First Horizon (FHN) 4 May 232023 Q1 Earnings call transcript

Good morning, and welcome to the First Horizon Investor Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today's event is being recorded.

I'd now like to turn the conference over to Beth Ardoin, Chief Communications Officer. Please go ahead.

Keith. you, Thank and call. everyone, for First joining Good thank investor Horizon's morning, you This confirming to press entered a morning, issued we release announced agreement. mutual with previously into agreement that TD our Bank terminate merger a have we

well A additional we be on press can page relations as the copy morning announcement investor this of release this found of as published our website.

earnings Relations found will be this being we Please our for QX slides on that speaking published be replay. also Investor the we release to call, call can this recorded website. will During note live our that be for is and available

Joining and are Hope Bryan morning us Chief our our Financial Officer. this Chairman, CEO; Dmuchowski, President and Jordan,

today that subject and begin, ask you expectations and to risks I'd that are we to X-K uncertainties, our from we results these in cause that our like our could statements filing. factors we differ that review you to Before forward-looking remind will make

the the will address also We non-GAAP of adjusted and which exclude these are measures. impact notable results, items,

important to it's you X-K the not GAAP but last reflect to for them. aren't our review our comments And well. we obligated understand current least, views, as should our information and update in you So

over call Bryan. that, turn I'll With the to

and Thank for thank you, morning, Beth. joining Good everyone, all you us.

and we I who results. Hope, quarterly to to TD transaction strong will will operating questions. line open regarding recent today handing will cover update discuss over position it and financial position the your the shared Then our before the company's our we current

be First were time May regulatory be XXXX. that for provide in by announced merger. relate of We assurance not they by updated TD extension, could XX to into approval did any informed to very mutual or in not an line and not could an to provide they with previously were to we've obtained Bank terminate way TD entered that Horizon. now, XXXX by like fact unable our regulatory clear. The seen a you've As approvals I'd agreement

make Let cash time you, the pursued to termination the I possible can to is we that What other in agreement, path First At this structure every the we no to the any did any assure changes will agreement. you Horizon. the payment of $XXX complete is success. to deal. or me in discuss to changes of million terms This transaction without the merger TD First tell $XX to reimbursement fee a pursuant Horizon payment under addition due million price

our stability. as We independent organization from we of strength are operate and forward and continue moving position an to will

last the service as on am merger. I preparations our remained have Their this provide have during to months, that, initial period. wavered to not an And focused exceptional associates commitment for this For clients grateful. XX intently growing we our company dedication and immensely for our made

quarter earnings conference first franchise, changed, lot great stability changed the have world recent we our industry report. not in is in and a has in call during is first more has our of our demonstrated time. This What held than that strength as this investor year. the however, A and

told As we this you XXXX, February when was will bank this recall for I you that in merger sale. announced not that

loan of by deposit benefits business diversified Our the strong composition. businesses and was our countercyclical our a growth mix, and fueled

we TD, our right opportunity for pursue We fiduciary with an equals had successfully attractive duties, were also unsolicited just our merger at that believe presented consistent of with the We represented IBERIABANK. by time. completed with our shareholders premium to

a our building risk remained franchise Over maintaining the management strong base, last on intensely practices. focused through capital of a and year, disciplined credit combination we culture,

strategy the maintaining continued positioned a is strength balance for current with environment. disciplined have by able we demonstrate provide normalize our earnings been Even few a pre-pandemic rate year. to details well the sheet best-in-class further Consistent amidst deposits Hope while a the minutes. deposit current in asset-sensitive shareholder had balance our margin. and levels will returns macroeconomic diversified to sheet decreased a uncertainty, maintaining last to that industry, We

and continues a of regional moment from diverse XX-state last stable sheet intensely I clients weeks. pause deposits how segments for across footprint. our we the consist in the of our confident to sector turmoil balance business set that how just you, in been banking bank I've in sheet the balance is. point. this southeastern stating I'll our cost-effective and several Our amplify emphatically watching to fast-growing a U.S. specialty am for model Like are strong these

disciplined position, our strong stable reasons mix consistently continue as well-diversified, year independent these capital It for serve that is in I and as dynamics funding an a incredibly navigate so Put clients. challenging simply, future credit we our bank. industry quality enabled confident am and journey XXX our our to business our

in over our it discuss reinforces turn confidence I'll Dmuchowski Chief Financial our our to Hope? that, path. which With my Officer, financial position, Hope to

opportunity have Bryan. the color around the detail results strong balance to our Thank you, provide excited sheet. to I'm of our more and quarterly and strength

will previously, the QX are earnings slides I from deck. be our As referencing stated

I Slide will start X. with some additional commentary on our

build has XXXX. in XXXX and to Horizon strong momentum First continued

Our first year-over-year. and was earnings quarter net adjusted income of XX% million $X.XX $XXX per was pre-provision our share up

prior basis strong the We XX CETX of have a points from quarter. XX.XX%, up

available loan valuations or the of $X.XX QX X% Tangible companies per net to mortgage quarter securities. shareholders X%. was increased our common $XX.XX, growth, on book income excluding loans to increased in available-for-sale to and an to value increase due share mark-to-market

with through interest XXX of deposit net growing from the strong our of loan our cycle benefiting a portfolio, X.XX% points. adjustable rate XX% basis have which deposit is disciplined We and QX margin pricing rate

higher bank the margin XX than regional points peer basis QX group. Our was

have XX, additional information on Looking we deposits. now some at Slide

elevated X% average returned deposit deposits an pre-pandemic of COVID, our level compounded we While levels now rate have QX saw near balances with XXXX. of since growth a through to

benefiting which our we to has we securities, deposit XXXX, of deploy securities in maintain our As XX% us years, margins. deposits allowed assets excess did not disciplined only recent into in in pricing have our

about balance maintaining additional while our in the new a asked in increased strategy drive for our lot our in marketing In new launched on client deposits. We through been our end. pandemic volume relationships. with size, have in to also million saw deposit deposits years. account campaign deposit focus competed a sheet February, our since XXXX. deposits natural XXXX, investments $XXX QX have late we getting to strongest We generated bank quarter first We approximately which regional our three new-to-bank deposit

market are our continuing are bank. we virtual QX, and relaunching our efforts In

prior In seen our with outflows or changes we retained deposit our early relationships We notable clients, quarters. of have not since any is consistent March. our QX, XX% to client which

to continuing opportunities with existing look and to to grow disciplined our strong at pricing remaining a deposits clients, new are maintain margin. while We on

stable diversified our On Slide like would I funding speak to mix. XX, about and

Our to between concentration Across which XX% commercial do corresponds to weighted be diversified deposits, deposit continues XX% base, of nearly balance billion commercial deposits consumer. our $XX consumer sheet of and and billion we client client risk. evenly geographically have $XX not

XX clients the XX our X% X%. top deposits client of deposit our relationships only top and represent Importantly, uninsured only represent

growth relationships. for grow The average, First XX% Horizon population client footprint providing has opportunities higher than new-to-bank us to national the projected

our approach, clients continue counsel insured unique by We leading are either of the deposits our and and a retention. are build with XX% of or with strong collateralized. to insured our FDIC, [ph] XX% to high client relationships deposits capital

points. companies strong from mortgage the decreased loan environment. we macroeconomic quality. non-office reserve was Turning credit increased idiosyncratic or primarily losses expense Net build, a excluding by basis charge-offs two loans One million for loans million a basis and in as reflecting $XX to XX, of impact quarter driven as prior $XX two points. challenging points relationships. quarter growth, continue exhibit for points X.XX%. quarter Allowance to increased XX XX to relationship. driven C&I to of was The basis to $XX X% million the basis well the a the XX other was provision Slide was CRE to Non-performing by This credit the

credits. have As disciplined through and cycles. our energy culture strong performance management XXXX, related us to credit higher this we achieve economic saw different slide In helped charge-offs shows, credit risk

this and standards. decreased exposure tightened since energy have our to our We sector credit

state Our franchise and on client our specialty loyal itself and businesses. prides XX footprint across relationships national stable diversified our

from with less than to our industry loan having sector diversified Our concentration. be and book geographic XX% industry highly C&I continues perspective loan portfolio both a

on XX our improve that further see our capital only strong remain will termination you'll TD capital Finally, Slide the position strong position. and

the CETX regulatory capital was of losses fair for loan ratio of of the losses of value XX.X%. securities above X%. X.X%, of threshold Our quarter for The ratio well unrealized our net is CETX the portfolio available net for and held-to-maturity sale, net unrealized for

Our is peer bank than higher CETX XX regional basis group. points the QX

our points, equity of termination conversion common increases XX Additionally, XX common agreement assets $X.XX to the basis stock by increases share at our book G TD and to by our Series tangible preferred merger value per CETX the stock tangible basis points. tangible

Series forma assets higher the common the X%. $XX.XX would ratios basis is to basis, to and XXX XX.X%, regulatory be points common, which of On of of value after of tangible G minimum our tangible a than pro conversion book X%, equity CETX tangible QX

First our and widely and our in has our results, sheet, recognized permeated Horizon's been been by financial consistent balance industry strong clients performance observers. has has illustrated consistently

goes to awards in strength Best Slide and accolades high to serve franchise Greenwich a and XX of this Awards, most entire environment. The XX credit of the highlights received bank. QX, We of results over our second our challenging which team that received including continue illustrates possible these standard made strong for we we performance XX Excellence Brand Greenwich the even clients. how in has any

discuss focusing go of host commitment here look I we Finally, June to X I and as to top-tier will value for to Nashville strength and enhanced driving and we our our for achieve continuous an company communities, our it with dinner X shareholders, the as that am sharing foundation, in With our First to We and Day pleased on our to details Bryan June more with continue will forward where back further our look you report plans Horizon clients, associates. Investor performance. improvement to follow. that to our on pass from and

about I'm Hope. for execute as the opportunities growth excited to Horizon plan. ahead our you, very we continue on First Thank

on management sheet. actively always, laser-focused balance remaining and managing focused we're our three As our things: disciplined team on First, is

credit quality will which continuing and is the to team, largely maintaining unchanged out through we management our strong our practices, to revenue time I excellent senior the expertise, is diverse specialty announced risk merger, build Our streams. leveraging committed from note

with deepen client them further products we relationships by exceptional our to continuing even will provide experienced counsel and Second, services. and

industry-leading we look and mix and clients believe our state the products they solutions-oriented with XX strategically to approach relationship-centric in last provide a footprint successful our unparalleled so we us. and We has made our know that that and the know senior beyond over will space. us advising grow decades. within Third, same XX counsel of We are

bankers change. and That in live supporting where businesses, the communities active will and Our work their not both. they same stay in operate they

We the today. well continue platform at the growth and ambition grow to our to underway last the stronger remains -- even people, was continue perhaps when institution, you that and on journey looked have a

We and look journey joining forward us to for continuing today. you, again you thank that with

As or TD. to we approval the regarding open directed regulatory TD questions process up questions, for any should be

I Keith, take and Hope turn I'll that, to With it questions. you. your will

Shaw Yes, time Instructions] the from will first [Operator Securities. Jared And Wells question-and-answer At thank Fargo of question you. begin this session. we comes the

morning. good Everybody,

Jared. Good morning,

able expense is of to efficiency opportunity more past think that couple have the year? been that X%. over and the reduction something about that to go I try with bottom out retention back the of that Is And the look we just workforce of be plan. rehire should you that the year-over-year I to you that people get you said a from benefits when How lower down of headcount, in flowed you here, about customer-facing guess most an to sort through Or retain a the know for? you're you've to at questions. going line? base. One,

Yes.

So good question.

announced comparisons, the of XX You the Horizon the completed TD we the days have MOE to year-over-year you literally integration IBERIABANK-First at to transaction. look mind we keep X when in before

had with that We've completing sort -- retention have but strong we headcount everybody, very natural program very, we in retention essentially. associated of our about some had And that, turnover, in like very the very for just following of relationships. entire about so And client-facing feel good retention very, the our in the reduction a place integration. organization feel key areas we, and good experienced a

So the opportunities of most savings driven out transaction. reaching the cost by flowed that is of IBERIA targets of sort that BANK on

Jared, this is Hope.

as that so last thing our our is other well. did rolled The books mention off year, I'll sell headcount title we has business

Good point.

Thanks. Okay. like And then you're out, termination. fair looks value are what pointed all then like more getting what And little management but the capital capital thinking a indicating a on How of the about on after capital, you've strong. I you marks. that's appreciate thinking ratios from it capital bit color value. been about, book I below are tangible here? you know you're shift of

of lot a something a would have capital. You consider? buyback you Is

environment. think, is now, focus right this uncertainty in I Jared, navigating the the

We tools the capital it hasn't uncertainty the there several next will and quarters management of been some buyback in plenty at past have and use this we we of the be on the tools to used through point, and we're environment, focused go available have although do of this letting authorization. year, settle out years. as But opportunities

loans the and moved you that mark a additional part were going look on when be in two maybe you is NPL. those? loans to then reserve deal? those against a there that? Were And And credit those me, finally of Or that addition reserving to there just at could highlighted for credit a forward

Jared, quarter. taken. There's additional no, just to accounting this down treatment those we've on merger be no those marked

Horizon legacy other? loan loan a they were from First legacy some But or

One was yes. loan, an acquired

you. Okay, great. Thank

do wrap nothing very whether I truly Jared, wouldn't were environment. the else. that are on and any on used they Hope situations they situations had First or Those anything emphasis and word little are These economic and idiosyncratic up the point. truly -- Horizon I'll place legacy legacy were or to idiosyncratic. with idiosyncratic, unusual

you. thank Okay,

question Poonawala of Ebrahim comes of next from Bank Thank the you. America. And

Hey, Ebrahim.

Hope. Bryan can Yes, morning. me? Hey, and hear Good you

got we you. Yes,

the just question, the year. maybe for guess, had deal outstanding first I whatever, year, a you this X.X last,

mentioned within on the update leadership I'm -- think a about And this go-forward more we in the how lot Investor think you rank, we when was weeks senior As is deal -- you about assuming of you a announced a June, of IBERIA about I couple about Bryan, and as that think, basis? integration. get as the settled we'll Day at think think and

an IBERIA we the make few be the Do If years? was year merger? update of expect there the chalk get to plan us you any in the path sense post give a we we you you some And where expecting investor? kind leadership next the last Should changes? to structure changes the as when for should

shouldn't you Yes. any In a expecting changes. no. word, be

year a one has had in of team As focuses over my to to I continue our noted prepared years regulatory banking if was we comments, the to our primary stayed and approval. like intact. operate past the organization when deliver and And stronger and organization receive we for XXX build

quarter very our strong And first that team very demonstrated been place. engaged the the detailed as of with and highlighted morning have results. year. team. feel the last course Hope a this out of It's we good strong we're very in have way They focused a about leadership and I coming this momentum I think announcement in over in

very Got remarks. you the a volatility and about around I there's deposit When sorry, of quickly certain initial of it. outflows, concern among banks. And deposits, obviously, prepared just missed second some and think lot one

deposit the us of with seeing give By bank And in terms do terms of client what base done when close a your the you're is terminal of you too outlook think deposit Fed beta? sense behavior, Just a repricing? rate stickiness just is and the if to the of hikes. in what gets

base customer Yes. a It the probably that's is an about and deposit understatement interesting deposit and environment. the very feel client morning. We our retention. unique environment, good our of It's

good her our around as comments, were BANK very intentional in ago. base. managing deposit Hope client year strategy, roughly in IBERIA customer or trends seen have noted our integration We We the following a

to to assets, were or like seem in phrase, In otherwise. an securities deposit and inflated what a not we willing take base us invested

base Hope And that stability to described, so today. we deposit base. we asset our and us about competed in of an very as deposit size the environment that, down And feel got natural good

Our strong we'll is today to you about but as deposit time noted, and suggest, to our Investor we are stronger customer spend both that. as or talking build more it relationships, look our forward think base we and And continuing at broad deep. as Day,

you. Thank

You're welcome.

to Thank comes next And the Jon you. question RBC. with Arfstrom

everyone. morning, good Hey,

Good morning, Jon.

Good Jon. morning,

EP's and on that you to saying, stabilize? expect XX follow-up Is you're deposits, question That quick do Hope? that what Just there. Slide on Bryan

us perform a I we rate. What say, I'll really deposits Jon, peers have runoff expect to competing as Last the with for to year, [ph] a to from industry. allowing at ourselves with high the year our were us deposit our I line in our in intentionally while with last of line is peer say were space deposit peers, expect some I'll perspective. group be not now we were

in are we getting noted comments, rate. we on our more As competitive

new-to-bank margin at but the doing top really were we deepening by not the our range relationships. that pricing offers of there standpoint. are We clients, protecting year, from existing being up Last acquisition

Okay.

enough on Fair been this? And you time it frame a I your around Okay. approval get big simple know a much, line. said to is as of stock. say can't that but people lot couldn't that. Bryan, involved as obviously, you have TD reasonable picture listening

fair to as independent there's two regulatory story, any company, You're or an about decided away. move way as it. sides free to if don't There's you and nothing have forward? at walk operate essentially, to restrictions both all, You every to burdening you business you your concerns ask that's but a

as timeline unrelated and Yes, it. think for articulated for Yes. I to is XXX were have the bank ability we a Horizon First it the The operate to approval. as no to you our We issues state unable what years. are restrictions on as I'll are back concisely achieve in there last

been ambassador foot people today that now? you Do Jared employees, the a been talked right lot what with the the your your occurred XX,XXX any as I And your over priorities TD few another you one, work and an merger and are retention. in about there know of and and have need feel Okay. done and like And clients clients have first What fix your your then question. of year? just for to you disruptions you've last business are forward? past for things couple that move you've

side real Yes. the in of any are of size don't any business. there client-facing our think I disruptions

perspective be pending be of it things technology think or and not place or say will impact that I don't more But because there that would we about clients. that with in do our will of get our ought you very from to deal customers and and an we'll course a have that transparent year things remedial into nature. that largely a to think upgrades be I We'll talk operations so. fair some put to of merger. as There's of Investor over next Day. the to that affect ability that But the serve some we and

us. So every as generally remedial as build we'll lost momentum few be But we've tomorrow, that customers. And our side. and we of I a have today, first to customer-facing going hard highlighted, hard with required quarter the we're results day to and demonstrated any partnerships the speaking, as will the as relationships things that haven't work think, on really win

the is There's And do. more Okay. to done. nothing IBERIA conversion

of you about additive may terms You're just in things talking some delayed that (multiple speakers? have

is putting right. little our deal that an of with. not you things because There's have things they're generally have term. process It's inventory taking been We're manageable. strength help through things Yes, one operations I integration team well it's to doesn't get and that's a done. short of we'll day-to-day, mostly, together. care of has period like us installed that and that about ability that an in of real is great those the and And upgrade technology comes to the get that think out done. our to concerned It's positioned I'm the that done job stalwart get this it a speaking, that

Yeah.

Okay, you guys. thanks. to Best of luck

Jon. you Thank

Thanks, Jon.

Instructions] Foran next comes with Autonomous. Thank you. our Brian [Operator question from And

good morning. Hey,

Brian. Good morning,

morning. Good

one. question of came Was you guess, Can answer guess particularly? clear a you kind the to speak been that this getting like night? it tough I general still that? you very Or I'm on morning is, this Obviously why on You've people TD drivers. all? timing to and why at the from what I last morning can

we your working completed very, or getting most we very on this it's mutual mutual time that is announcement depending on the -- morning. it because early late recent signed Well, the night It's and termination this started specifically, what termination last that morning. zone, drove we

you'd the give Okay. as all rescrubbing like to thoughts on we that where And settle on earnings X? that NIM of Any is going and us? guardrails think kind Or is out for about of then June agenda forecast, more kind good stuff? any

question. Great

We cover Investor will Day. that at

last this stated, night what Bryan depending morning this on signed zone was you late As or just early time are.

prepared But or XXXX, at I have what that don't a So quartile and the consistently I performer, next to top is, say XXXX, not will point. we're we see quarter give changing been guidance that. this after year

We specifics committed we'll X. Investor continuing be a X more to performer top give June and are at Day, quartile to and our

things that in hoping I for one Brian, year is away. thereabout, those or gone kind of of calls has forward-looking conference a for need guidance not having was this the done

and in the because saying last the zone, live I'm just chaotic, things that are loans, guess time loading the I you sitting X.X% one, not here zone HTM time I'm I of right Is in the up. keep depending of know the just now. transcript repeat, that CETX, I benefit don't and on right not think said Series but the G. you thinking can what was fair is so value AFS, Hope, number? you the giving

maturity as CETX, That's a like with go XXX basis stress pro was in above. what points which sale, would value QX. held That reported was correct. loan in as to it what's earnings shows well if our mark. basis That available the deck, we really look what is we scenario the for forma -- to full our On

regulatory And so up you hurdle. pick points the that basis XX above additional

it what how just from a convertible I preferred Series And G, that, could Okay. if you the work? is one, does last TD, can what in a remind sneak

us gave had agreement a convertible it. two us on they the At the convert preferential One $XXX merger, close preferred. regulators. fund it common $XXX of That would the dividend if employees not merger was a was a shares, Series as it to become converts was And more million for million it was that by It's to $XXX for ways. retention being shareholder. which no was used million, to for due G now different Correct. may approved common And our the well.

price share. termination conversion That the $XX is a on

that's to that So see. in see happen. we'll going Like XQ, the tangible book, we'll

Right.

is guess, million in Series it's and add be to you I $XXX if earnings going -- to this $XX and G? it the also payment closer

Correct.

If you would above an were to a book we pro up additional $XX.XX. on forma tangible $X.XX QX that value, pick

Okay.

like then I $XX.XX, So really earnings dividend in pro okay, forma got is think it. I is think -- whatever but I and

$XX.XXn [ph]. Yes,

still it's $XX. So around

value book forma, the pro $XXX Tangible Correct. you $XX.XX add a if million. would on in be

And the conversion of it.

And the conversion. Correct.

for you thank that Great, help.

Thank you.

Thank comes you. KBW. next from Brady And question of Gailey the

Good thanks. morning, guys. Hey,

Brady. morning, Good

a of of have pending? on the you target company is transaction, side and have as has TD a producers. there you of comment and a loss to sometimes any lenders exits a be this Can merger revenue with banker you just that merger know talent when tends the I seen been on loss

our for support bankers a is frontline And that our that strong a plan would organization. the role we I force we the of committed with very Hope foremost, TD bankers all as teams. today in and what time remains committed the say, we and Yes. of put had retention combined announcement them and our mentioned, customer-facing first in think I in and at

nothing seen So we've like turnover this environment, unusual. in but everybody

very XX And this we today quarters We've seen enable retention relationship the with will in into strong and drive manager. to the the continue very that Customer-facing next over us with of confident several to retention team last strong I'm very that course strong very momentum. portfolio months. manager, see announcement strong be banker will our

I I you're that's Okay. expense think view. prepared to been I and some you the mean, point of that maybe guidance mentioned But there's if understand. some the give the have base, technology base, think obviously, you And you know -- office guys needed of about yet, from you not on catch-up what back then, expense postponed Hope, upgrades, I kind even

So be the being mean, expense with that think couple do kind going standalone somewhat years next said, elevated is that company? to as for you need to just you to growth a of I of readjust

Brady, absolutely great question.

you does a in right going. re-prioritize, to will rate night. and reinvest on long our need opportunity need that to need would that seeing just we going well We impact what out not base at technology. is. We'll quarter take expect to as expense will last to look we material what And to I this as any a clients But get do technology right what as we our keep know, projects as for time focus the forward. but the thing run is found

a in more do that thereabouts. likely up. out Nashville to expect better But expected back we more line. base. when days trend or I expense in it's some to step-wise function it look catching some like We'll more know a and will incur to a normalizes XX pencil will than certainly ultimately, get our together in We Hope surge would costs

question gets this me, wanted about this this transaction a know happen. then is for to shame isn't deal it's you whatever And final both such resolved, think happening. do revisiting sides their Once merger? I TD issue

our about anything of future, driving regard. point, we're this have business. that focused to the future on on basis And we're At in speculate I focused and the no

Thanks for right. color the guys. All

All right. you. Thank

Brady. you, Thank

with from next question UBS. the And Robert you. Smalley Thank comes

of outstanding have? for fixed any there on own with of lockup side questions. the kind from One, A percentage couple. Thanks what is TD of will my I'm morning. First the UBS. good income Horizon? Hi, conversion, taking shares Series that And they G

level Secondly, right appreciate is environment. high pretty down you a you and going to capital, which the determine What you level how will you're there? do XX.X%, think retaining on go that is now And given the whether forward? level, at I from

kind And of regional cetera, disclosure, the then terms and liquidity do liquidity? Thanks. deposits. third, stave we're that you anything and I market around seeing concerns off to appreciate everything there that around need Is general in et to in that else you've banks in said order of on

Yes, Robert.

I I'm X.X%, number aware like the something to number. out that think not price at like First, the And of X.X%, works X%, associated $XX that. lockup with something conversion any

banking has Silicon Second, the been through environment. And entire in environment competitive way announcement are or very it in terms, and today's view through that liquidity. we day Bank weekend's the all about a than it we the was very feel our today. And has a the period, and what environment, situation with last regional in starting unusual put in this liquidity, before. It's good different space competing today any is been Valley we've deposit yesterday nothing

feel positioned and how from relationships. perspective, we liquidity customer-client for to about compete good So a we're aggressively continue we'll

capital, And correct. you're management, capital then

We we through as have be earlier, of sort yet evaluate is to it's be capital or And as a into of more to that I environment, timing strong and may work to going enter intend least capital be we like, seen. what said very we recession the what ratios. whether volatile operating looks at not a

differently. my come other capital Every a longer-term once side that. of out get the experience, little decide you ratios bit we We'll to cycle, in

and intend reevaluate the was strong that. merger back to but at that think do CETX capital time. we is think lower we now We important, a level, a bit You differently. went over we base to retaining continue to with capital will into a little it But for

to make. confirm, we no Robert, have just disclosure to

outflows. have in beginning changes of note been as since no have competitors this that made coming Also one March. comments, notable our of from we It's a result consistent my I do our to As deposit of deal. $XXX million we a seen

that to I'll So all. disclose you

help. Thanks great. for your very much That's

You're welcome.

Casey comes with Haire question Jefferies. next the And from you. Thank

Yes, Good guys. thanks. morning,

Hey.

question, deck on. hedges that some you cuts? quarter first the guys indicates should we downside was you deck, get lower the wondering done have guys slide do what earnings have the protect First slide of I against just Fed rates, to

to are earnings. are question, that Hey, hedging was downside. information our create strategy. Day, Casey, the I'll a sheet provide in It the order absolutely securities but It Investor more about on on is protect to we'll take that a not and strategy balance against

as but and did and the down is and the numbers risk at get using for it that look XXX end Investor you. updated how to release to continue scenario Day at our exact we we're -- I down so our is, include QX of downside our securities. will And we what we don't XXX at nor that have

good. this Very excess on just capital, pass. last to what to participate wondering more hope -- situations, that if there what and I'm I just just some be one Okay. and are would me, use for And of First their distressed appetite Horizon, would come capital? doesn't But

continuing now, now. sound, making this on down safe, right we time in That's not organization our environment. this and think manner today as announcement road relationships about we'll on focused through by a We're building continuous on and this efficient work and focused about we building we're doing broad it ways. refocused in this thinking Right something the that and fashion, client business business operate getting that to in deepening spend any a and very

Great, thank you.

Thank you.

to like Jordan would for I now closing Bryan And session. any comments. floor question-and-answer concludes to this turn the And you. Thank

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