First Horizon (FHN) 17 Jul 182018 Q2 Earnings call transcript

Good morning and welcome to the First Horizon National Corp.’s Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Bowman. Aarti ahead. go Please

non-GAAP at Please presentation the call we'll forward-looking reports. Investor number our from most on a Actual results reasons Brendon. call, recent supplement and our outlined are release, and the website of section slide in use Relations annual we the and In may note information you, this earnings that financial quarterly forward-looking posted will information. mention www.firsthorizon.com. materials and Thank for in of differ our this earnings

statements this reflect obligated call, in of our this authorized the forward-looking identified Bryan Losch. to the only non-GAAP call. is our Our in we this Jordan; views for webcast BJ such are to information and on include GAAP today, those and remember information in our is not our record as The website morning's and materials. This speakers presentation Also, and earnings reconciled materials CFO, update CEO, our them. slide is that please

Additionally, over our for turn will now be questions. I'll Credit and it Springfield with Bryan available Bryan. BJ Officer, to Chief Susan

made, the Thank and good Bank feel progress very quarter about second touch few appreciate Good results everyone. integration, completion about on also of we've I'll joining our very us. which the that excited morning you, you a minutes. Aarti. I the I Capital in

steady and strong continued showed momentum credit loan the quarter Our results for quality.

side. very they very our our the strong with months. Our up momentum fact We also six the running from are the activity trends. on saw in have We're pipelines at deposit been where last deposit customer in the end quarter of significantly are good they pleased

but of the right expect in an our in ROA next later are couple we for ROE think for to the I quarter. close to at more years. targets You'll in of X.XX% where hear both those be the talk and the about quarter hit the And BJ X.XX%, XX% long-term slides, we

about about very of testing so the It Very, and then feel customers the completed I a excited appreciate and last almost came the we're weekend, I May, very forth team was Bank Carolina went years. and we're that of Capital and and the to next deploy the us to Day opportunities so focused bankers we be integration. capitalizing continuing We I the and results integration the Bank enabling on so and which a so the customers, deliver excited next our opportunity about the integration integration think and for that mentioned models The outstanding couple really grow we the we'll very integration, continue of the improve weekend -- great systems Southeast a on best really excited Capital think of Memorial in profitably Capital lot us in progress And pulled forth. Bank over the in Capital that. Day those to customer there. next that good best going on do country. the the a in can opportunities business several experience on very these conversion, Memorial of several had effort we month have pleased over the ability We great efforts years, on with And the -- models year organically all it, realize way mid-Atlantic quarters, upstate our so of Bank and deal strong together. on the markets pleased with planning that markets synergies not and we're on they effort back really the put and the couple of think growth into if capital a to integration that some and merger. and to the particularly our operating that over business assuring organic with these South of and support markets that In years to are huge and the effort we all technologists off. the in and of about so work Carolinas,

positioned all think, -- are returns of I over the strong We well years. we’re to couple next deliver

in we positioned economic more We think growth BJ. have for going And the well we environment next continue the couple that’s foreseeable in a a hear to -- position about from years. we're very a great and strong very, franchise we that we're operate good think over You'll to think future. very of markets for

to and So wrap BJ comments a over come I'll few with BJ? some turn take to we back up take I'll questions it later. before that,

Great. Bryan. everybody. Thanks, Good morning,

of on Let's start five. the review the financials slide

shown in growth adjusted income results impact the and second difference quarter net of linked XX% quarter adjusted or expenses, momentum, as quarter X% reported EPS $X.XX reported accelerating interest the and accretion, between nicely related annualized those was up net loan Bank and betas our by through NIM of linked and with loan interest NII pricing XX points the this continued continued pricing organic positive excluding discipline after the growth on business X% core NIM the strong EPS expected net NII more both The and trends, basis to pressures. XXXX, merger mostly bottom on quarter deposit points what the income contribution merger. and offset linked and EPS accomplished Capital basis strong impactful We NII right pre-tax the are based positive income than For and the to in Even Starting to margin just expanded by X slide. X.XX%. and well up interest impact adjusted quarter improvement we margin grew EPS tax continuing increasing purchase the were basis. the The on NIM on expansion was the increasingly as to $X.XX expanded X.XX%. an with the from X% was and

respectively Continued on X% an helped loan up with average X% growth in also and balance the linked basis and sheet quarter. growth quarter, deposit

up non-interest deposits growing deposit Importantly, relationship X% X% reflecting period-end, on and our base. on our an bearing basis continued average focus were

balance totality sheet and which along portfolios, and continues work loans of the strong the Our focus growth managing deposit loan intentional remains across to on strong appropriately optimizing margin, our mix pricing is Expense to our franchise. our the the discipline includes and deposits our and of advantage. with

merger the excellent in with quarter as credit the next and quarter. the Bank Capital provision each realized quality in we expected, $XX to quarter to quarters. charge Credit strong expected. $X million no Only of remains net continue continuing throughout to cost be As increase related of number expect this million saves performance and offs several

the of Capital Speaking merger. Bank

it's to we're last to update. We how for as pleased turn with confident performance year. slide when our and and Let's remain well adding about announced more it today meaningfully And X strategy growth. the an deal we going than as financial

As and tax well EPS you execution announcement, reform. on accretion more the we saves see, control synergies, at as we higher revenue original twice than due cost things benefitting as can like tangible estimate from now can that to great

completed our roll ready previously we mentioned, we're systems growth conversion to Day our with just weekend Bryan in markets. As and discussed we over Memorial newer and

have saves cost million do you of the quarter. XX% we second cost saves And the in achieved if that the right rate of cost expense saves Our are million means the on math in run in We roughly $XX track. $XX today.

come. a growth earnings lot of earnings to but already captured, So power also more

specialty $X now first revenue business we the really $XX Bank Our from Capital three, of amount have of by customers now sheet. the or at main and relationships areas. synergies Bank generated in accelerated to capacity Capital end are increase from quarter, quarter. deals franchises. annualized in balance the serve of Number significant bigger through revenue First Tennessee and closed balance lines. driven XXX second opportunities to sheet synergies And on largely in The the the referrals lending representing our XX up mortgage and products three two, million, consumer deals quarter customer in in Number a expanding process revenue synergies, both to banking first of second quarter’s in number one, number million

I And the on that. color a income expansion interest net Turning margin the and strong growth net seen context interest as quarters back last this discussed saw slide over quarter. is gives significant to the and earlier, more we’ve we seven, Stepping you in and slide impressive. recognizing bit a improvement five

responded the relationship like It’s expand deposits as deposit related and and Managing sheet the XQ, faster benefit this look loan increase interest that the and betas. And priced to as so. our also pricing deposit driven you from hike XXXX pricing the beginning X.XX%. And our deposit across competition. the the first XXXX with on by core us our to we the And loan appropriately our discussed keep accretion, do long of we anticipated to purchase betas commensurate term points X.XX% line loan since right holistically betas deposit our XX% pricing, hand our to saw betas. than call, If the hikes growth, in XX nature Those competitive again basis to benefit of important discussed XQ, we we to far points X.XX% outpaced that in our number quarter additional we rate will NIM rate mix XX has increase XX% includes to from to specifically large is continue to from short-term reported a we saw call sheet balance are NIM our and our basis of betas beta quarter. have build the up expanded there X.XX% the net are betas quarter and particularly relationships the and current of at and allowed customers. remember have look first like on balance of cycle entire pricing we increases bottom the our two with net as types margin to chart

eight, growth end are X%. saw in moves to good X% X% were some about balance the growth intentional growth up making despite a intentional an to period average quarter slide optimize sheet moves loan of Turning loan Total on the with loans the created we balance with pleased the headwind we that despite basis sheet. net and on

to growth. market especially strong demonstrated again We on a gaining where areas linked quarter banking share loans of saw with XX% companies strength mortgage specialty Our we’re basis.

this to helped balance boost entire has X%, in-house our a platform mortgage growth. of franchise lending sheet of where our business and Capital deal healthcare synergy growth franchise Bank’s client saw strong strong restaurant finance a saw our linked X% linked linked quarter a growth quarter X% our Private addition, strong closings, quarter. also did up as adoption on In consumer revenue on the businesses from is perspective capabilities across

to middle Our loan continue Tennessee our particular quarter. and we posted continue in loan linked to portfolios in efforts Tennessee where in steady show growth X% momentum growth gain

half of million million year. another $XX our another of loans, to Bank headwind we loans expect growth expected Bank half those see improve The our somewhat Capital was was relationship million $XXX by pipelines, of I $XXX growth start back year-to-date. created integration in exiting X% merger As what first value Capital the mentioned and in sub-prime markets slow markets and With growth acquired the the due through selling off conversion of auto in year. this to in the activities loans in we non-strategic the of low that will loan the running merger intentionally

and numbers on All will of our portfolio mix. growth and we profitable our improving improve continued of products repositioning book to relationships these profit. focus grow And continue economic to the demonstrate loan

loans. TRUPs future. and you the credit efficiency occurred to to And benign and an several zero quality a a in credit slide how and the criticized in to decline growth nine, and pass only quarters. over million asset for expect of Provision net continue profitability XX remain the million Slide at the foreseeable on $X was of loans sense the we mainly $XXX trends just We last grade has from remain saw on in to charge-offs Moving quarter quarter. were XX% improvement excellent. gives much approximately environment upgrade of

the steady growth to bonefish accelerate associated good was trajectory. benefits, Capital before. in key business, growth our together its First worked While momentum tax have Bank as and improvement reform metrics as Tennessee The financial the our on all combination addition well and of EPS strong existing continued of

Bank operating Capital related our and six core at seen. growth the the performance Today merger Today, $X.XX. XX.X%, starting the key we Looking XQ, improvement excellent merger last performance our bonefish is shows EPS improvement. $X.XX very XXXX quarters over on in reported tangible metric before XXXX. is the equity of basis seeing announced, was tremendous Adjusting costs, just the XX%. XX.X% point an an common in for our adjusted in earnings, XXX of was strong. increase ROTCE was we've adjusted Return

Our ROA is bps XX to an basis adjusted XX X.XX%. from up points

Our NIM, improved XX% more XX cost and up adjusted saves up X.XX% improve X.XX% revenue is And improvement growth has come. from up to more XX our in continue basis points from net to on to and XQ, come, we ratio interest will total points core today's margin a XX% saves, X.XX% with cost profitability to or to synergies efficiency With growth profile. and XXXX our basis NIM.

year provided have us the us XX, very key the clear. quarter So into strong up and pleased our And and rest our on slide the priorities wrapping over the pleasing very of and was near-term that to we're with XXXX. second for trajectory are performance

earnings on deliver Bank the savings higher accretion will revenue via and from synergies. Capital our We cost

We momentum over to I'll retention. organic With opportunities performance and back our in relationships will Bryan. that, acquisition to will to growth customer enhance across we maintain our drive it Florida, with markets strong continue and Carolinas build and and newer turn the

our momentum Again, pleased second for to with XXXX going XXXX. our excited all again second their of dedication. BJ. you and employees Thank you, our I'm quarter customers results and Thank and into about half the

you and did in expand that person made build about attendance. be plans via information had to To we've that be work in Xth, our We'll you execution you call. an integration. and the at the perception On platform. Nashville to need with many participate in our Day team our will As Thank completed all for more those opportunity in feedback completing conference of you not for thank of that us. in that to useful the And hard we if study November recently. us hold the we Investor team will able changes to hope be they an for and our that providing conference strategy join executive will

hope So for the that call you we’ll With your I put calendar. now questions. that Brendon open on

you. Thank

from now Alexopoulos begin Instructions] comes from question-and-answer first Steven will JPMorgan. [Operator question go Our the We Please session. ahead.

everybody. Hi, good morning,

Steve. morning, Good

to wanted which came above for on quarter. I this expenses, in were where we least looking at start

markets And there trying increased a was Given your better revenues the additional down costs quarter-over-quarter. the quarter? adjusted I'm the saves understand were and that this in why were capital unusual expenses internal to above Was anything realized bit? forecast?

BJ. Hey, Steve, it’s

Now, our about some strategic the well this costs There items, pension believe strong franchise. out very smaller other discipline as but nothing that was of across and our right expense some and several adjustments on costs the that special to internal it. were remains smaller hires assumption forecasts. as We related There's nothing things ordinary. several incremental

so, our expenses And to our of to continue flat we that more expect realizing be as cost will we’re saves. down

Okay.

the a good then additional million put in So, BJ, build should saves, and cost base? going off forward $XXX the we just adjusted that’s

correct. Correct,

was this, And margin, scheduled the on the I disclose you accretion versus then the quarter? in what accelerated think didn’t Okay.

Steve, you of $XX slide We you on total the scheduled look probably would accretion. have gives it If around accretion. expected million seven,

so, obviously And of million there $X unscheduled about was accretion.

Okay.

half about points? of the So basis XX

Yes, that’s right.

Okay. you And core think How the curve about moving then, like NIM do NIM, getting the BJ, pretty is forward? yield flat.

quarter. this incredibly saw Yes, pleased we so, what in we’re think with I

deposit low. heating has keep the strong about, competition you couple far we further. we very long-term rates the talked our you have if our that rate asset been We betas over done, talked able as And we the proven really loan even company deposit so, thought deposits. can of have the But manage as and we we’ve to beginning our And this the grow customers with sheet over to relationships years hike appropriately look got up. so what sensitive our responded we keep about We’ve since been for out to faster look last at doing. that we with balance last if than had the it re-pricing we of cycle,

points by that serving X our core really, relationships across the still And company. performance customer so, and really good the quarter. of expanded basis we all competition NIM our in of and up heating That’s

core where a If auto the start the what slide risk exited NIM, to X point from margin. for was you’ve portfolios loan not saw which you on look with sub-prime sale, forward we on we our impact thought we That have about taking got on we within had our basis out eight, profile and us. that not strategic

so, there, you the year. based that see the to think as we throughout And if as side expand continue core of deposit loan the maybe seeing start points we’re our couple in what on the rest by well rest can the on discipline basis year the the pricing a of margin side we of

Evercore. question John comes Our go next Pancari ahead. Please from with

morning. Good

John. Good morning,

On and the a if bit quarter. or little do capital outlook we markets around type the impact more think on what’s that you your low it there in this you business, do while? What came for see in should see the just What there? particularly ADR, you want here expect improvement the could to down can remain of comment

low. It’s that Hey the income. BJ. John, very level market interest rates equities direction A helpful; there and headwinds rates little of that and loan business growth fixed of fixed income could face are is it’s the means not more volatility. for very, The occurring. All possibly positive in is versus tough is economy still

positive regional it. for right it The tough is us that The bank So, is. earned through it’s it thing just market. is what

that helped us We again as FTN day today. in grow help franchise. one the us continue is not it a going is our but past, And day EPS like to to

have and we’ll in banking continue great income we continuing any through the and we’re business. headwinds there we to growth the fixed strength opportunity business and the earn So, on focus to on have

income Hey and and low don’t a improvement it’s We the slow, said, But expect quarters Bryan. environment what in second back add said, year. is John, of as I and this is of seasonally the rate a the turbulence more to curve, we but little have to put rates month. QE, that wind, pass don't me it is third get amount of a on this unwinding to flat yield summer the difficult it's I BJ a business BJ bit business. half fee raising would will Fed that normal will tremendous forever. calendar a ask a interest volatility guess a the because are we the of with nice I still back think and environment. think Don't This

you a think I some whole shouldn’t tremendous be expect expect we'd back this modest change, a it but the of improvement wouldn't in half lot of amount. year, So

it? do -- something for options Are you that And for breakeven are you in when the think then point, ADR? long-term what at to course you for on that you this what it it strategic this or the for at all, is level? it's about that and point point is business long-term? at just losing at Are And comes par you the money separately,

Well, yes, loss. the a had and for we slight quarter,

I think between net pre-tax quarter. of $XXX,XXX and it $XXX,XXX was for the down loss

whole into put it's $XX,XXX lot of you or $XX,XXX a breakeven. not day So a back

in little a was of it tiny quarter. yes, the So, bit drag

you is business the been about turns will interest the rate it's of and economy and of countercyclical if terms we're mind you and in a like overtime. market-niche And results over very expertise think be in have income as interest interest in business business the win XX the well XXXX we never, and rate valuable because rate think business years. thing the at very this And very at environment the environment an the we've strong. In a the when we fact in the is environment that business, that never of keep business XXXX we this this other look in and and we is say fee the the We long-term, countercyclical look benefits. the you but that to back saw

back some ways up. about way is credit hedge think it's one So to it in a cost to going

we we're the and we capital the to it's a performing it improving we're like We positioning. to glass would at at that, the market we at And the we break So and while results. controlling be not business, focus and not today, we not look costs working our allocated it’s look in where just situation. intent don't the leadership look product on have and on think

next comes Our Raymond Rose with from ahead. question Michael James. go Please

of where Thanks. as were in Beginning and on you're loan six the mentioned significantly headwinds seeing half back some morning. what past we give months. of pretty you strength up or good the Can us the anymore that over the just be year color move you Hey call the potential portfolio could strategic sales? pipelines the

will that? you Yes, Susan, take

yes strength was Sure, new had One pipelines. production of I would seeing the June our the we're good thing month of note in we've too loan this in some year. very terms strongest month

for quarter. So last second seeing some strong half of the We're to of terms of Tennessee, pipelines pipeline also Middle year, in month the addition of we particularly the production out specialty really businesses, is Houston. good in Mid-Atlantic the our pipeline. strong saw the

we're So has the a pipeline. strong with also CRE pipeline. pleased

pipeline real estate. in asked in the commercial area headwinds terms headwind, would You potential of be that terms about one of

structure see Although those because where but the the we drop business real just of did at risk-adjusted the a underlying and credits. in that's that rate we have through pull little profile our estate look are we pipelines strong, discipline on of bit, commercial the

to to watch I continue That's it relates commercial structure. new the due area, the real we So to competition we'll pricing in heavy business one book estate. think as

Okay.

couple next else net quarters? all should growth loan over we So levels expect assuming anticipate or growth, of of loan similar the equal,

in and pipelines closer -- it's in stronger. describe I it XX% June this up And amount complete really inward to expect close that digits comments. yes. guess add growth, Yes, I now we required got goes that is the focus energy we that's to the of [indiscernible]. saw as months were to I'll they're Michael, integration said, The Bryan. from hard Susan's the the probably six the Susan was completing to was mid-single we loan still It up average. the that. and integration picking for into

feel we point. sustainability loan this the about of So good at growth

of about market more in to Thanks. as you relates Florida to Okay. alike? where that? one could in campaigns And just guys the much follow-up, specials strategies then we specifically, the deposit it maybe terms you deposit stand see do talked just And have how more expect some of things with

the talked our so quarter, second BJ Yes, like of it’s about quarter like some in first pricing. the I second increase took we quarter telegraphed the in at beginning we relationship the actions to

to the for getting balances XX% moves, so little and those had new We tiers pricing acquire up. which around to Tennessee XX% rate Florida in some customer meaningful look South grow particularly also relationships instituted Mid-Atlantic, our those pricing moves again well. has our to excellent. acquisition made Middle since higher on We’ve moved customers to been bit to We’ve relationships start market and emphasis So fairly them. retention the in with markets up money retain pricing we like those or as on checking particularly an newer obviously $XX,XXX

deposit we to we’ll beta our protect one quarter. don’t I’ve the quite And it is feedback our at grow. totality will from us that of piece that expect out deposit margin, of customers come will betas so good good but that, to saw the continue quarter-to-quarter to will that down, seen that see to customer so And this we again of success appropriately we’ve allow relationships. -- and I the it. respond continue think look But we to

DDA in with We relationship that to people a way sales help have sheet a tremendous side will deposit our on in sensitive of those XX% is to asset serving the to core perspective focus serve customers extent the deposits. will continue the checking to leveraging going our we loan rate the we and in continue customers were the bearing by margin the of look that balance to mix And a non-interest that larger money so. we’ve or do expand got. context relationship and market perspective appropriately on from But we

comes next Casey Jefferies. question ahead. Please Our Haire with from go

part that pricing. morning. guys I and deposit acquisition on thought understanding promotions with Wanted of other market would borrowings follow-up which the obviously up. some But down to pay positive that the lean of cost some new your and Thanks on obviously the were index, the was you mix the higher some short-term shift was are some funding my to get of borrowings good markets side type and it strategy, into and

wondering for Just is outlook funding categories? higher cost the what of your some

can half Hey, in of Bryan deposit integration there talked merger so there, focused you know customers, areas of that care as first were create our we a Florida about main of way and of Casey, people deposits South conversion the on doing can index years next so BJ. and our it’s meaningful to overall mix. build Yes taking one year our think the improve customer we is relationships down as couple the be aggressive merger over South really and deposits that very But Florida activities. the we actually some replace headway market in grow

little a to of to them time So able to do be bit had that. for give we

South that again we it’s a of institute start said and can several confident that that we’re that something customer do little in forward our give quarters. time organically that. pricing, As we take I quarter Florida to just do over And did to bit sell. particularly to acquire we’re people confident some can the going name the But second relationships to aggressive help out get in sales our there, we going and next

periods weeks systems going weekend, but are you to Memorial three as Casey, two or you on we are converted this of and those banking now online of lot new are basis. systems things Day training a where deal Bryan, the get is with point two you’ve got on, a you’ve can service banking got folks on customer using next who customers tremendous BJ’s on of the a done and in to very imagine a trying the lot visiting day-to-day the of branches and and statements who mobile differences technology, number people intense who’ve

we had program. a heavy So ambassador

a in June. had of the middle -- to really we until intense the of branches So activity it our middle lot call

now So of leveraging said, back position this those start as we're in BJ the really to half year. just some in of strategies the

Okay.

expect into do borrowings that's half of your back year down you in and work those baked So core NIM expansion? to the the

to absolutely. We deposit to continue towards shift deposits, mix more try customer will

you Okay, want great. for growth Is picked strategic that clarify CBF, portfolio in of million $XXX these opportunities going from CBF. have everything sub-prime the loan on front, forward? And just -- is the there you or more exits the don't types to from that headwinds of off

of probably and portfolios profitable What the also of that's with sheet. continue to correct. terms relationships. opportunities that. In and we balance sure and portfolio we're just is on good relationships company making its do that And focusing That’s sales, core management doing we'll aggregate growth

So that loan kind bigger don't see point. of sales. but discrete continue, any stuff I at will this

to Anything transaction-by-transaction. you forward ought see be going

next with go Deutsche comes question Our from Robert Placet Bank. ahead. Please

Yes, Good hi. morning.

morning. Good

up South in markets guess larger I of yourselves term? medium years? kind do the the Carolinas on the question markets just Florida. size ambitions and picked specifically you what Bank are those markets Capital over the terms of new the I Just with your you of foresee guess those and over getting next longer then in couple there presence significant and over in

Yes, Bryan. this is

lot Tennessee. excited feel custom growing much and very outside about really the have present very, do are of Capital us. of to that argue like some the to to you Bank markets They are are a serving are markets very rapidly. that are We They who look them the opportunity

Capital about And dynamics build the markets ability of had so excited that. enthusiastic those of about the footprint. to our feel good the that expanded off in about and we're just Bank positioning We're

Some of that is of BJ synergies set. ability talked and to products overlaying a bringing he our products, broader management some bringing about earlier. services bring revenue about and But treasury that additional wealth when talked management product and our

markets. that the branch think While big our density by activity driver lower our We branch the be markets in of branch those those don't place. will a starts necessity branch at be driver big in footprint and to ability density grow will or

that for and we can strategic the very that said in we leverage be looking we grow can we past, platform do have that that to that quality for produces started have Bank way and on will a services continue footprint and fashion build and expand a bankers customer the base we generate. bring We and momentum the to us products targeted high as in can on had it the our to that to Capital in allows

those look the as be years. So we will of think our markets, primary next over that at focus couple we they

acquisition our business customer it and and the in hires to the building aggressively capitalize bringing on present. strategic Just through footprint opportunity

it. about excited we're word, a in So

add. also I'd

Carolina track and name terms ago. blueprint We share today. ability can to have have and that grow company years Tennessee is done than already the how of for and to great great in growth is opportunities. South Middle of our lower has really it. exactly Nashville sheet example how And markets good with ago XX% that recognition growth greater North where our we other larger number Florida, that's our had markets years we intent We the what started share. versus five our to loan be in talent five intentional to we blueprint it to and in an plan one exact transport to the we and market was market deposit five in Greensboro, Four, market outpaced years, Charlotte, different to to that and balance is far a do. Raleigh, far And

comes question from go with Zerbe ahead. next Morgan Stanley. Our Please Ken

Great, thanks.

you how us business actually question, First expenses can guess of just much with page fall with those the am remind XX just are like at markets and I the Because looking supplement, I your capital variable? of off or revenue a that, way dollars much have it couple despite down the a looks million more like expense with go a would along non-interest expected of to I larger decline? only lower the revenues, in

ADR, our to team an through I job out it'll out. much the do as now, point could. revenues Ken, alluded not us it so at BJ. hurts there than fixed get model compensation but way it's much terms is help was but at to come it the earlier in has fixed excellent management very trying job done The our our where you variable Like costs, today. variable has level expenses it’s taking down. back, doing much believe that's the the just we manage there work, will Yes, just the variable, in that’s breakeven about our team very that down. be The great expansion get sales possibly just a it. asked we And Brian base right and some but But cost out there of is a costs, a to we're to so comes people, as difficult difficult obviously of is said to before, of I when leadership as you point the can About there a what's faster more in see market. the XX% move expense earlier, to not is expansion And

Got it.

then And the XX%. XX% reasons I was as And terms quarter, of predict understand beta, from XX% -- in anything if a to to we would going deposit taking probably just But and want stop the interest the beta you're quarter. competitive, the deposit bearing there, calculate question look the you quarter? next again remain switching it I this why this Thanks. gears, on an the an forward Okay. what basis, is, some suspect But does quarter, into of I forward market beta actions theoretically there is the next being that it quarter? go high if really

BJ. it's Ken, Hey

I quarter. and deposit we That's what it would why in beta saw. quarter about actually this inflection we on this the said competition first have point absolutely call, So expected talked that's we

disciplined since very our competition very the intent with building of I and and optimize there of are our that based reason cetera, The on a we you think with customer relationships on we lot we had to company et saw that relationships wasn't long-term that, look we customers. the hikes, and the show discussions trying and with moves the rate profitability watching on we slide. is what back could at that all be if

the last see the appropriately, interest again, couple of because If deposit making betas responded increase managed and we beginning investment the we've the different we deposit the [ph] basis the interest to the different just we X of pricing the beta on margin, asset loan loan we expanded had XX% I'll by points, discipline, months. it continue really betas. mix, having sensitive net conversation. our but And to over as XX% can sheet we'd core We a way, the were cycle, and even we testament that had, We So in be because with loan said to increases a an our relationships. earnest XX% a it which And started our say balance people knowing smartly. that rate the the expand bearing quarter. mix, deposit think includes And deposit in going beta deposit since margin we to margin we're the in side. the manage

As come you're think see year, lag and we’ve call. to said in that tremendous lag we experiencing of earlier created XXXX, our We out, the a first had seen I that into really in as been And that. wide. is moved of amount started quarter some have we industry

we lower, margin a beta said period or any in some measure percentages to are betas usually manage in how it in for can sense depending concert the the we loan or with them time, it maybe moves. like that So But quarter short as BJ and manage on one of higher growth anything.

we’re long-term that in that liabilities, like but us view it and to of long base. we and We take want our rewards to that you in sure builds a competitive give manage target balance our base deposit that customers recognizes You make we the necessarily deposit stability the fashion sheet that, relationships loan-term. and pricing and and relationships a can any wouldn't with

betas of into at we run So level don’t this move anything while is as the half back that suppose year. theoretically to we expect possible I

comes Brady from go with Please KBW. question ahead. next Our Gailey

Hey, good morning guys.

Good morning, Brady.

we’ve $XX consider down accretion that you to talked quarter is for what but last to the or million good XQ get the closer quarter But you was from a million the next prepayment think $XX run million about of were $XX know and do know will I yield already back forecast. I couple hard total accretable be up -- level? rate that this quarters that So about can would levels

the down, followed for looking on and a first settle back come couple difficult the to very, particularly this very will interesting to you going dynamic quarters of it exactly out. where accretion, it’s beat in get that Yes, all have at those it’s

the this therefore three coming terms $XX we just drove the XX% But actual accretion the through $XX of And the so in were that quarter had unscheduled the payoffs in million. loans increase and quarter first had size, large three we actually more in between and of that majority loans. loan million

between unscheduled $XX believe be accretion is going do So that And we the range accretion. going print scheduled we million we and number to to is more come whatever a quarter in million of next million the quarters down. that couple the $XX expect the and difference $X that to over

core mark the in unscheduled that we going back payoff keep is loan a if to in not our at market think improving market a which is doing by in about, that in rate, of terms we’re other rate we’re we of when that’s actually loan is talking But interest I accretion. really the rate mind thing see net a really coming prepayments margin that, the replace forward, net some income with markets growth so.

of today, going we’re benefit So to back it’s to tomorrow loan-by-loan we’re in a core get going also accretion that and accretion NIM rate. incremental at the getting benefit come higher the on because

continue a think going in opportunity forward. growth both we this closely, manage real So our it’s income there’s lot core to and of there and we

you not just XX% but stock looking updated I at repurchased buyback mean, TCE XQ think I a it’s you just the of ratio how or all you’re X.X%, here? price and the XQ of with year-to-date, XX% I from in know then any have it’s on sitting down or And mean, stock think I thoughts here tough, Alright.

down Yes, shares. X.X end we and retire matter quarter effect did the it’s actually shares dissident care in hear so so that one I you’ll those retire chose mention of to period in that’s shareholder related we buyback took to the our is million will go shares thing

But dollars. do to some there’s that XX in quite given affect at of million candidly opportunity where we’ve forward buyback going share that’s think buybacks a we So traded. look

are that do think strong, commensurate We board. and from to sheet we got look will as that with levels of plenty have. forward we the capacity we’ve so capital And go we balance authorization our the

going that And for so, us at. option to certainly an yes, is that we’re where aggressively we’re look trading

to markets be we’ve the to capital put Brady, to next excess the by this can alluded we as that of that about on necessity years focus in we the to I’ve talked our the into opportunities to the deploy businesses, couple program with is is that over that, think add that in opening shareholders. growth going comments Bryan capital organic that in earlier my repatriate

sale there our in be bit price the and view stock has a will gone on So it. we to opportunities think retire

retire As $XX as million look opportunity BJ we’ll this buy quarters so quarter some to over back or roughly stock to well. for worth stock an we and said, have opportunities of next couple of

Sparks. Please ahead. go Our next question Mosby from Vining with comes Marty

morning. Good

participate actually Thanks. timing; And I could appreciate the I quarter. this

$XX still you get mentioned over, which even what from accretion. the gone is as get see you’ve you KeyCorp eventually accretion accounting you million, goes excited away as is you synergies, something kind they just that of back which you the incremental on was right and is net sees evaporate. of now that’s Huntington got outside in you they’ve the When but a just this hole moved with synergies, purchase the want dealt that expense just this as portfolio. reality it temporary, almost income. an through in been $XX everybody loan of in it million that to this convert has $XX a revenue I that you bit. a what So, million Bryan, BJ we’ve mind what to have move as you And ask interest my because acceleration question that I with the But loans

of of like as in here million to as want then you the because kind able runs million the be the rate just I next least pretty I $XX of sure back wise be and outlined kind would quickly So, revenue that down, will synergies. million run that $XX going it timing $XX quarters to same that to it? just at seems million the thought several make buffer $XX the concept

always Yes, accretable since and moved Marty, said, said, is integrations difficult about to It’s This as the you’re yield. a BJ in higher prepays, loan BJ at we the as these replacing with as higher yield to always talk a thing one have start. difficult marks. estimate the asset -- and is I’ll rates did Bryan. of And an it

yield earnings. that’s flowing So, in through the of a essence, little accretable I future period got through you’ve and that’s bit guess bringing

has $XX suggest, As think million. to-date, slide we’re got think at I deck BJ in you a savings I cost the that shows

I year. think moving the million next to threshold shows quarters million the the million $XX next it area in over $XX get in couple the of $XX range, it

this $XX we’d a to get by a million savings the on quarterly year. on run we basis, next time another So, rate quarter in time cost expect

So I off. put yes, you think the can two

yield time. sometimes net over income that accretable hard more that model that talk around BJ think in statement anything the alluded volatility as income out we is some difficult may level about and I But interest to to than be will have create today. the else

accretable part points. quarter. excludes quarter to not up lose important core to the point That lose, think important I the most the not yield was this last X NIM is our basis most that fact and

the is our made and of the about profitability at there. progress just feel very you we objective the look If improving the core balance we’ve good very, sheet

looking kind the of I to forest your add through because think at it’s look would tree. to I at the point, Marty, great a it’s also it way And

the -- coming our are will income that’s specialty come that’s for, strong accretion we’ve fixed growth income already business in that in offsetting we’ve paid got our margins. softness opportunities benefiting real got We’ve that’s that eventually back. that got multiple You’ve in It’s businesses.

We’re opportunities the in ramp Florida market. and up about growth Carolinas to

components growth aggregate it’s business other play inside. multiple model continue an in got a balanced to we’ve think we’ve give levers So, each off EPS revenue a this sheet perspective such the that to those balance perspective, keep speaks and and opportunity us important from I all can that that that got to perspective

How interesting go close you the be between you the the gap? yield, to your up can have DDA take which what it’s from the about is giving pass of XXX up rounding you And the everything markets That margin area. is that because is banks And than bonds of you real which is for about current higher versus you, today And buying you liquidity go is then look willing do the the curve BJ, conglomeration kind have to yield, the of and trading think because because the year when advantage of the can quarter opportunity talked would of yield of points the expansion, it’s you stiffness turns over you are securities and yield points over the opportunities -- it is asset out the if the where have you at it. do securities that be where have the see get don't account trading curve two -- curve look effect. kind two a time. you the the portfolio every capital over the you line almost willing, end basis at you short to much you years

create some go margin your year? think next So you as couple over I levers the of things there could earnings to also that

related trading our our Lot good SBA Yes, of loans Marty. loan our to held so right for it's are balances sale. coastal a and really point now

running parcel into I about loan as ample Quite excess and businesses. can relationships and we deploy all think we business. our of of we’ve where talked opportunity part our they're liquidity candidly profitable have rather we'd that think So we across

those And so the to opportunities there in look in businesses. Florida, I deploy Carolinas, continue specialty think Tennessee and the to most we'll likely

SunTrust. Our Demba comes Jennifer from question Please go with next ahead.

are specialty of those the are looking have us what And those Question you. two in balances grown you're the you kind nicely well? years next give sense on a for quarters. in you the over to operations? several one growth Could the lending Thank of last there each of for

through Susan. walk Hi, that. is Jennifer, this I'll

think growth good some opportunities. specialty have our do earlier, said we we businesses As

both healthcare $XXX million opportunities In in again healthcare, are good terms range, there baked kind of core grades the roughly sponsor on healthcare of and our the also healthcare.

relates over a like opportunities about in balances $X.X in us. billion we've XX for that there. lending well the there very it in to We're been years, business downturn. terms asset-based of As for We is feel which performed great lending during asset-based

asset-based out know a that as growth that continue business we up. is and as relationships. lending, It's to lending, you with grow mortgage well-run well. We Also continue for in in warehouse Mortgage $X.X very performer to And customer base warehouse on lendings of a was terms focus it's good to want factoring balances. point opportunities. billion us strong

call If lending, almost to of in you clients mortgage clients’ in as We're look XX% warehouse deposits. in of up number year-over-year lending. at warehouse terms continuing mortgage also the we're for of them customers numbers

for it deposits. it's believe that can raising business us more we a to even So as become relates important

the market. need It's about at remain Houston in which million. while that. $XXX business, us. be disciplined, we third two a the energy at Our it's low still It's Good for one level in to you relatively where disciplined business

be average good there well So metrics opportunities business pipeline to showed opportunities. balanced finance a there. look at good we actually Franchise we growth continue quarter-over-quarter do a there. see will some XX% that to for some us. continues It strong be pretty really business. good run is believe I the And

want some grow. watching to opportunities that still things compete we against, competition finding do to are good may we're We but some not

roughly real in about the year-over-year commercial really estate and of adjusted are commercial Bank continuing our in by existing talked core those real again, kind partners. transaction. our for good we've we quarter-over-quarter. new That's I on So to a flat estate. commercial customers do brought customers strong and Capital bank portfolio some We're But We're to our earlier. real estate obviously business pipeline got capital in with

business us type and So we really a geography. for diversification terms we relates as it's portfolio the still disciplined remain feel in of important like it to very product one

be So and support. incredibly overall banking us continues one for we important to that specialty

reference. future for just Jennifer add also I'll

upper at the commercial breaks the Appendix look hand our in bank were side, average left XX of $XX regional earnings which in it out you aggregate Page billion. slides loans, in the If

there want breaks all different you the for specialty give that other our future percentages that we down So businesses reference. of if

Research. from Geoffrey Elliott Our comes ahead. with go next question Autonomous Please

clear, kind XQ and sub-prime NIM thank X.XX% you a taking points given Maybe just specifically what everyone the morning, also basis a takeout you’re of year message so to Is up X.XX% the to for the core of that I following of quick has question. NIM want am in or end. check X.XXish to one right build Good over saying of then got all the X that we’re you’ve so basis year I comments on kind rest couple get at the to just from something points and wrong?

right. That’s

And the side… then on capital

That means on margin expansion a is about core we’re basis. talking what

shares kind you Got you that in side those on you can you sale capital feel of the stand some to Visa remind right now? the terms it. us buybacks And then of some on sell where given of could stocks

contingent so at million worth about got $XXX zero. shares A substantial sheet to if that’s you common still B balance pre-tax equity on share I we’ve $X.X what call relative our so million just rates Visa so of pretty looked Yes, million, it’s I conversion $XXX maybe think at

buyback not add discussed trade. be stock free either us good for will We we able our levels. dry that you it’s to look to our so. own But that’s and we’ll to as to if powder monetize to before, do continue opportunities So capital for

mind structure what our that capital it. our to our always as capital we of very optimize CETX me at ratios, my a I I'm TCE to a look at when forefront sits to consider CFO and So the looking our TA or total is part that much of or

out So it holder shareholders. want sure but our company we value for that’s get now appropriate long-term we’re of Visa, to and we a the the that make for fairly

Our UBS. ahead. Vandervliet next Brock go Please question with from comes

normalized this thanks can for at of negative what be to sense you provisions, Wanted very any us my just or more looking or credit becomes tailwind you when taking forward? pretty consistently Hey, here going cover good of had zero question. that should morning and low give we

the the to benefit Sure portfolio it’s addition non-strategic as the portfolio that well continues fact in in and of perform off. that had you running the know, we’ve to run-off

some provision in the So portfolio that that we’ve quarter-over-quarter. bank core in non-strategic steady had to of note releases bank. in the had continued remains I reserves will the offset we’ve reserve level have that the

to see We continue excellent quality the asset across board.

things non-strategic. overall which quarter-over-quarter point So X%, talked got being assets includes slides on strong. few bank down very, I’ll total the We XX% regional company, your out core about non-performing they’re in you’ve the in regional in things very a some bank down so

the saw which some by had non-pass bank is decline We positive Bank loans migration. also The merger, of regional Capital grade X.X% we inclusive quarter-over-quarter.

reported the of net increase in now As that L see the as that appropriate looks everything strong again some terms regional see we’re at to normalize foreseeable future We the very, But point grade you remain numbers low. because would like and you some our do very, not in point you with wind know our continued again. very very us believe down factor bank in excellent start could point charge-offs see strong in I’ve at credit The quality to saw performance company just action average loss into we and time the Triple rates would that for migration across non-strategic. take models credit seeing provision. we

question next Christopher comes from FIG go Our with ahead. Marinac Partners. Please

I of Good thinking the was cited all we an number could a calculation caller little deposit precise high. was that the I morning. earlier debate by But beta. Thanks. know just

flexibility on the was to quarter more the or little deposits moderated for So, beta buy two. in next if you the of bit be a curious quarter just this moves kind

in what given Just so Fed saying we're far funds.

BJ. it's Chris, Hey,

so yes. denominator you’re answer it short seen one what Fed would Depends that too. for is, for thanks clarification. So The on effective lower have we using rate,

talked we about as betas think be won't of quarter deposit it as what step the a was earlier, up. because saw As more we high we this

modestly quarters a to you deposit then pricing increase up relatively it’s If particularly look we several years. we over couple are flattish, the back started last when see in last competition. our of interest, the deposit increased they very rates And meaningful over had stayed consumer

our a our step et stair cetera. positioning, step. that ability don't with stair customer seeing it’s from a We going on was based to it So competitive grow, think necessarily forward, relationships, here we're what

So appropriately yes, protect quarter-to-quarter, we respond think the our deposit betas come balances. down, but will we relationship to always

wait deposit the focused going on a what to again we have be and to we're what see, going back with relationships. totality protect focus We're of it'll customer do to betas. but on So are that's margin, the very managing of our regardless and the we margin, to going

What of Great, that's a quarters, end are that. confident and June upper does just follow-up for to you a it's the get kind upper how at end? it ROA, X.XX%. there that And from helpful, looking guess few out on that now is thanks I the that take achievable saw bonefish I

to X.XX% -- see, being the benign. we're XX credit March saves synergies so Yes, We end. think of revenue going And on it's already. updated achievable let's think as think targets, XX very to we And come that that continuing level about, very upper those we're one remain months. bottom out what costs the We to nearly close environment the say to towards in, over the our continuing that that growth at talked to putting we're to next, that's based realized. striving continue we're near-term we Bryan and trajectory after for, of that quarter

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

Thank Brendon. all morning. for call the you participating you, on this Thank

a any tremendous We to you need our very good across our that, hard reach have folks systems the day. are with moving excited very integration thank in positioning grow and our into franchise we markets and the out feel you complete the very, our or about appreciate hope to and and integration, further systems customers. completed questions the our free you of opportunities additional have phase. about markets all commitment to We dedication that Again, integration. of and great With work feel any execution the having Please the I to and have us if any information. new

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

now may disconnect. You