First Horizon (FHN) 16 Oct 182018 Q3 Earnings call transcript

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

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

we efficiency. leverage Thank areas delivered with cost I’m in returns demonstrated results. our quarter deployed specialty and credit growth thank Good effectively We everyone and saves with capital. operating our trends. We solid improved excellent for earnings, pleased our joining and third and positive morning you, you new showed in Aarti. us. strong and continued markets, We

adjusted down to of We additional capital efficiencies. with was strengthened we XX% XX% adjusted B we expect we on sale merger-related in are the third returns and realized of cost our quarter continue it as strong. Visa X.XX%. the efficiency at to ratios at Our ROA Shares. track was our continue was ratio be ROTCE our and to our Adjusted with and about trend saves, XXXX,

of to $X.XX. to continued share We pipelines the increased were growth of Loan income, the Shares steady. spread, value in million from we’re the product did the up gain note on and as had value book commitments to and sale outstanding expecting over relationships low from some the of slide, remainder will fund important as that by over single Our the deposit in the you Visa net year. we repositioning reduced in low tangible balance good see It’s sheet per well and our quarter. $XXX

good Florida. and new momentum our seeing mid-Atlantic and encouraged our the markets the We’re from areas trends South specialty I’m in by in

markets have capitalizing differentiated opportunities as We’re do think demographics. that focused organic a then We serve to can let we attractive the on and open we see you and up and strong BJ, good opportunities on very economies to on for have walk customers build questions. basis. over new With our good our we in some growth We our comments platform a him continue broader it and turn have I’ll to areas I’ll quarter, the through closing that, specialty before there.

at start Great. our In $X.XX, third sale reported gain. which Slide the our with Bryan. everybody. was results. our financial morning Visa quarter, I’ll EPS Good Thanks announced included previously on X

gain and that Excluding was at adjusted expenses, $X.XX. the acquisition-related EPS

down reflected by with X%, performance driven leverage adjusted quarter income X%. with revenues adjusted operating pre-tax Third positive and solid up expenses adjusted

to offset quarter. was Number about quarter This X impact On fixed as million accretion was day up in was the driven factors that linked expense second ADR about the declined XX,XXX and loans, preferred some about third decline of X as as from a revenue. a by XXX,XXX. we income of million trust income that auto higher well quarter Fixed The to change, the the continued merger and by cost the revenue generate and totaled some side, we loan had which heading realization second marketing-related will by the incremental into gain however, a sale loan saves. X on quarter, about sale announced help quarter of we two from momentum one, million lower make expect was in primarily which driven million. NII quarter, We around quarter, fourth did, investments XXXX. incremental X

Slide to TCE we was with value $X.XX million, positive of $X.XX September, share announced X% quarter value an Visa previously in tangible from net remaining additional higher our and gain per to earnings. Turning to early $X.XX as about was rose increased $X.XX Visa for capital after-tax the TA book and in the almost gain X.XX, Linked a we B Shares X, quarter, XXX sold quarter which in And along impact B basis the in quarter our ratios. you than to book of tangible earnings per value second up per growth slide, share the book on EPS and as see the points meaningfully an points with our basis increase share. both CETX increased tangible to $X.XX can to retained our our XX from this gain X.X%. ratio XX and

X, NII portfolio. Turning on mostly linked interest NIM margin of you and to Slide and net quarter down the a is XQXX sale from the accretion the lower subprime ins impact quarter interest the net and see third expected trends in income auto and outs with

moderation be to deposit see although expected. as to the were as high, On did deposit our competition total side, continues up XQ costs cost XQ a in we from increase deposit liability

hikes Our at XQXX of cumulative rate beta start XX%. deposit is the in since

betas the time period, outpacing XX% movement. loan at For that same far beta deposit were

that mortgage focus the deposit advantage pricing relationships appropriately and we we continually specialty end, improve growth rate loan look deposit on Slide performance the time, that Taking to an continue and dynamics with optimizing in the growth growth areas have see at our deepen sheet we our specialty of portfolio businesses our continue advantage over press along before, and loans banking origination XX%. and about balance of X, to increasing To of attractive companies we up are aggregate and deepen with and of to our floating deposits margin. portfolios our business maintain linked Loans and businesses, lending quarter, of to industry customer those market our our grow improve relationships, XX% nature able share. discussed loan been our volumes linked will take As to the in across managing growth over our have annualized strong are mix loan quarter down, by mortgage to intentional we our with margin totality on demonstrate time. although a were

increase to over time. month but to fall, we usual, share quarter purchasing be As down the fourth believe market summer gains the of and have strong opportunity further home expect seasonally from we

strategic in linked lending expansion existing Middle growth based markets, where X% primarily we ongoing by loan growth with quarter, efforts our utilization. up X% Asset In driven success seeing customer was of our posted Tennessee linked line quarter. we’re

of As by you from the to have bank has the of while growth economic know, the some the loan it of businesses, mentioned. perspective, course over seen we has lower relationships are exiting profitability regional range X% a the our annualized optimizing balance the sheet been Bryan continually and we in on as X% focused spread come maximizing net year while

portfolios about we Over a yields loan replacing will the loans right have impact free XXX long-term has the This by alone. improved balances up half in and overall loan basis XX sheet time, points on what roughly higher these reduced could our for the loan it yields of course year, low thing growth bank nice of balance lending. Over sheet is balance by our regional cut million. for by and our have this This those have has return spread been.

at million credit basis to X, were trends quarter. remained charge-offs you also loans the at allowance the on flat third remain was As steady the see second quarter, excellent. at million Slide and XX in X can Net points. from Provision X

to on give XX, quickly Turning merger. Bank an Capital Slide I’ll the update

started cost XX saves be and remain third in costs of on newer by the in million deals as South XX% we as are and Florida. should mid-Atlantic run the means what cost and in achieved to the the this with of Revenue annualized run and that the growth process. Our were in in rate year signs of have from synergies date Carolinas have see promising with quarter, I increased we call year. to rate track closed the our substantially again expected fully Bryan mentioned, savings of of end markets about both now XX And million some

we’re sustainable Our confident for to to almost our these markets with sit in And and very now at retail and us, those positive equity Wrapping ability respectively. we’ve linked up activities profile return deposit were assets those expect deposits return on XX%, in pleased up and built a in on that on quarter X% on our before, a as both we continue. discussed and behind common relationships going XX, markets are we with trends integration loan tangible Slide return grow profitably merger that are X% our we we’ve and return forward X.XX%. with profile at our where returns at XX.X% equity that

will right we’re below, in improvement improvement our and shareholders. medium-term at we our to continued exceeding continue our or which return already May of these targets or results, goal drive efficiency in XX% out towards With return our laid ratio the

turn So, to back with it over I’ll that, Bryan.

ahead I In and the of the opportunities Thank results pleased you, summary, excited about BJ. third have quarter we really with am that us.

continue XXXX the drive have the feel and sentiment good about to returns quarter. to business. our strengthened economy into in in fourth We to strong continues The be Loan are continues optimistic very fourth good. the ability be quarter Customer stable. to pipelines about

into second wrapping of of into customers thanks work, also we look hard not the the work and of hard So, the third to quarter late the optimistic integration serve up for as the and that. we’re Word employees remainder this only to and appreciate XXXX. in their the of year all into but all quarter, our

our Investor Day in we’re X information November our execution our We’ll executive our but on As only strategy, a more with about in attendance. reminder, providing holding plans not be team Nashville.

we’ll for With any it details, need reach now out up you Cole, questions. us to open If directly. please that

JPMorgan. Steven first ahead. Instructions] Thank And you. Please [Operator the Alexopoulos comes go question from from

morning good everybody. Hi,

Steve. Hi

were you to side, the want at start the balances? can had in to interest, see why increase all XX looking such degree on which the I deposit big increase color some and prior to the was you give up deposit I larger saw surprised increase the increase in Was costs, there? done bips it commercial account a of in on related we quarter-over-quarter,

is good morning it BJ. Hi Steve,

the I much deposit has the think beginning the than competition commercial since cycle been side. deposit side, the consumer of on heated really the more

really business rates, not account. as change in well competition high interest-bearing like material competition earnings the is there on So, both what There a looks is there. credit the as

was anything of that continued increased the in just ordinary wasn't it’s there quarter, So, out the competition.

and Florida Carolinas markets? deposit side, perspective in BJ, as of types what in on cost the growth the you're out are Okay. have calling what’s some you pretty good deposits of do those you the and raising those

Yes.

So, it’s our normal mix.

and the saw would we Tennessee. that core mid-Atlantic rest ourselves expect – as little in in we it’s and well, in and the what market betas strongly of you and obviously with also markets Carolinas CD are the that a in account tell then those we’re I with in then footprint saw checking getting We you deposits to were we money line of coming across we’ve leaning are bit out attractive, and offers gone in as but out those relationships actually establish retail the integration, the of more might terms thought the bringing that deposit

our we’re which is aggregate, nor isn't mix highly our betas, are what in to different elsewhere us. So, encouraging portfolio materially seeing than

we growth markets. those momentum to deposit able continue drive and positive expect be to in So, to

over meaningful there to love is market such replace we could in enhance establish time And our markets that that establish relationships markets of work about funding talked and index marketing-related improve we’ve deposits those we to a and perspective our with that mentioned those establish core I again brand a see previously, some further investments a deposit over time. margin. continue putting from grow what to earlier and We’re growth deposits foothold, as to

the about core helpful. That’s here in And XQ? how margin are thinking Okay. you

than my as characterize I’d the less largely stable. quarter. as would say the with have line it we that going we would was I have would hair I in thought, and fourth see what thought and view relatively maybe stable into so, what margin a

question Poonawala next Ebrahim ahead. Lynch. from of Merrill go Please comes And America Bank our from

Good morning guys.

Good morning.

earlier, XX% wants Visa I'm first from I capital but just the a not if your given mentioned a Bryan stock you remaining management understand being trying BJ to you to I’m and to recently that ago in cheap, the XX% buy million who about think we’ve strategy, to I I focus felt again it in to July gain down deploy management's then, to as like in around appetite guess question reiterated that on you bump just about X% back sure we’re it, trying the take gauge was CETX, the your urgency stock just buyback or felt authorization. quarter X% $XXX got get, I'm since to able

hidden add wants the there that be Hi now of capital of Ebrahim, this a again, and start ratios, that the there. the from high created Visa – ratios will I’ll price-to-book on and were low we monetized on. future, think capital But as sufficient. one to screening stock. is were ascent to look our well think do was we had that our bump opportunities in and repurchased as opportunistic we book ratios, We bolster our we on on we if feedback tangible capital capital be with Bryan. we asset to maybe to those book, low knew total that BJ as We and the price lot into

We deal quarter. third the information about great it testing. We have published a our in of stress given

got with have and we our and you capital XXXX. managing into organic this growth number being year that loan into remainder priorities growth, we the for as one, think of probably priority So, look out is that two number there,

as there So, and stock do we use that the it be and do do opportunities think fully to to authorization intend buy to have it we we will attractive appropriate.

it. Got

what to return and that of bullish is opportune some into a confident that well our earnings very juxtapose our then this we’re if you XXXX, looks like, very at the our look back our what and continue we’re like, can book time improve where would we’re taking company be you where add what tangible on price-to-book, price look to could mean, our maintain buy we that profile and and shares. I Ebrahim. I and forward with great

fair we the think is TCE targeting capital going is it when still to triangulate you're also to X% is that X% thinking CETX management? capital So, to that about or are assume where too we X% that ratios something

look Bryan. the in our the ratio X% particularly and The billion] and equally has risk Ebrahim, not of of what’s an when focus assets, $X.X ratio, the a in associated primarily that and X% assets [X.X We we blunt doesn't still you this created focus on capital. that weighting instrument our bump. balance shouldn't is CETX to it at to X% even the reason income is with average – risk the are draw on very our fixed it much is we little is business very, and sheets very more

forward. ratios we think So, our good adequate a we manage those think allocation more that’s framework. around and capital We We that’s will use to CETX. manage going capital

And go our next ahead. question Please from comes from Evercore. John Pancari

morning. Good

John. Hi

that a looks how contributed like $XX credit the quarter, can to increase side, MPAs, on the in on the – that any First, that to in what a of size did any you of what’s you million noticed the on or reserves credit bit moved take quality against nonperformers give you industry, I little flagged incremental – it put the charge-offs? color credit, Thanks. was the aside or us

I credit, Hi a had the We John, a did quarter, some industry. not it we it reserved against third in the any previously been but million financial the was we – believe classified $XX Yes, services in was did it. have take non-performing from it’s charge-offs, credit and Susan. it

credit? said it was you services And Okay. financial

Yes.

front? any Alright on topic, incremental you any inflows that incremental then on any Okay. expect – and of that indicative

seeing actually is No, really continuing was pleased isolated kind an probably of portfolio, as I’m for and that commercial relates quality rating quality, grade what it downgrade. asset which with PD I’m asset quarter-over-quarter, strong we’re isolated that incident. average the was improved to grade just see to really one actually default so our an

but know a to give margin, it through for are know it. about relatively off you we thinking fed us fourth in a we I how on Investor thank additional the at move to And Okay, further talk then XXXX. quarter, little the trajectory still Day, you see as expectation and going going for I we are of XXXX? looking separately moves at get some it’s terms some relatively you’re or should we about how probably your for mean, the some bit incremental think I by general are stable we as you. expansion about stable through

Hi we at the John time. well, sheet Yes, are improve balance our margin we as a continually more about BJ. to Investor will to little trying but talk it’s position Day over bit it

start asset fed with number late two, there for sheet company outlook to our our and think we year, you sensitive and that asset next well. would sensitivity this our is provides If increases, year continues at and more our least perform with Number tailwind, to continued loans balance business one one probably mortgage a one.

of are think as So, provide well. tailwind moving share their even to as market going the curve originations is we take mortgage starting to moderate the to industry us is long-end higher though ability

as do And margin. and be we're on of so to three continue continues confidence think way very, our most we be, as execution And we to It’s well those consumer on very, very and to that that DVA things so, based loan growth we going three, into businesses, our side help and including our the commercial it’s have growth sheet to XXXX, businesses, to last plans drive are, continue we balance our the the profitable as specialty and the in are focused our we're expect banking and out intently in and that improve that our be you on will support business is focused know how to DVA improve well. growth. relationship we our disciplined the help loans you us margin in to that taken lower to on our think DVA in growth very DVA able sheet funding can Number continue. as we’ve seeing incrementally who these spread balance will what ability

So, can we’ve levers prove margin. think several we them got we help the time that continue to that over

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

Hi, morning thanks. Good guys.

morning. Good

run-off the worked on then growth a how or do here outlook. pipelines to Wanted that that going that quarter, quarters? have end that through to million you is XXX coming How of of are know in still the the adjust – specifically you touch most you at we’re is the loan of guys, headwind have and year-to-date, to still

to take at which I’ll business really other X% start that relationships it things the the had felt Tennessee-related Yes, a sheet repositioning portfolios advantage to was low with be the said, that we single X% different to it repositioning, run-off was of in that opportunity we we we product we balance that as the and have. of like the by accretive first also aggregate, be but we just In we’re portfolios. yields couple of simply able that loan beginning were it to the Bryan year, to capital wasn’t not were of areas have bank-related There saw, to our an way portfolios ranges clear were deepen. didn’t

to took the we take move opportunity ahead. those out and So,

of repositioning of over to done We’re terms quarters to largely larger we of first of I optimizing that wanted would occur our continue buckets. or with balance the the this, you will change not of in that sheet most tell magnitude the do always the we’ve some that magnitude what repositioned we’ve like but three

And visible. would nearly not forward, be going it as so,

the was third actually excluding And about in a increase so commercial, we’ve businesses of pipeline quarter-over-quarter, commercial mortgage production then estate seen production XX% the and real warehouse. even quarter in strong, on core specialty that’s significant side, production and

was If – quarter-over-quarter you was new include mortgage warehouse, up production about our XX%. production about up

as businesses are bank of then well-positioned areas, for Carolinas pipelines So, market fourth fourth many the the capital quarter. we really multiple including quarter specialty feel pipelines and we other into reporting the Florida, go across strong and

very the the year good our headwind. is Casey, the the characterize of of and month fourth go a quarter. was in this into production strongest September wouldn’t on repositioning of I terms Susan portfolio pipelines Bryan. personally as said,

on comments, opening it As in BJ noted higher. that a margins our we with point business that XX-basis his replaced

cosmetics note balance you deployed to not of profitability the I sheet, at think it’s it. sheet balance just we’re size that that driving sheet the capital important the or return of on the look have our balance when the driving and the the in we we’re

So, the of to what balance it decision position while sheet appears be right to is perspective. loan more be headline to topline profitable from profitability a to terms a growth in may relationship-oriented

headwind. want characterize just I wouldn't as that So, I a to and finetune

quality of then and one optimizing better time, exit additional And management relationships, insight looked and have customers have treasury deeper cetera. where these this about with you kind cash performs point you at into flows, single-product we’ve relationships asset et over

So, we margins, asset improves to also time in improved that quality. addition believe that over

with deposits? higher is Okay, optimize market profitability, is higher comments appetite you BJ, actively side, the higher guess paydowns, ratio index are funding is to to a market keeping and take so what’s up cost guys index following I I’m on that the optimizing loan-to-deposit XX% on that or something okay, perhaps understood. that the in to at prioritizing there your the

a obviously us. It’s for high Yes. priority

XX-ish particularly percent good last over margins the basis we as we markets loan if see points uncomfortable, growth, market replace possibly love our we much a I as talked quarters, in can. going replace comfortable the think would index not couple with got because us newer sometime would and does a ratio growth. improve couple would to by about it, growth loan-to-deposit doing I As but build that to make that but like loan we’ve as interest profitable to our our we able net now to deposit outpace saw we’re to right, higher to It’s income be portfolios, while, a that, because of would take we’ve personally time that

around we more hear on would finding focus it. to topic, on optimize intently do that’s but our mix you to from very us continue Day way probably trying and one that to Investor So,

question Please from ahead. Zerbe Ken from go our comes And next Morgan Stanley.

thanks, good morning. Great,

morning. Good

portfolio starting maybe if I you X.X%, pockets like up total do we average the X, run-off it in guess Slide like like about idea again growth up this it, the it I some what that is that seeing to with you we you guess point, the talking like today? the are drives out is also but of understand were I biggest over look where next headwind loan cut strong year, earlier, certainly I and loans guess, as have at kind than accelerate, growth, looks growth, higher what does meaningfully of that where Thanks. that

don’t Ken, that I this see I to start. Bryan. particularly ahead loan when is growth. anything is will

thoughtful that fourth the see think about it I to smart the trying We when across headwind, the activity, problematic a very anything that our balance in characterize something the put can't reward the for are is a take some about on right way long relationship, and be to and we said, the pockets have going pricing there picked area, decide relationships, you our might of one up ways all managing I have strength to we using just into at balance in balance that enter see good don't mid-single-digit profitability, is markets, quarter balance good business a sheet. optimism structure we’re into we you're to we that that characterize I into area that the still in in potential we’re point what term we sheet so sheet, just those that a and risk That very so for were competitive we sheet and particularly to look we call would book, gotten be reasonable managing we we we're is as look we as levels and about are of think and think or pipelines in we growth quarter. these support like of and some markets XXXX

what you should Got as a given question And income just are to next sort accretion about you. expect That accelerated on kind here helps. accretion of of volatile income remain to And just NIM or being assumptions is that? continue of quarter, part the the back stable making it then underlying pay-offs? decline from we

Hi Ken, it’s BJ.

loan in this peaked quarter expect step any XX. a quarter, next down by quarter I couple we over would $X we our accretion to XX that second given the think quarters. where it I quarter had million, and had of million, continues the a probably several million in $X

certainly so And margin. would that headwind to a the be

And Brady go question ahead. from Gailey Please our from KBW. next comes

guys. morning good Hi,

morning, Brady. Good

efficiency saw or So, as coming I longer-term if ratio, of better as saves XXXX? can from ratio efficiency at know have next XX% kind you you in year some look sub-XX, level quarter at still a fourth you the CBF improvement get the you on some data exit cost the of have this of and XX%, goal you think that you that then into year. Do the you

Bryan little to believe do of going about positive we’ve the of I balance we quarter. trying for. That’s be of fourth some side got, about goal. a into and of talked overall we’re Both talked we're bit the a operating drive driving it the what our momentum And That’s sheet. will to combination again, both profitability Susan out what the leverage. funding

efficiency very take what XXXX continuing money from that organization we’re out we’ll be to such improve as ratio. spend on merger that we disciplined the saves, we of We’re going into been have continuing cost and the to about

improve quarter basis more. it margin continue proved five, clearly we over XXX seen to you’ve by priority profit the in And last six the the points or that’s one company. even As of to main our

a potential another for side, Bryan has you realized closed been are All right. almost little start the got CBS but cost acquisition? you’ve ready saves the And then come, to about on more M&A thinking quarters few to now, a all

and We're this have Brady, on answer that on focus tremendous the to and want is that and focused and model to we is, Short build we capitalize execution We continue opportunities. no. think our on that footprint have markets. organic momentum Bryan. business and those we opportunities

So, in no. short

it. Thanks Got guys.

comes Securities. our ahead. Please Shaw next go question And Jared Wells Fargo with from

morning. good Hi,

morning. Good

earlier, what on CBF wanted guess and markets, those from the markets C&I side track I loan see the increasing? with on to from you should following transition up new the of expect they just to away terms moving transitioning? the CRE Are pipeline we and markets in comments the into how are in

relationship new shift Yes, of we who C&I. existing core and are commercial Jared that additional the focused by on are is building we and South and Carolinas capital we’re is in market and production focus Carolina in in a quarter. in strong the teams into in recruiting as mentioned fourth quarter, From strong Carolinas we bankers which the core the Florida, good in addition earlier, third have real good very particularly in the going on we very C&I are Florida seeing had mid-Atlantic, that terms in both pipelines

vibrant with we and pleased we're are growing. where opportunities those in are and markets and So, dynamic that

also attract bring that from to time. over, potential pleased that clients could We’re with over our different have ability strong institutions many they bankers

up moving and growth that as is end so play quarter? we the on quarter it then ramp and so business far income the was XX-year at sustaining through did quarter there, moving the to itself of fixed was in that, the the out through ADR’s good that fourth and Thanks, the Okay. see within did saw started the that the quarter how

throughout around quarter. It bounced the

because just in around fixed of vacations. year Third and and the happening volatile of businesses everything holidays the income month quarter August that’s is, any and

fourth trends but we bit was little probably of start around. into on little a it average have even continue down bounced and the a the was better it Activity up the September, in seen quarter. same year throughout and a So,

you. Thank

comes from ahead. question Deutsche Rob Placet next Please our go Bank. And from

good Hi, morning.

morning. Good

Middle of number Nashville growth last the if that seen market is a over is, then I you’ve Tennessee, and you’ve just you the had markets Nashville differences curious in talk strategy versus is a the could in years, in say translatable and any the in Carolinas how that Carolinas? new your was about success there, strategy,

is This Bryan. Yes.

how Florida. executed believe in those years the I gain in middle model Florida the an continue about we going Tennessee South good and optimism opportunities example. to in handful of South been a the point over really grow mid-Atlantic important example think last We mid-Atlantic, that’s firmly articulate of markets for we're to that’s is that and and share

In deploy and fully proven works, addition is intend demographic similarities, it. know the to that to we it it’s we model a

lessons the the Tennessee we are use be to middle to So, going in grow that thing. same

are it deploy does and give to growth and going Florida mid-Atlantic We optimism. markets us in the that South in

Okay. Thanks.

bit. One will Investor point that about tease that the on is, be talk Day that, I’ll of a in final so, topics Day, Investor the one little we which the

comes question Capital go from Arfstrom next our Jon RBC ahead. Please from Markets. And

H, morning. thanks good

Jon. Hi,

Question on synergies. the

those annualized And You example of deals might called out in process. one revenue those you be? might XXX or be, you much and how million give then what potential of maybe deals us curious an or $XX deals see? of closed in Can two more one

We have several different types of Jon. synergy opportunities

there. of give already you are different are believe more couple out and ones a that we me Let there we on executing

an Capital bring and a these and opportunities Bank, but on going while, Capital opportunity Florida. exposure verticals we one set are I And in our or take where First but lending Carolinas other the are in up had the The opportunity a customers, balance one opportunities products about an standpoint, important That’s touched client to didn’t broaden to management I we’ve opportunity businesses. client over there wealth core synergies there. And the we we not would then for and to it with expand businesses the additional like as even the on be in example The would lending management is example. the to either performance. to against in to Obviously, First then when banking on legacy sheet the we we're products the a referrals do and Tennessee Treasury bankers those a is existing third our seeing opportunity offer relationships where Bank we and box least executives, from within of earlier to have clients, to owners so that all would private there’s clients, in existing franchise limits of customer be into franchise opportunity Tennessee without that specialty lock for offer it this and opportunity lending last, hold specialty had how in private an bigger know return to from limit. terms side but be. For opportunity

we're lending, franchise as So, referrals asset-based lending, opportunities finance, so for warehouse seeing mortgage well.

Okay, good. And more more come to expect to you come, from opportunities? these

Jon, this is Bryan.

tip I think the the of here. scratched just iceberg we

treasury broad card across and have I balance a whether referrals opportunity amount Susan of of sheet to number businesses. and think, it tremendous a P be to fronts, we management articulated expanded specialty as

was ours. You our like markets credit expand capabilities will and Capital the take have for much profile example. we business, and the there in us greater opportunities. ABL growth The these opportunities call tools to give ABL Bank's

are opportunities to and there think we continue left we will few build a them. on quite So,

Okay. is spread a if the looking but for loan was missed And of quarter, back quarter? of BJ. for one $XXX the have million quick a you may about don't headwind? through balances notes, my I the that that know this, I right about then just reduction low mentioned for it, some I’m

It No. was about year-to-date. low in probably would it sold low which million] and subprime spread then million. XXX I less auto, we value [XXX million the remember, was than that say total for $XXX those little was

those So, couple in aggregate quarter. hundred in million were the

you. thank good, Yes, Okay.

John. Thanks

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

questions. taking for Thanks my

of some stand wanted put the out some the core franchise. guys? wanted you just you releases businesses a kind you that those lending obviously Just be There’s where the businesses of a hire us, the know can mentioned different where to those those press in you follow-up size of looking the in for bank lot Susan on of about growth, and both opportunities areas, specialty of build Thanks. get some Nashville you may for to outlook hires, are out in to you and

it BJ. Yes, I’ll is start,

is look in loans top our businesses ways mortgage to to than in but finance across asset-based And franchise really national have share. and our that business particular aggregate we lending that’s expand for those X% lending, priorities, market one our business. profitable most our to continue company loans of less business So, to mortgage companies,

on those fewer is lend There out like we that opportunity in to those risk those have returns that niches businesses business because know teams, we higher They before sub those. that have very that is that to areas we’re within build and those we focused different how over continue those you to And we as optimistic within specific more to see specific adjusted so, have the excellent and businesses. clients. huge of can efficiency to lines we’ve ratios about do competitors talked reason time

lending all little and that more not So, can see bit in some so banks other it, rationality a do we areas. feel we might

$X five billion it’s excellent we been that’s growth really over types pushes those continue of double-digits, over and all even that’s expect will growth and very last us growth that we sheet allocate been the out profitable business, less make more and that balance growth So, trying balance to grow resources to look profitable. XXX% have of our and of more and grown if businesses lending specialty to towards the that sheet you of in years, terms

the color. just Maybe the run-off great excluding on non-strategic. That’s up of following that,

mid-single-digit growth cards You think that is core next still we think of the bank kind rate year? as about guys in of the

think so. we Yes, certainly

sheet have that the balance So, need has some year we of repositioning of that of about some the growth. talked this

look be cut in year into our annualized mid-single what that X% some think. I growth, roughly sheet but total to growth digits I the portfolios regional at the bank of think in the going repositioning is if think you X% balance by very itself, and may we reasonable half next for we're seeing so was

from one That’s helpful. one Maybe just final me.

thoughts out, guys? impact of quarters seasonal but for of couple on initial the So, you any Thanks.

because very knowledgeable impacts want this and we I in magnitude going hear would for one we will I nevertheless prepared you there, capacity total on thing love specific change the any don't why disruptive, in. if be have of to very with any frustrating number it to had would it’s the We share and a be Yes, are think can but it of terms to of you our prepared hopefully maybe seasonal, for dialogue does but are in we're change where the place day landed slightly ahead in or line, like continue in and reserves more before but going does to P&L, we happen to in a helpful our banks one something our implemented. it’s actually that it on investors and look we being with such of both change planning can just

Jamie week, to made procyclical. comments with I what be last will Bryan. said. would Dimon think, strongly that is add I BJ this agree I that Michael read the I it

They to good particularly to it’s are BJ's the not any think makes minute better accounting strong so investors extent we not support. when financial of this for convention have or express an to think keep who sort think it economy. demanding be not keep I and I standard to to finding I a understanding investors understanding validity of give I just ultimately, ago. on this going accounting doesn’t. think saying think don't investors groundswell going the will customers financial it’s good that the and or it that point statements. reiterate of don't be is it’s writers. for and To talk I to long-term, I it’s procyclical. sense whether to the views that statements of this helpful you of need

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

Thank you morning. taking Good question. the for

in NIM clarify a just stable First to you just fourth clarification. staying quarter, on little was are the the that? When I the that NIM, talking about core wanted

right. That’s

you. Thank

asset to of much in other rates? how deck. from mentioned the a a X few rising negative that into days us used given you last is useful in the chart just and year-end NIM help sensitivity, from be a stable seems So, of the core positive of as to terms there that gone Slide the you asset and rates, I about the sensitivity be slide kind it slide that benefit the on times by kind just a but in call, of given impact quarters, guess shows of but Can a conference quantifying deck, still the discussion couple

here Aarti anymore. and thought at because we need is sitting that me I that laughing pointing didn't

of trying terms the has a would There sensitivity, marketing money point think it rate is aggregate the I’m to in we has roughly had types deposit particularly – I but million continuing there. changed we rates increases changed and predominantly XX meaningfully something we’re asset little maybe, to and the our into move, been portfolio CDs mix had do basis sensitivity I think graph for that we lending when $X dampen of so that have like seen modest rise shift shifts asset net that same. Now the it be from floating as that recall, started annualized a expected, expect hasn’t same to need it’s into before and in may asset sensitivity we much that, of in would it as money which have market in more so bit the we

that so are really guess like there? it NIM not the it’s last and through stable much I been XQ, XQ coming asking benefit feel piece comments doesn’t William is what’s quarters couple for there the suggest in is, of core reason there on kind the the missing of

the two you been tell would last I the have so quarters has difference beta. Yes, that the deposit – really

them. sensitivity, were ahead stop say which to higher short and will been when particularly and active So, we was first defending very, metrics actually we rates XQ asset of where would of in those think We but put rates, dampened sensitivity course from base, XXXX if we our help betas the you increasing. before. of again Last that time of net quarter low, very beat out have beta couple XXXX, deposit deposit deposit back over us have that sensitivity. of let’s that quarters terms our because on asset ultimately the go We the would that graph

of over asset so, we but our through cycle sensitivity is and timing, Geoffrey a a And intact. it’s think time question I

Stafford Tyler comes from our question next ahead. from Please Stephens Inc. go And

morning guys. good Hi,

morning. Good

deck share and driving that talk obviously just the I today, the yields at are start share business that spread if and to the mortgage any degradation wanted the that all, I if wondering you was there market can gains? market in gains seeing warehouse good about about or volume, just you on just talked and given quarter pricing curious a just

so the commercial have is you Yes, Do that… it side. still our yielding on portfolio highest

the for is Yes, yield the [ph] XXX quarter.

and of so the we’ve generally very more rate terms little would yields trade-off expect and portfolio to healthy. of that net in we than market in say type gotten we are of and would leaned share, of a try to has acquire aggressive volume as that but build bit [ph] XXX though almost instances where been course there to yield it’s so positive Yes, that so certain continue a course to balances, us continue. momentum I for

and do look you increase Bob that a there a profit the team we’re We business that to phenomenal balance managing will returns will always using our to Garrett gets paid such rate and making profitable sure economic well. individual at giving managing bank as for sheet on out tell I of share clients, also that company relationships and and our our fair pricing job our but loan-to-mortgage

So, we very vary do rise how as so because they with business short-term to rate pleased and to when continue go it’s particularly we're if expect rates up, oriented those yields performing.

were we in count, about of combination up was up them deposit And we’re with but really that, to about addition growth of to in some warehouse, opportunity increasing it and client thing year-over-year so cases, lending one a customers. calling the warehouse, some those customers XX% it’s and talking then as within good then, an we’ve on In deposits existing mortgage, in mortgage count increase select business mortgage to numbers seen client share, in been and last warehouse lines just quarter-over-quarter even clients. relates of terms X% market about

on like we and and opportunity both like side the as that deposit are well. the business winning the So, we there

do what would the XXX helpful. been have Very XQ? you comparable have yield in And

XXX.

the guys you earnings forward of just And you’ve cost attractive on XXX Okay. just mentioned CBS got then, quarter, the your lastly, annualized now EPS based looks you savings stock BJ on profile, reported XX% some pressures. I funding margin run credit at normalizing then headwinds headwind next the declining accretion year from point, margin at higher – GAAP some of and would rate and and the least, costs imagine on

biggest and that will driver see curious, drivers see? So, an you you biggest the what’s driver inflection forward it trajectory or earnings internally I'm improved earnings the to that just from be that

to is $X.XX $X.XX. times clarify, just Tyler, Hey four

the Yes. in items. onetime I there, out other took and of some items drops the some

regardless talked is was there rate $X.XX what with stay That we doesn't on thought run We now. and $X.XX, drop right this we but growth will loan I at about outlook which got, what for the call.

repositioned said, see can sheet about will help next the profitability the We're going And mix. growth, our markets, that balance forward. believe funding year, overall, through. of feel certainly into good we which again terms good newer got particularly we’re going asset come of do for out we us just We to we we So, sensitivity deposit pretty what very, in starting to get in still can leverage stronger we’ve full-years’ line very our focused expenses while positive saves, the expectation worth of continue operating move and be to be year, the next a year and up. we due top sitting primarily will line cost that the things on down benefit drive top today to would while I here would continue those expenses next

year So, sure to obviously should helpful into earnings on we’ll and the happens that next be going very that that side. be making expanding focused

both for we about at we to talked our sides very what of at of improve attractive the share our as time we to so continue us EPS, be and it’s earlier, looking buybacks the equation profile. per On share given valuations look where denominator think will are, earnings that a

add just Bryan. to this BJ's Tyler, is I comments. would

you're a growing year. calling and XXXX, the turn we the business that this And outlook the of the momentum and see up. lot quarter in turning, see – to integration, for not [ph], we goes and through the the first the fourth we a quarters job we’re that the integration see the unfolding and have and pretty focus clarity did XX bankers but tackling have and are, great confident the in really blocking pick in our of a the year, where on three we business. doing our next efforts short-term efforts of first, our We the We calling about as remainder recognize half when good of significantly year

go from question ahead. next EPS. our Vandervliet from comes Please Brock And

cadence like Hi, resounding didn't just thanks, question, sound and guess and in volume you're up you FTN good seeing probably following of on morning. the I terms there. endorsement securities the Bryan on a touched business

a march metrics, I You���ve long of and mean more ahead got a tailwind efficiency certainly would ratio more give rate another and you of with get a that until that to for of hikes in that bit and parting fit business, on you terms up does leg in? favorable how kind

for Brock Well in counter a like business that’s presentation cyclical. business is shows a deck a had mid-September we and a early that it that we slide made and

if the it many has in business done is with at perspective, on not. and our years. look than So, you and very many, a it comfortable that We're capital XXX close been well we’ve returns it business years from to one for

well in have that and a it when And deteriorate pickup in historically, we start cyclical so, we we understand there, the credit it pickup will it to credit a I that. and up offset counter see have for the industry across countercyclical offset that as it well, is does seen we an think us be will see and while industry in we advantage will going many ways not to ours an will have a and and cost

feel business the not and business think about profitability the Given to we’re a allocation We so good the and cyclical the what committed we and that, we particularly doing and it’s quarter. capital two outlook six we next feel business, comfortable to good the to balance drive in about the about control team, panicked with, it’s we’re three or we’re that like for counter cost so driving. or they’re

Separately tempo that’s small that of negatives when and we, follow-up Okay. oscillated or we, do provisioning normalizing? from as we positive, the should should small when the kind about provisioning think a on how

credit remains good asset we At quality non-strategic, have to allowance. opportunities the across you point we’ve as few models would in at next started were and they to obviously Brock, If we this to what the the got to point. quality this relates continue so see coverage rather quarters, today. the run-off that use on portfolios, see see excellent we’ll and believe provision obviously see relate I the that the remains deteriorating, continue non-strategic know stable to some we turn, it based economy available

Please go from And Marinac FIG question our next comes from Partners. ahead. Christopher

not had Thanks, mentioned while Bryan being the repositioning you a good morning. a about headwind. ago

timing out as of ROTCE, a kind coming play It earning we onto seems XXXX Slide tacking where ROA just to want ROA, the that bit So, little as you on that get your bit the that. go? sort looking a on you outlined have catch just common obviously the XX, at a but can you just ROA, zone return just soon of of and below just particularly that stronger strong in gets do tangible to up to on reconcile see timing as then in are the on little

this XXXX, you of and ratio, capital. but affect as start of efficiency middle also see should your which quarter. will the to capital fourth buffer you save, continue ratios did of in the then you the those additional it improving think both I see the realize to in increase cost rate particularly improve We the quarter the

So, a improve we from of starting level that continue higher in but would at XXXX. perspective, to capital, it expect is to a ROA

want great. go back to then, question, that. loan possible have Okay And may prior a mentioned yield, that to compute the I in to just it you is core

of don't I me, front get to can we it it but in have you.

do hard be core may Short yes. is, can We the that. part. answer Defining

we excluded could do that If nonstrategic, you quickly. just fairly probably

well the time. you Thank Very so guys. for much

Thank Chris. you. Alright

ahead. next And Keating Barclays. go from from question Matthew our Please comes

you. thank Great,

Just quick follow-up company's a the please. sensitivity on asset

from deposit betas we the of year. about levels quarter half moderating this talked in last So, XQ back

then about separately, betas perhaps the more expectation? our that in at we quantify you in had QX, is could think past LIBOR you saw on this in move quarter As deposit reasonable what the yields. think loan you And Thanks. muted do QX impact

BJ. it’s Matt, Hi

the expect would venture the was flat betas, So, be that and XQ would the probably to XQ other Matt? XQ I was think levels to What question would so to in the open moderated be the terms and will deposit mark. clearly of fourth further high-water that quarter. helpful on course say XQ I from that moderate core of in I our margin

obviously, – more in would quarter, I up move muted bit that you and here, a do Thanks all? BJ. picking but will And an think was to are like the it’s muted so LIBOR beneficial the big see, is really other the have on loan looks obviously if it third be yields able question maybe question from guess at guess so flow the to like, impact quantify through, how – of I you that you

Yes.

called the points if point was of look at our decline, couple had LIBOR ultimately. stage that I X on others I’d think was I basis you slide, related rate to think say, NIM something reconciliation basis a about and which we

Great. Thanks much. very

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

reach encourage Thank to November you, X, if our already, out and Day I’ll us Nashville. us to you Cole. you, you Aarti time in appreciate for join have please We taking Please this join with now. not Investor us Again, morning. let

our talking lot but good year, cover. for more follow-up there through to questions. a have reach we’ll team of has free Thank have have also we’ll a spend out beyond. about We for this that our and outlook great Please any remainder if XXXX time of you. everybody going you day. I information the We’ll the and management business, feel hope

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

now disconnect. may You