First Horizon (FHN) 20 Oct 212021 Q3 Earnings call transcript

Good morning and welcome to the First Horizon Corporation Third Quarter 2021 Earnings Release Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ellen Taylor, Head of Investor Relations. Please go ahead.

Thanks, Kate. everyone. morning, Good you appreciate on a such We joining day. busy really us some Bryan President CFO, our provide questions. then our take morning, happy Jordan; will Anthony remarks be we and will Interim This your and CEO, and to and Officer Chief Restel, prepared Operating in with are we that Officer, effort. have with us our Chief Susan And room Springfield, today to Credit pleased the to assist

and forward-looking we need differ So, X you our risks you statements make today in and remind will to cause that our SEC to of the I and from review filings. we uncertainties ask to may Page factors subject are that presentation our expectations that on to results

our our You at can on materials earnings find website ir.fhnc.com.

comments exclude non-GAAP results, will refer need you Additionally, to the These are of our which notable measures. items. to be that impact adjusted aware

you review aren’t So, GAAP but Page of it’s update – our the presentation. to and we and will and our you current over information them. should views to in least, to Bryan. you important hand last on for that, earnings release comments I reflect with X need things that really And And our obligated understand that to our not

thank Thank of a this more I progress you, across results the benefit Good quarter our demonstrate you morning, our and with diversified the for and Ellen. joining call. company pleased the everyone am continued believe that model.

and excess and markets drive over continued of are facing of that on headwinds Our growing muted performance. to loan the common levels return pressure and of share the delivered is liquidity, an growth on despite starting given $X.XX tangible attractive base XX% adjusted on a rates EPS short-term a competition, basis with and specialty higher businesses We demand. strong near-term our industry of equity

on in be proposition improvement the as markets continued focus environment well nimble set a the our to value broad with I where differentiate. we client-focused am positions can confident us and increasingly macroeconomic that key the segments product reopen, Given

think As of spots there bright I worthy are were that quarter a noting. result, several in the

in reductions loan given interest growth was we expected interest net of of net commercial underlying driven with X%, generated income and was down by portfolio While which of X%. merger-related the benefits, X%, core growth net income PPP quarter, growth in loan

We over with commercial continue $XX in commitments to see our and pipelines quarter momentum to X% the just billion. ended up unfunded

strongly across Our on relationships serving their and to footprint. our team focused clients anticipating needs continue to expanded remains deepen

environment rate basis down quarter. of rising in robust income a the in strong interest to this XX% of total particular with profile well-positioned given banking was rate basis and year. increase while The moving median quality deposits saw quarter XXX a to we of interest XX% the – note fees loan annuity net team a basis shock declined our be and loan in levels in mortgage last improvement fees, points fixed $XX to also the by to improving are normalized X fees in point continues sensitivity that banking a well target with and the provision we This the in net in levels expect the were with And quality reserve healthy excellent benefit cost we intensely overall environment the points the balances strength sometime a macroeconomic X benefit next quarter. yield million net is a and hit focused wealth in net with X across with positioned we basis on a we quarter, bearing It’s curve. think interest XX% portfolio our charge-offs return Our points to relatively credit quarter, important provision declined are in be on and only the to Credit ended decrease in That quarter. peer interest the also to deposit cost deferral another more decrease the income of last in coupled quarter sales. drove quarter. versus release X% highlighted traditional of up which on our

impact we of for Given industry the will look CECL, and ahead, a expense provision be the us headwind as likely overall.

repurchasing to of first February progress new the until aligning our MOE capital piloting including for delay on a common and integration shares integrating digital relationship of levels treasury with of capabilities, launching and difficult systems objectives XX.X%, profitability and of the return $XX.XX. increased the in quarter remain around round the And the execute next systems per strong book strong we new nearly a continue with capital the As year, services, the stock to completing decision CETX share ended despite quarter of ratio products X on banker XX% the consolidations. banking by tangible platform value our million tools we center and and with of

Given some items marketing of platforms, and is reopening, as the our expenses in in to were our the integration higher of which with to as costs well higher tied markets much quarter. idiosyncratic due up costs seasonality X% along the

to to the continue expense quarter. approximately We synergies the quarter efforts, to people However, integration net will of by in million least later, as far, expenses we and and $XXX cover identified merger. confident in in thus Alongside to we expect And savings year. in ability Anthony invest our technology we million next remain revenue synergies tied revenue fourth fourth efficiencies. annualized drive have deliver moderate the in our at $XX to

and As am dedication help run will continue details. that of organization world next value objectives. the our shareholders from they macroeconomic for now, very recovery and pace we emerges increasingly drive year, the the the pandemic evident. ahead to the as continue the through for grateful I to I our achieve as all performance our of to And clients, increasingly and momentum about the financial work hard to of constituents, Anthony? our combined to in be the am and optimistic power Anthony the communities look begin work of will associates long-term deliver

Bryan. million evidence Good Slide reduced has we per Overall, progress organization all. of which covered. briefly Slide items of to or the the combined continue we quarter, the in pleased Brian to share. make highlights results across most where we morning will the power the the the by are already MOE you emerge. solid starting X, notable $X.XX and I of touch Thanks, X quarter, of to on $XX after-tax to our outline which see provides

we $XXX Adjusted income, quarter. fees largely and of investments banking of annually additional to non-net we retiring incurred legacy strategic $X costs We for generated additional about to to masked million PPNR tied fees. quarter X expected items $X merger-related reopening. million mortgage net improvement impact redemptions next trust adjusted was tied higher the costs million to will by along of reduce recorded approximately addition of lower interest with tied an core markets overview income income $XXX interest merger-related of expense traditional payback Slide record idiosyncratic expected notable an quarter. The preferred In with underlying non-cash million to pre-tax banking our $XX X in items of moved and declines financials fixed in the IBERIABANK provides the interest years. and by securities million, PPP million expect $XX and of an and net reflecting as in expenses

post returns reduction the muted Given before the decline equity million return in was drove $XX overall, environment, on with and of credit healthy credit. which we provision an credit impact the continued we XX.X% credit adjusted to and a million, $X.XX overall to $XXX macro improvement EPS. tangible of continue of common posted But XX% from down in the quality quarter. loan a last This growth, provision

by As Bryan value a book income OCI. X% return on mentioned, portfolio tied was GAAP came tied $X.XX the the the $XX.XX, to largely per of share decline $X.XX capital in in a impact as net security mark-to-market tangible and at to up offset

net PPP to Core tied up income portfolio was interest merger the X, income interest was balances. given lower decrease net million quarter X% accretion down Moving lower of $X to and the expected benefit Slide as and the linked was in reductions overall portfolio the declines given commercial continued competitive count, deposit income continued by cost compression offset loan landscape. loan spread and loan LIBOR and day growth in balances, partially consumer higher investment

security put excess During to added the more a our up on purchases of basis to work around and ramped around at a spot we quarter, cash $XXX million yield X.X%.

X%. up securities interest quarter XX%, our assets result, at a As ended earning the to

total plan Our origination year which loans the of redeploy excess translated around by XX put linked to spread basis opportunities to a We linked points X reduction on point billion, new tightening, as have NIM of as margin. $XX reevaluate collectively was cash up of a cash. to with will end in we $XX.X excess also the basis with higher in down ended X is X X quarter and spreads from a additional NIM down down second recoveries with quarter of NIM $X we overall well Core continue about work given current interest the non-accrual quarter. point lower as by cash securities in to Reported points quarter, basis basis was on to cash tied core excess impact billion points points move basis driven forward. X basis to billion pressure

XX the were in the and point mix in benefit disclosure quarter. that brokerage trust impact margin determinations by and the DDA volume $X.X quarter deposit around in reflected is core impact sheet. originations million higher decline Under our basis of basis mortgage title to in down interest-bearing leasing as on added we other our and margin, X to a in non-interest year-over-year, the XX, banking increase tied and cover fees NII, offset assets NSF income as risk-weighted higher mitigate income well see recent balance sales This generated structure. daily $X.X you illustrate as to driving given let’s this points. charges last an in in is the towards XX would in also interest focus average points and to puts and higher position. quarter. fees at relationship $X a of deposits. net the of takes tightening X% further anticipated about basis improvement income helped which income and help to our that on partially came change annuity and continued with were income on more Fixed fixed and pricing revenue tied transaction service to a with insurance Mortgage excluding also growth And note I down declines million can compared million of the We to the core spread metric down the the excess fees. fees compared down were Slide cash view, Headline that on this about

with in investment simplifying August launched in NSF the the While a the in with and going goal the in the $XX The into was non-interest occurring gains our for expect quarter, aligning our for First the were began Over $XX portfolio down by legacy the the XX% quarter. in regard overall overdraft First we the up million $X service program charges institutions originations second originations clients. late service approach change new in income clients. conversions August to security for remainder with reduce fees experience legacy our with system tied million streamlining was to decrease changes to were other of for in an IBERIABANK X%. IBERIABANK changes following charges, IBKC reduction to conversion features to Horizon February for range the across we production franchise. our February at With annually, time, Horizon the of recently million key of overall the and The driven

some pandemic-related by million which tied count, of in day credit benefits to will slightly linked review shift partially our Let’s impact from offset a quarter you of expense medical fixed payouts increase supply labor note in totaled mortgage carryover income helped more related merger continue originations additional up in $X incremental and million with expense $X and cost, reduction as because as to markets Slide revenue-based costs balance and the million vacation fee $X salaries Personnel commissions incentives. related turn costs FICA a Adjusted $XXX to we reopening, strategic remained decreased and was $X and the mortgage million relatively lower constraints. stable quarter, saves. XX to that seasonally higher mitigate and offset reduction cost to idiosyncratic income stable Incentives a and $XX sheet, should mortgage. I trends. on largely investments of see a without corresponding million, million as and expenses seasonality

new non-interest Solutions other up like travel million Additionally, as well tax in for largely and Business million and areas tied of advertising driven our finally, in higher increased Online markets in Treasury higher given markets costs $X as in And increase $XX reopening credit-related and expense contributions, higher by spend, a quarter, pushed Banking million. services contractor entertainment investments systems, outside reopening. and was fraud also costs the $X up costs to

identifying XX, focused redeploy toward we balance efficiencies are and for On the opportunities sheet conversions the post which provide on driving Slides organization, to We areas, higher in particularly expenses our cover profile. and XX growth systems February.

mentioned, X% reflected average balances, this PPP commercial quarter, were Excluding the as X%. billion Bryan the loans increased in of which And down growth $X.X in quarter.

XX%. up deliver points to increase X volume helped a in balances pricing purchase Our business warehouse strategies with quarter X% percentage in linked the mortgage

are X% this which economic are decline our activity but Additionally, the level lending, path reduction finance estate and refinancing somewhat offset continued opportunities. offset refi This our in of loans, of with these finance we traction other see increased given and in pressure recapture to real drove the commercial a increase of the higher real equipment from to retail, the levels of refinancings, opportunities with a by being by specialty consumer we across see somewhat growth. to businesses continue reviewing secured capital Overall, in to franchise asset-based in levels is markets. loan activity footprint translate recovery estate pleased growth in we

basis in further our side, saw costs liability we to a XX inflow X quarter, basis a or average continued funding which driven down helped interest-bearing of costs points And total deposits. mix points increase by X deposit $X.X deposits, for billion the to DDA the X%, On improved improve the basis of points. with

asset continue levels costs to bearing we to the where median reserves, provide healthy companies and at Bryan focused see allowance deposit is interest PPP on are of portfolio. Slide and coverage mentioned, quality charge-offs toward exceptional our we intensely down information loans low mortgage we loans excluding non-performing and of On X.XX% loans As driving peer levels. and our X.XX%, on XX, and XX and

loans, Additionally, when absorption you consider which loss X%, total the acquired very unrecognized discount is is on strong. our roughly

tied and from the quarter, the XX.X% capital on in accelerated XX.X%, XX, of repurchases our to the Turning second Slide quarter commitments. share CETX unfunded ratio in down growth higher to loan

of million in capital Bryan common quarter, to stock As million returned repurchases. during or mentioned, the $XXX $XXX shareholders we including common X million shares

while systems Moving number XX, substantial across on make we on to of the fronts. continue we integration to early had progress merger to delay conversion year, to Slide core a next

of net launched mortgage against banking and of achieved of wealth $XXX we and in events We During customers. conversion million. conversions, couple MAC savings the conversion, annualized system trust completed target completed credit and $XX for run-rate quarter, a commercial our finalized the and online our new million a card our pilot platform

on Additionally, revenue that million additional to have private tied and far and to synergies thus $XX we mortgage of tied continued client commercial capital markets, and synergies revenue loans annualized making identified solid roughly wealth. debt are synergies traction

are base extremely focused enhance and continuing client we our outlook. We XX, or On quarter by our fourth retaining Slide services. set provided growing of on our products expand and to

average single-digit loans merger be interest-earning continued reduced modestly and to PPP NII expect the and of down outlook given for down low assets end with the high rates. low at benefits range the We and accretion

to X loan benefits of $XX $XXX of billion continue will We see period deposit see Round a costs. million PPP At total in excluding expect related had as we that we to to fees to PPP and loans, and million. PPP $X growth including continue total modest end, lower we

largely majority Round We of expect X forgiven year the that will the be be Round the the vast portfolio year. forgiven of quarter and the third of the next by to by end X

single-digit mid range and Regarding fixed pricing non-interest tied moderation fee further down lower to changes wealth NSF income. be decreases income, expect our and high seasonally we in the the – in high well as to as fees income with to mortgage additional in

the to calls reasonable to range, to that basis of the higher see single-digit XX expense in low X markets it’s non-interest tied decrease idiosyncratic levels, And seasonality some our with for to points charge-offs included third expect reopening quarter outlook costs range in be investments, outflows and which items. continued reserve to and We near-term.

Finally, we remain to to expect XX% our ratio the CETX in X.X% range.

to As perform well environment. feel Bryan we mentioned, ability current the our positioning economic our about and given good

long-term to and believe synergies short and our includes XX model continue loan highly will We our Slide revenue and franchise growth. more attractive objectives. deliver Finally, diversified

And expenses integration digital growth will Our higher and other opportunities and productivity needs efficiency balance performance that, us support position to quality Bryan. systems actively beyond will to our identify return to call and give continuous to redeploy And to allow MOE the drive we with to objectives near-term in the the and improvement continue to the credit complete as clients results I us of future. and our to integration. continue higher continue associates manage capital, into to the attractive and deliver well sheet back and to dynamic

progress business with higher quarter. clients Thank provide Anthony. made is model our we deliver markets momentum technology. and excited franchise our am have and diversified continues of evident to a integration what attractive the products more our we combined with about of the growth synergies, you, achieved our results revenue merger The improved power towards the I benefit in results. organization and The of objectives have this the

grateful am top our again associates bank management Kate, our And to their and environment and and future. structure confident building into now With up relationships shareholder quartile towards infrastructure growth enhanced and communities. higher capital client open value. performing macroeconomic to a to positions to we deliver will in become to questions. dedication I regional our top drive us am I improve, ability for for risk the As the continues returns it strengthening and supporting that, our

Casey Instructions] [Operator comes with first question Haire ahead. Jefferies. from Please The go

Yes. everyone. Thanks. morning, Good

low Just, NII single-digits, the Anthony, low guide, mean clarification the the point on or high-end does the of of a – X% that X%?

Sorry, X%, Casey.

good. Okay. Very

kind Okay. of And the this saves and expense I continue to the know tick a are of mute reopening costs or the you headwind wasn’t curious, that we there that you side, I chewing fully quarter. But saves lot cost the the was are there could – kind there have into as costs just remaining? there forward more on progress up look in reopening are potential of there cost is

No.

reopening are largely in I numbers think the of the costs kind now.

Okay. Very good.

run-rate Okay. And fixed the give then mentioned where you this expect trend fourth the ADRs to you side, then just you you policy or on lastly, – income some fee and the on charges NSF can color line is fee change drags, potential quarter? in service can quarter where the where – the do and us

Casey, amount Yes, unpredictable. system to across bond business excess environment. Bryan. continues good. feel liquidity There of the and this financial be is tremendous We good is income fixed inherently still the is activity The a still about

is Our $X.X the average year range full that for forecast million that fall for we we the daily in will revenue. And expect year.

it it. million driven on about the is to this annual implies in liquidity more the reflect charge The But annual to, one, little desire million our on to impact $X fees, so done level is be lower changes basis that revenue. down that on basis. some changes fact then be fees, $X.X The a made still average have SFOD, we an And some etcetera some an has NSF we fourth in in service strong, to daily So in – environment. amount which made expect customer-friendly, quarter. we in that

will customer be insignificant, a on will over it it’s for it think quarterly rather but retention So acquisition, be we growth the long-term. and better basis,

not and to every lot right? That in through mentioned a our keep then, just Bryan So of the tax annual Casey, know quarter, typically equivalent turns since from recognize number typically the somewhat the that just this And add, impact it want that modeling an to number part year. for on which you. deflated the I of of is just then the early into customers early etcetera, year, accelerates refunds, kind consumer in year the benefit number

it’s that number a So flat just quarter. every know not

continues just deposit And one great. Okay, more, growth very be the to obviously strong.

position a do – the strength? cash quarter. increased guys? cash got what the liquidity is again position is continue that And for You’ve the you this What expect normalized you then to

PPP up I do end that through the of continues unfortunately, we think that process go that exercise. kind as Yes. to just recognize build, as forgiven cash cash, the probably from this receiving through we continue we

a $XX will would do I’ll Bryan, have in we’re to relative hold have, of cash going typically I to for So What us. to and very the probably likely cash. continue to a we cash you, is know, tell painful talking or more what it’s don’t of billion strong normalized always you of spend what time although we $XX remind do of kind the excess environment. lot type maybe be I’ll we dispose use we billion about cash to

Just that, coming we cash. than lower cash something in at that slightly – on what lower earn is than the recognize

look And quarter, a But it at the it’s you in that. XX sheet. that just lot for the basis so when although it’s inflating points. we’re anything not during paying – we’re yes, growth And cases, recognize balance the of is earning painful, really

because nickels generate I concept the lot a don’t some like it lot of way mind up creates to income. noise along us. of don’t for the So picking I of although it a

simply the The lag of does, it’s a other right, because think across adds for level to of it tremendous industry, you’ll more is deposit the the of Anthony, liquidity. Fed amount thing been historically And board starts liquidity. it that when lag too, than modeled deposit see increase, I

Thanks much. very

Casey. Thanks,

question Brady Please ahead. Gailey is of next go KBW. from The

thanks. Hi, Good morning guys.

Brady. morning, Good

an if for the quarter warehouse, you was ex-PPP look linked thoughts think the quarter, on had amount about and any loan loan X% I if I ex at of So just And was wondering doing growth seen, annualized. peers growth we’ve quarter of I that. this over we’ve linked to example, like, Synovus, grew mean, some XX% that. start I seen even inflect. than annualized especially quarter. really Pinnacle your for know this better growth was one quarter, I

putting up higher out So, of loan notably coming your peers of COVID. as growth some we’re are

So, growth loan the comment if the you on you X% beyond just wondering this better guys saw level idea quarter? just could of

I’ll likes. if Yes, very add the color markets if She’s for very, recovery. and close And she any to interesting the Susan with then on not very, to start, being We high This ask I’ll extraordinarily to demand Brady, becoming very is competitive. this. growth an the we’re term. loan are And is had even they selective. and the characterize being structure I very see price, markets, I’d on that say on And competitive environment.

in things One highlighted we protect is that sheet couple we balance our of a we emphasized the of the protect different this one, integrity of morning have and to credit comments ways quality. want the and

in So price our we’re base. real quality. about credit customer opportunity structure being That with thoughtful we the very said, in an towards long-term see term eye

momentum real franchise. across We’re strong seeing our

continued pipelines Our have to strengthen.

growth. our We on my have commitments X% quarter-over-quarter, balance for loading view, the up were about future call that sheet in highlighted is, spring this which

their results credit loans other grow up And Susan, our that add of about don’t so go on customers being to their focus We hit. our But one, and fixated marketplace. I’m having their loans ability our about in to got grow acquiring that communities bankers, competitive to on ability in and out good that? encouraged We number we’ve to what setting exists to that and get a picking sense you enough bankers have opportunities focus growth. on to a close to I’m optimistic want anything and I’m drove a fashion. protect and quality. quality the the not

Sure.

in mentioned starting asset-based pipeline. lending, was good revenue from of the finance, really, equipment look We organization both the seeing there pipeline with is earlier, areas really as are And additional good up at increases combined into referrals pipeline, you those quarter-over-quarter. had revenue synergies show for synergies. if momentum are Also, to

in we’re our Middle which, are as still businesses, those know, In etcetera. strength markets, so, addition Tennessee, Carolina, North good, very – Florida, Texas, you to markets, strong we’re specialty growth very, Georgia, seeing

Texas. in the of We’re the markets in some Southeast best and

hire very good to In that market, are had us relationship that from of to managers in leaders important some those addition continuing markets a success both to markets, and those very, good market high-growth we’ve perspective.

new bank subs getting that producers, higher type over of that sheet. hold limits bankers these our we’re larger strong a well to to taking some we’re existing relationships balance addition as also In our bringing of these as existing as selectively from with we’re result both clients

So as the selective. we’re be very prudent optimistic future. But remain Bryan said, will and we about

of is kind being you here. should over year? as back we end half into which of like on Alright. the anywhere book question it’s time. rise starting book deploying is think of the another about $XX we this anytime The bond look And $X I into into to cash, curve going just my end you said, to pushed then Anthony the long in sounds billion similar the you’re second I as going year. what the bond the soon. have excess time, cash XXXX, do cash $XX not over do mean, all mean I to hear the But more by of to billion of billion

Yes, Brady.

in So just $X million clarification, of third $XXX a the in putting announced – so last We’ve point about this done of call. quarter. right, or got so we billion that quarterly the conference

are of and economy for the the continues is us, think in tell tail forward. then relative know, up. we million, got So But rates funds where Look, year. an and of is for of right? federal creep I’ll at as where you a expectation end news we’ve kind we through the reevaluate moving it, piece So by going makes done the little to I the to I’ll year right, the call to expect the to we roll think bit increase sense we’re are what get you, end good that $XXX of kind

wait to And what to we’re so we most the probably you think to What to me I call. months next would evolves to definitely telling think sense now. prudent we’re to the going we’re over I X do kind what going But relative evaluate to makes of X before going I see – tell here it’s for as it is opposed that what and us. make

So January it’s a good question for conference the call.

Yes. thanks Alright, That’s guys. fair.

Right, Brady.

is question Steven ahead. JPMorgan. next Please of from The Alexopoulos go

everyone. morning Good

Good morning.

start in on from larger customers structure high calling there, then competition the banks, from commitments is X% or that existing I say want And out, to that too. some that so new and color you peer Bryan, increase term, customers? was on regional when give – price is banks? you’re Maybe

as It’s competition is part bigger players. is of the board. through – period to all last might not sheet. is liquidity a it’s trying where really That’s customers’ suppose, I sits excess balance the We starts that yes. system. growth show institutions you reasonably up And loan in it’s liquidity the the given amount with in of the across money. way intuitive, on expect, demand some talk the about smaller The excess The as our strong

commitment a So things. It’s borrow that much. don’t of it lot – construction The X% as of combination a that need means is lending. they to is

suppose, we that a and is else of in variables amount payoffs. dealing just the is everybody of One with, sheer I

and for business, the that. greater. is estate but the were an real strong There third payoffs in example, originations to second actually commercial quarter, end had Our very

a book into those we commercial loan when so flows fund And will and real that That loan up. numbers. new estate,

nice It’s a new it’s mixture mixture a of a got of We’ve customers. So blend. existing customers. very

the markets. our some in across our franchise of seeing good markets higher-growth stable more momentum We’re and

we’re ones the last over of Alabama, is in new seeing done relationships. the quarters great several extremely customer that’s well there acquiring growth opportunities for example, One

which pricing you I follow the just million impact if fairly the given wanted revenue is on Okay. How have from fee change, also? actually gears $X you to NSF ultimately That’s minimal. and transfer up would actually up the much helpful. very $XX annual eliminated shift

you let tell front what, we us. I’ll of that us if – don’t we can see right have in

we Let we before during call. off. we us come see can dig will it, we can if get get And up if the back that

Okay.

million. It will be more than $X

million. $X than More

Okay. helpful question. Bryan, It big picture see just a to maybe, would And that number. find be

to offense, wood is is company do company the chop, Is the XX growth So conversion on fully the delivering? more still bit. of right, particularly looking on point this integration, to moving will see this a a bit the delayed quite where a with the of list you at system more being the is of back When merger items on there focused regarding Let’s focus staff. capable event? that Thanks. And start staff, mid-’XX retaining recruiting new that right? see on we Slide

Yes.

the integration then. hope would and the that of we of passed else, deferral done So, the Columbus we like have week on it, we everybody it Day first

that Ida of of were on As the drop New forced notifications, on the on I that and following that midst the back in out reflect – Sunday. good Monday customer being about decision. decision etcetera, position hitting feel to we making I Orleans

think difficulty customers. our impact and our technology, then seeing on train there, and devastation and etcetera, in associates market on the the ability our the to I recovery in the the deploy impact and

will up would the we high February, say time. the in I quarter was move. the a the degree picking you quarter XXXX. If of first of clearly impact see to the and start confidence, second have that completed the the starting cost that in savings. I will think savings we integration side cost on delay in the on benefits part significant good talked get on last the impact talked use in of of that about a about of make one-time. We’ve We’ve good I will integration

it acquisition think, number starting as we’ve franchise. of mentioned revenue, sort the to $XX see in benefit the in side I a today. we’re the in and of of of we of different the the about customers alluded to We’ve ways, revenue talked million

tell mentioned are on to talented the They our organization. in bankers that that platform. we’ve onto a President, our Dallas the front new looking are to platform I that So bring footed. for Susan into very to hired markets, has you on the – bankers come our much would example,

hiring bankers. We’re

‘XX. momentum much So footed. I front and into think will that you think to And couple I next over we’re the of very start see quarters build

my for questions. Thanks Great. Okay. taking

Hey, where we’re on for if at of following up NSF $XX your in an we one fees you remaining kind right? run basis. Steve, If $X annual kind rate you that question, million adjust of million around on the are, look number,

volumes today. mind, in Now transaction at to relative that’s all keep

that all change, but the of rate. current be So run that could kind would

lot. a thanks Perfect, Okay.

Yes.

from is Jon question Arfstrom next Markets. Capital The RBC of ahead. Please go

Hi, thanks. morning. Good

Good morning.

I that saying on levels expenses we and question, QX. you’re the the in QX earlier down dropped Just Anthony, think Is QX that one probably to expense back clarification saw fair?

Yes, the expenses will pull back.

Okay.

Okay.

And some come that’s the right? other items, of Is out. what about you’re talking will that that

kind but to definition we our it, that had of Look, items that view a that are one-time some I’ll don’t repeat. call of, from Yes. expect them reach – don’t the we

and several expect those structures as within down those there then will so And also tied we roll see And to a down. certainly that kind fees, are bit. to income, fee little so that roll will some moderation clearly, incentive of

the confidence decline the we We will the that quarter. expect see us fourth in expenses gives in the what

Okay, good.

We that this our of called on hadn’t is increased been a spend That’s that we’re in new I piloting one things We Jon, Bryan. platform. we quarter. marketing. spending services much mentioned the the marketing treasury out.

but out We platform new on the we’re now depreciating haven’t services side, as well. treasury taken either one old the

coming is has up. of have there that. third sort to redundancy expenses That’s ability And we’re bit aberrational built I hat focused out at the in and ability one-time a that control this my said year. this of I I the the as $XXX have would And in reduce in think would trend. cost costs about that start later million see to as feel I opening lot to I and So we drove fact at my I’m on quarter. savings. of that the of in on in doing hang past we a cost – of the little business. already down Anthony you’ll organization gotten comments, take look good said, the demonstrated surge confident least And that our what the a

Yes.

where out you’ve that, saying figure credit some elevated square quality. on likely mean you still industry, prepared provision Maybe is be little Thanks. comments bit us to seems that? expenses. and/or – the been thoughts that Byran, it to relative could of Susan exactly for headwind your you to great with Bryan, a term, and what your Yes, for reserve on your want a go longer on help Okay. And just the for expense I

the obviously back that economy assuming or doing are emerge coverage, other to to could the COVID, we Jon, continues so. in and events, from which that any start. we down now CECL of get coverage XXX absent X a I’ll day believe kind range that we see

we’re that’s thinking. So what of kind

I in requires the a will highlighted was comments is was quarter continue actually we million, and dollar last that every it reserve booking Inherent of down. CECL, about had My while is reserves. Yes. release, think, growth than reserve quarter. we million $XXX this loan headwind, great $XX you’re less releases And

brought a we etcetera. growth booked, extent the we the X.XX ex-PPP, to we for $XX So loan up million down it ended at

up We’re setting reserve.

We’re a essentially just when releases acknowledging you we losses. build, over book will time this to where book LICA pandemic CECL sort reserves of get loan, point that and into a you those diminish area pre that of area loan X reserve that get we CECL as the XXX under day

and And front us is cost to all the you going industry highlight. So the trying end to be on a it’s headwind for we’re just it. credit

Okay, alright.

comment there. a is of longer more So what you’re saying term

Okay. Thank you.

Thank Yes. you.

from Rose James. of is next Michael question Raymond go The Please ahead.

And taking for to good back my wanted go I the to questions. Hi, fixed income thanks morning. just business.

there to if some rate business As on think pressure we environment, I I the the performed look back get into a ADR. way was last rising cycle,

helped that You which we Thanks. remind during a you some time decline. soften next us period into the in year the guys ADRs did environment, But there later get securities as the rising can well, assuming how just rate to trend, would XXXX? coastal

by of of liquidity longer the curve bond curve been expectations, continued the the of the a think, curve in moving end good level the significant A than system affected fuel financial business curve environment. I the rate for in cycle, and this Yes. is on up. rising rising still yield shape business The rates. – income Thanks, one, fixed is the term exists steep in the of we a Bryan. it’s the with And prepayment, Michael. has the actually more longer This have of thoughts been even going really couple our to and reasonably be that

this So under to they will Fed our sort quantitative expectation will it to purchases of the are reduce is purchases the year, telegraph purchases do continue that easing program reduce later continue or start the to going of start of the a to half long-term drive that that to curve steepen up. will that XXXX. revenue. But and over come fixed then will tremendous significant is liquidity income bit. manage expectations the there think will That course the a amount yield The we a of first reduce

significant rising say interest move be for a of in get you portion we sheet significant sensitivity extreme would balance the have the sensitivity rates majority of offset sensitive interest that the curve, in vast is. If – the short-term got business. to that rate short where strong less our I But attractive strength, the very we’ve a interest

expect early or do year continue So be we but you’ve steep to will the moving that rates. significant ‘XX, short-term next a We good business got expect spike curve. Fed relatively late a in don’t the up bond will start because

guidance ADRs That’s years that during great X.X of just of color. was think a kind strokes? broad to different X be And the ago it cycle, back around range. a that reason to for would Any day couple this in the go

customers I’m that And there And into we to that’s We I as tell of ‘XX, customers. buy But looked it. I impact rates. what X.X to range. and and I’ll a that shape to that what we quarters will so I out I you going many the know our X.X had bonds don’t trade you – Anthony bad that a talk it, is And wrong. it’s we business single were to range putting deliver don’t call yield think from We something missed one not don’t to for the our think – to about interest X might day. bonds know in say range curve I I that again. every

So can have like. an don’t just know we them. expectation while look today, rates we to have for position what We really

questions. for my taking Thanks helpful. Very

You’re you. welcome. Thank

Morgan of Zerbe Stanley. go from ahead. is Ken question next Please The

Thanks. Great. Alright.

expenses, next year? to Just million $XXX conversion we thinking in notice going down happens of Thanks. step Is mean I expenses the would terms our when a related in the that end? be am meaningful to of savings February of from deal. the cost I of in it system there

it’s Anthony. Ken, Yes,

because the second of are see going will February, quarter. the of the conversion likely end in the just kind you to really see scenarios, towards significant is more you the think move tail of I that

or just the And sorry, dollars of are quarter actually growth? what it. magnitude of like lack absolute be would about? gauge – talking lower trying Got with you just second am to I

growing. we we of no, down that to just second Not we step are third quarters. between as kind decline. significant The the see not No, and no, expenses a start move should should

sort what fourth talking I think you see. you it guidance Alright. I in that at just had you growth thinking sort in a Perfect. And mentioned number clarification X%, loan the expect basis. When ex-PPP of quarter, you was quarter. core then modest, a slide, like on up know X% ex-PPP this or – a would you modest there? say are I you of are similar question, Thanks.

Yes.

at that ex-PPP, think around to so is it total But be will it’s a loans something X%-ish – looking going that’s kind – good up. to about. I be think range – So, we are of

Alright. Great. Thank you.

Truist. of Jennifer is next from Please Demba ahead. Your go question

Thank you. Good morning.

Jennifer. morning Good

of for Bryan, thoughts integration Horizon? you am we deals merger this question what First after year. you have are Horizon where on next think lot stands And First M&A seen on wondering your I the a future M&A, for a year.

changes. number tremendous is that capital for expectation here know that. and places couple priority in this Yes. franchise a of dimensions post really a There into are acquisition is how we our a that my merger to us. across go world not integration opportunities so My as transactions. the There have got been – today, quite of I we many have sit few don’t But growth that deploy

round our feel to invest have technology or being we many be ability the that this opportunity small when in our that’s posts relatively the majority get the really growth we feature our we of move to we in practical have to in are finally, believe a South of $XX add continue for to that number balance goal I we We while technology, of to and we and of any leverage think presence thing have things and in the continue that will think strongly a on better rate. the integration existed. $XX markets. will in numbers billion, will other consideration We in still that top new those customers deficits XX vast on XX MSAs sheet. the the that capitalize about eliminated have billion And is functionality

just of don’t You sort across stumble $XXX billion threshold.

growing we of our think these to our on demonstrate base of view, that And growth, organic in this taking we uniquely the to focus So, positioned want will franchise. be customer we out advantage and power this markets. coming of integration

not way our the is we execute the a when logical to view, is to thing priority. footprint in technology. but step. this a power spending M&A long We next and franchise. it comes it’s game can Scale want this not that matters, And matters. believe not you of win a that’s And the So, demonstrate of and only don’t saying

you. Thank

you. Thank welcome. You’re

Jared from go Fargo. is Wells Shaw of ahead. Please question next The

of that economy, thinking Hi. taking X the is something be guess that, Good or for that you think the the there improving day questions. faster approaching on the – XXX I couple like get the morning. Thanks a is you end one there, can something points, we ACL. we level, than When talk that the follow-up about should could we basis that? get ‘XX with – by the

there – you Well, mentioned, number are factors. a of as there are

continues the midyear not possible could another and there is it variant think improve, hits, I it’s or be next to else economy that something year.

earlier, this depends at on can’t Bryan that As other some predict said things it of we just point.

opportunities extra initially or to that that and digital to taking systems Okay. that find And allowed time expand then incremental technology weren’t offerings has conversion, for emphasize the considered? you any

Yes.

for of not what conversion. our changed scope the So, really deliver to we plan have we significantly

it, Certainly in the of opportunities, really experience a we make be dress additional a for do experience we been I the haven’t that taken will the through we will call what part, to the and run around we there rehearsals have sure mocks few, enhance. changed We perspective. which extra client from want. really most conversion scope is edges, time has play to what to the just client But intended

coupled our the prepared have do it Delta Then otherwise people than us get to time the might declining better gives systems with variant, more opportunity they and training our been.

yield? are how do a bottom you on new that at finally me, production incremental this And just for Okay. are on spreads yet think loan the loan we And quarter?

Look, spreads low limit is I lower like there to in about XX go. points how always to Yes. quarter-over-quarter. came they a basis say can

And is stability terms about that the kind So, see right. going our continued in, I some level I forward, will spread environment for think modeled it. us. as really have we a within in of some but expectations we call might NII, core competitive We of wildcard number, of drive compression. think The that where

core. the have of to least guidance that we at in on a but the Bryan given clear we So, of I competitive kind reaching terms Not number, trough in evolve. pretty like view said, core think continues environment that are feel good we is our

recognize And out just as that well. so is that there data

Thank you. Great.

from from Poonawala is America. Please question Ebrahim go next Bank The of ahead.

morning. Good

Good morning.

frustration XQ the terms peers look when you around just the in starts outside? is some post XXXX be the outperforming from power by to it great the think the of see I we all we the revenue everything at about on the And of growth, I holders do should where question as growth talk fair deal? guess you delivering the longer Bryan, end responses. there your just kind term is But of ROTCE things Anthony first together, on year talked as coming of I should some think follow-up, franchise. a expected ‘XX loan think I have of and when you

Yes.

Bryan. is this Ebrahim, So

you I the power see to XXXX, will of think start the franchise.

of what it’s next are rate of year, strongly see we of starting But for the franchise, and a little strength interest to that a this loan of the are will the it. are the you we And fee-oriented we XXXX. see to I seeing mask across transition actually this think bit you pipelines feel signs growth the seeing grow emerging expectations very our the franchise and time by given some businesses. environment, some macroeconomic environment by the ability our for

thing, clients Yes. the TM we right, will as on I have card And then products, I have to legacy probably we conversion, it, into onboard point that some, a then into where would head whether them convert are we putting product mean Ebrahim, we one knows it’s conversions we just everybody do to are into and then doing, I them other to selling closeout But go various whether us. are all them, IBERIABANK periods call realize people not new right. some out,

conversion that So, limit ability of move kind there to are just sales our things that natural do to recognize we as some some up the point.

sure in experience of making terms I move client those, it, kind twice. nets safety off of all don’t of have so relative call And the to will we come them to

And out that think will so stuff way. of the of kind of I you with – all

will to that efforts only across categories the I of on you the but and not think know start really some the of push, see sales, to kind are other the fee cross-selling we loan pretty going be incremental strong.

addressed And question and helpful. if separate I just apologize this. That’s a you

virtual the September, in Wipro think I partnership with bank infrastructure. cloud on announced you a

don’t talked I provider Just the that’s same think the bank. – for

on a us and of virtual at point lending does out of sort in sort Is some virtual bigger deposit give what’s with terms of there a play it sense of bank? strategic side? plan Just the breaking both and what

Yes.

first we things. so hit, actually to a very were tell we bank. cloud the of off system you We of environment. will new couple a I So, you bank that are look of of virtual excited to about different core the kind convert – kind Ebrahim, legacy are fin-tech the on in

We The reception continue the out the to been and to the of has good. kind that. offering product build really

employ. masses unveiled going strategy to will it, quite the haven’t to call yet, I we that the really are We

effort the that out going we brand to continue it should of bank. a we have will And forward. drive kind it virtual capabilities will are build and to going product that marketing You functionality how expect distinct within we and

where will it to experiences three our takeaways only six become intent bring You support in kind of foreseeable in be part months us But and really right, First to bigger, the see not next will months, that drive grow the is for more itself it to revenue, to call, the bank. and Horizon but of help well, will terms can the you. future. apparent it larger learning near-term, back similar can of to for we It

there is intent right from to So, learn than something now it, see we term, then different longer profit do it. no what it, other And happens. from grow make will

it. And the at time Anthony, just of lot integration, looking a Got vendors. spent around last year during you the fin-tech

that And about to in? top that Bryan, out upgrade jump am want conversion, from one, bank come process. multiyear perspective do talk system a the the you things you needs be to and a assuming of As to three us I technology the if two, will

Yes.

we I that as biggest Look, I tell move. thing will Yes. the you kind think of

we close deficits up about of closed have as were get So, really leading kind want technology the Bryan of we really talked most gaps it. to and that we that to

upgrades do move delivery. or really those things can think about starting a few are that as leaning to would have we around on we say in on edges some I do good some that I spot, So, efficiencies in to, need either what matters our is peers improvement things But really significant it, forward as still position us technology-wise work we to pretty think drive a our call related that on. I in the a to

So, of out. stands the that really credit process one kind is

of obviously, what Encino. we do is have it’s of be I or to are front then so going And pretty we And powerful. end can whether installed that, side think that back side it end with there,

going how further Encino with will drive we So, the about whole we upgrade hear are taking complete of more really improvement. a kind expect to and

is The platform. the second thing treasury management

growth invest made companies TM and strategic We continue. priority recognize both the had should to have have in That a space.

that on we our made And I all we available TM kind echelon are that I think put We proud. in system that will investment. pilots of significant once at We will have have through a the us kind of you I of systems of am tell started all. very top journey. TM will

And nice get out expect really more to that. hear lean into should you that continue us that to expect of should And growth to so, some and you course, with to with more of investment then development.

our of in I and revenue probably you new are we kind regional really put would overall us those relative of to presidents point type cross-sell So, opportunities, understand it, and have books, land the the that depth management But two will would to see some the performance which their and profitability improve not the, out help etcetera. only clarity. fully call help just big profitability backside, bankers that from tools should driving on I

the are the the impact So, to big three most for have probably those put those – I items to year. had are of kind next tell three on table. going I that will you

fantastic Brian to job building focus and the have think technology core Anthony technology for long-term. I driving over a us Ebrahim, add improving and would done Randy I on the our

things putting One much run excited is about our a new am of and understanding really landscape. him it on I customer to banking this customer competitive later year orientation the needs hat regional with franchise is technology Anthony to and being the process closer and

capability. have We push great a got

will I with our technology. working regional think create bankers and our for leading pull bank Anthony, more

better Anthony’s think sense in been be and us to somebody with infrastructure that a facing as of get with will we end-to-end all having I customer the time. that’s result the So, better help vision built

apologize. Ebrahim, I then And

things, us doing of for we just what to to tell a helping They number You healthy asked of partner I are big right systems, before dose for want are of we use getting been that fabulous have of make stuff. me testing we but Wipro. a we a sure Wipro us. you deploy about it integration

want so give I some just And context. to you

us. but us So, they fabulous they years, upcoming have different around will for of things be the partner through helping a lot been a on

Thanks my taking for questions.

from The ahead. Scott. Please next Montgomery is of Janney question go Marinac Christopher

wanted I further? that C&I when Is commitment related outlined the slip would lower you ask went modestly about the unfunded commitments And trends we reserves Susan, reserve to off. to purely that that Thanks. see credit earlier?

commitment you the both our look asset for unfunded we drivers, funded. mean, – just just well quality, at I Yes. main were as when as the economic those own environment and

Okay.

even So, up? it’s the though same trend the have gone treatments

Yes.

you then Okay. changes And have was activity that seasonal citing Anthony, back that volumes, earlier? just more visibility on seen charge to it transaction commentary, the you lead behavior or to service were

dynamics and right. What have I will you I am appreciate tell can sure you Chris, shifted Customer post-COVID. this, behavior

of And impact right. liquidity, is then an tremendous us. so amount certainly, there is that And to just

it excess about in lot not commercial more. sits but think you If our have customers, of a consumers our cash, all only our

historical break NSF terms of probably in any fees, from overall, it right, of the pattern, precedent. So kind historical

adjusted And too to going probably current number rate The to me go. are gave the of for early that. tell for so where kind – you it’s to run I exactly things was you

So, am you be starting But to got. that volumes are the tell I transaction to I will best the you give trying reemerge. info first I to

were up we I transaction volumes think XX%. about said

kind go. And have where world. it’s just different we of to so It’s see things a

give look going to hard And numbers forward. so to the little a going real a trend at historical that’s that to it’s sense be you bit

I background. I the much. Thanks very appreciate understand and

Thank you.

Please Rabatin Hovde next The ahead. go Brett question of Group. is from

make fourth PPP the or on the digit stable assumes change I understood of a around high-single Hi, accretion relatively little with quarter quarter, linked high the accretion which of PPP? decrease, core part the I Can of NII sure guidance NII break digit terms you lower in wanted the versus NII. core that to low-single maybe good bit in morning. end the in

quarter. linked So NII $X about well, Brett, our up core million was

it So, quarter. say this break when you

quarter? the for Well, fourth

Right.

we are say some from come – have believe so… think and see relatively margin bottomed accretion would this I core I that we headwinds – quarter to continue So, in the going NII and but to we merger

lower And PPP.

lower PPP. And

as being think digits X% So low-single to overall, X%. of we

down be core. modest we continued So, to But could it’s saying are in going probably performance that we see level.

might am ‘XX? out I And think Okay. if if curious into about might this some position talking make year CFO you you announcements drag the and earlier, that were then you

Yes.

appreciate is doing. Anthony So, fantastic with first I a is would and number I job a that. what of say, wearing doing really He hats

grateful So, he for I is am what doing.

good team we our are really think progress, leadership making entire I engaged. have Anthony been and

good have conclusion think will had number I external this a good or making are I a And to and if that candidates. year. year of this And very guess think progress. We we get internal we seen next, we to

in revenue on And more or fee be your to prepared Okay. the that product make I then sure about Would that talking for last lending sets franchise? income, was one the maybe want clear. the IBERIA million. one, I synergies, would you comments, were be side $XX

bit both, right. A little bit of a – it’s little of

we fees got to I some we balance credit products have expansion it, some provide what’s same and So, had we as as clients. Also of wealth the larger some debt effectively market credit the of, capital some well leasing – loan call to larger been using we of well. as balances to to fees. able kind right, At show up international have sheet time, have of our as our cross-sell have kind captured will existing some

combination. a really it’s So,

you of would that the If it in tell head. in number balances loan show kind up I that as my predominance I gave. me to wait you ask would

when pretty from. where I are look It’s Brett, to at the impressive me, coming synergies

million to something got franchise have the synergy franchise. our IBERIABANK are old coming otherwise leasing is the the from wouldn’t then the opportunities equipment just finance, We referrals like equipment incremental that in million and have And from of revenue Horizon business gotten. $XX $XX referrals old we ABL between and those business First

client synergies, product product We combined starting set revenue optimistic Private of management we I I am in yet. about lot one benefits we will wealth just we have huge the we go the But a sheet. a build go can think larger is talk footprint But about forward. way. other as this of be I mortgage franchise spread a I ability. think our think will significant lot that the very balance product, forward. and as the bigger got drive, a the around products And to

thing when refer banks to relationship I our leasing now just finance equipment the company. an of at about example, would of managers being excitement because the The have as product of legacy a other is able offer, both is the expanded might set, equipment too there add outside that lot we had to

So, we that from a a expanded of as excitement of And lot offering that. coming seeing growth pipeline aren’t together. there both around result companies is

Okay. That’s appreciate great that. color. I

you. Thank

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

if you for We of interest. Thank you. color Thank great you joining or And and you a a again. your as or this Kate. to day out hope us have afternoon you, have any questions further morning. need all you information. us appreciate additional Thank and any well. reach your great Please free feel time to I Thank

concluded. has The conference for you now attending presentation. today’s Thank

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