greater that's a than cost capital. is the long created We our value --

shareholders, hopefully, year the the faster that that better, project for thereof, project payback return tangible the with we out. us period, So share. you per five the cash of book other you more look at, one because a the the the ones And compared lack value at to per out look then and earnings dilution to number are we and flows certain that that a earning are years you our obviously, with is and one metrics part thing being that help comfortable or feel share

So But more that you necessarily hold there make metric you that dear of not if we good the one tend to have metrics is combination others. than success. work,

Thank it. Darren. Got you,

America. Erika of question from final Najarian Your comes Bank of

you. thank Yes,

NIM should first am follow-up yield rate with quick probability questions. the pricing I how over two about the market December the on of of all putting wondering, together? Sort hike, of for Just Appreciate in XXXX? loan quarter think color a expansions XX% pricing and the deposit we outlook; all those dynamics

the about of if think NIM the So and expansion. first you you XXXX quarter about think I guess,

We still next we year. the basis the forward, be for basis that points think which beyond, worth changes. of get But sure. number holds to will tends XX think, on the is to a have quarters, good am you end last XX, at by that when betas we of that look least obviously NIM, And six not and mentioned which that range range, points to give through the I under XX deposit the should pricing that and affected we through about

low Got legal XXXX. year-over-year we in in $XX expense outlook, prepared -- low And about expense we out take your you think change remarks, that growth build, is million reiterated Should the which reserve when in the the trajectory? no it.

Yes.

Got it. you. Thank

We time one have for question. more

Gerard from RBC. comes of Your final Cassidy question

Darren. Hi

Gerard. Hey

I apologize know your what's were color? don't if behind much, so remarks, how will file color I quarter. I and can disconnected, some your question; this but in us any can give asked so, about I Q think say you this up be when you you you that I got that? heard give If you in loans, prepared driving by criticized us

to to that a up surprises we are just mention when little when that. where They look through are they were did making bit for numbers. and XXXX, there sure below going you versus the you all, no but actually second ended mostly it I look compared quarter, be was you that,

through we seeing. not this When industry terms kind of any and just be is we here, as like trying that of read chicken there is specific piece. the nothing loan this -- don't are is trends, changes tends concentration. criticized anything a sky the in just certainly small is geographic book we seeing It's are much to and So the there are up and of that transparent. pop we our There that falling, if any is to look little some nothing more concentration,

not jumps in alarm thing. of is it's out, is risk. end overall, tend companies be present where that to bell. of up bit anything highly some change let's there little balance of is leveraged. those And sheets, enough it's again, transactions, you leveraged But the those a based. overreact, So when more for kind But fairly if broad kind not in to that criticized the us But highly ring

costs Good. then it to follow-up, regulatory talked had due a your elevated Thank the Bob compliance M&T And about in this as year, to handle. that you the letter shareholder clarity. about for

Now the or issues now just to X% course you these some see you -- a of Wilmington should go X% a On basis, lower we rising settlement. that give forward the for forward a announced growth guys, us expense big maybe basis? you flavor can go year, are on expenses, operating see behind we

doing is are a baked we work we plan, income outlook in and January that. be the general, before, experience of when you. of the through the our we look largely there now. increase our statement. as increases like, The shouldn't agreement, rate in And that written any into going run result be large operating compliance some in mentioned our the better we at with for on cost and XXXX back will But I

down. continue when we growth base, on But and more at just that salary as hopeful on difficult expense there probably to manageable. going in what's be look markets half going operations be We as with in more to our going and upward that at expenses, people go hone think that it, that But got and it's a manage increases, We those. to the are get is you labor see you our to we to effective pressure slightly some and that's can that.

Thank the you. color. appreciate I

would turn or I floor closing any session. to want additional to for back Macleod question-and-answer today's concludes This over the Don now remarks.

as today. always, area or at good necessary, the Again, release of clarification participating bye. on you Thank Relations thank department Investor you our any And all if call for code items please and contact XXX-XXX-XXXX. news the is

conference. your today's today's participation in gentlemen, and thank This Ladies you concludes call. for

You may disconnect. now