First Horizon (FHN) 19 Jul 232023 Q2 Earnings call transcript

Good morning, and welcome to the First Horizon Second Quarter 2023 Earnings Conference Call. My name is Carla, and I'll be the operator of today's call. [Operator Instructions]

I would now like to pass the conference over to our host, Natalie Flanders, Head of Investor Relations. Please go ahead when you're ready.

Carla. you, Thank everybody. Good morning, our second call. to XXXX quarter Welcome earnings since one of It's been had quarters few a these. we've

we So thank us you time the to for join today. taking

and Dmuchowski Our Financial and happy our Susan remarks. Bryan to and Officer, Chairman, Hope, Jordan; Credit will President, Afterwards, Bryan, Officer, provide will Springfield Hope Chief some take prepared CEO, questions. Chief be your

SEC statements website earnings that at and we will our today that our is our which Page from filings. remarks will risks presentation, make subject expectations may differ reference we are X our of forward-looking On and to uncertainties. ir.firsthorizon.com. ask presentation our on review Our this you cause call, our the on to available Therefore, results to factors in

aware our refer which will on be release please measures, to notable These comments in our the Page exclude of please presentation. are that information earnings results, so GAAP items. non-GAAP of impact our and X the adjusted review Additionally,

current Lastly, to our comments reflect views and them. update are obligated not we our

With turn things I'll Bryan. to over that,

for Thank you morning, and our call good everyone. Thank morning. you, this Natalie, joining

especially our We focus those our unusual second whole. are serving announce of events of quarter XXXX, in unprecedented reflected on in the and the the second It quarter an and proud some of we results. resilience strong industry incredibly Despite Company sector, continue shown. are our pleased to I'm understatement have company that say associates has our be communities been efforts banking quarterly results clients and our both to a for results. the to the as tremendous the and

and On robust ran the Hope on provide will campaign. more equity maintaining from successful quarter share we a of a Slide this later. you'll capital basis, highlights return on On levels. common key of while very adjusted EPS tangible deposit per find XX.X%, delivered of $X.XX detail X, some an which We

client new to in XX,XXX in bankers bank $X prospecting billion to Our and by calls new almost our bringing existing over made base growing X%. clients, and funds

with million our declining coming of $XX continues performance range. the the of end XX to quarter be strong net Credit first non-performing charge-offs low basis guidance points in and loans at from

capital is points basis strong to increasing quartile Our deposit Though impending facing I'm increased CETX industry confident with top macroeconomic is in to from very ability position uncertainty, headwinds XX our regulatory returns the XX.X%. competition, change, earn the through cycle. and

prudently positioned to interest-rate managing commitment to credit current well navigate Our and us the liquidity, has environment. risk,

a returns geography, Our greater and business ability and industry, consistent to provides product, manage market model diversified conditions. is which by through range of

so and advantage are see in We enhance we products of investing our our take in and our the services, opportunities that to footprint. people we infrastructure attractive can

uncertain clients these times. our for associates serving Our benefit and second in in the the proactive beyond gone our our during disruption to above A it the provided associates clients. outreach was of quarter have opportunity

effort, this clients As see for of in you us result our grateful the confidence the this and have quarter. can I'm extraordinary demonstrated

of work clients, forward, I'm for shareholders. for they thankful As the hard associates and to our our value deliver we move very and as dedication continue communities

With the through our call run and Hope outlook. that, me results, Hope? to let the over financial to hand

Thank morning, everyone. you, Bryan. Good

Turning Slide X. to

adjusted our the have for We the metrics on key quarter. highlights financials and performance

significantly strong past sheet moderation very be the margin continues this As interest remains up, some our the basis over have X.XX% year, and quarter, expanded risen Despite interest rates asset-sensitive. points. net our XX margin at has balance to

$XX very in X.XX% ratio this flat the prior coverage were both expenses million, Credit to of quarter strong. expense continues an and the quarter. resulting quality quarter after compensation. essentially income was fee prior to impact of Adjusted remain flat offsetting netting the deferred to Provision ACL

conversion G share partially offset per value reduction. after dividend the $X.XX contribution. Series merger hedges termination added drove $X.XX, mark-to-market netting earnings added out securities $X.XX. on by $X.XX. is The common foundation $X.XX $XX added a book Adjusted the portfolio and Tangible million the of our fee $X.XX $XX.XX of up The

we quarter, which notable the the netted $X.XX impact items after-tax On Slide $XX share. X, in outlined or million per

as pre-tax include $XXX place Other remain the fee to million retention Our prior notable the of derivative contribution the expenses Class-B $XX merger million. related notable well of to the $XX million employee awards a related to $XX which class, Horizon termination. include termination million, primarily First items adjustment items sales. valuation in Merger-related the Foundation, as following Visa

last XX we've basis clients position our our We to X% you from expectations. brings interest new-to-bank exceeded in campaign over year-over-year. funds our points ending which the see X, that year, can asset-sensitive this The of net benefited with from billion deposit Slide positive from XX,XXX $X.X the expanding On the margin customers, up brought year-to-date. more quarter our than balances response deposit

the in betas. increase The accelerated modestly of timing positive deposit deposit momentum the

be X.XX% interest strong, in to the our very moderation margin continues some net However, quarter. of despite

marginal risen, we points also quarter. than XX were costs have loan As spreads higher out spreads in new seeing with funding approximately basis production have fourth widened the

with X% clients. the X, our clients existing demonstrating to deposit of added bank Slide over the see and success On campaign, our XX,XXX have We our period-end clients confidence of almost deepened grew can deposits the XX,XXX franchise. in relationships our you by new

acquisitions competitive XX% generate historically Our balances with client new-to-bank targeted strong and outreach coming clients. offer of from

deposit campaign clients. to with great a our This provided connect opportunity

made who calls took increased and advantage by the Our on us offer clients balances with the of their outreach deepening average. XX% bankers proactive

from Mix the into shift continued noninterest-bearing declining second highs. with quarter balances pandemic

comprise in of of half slow DDA of and Noninterest-bearing to signs see stabilizing still down to proportion mix higher quarter. the deposits than XX%. starting that balances at a the are total was XX% balances beginning pre-pandemic second the is shift which pace of are We today

deposits, of Like utilization higher we of their lot saw collateralized product. on maximize to looking suite coverage a repo banks, our clients driving

of million we $XXX funding. repo In of added balances addition are deposit billion which incremental $X to the growth,

million loans the X% and grew on average portfolio, Growth from show to at seasonal our lows. $XXX we X% was Loans up XX, and first-quarter portfolio period-end. markets across Slide our On mortgage trends diversified with loan in companies types.

a great is been have spreads more we've highest-yielding business as pulled for business. to it's space, relationships, us, our and back line negotiate others deepen This widened deposit for able in our and the business

We growth in was CRE also fund-ups in by on our had portfolio, multi-family primarily which loans, existing primarily space. driven our

is and several trends million had despite a stable We other in expense. on income offset cover treasury of We impacting noninterest-bearing driven and in by million growth partially quarters, of $X fee seasonal increases factors. in which mortgage. remained fees, compensation, in XX. deposits management higher saw income macroeconomic has We fee Slide Overall, due the to fixed-income decline $X headwinds deferred fees for

we On review trends. Slide XX, our expense

outreach losses awareness declines and related from evidenced well in tax support this of results down expense have quarter initiatives, when and include expenses implementation expenses exclude as We to brand solutions, with promotions, to adjusted The increase company lower programs. the additional of advertising as franchise discipline maintained were you investments lower of $X compensation. client disposal Other our deferred as $X the fraud our security made million across $X in properties. million client million realty the expenses

reserves. from resulting We in $XX had and historic provision X% of with to loans down Turning asset charge-offs non-performing Slide prior reserve expense, million quality million to million, remain growth quarter mortgage to $XX of loans the I'll lows. companies. quality a net be Credit $XX cover XX, excluding build continues supporting and strong near loan

loans outperform portfolio at Our cycle, to all granular and allowance for X.XX% prior we coverage the in ratio our the underwriting credit the healthy experiences a If of industries expect benefit and types. to operating the credit diversification period. due across remains flat of the portfolio markets, stages industry attractive cycle to

on capital Turning to Slide XX.

loans, of $XX X.X%, points the even XX.X%, for XX contribution. the million of X% companies. conversion well-capitalized with added portfolio mortgage XX unrealized net loans basis the points. XX lower-risk losses very CETX basis ratio We basis threshold accretively points, is securities position The to The XX G up termination deployed of CETX adjusting be capital basis still including into foundation fee of the above Our in would strong well capital points. added Series

shared June. On Slide full-year reaffirmed remains what Day guidance, we've you in XX, we with from unchanged Investor early our which at

market there's a As for we're been all in interest expectations lot rates. the volatility of experiencing,

Our momentum modestly deposit point rates rate then basis through we and in The increases XX of the year. asset-sensitive. for flat outlook July timing positive hike the accelerated the remain is the betas current rest and deposit of in

in We with still Day. NII guidance provided expect at to our Investor we what be range

impact our expense moving and businesses reflects as the those well our outlook retention awards in the investments, invest remaining expenses. into as of core to continue We

our pleased with on excited are this the had are the and momentum to deliver to continue of we quarter franchise. strength We

XX. To wrap on Slide up

markets and highly-attractive diversified We to capitalize our balance are on business model, well-positioned sheet. asset-sensitive

returns As to through has risk, we few especially the we manage am as to accomplished years prudently team months. last are top-quartile our the few I and cycle. of and proud committed continue over last capital the the work delivering

that built a demonstrated sheet execute have balance we ability challenging in believe times. have even our in We to and

I'll it And with give that, Bryan. to back

Hope. you, Thank

results the of strength We strongly reflect believe our second franchise. quarter our

attractive lot accomplished extraordinary sets in so with in south. banking unparalleled associates footprint Our days. us to last base a client and franchise up the an XX build the dedication combined That our or

and We have are broad long-tenured relationships deep. that

are and enhanced advice we're we about We value-added have deliver delivering and established the improved that returns shareholders. with opportunities our way bank we technology. team, am a becoming on to well the to top-performing products that excited confident I to an have clients to regional

we'll our concludes for open now questions. This prepared remarks. it up Carla,

from is Jon Instructions] [Operator question Arfstrom Our Markets. first from RBC

Your line ahead. Please open. is now go

you talk deposit deposit you that? on noninterest-bearing is essentially if then on that expectations. little see to to And at about point? bit migration. pricing this all, question A a you Can over them in do alluded campaign, Curious need slowing your changing more, a do you

rate you rate ran Thank for is have Good third way did which campaign, a the Jon. on again. gone from morning, new with we question. first June a much hear XX. a has promo have We, expired quarter That out promo from Good you through that to we more. deposit and the

but to June. May raise to We the to continue to the run to in industry, campaign did do expect expect and aggressive in don't have need we we deposits

relationships We new we especially and brought continue board. deposit to to believe that we clients well-positioned with grow are deepening the our on base,

Coming as the were into by year out almost and half industry. of as a migration. the As clients on a DDA, of failures they during that moving we the how time significant especially of result saw beginning the far April, lucrative the that and of we the we as really quarter, became interest-bearing in focus is outreach that and saw doing calls the March second aware DDA no in of in the all

those as is that stable the really more and we quarter stable XX% can much believe been at operating the the accounts And second into we're not so, of for that interest-bearing. now are there's -- half migrate remain has

Okay, pricing very helpful. balances? the And on the some Day, of at you it then, depositors? are bigger some the pressures can on is on all Investor seeing at that but You touch with you touched deposit larger of

normalized money they more in the not in I bank as saw quarter bit already we and banks we're end-of-the moved as people money as the lot We were their starting quickly June, clients well industry, to think had significant this down failures. Yes. to seeing do would the definitely a looking changed as I see towards say little move a following of three pressure. were bidding settled not

that in I anywhere, more lending the The the pressure is which going -- commercial where it. to it's got you side. be following, not easy but more will think coming on quarters, Jon, see

As lending looking is industry commercial relationships. and to you entire look the broaden transactions, at deepen

seeing You're you'll the you're deals see of this of half participation club it's the that the in and think that transactions. seeing year. I commercial likelihood in indicated side pressure And emerging more all on back in

Okay.

tied So tied you're credit? -- to saying to more

credit brought relationship. They Yes. a it's a have. Direct just transaction, to more than

We from next Jefferies. Please go Casey Haire question have our ahead. from

up So Jon's some just maybe following of on questioning.

stepping like CDs can away sounds CDs mix? wondering, there much you percentage as you It but which know on is DDA of make is franchise. I great. of from -- a wondering how guys the the the deposit just ceiling promotions, is I was a On the are near bottom,

in on still getting Casey, to I our would underweighted feedback back QX And say, where portfolio? little bit targeting we're grew I versus asked, a peers think we're ceiling think of look -- as we're a I at in there significantly in I you what CDs CDs when is we our QX.

a So, lot our the were we of lot you that I aggressively won have money not really could I was the a CDs. in. If we where a come CDs quarter, we of we new-to-client still We leading. grow price -- in think the funds room more would there, money where tell market lot saw

great. beta. up, settles? Apologies updated this, cumulative thoughts on missed if any where And then beta I cumulative following Okay, just deposit where deposit

our said Day, would XX%. we Investor betas In what around that be cumulative we thought deposit

that's I a still good think range.

look I think as at things one my that on we our is, of quarter deposit-gathering believe what I deposit a like, the comments do campaign. depending our of I the result we'll this rate mentioned environment that betas in accelerate

rate future our reprice so we had do the And hikes require to queue in have not way past. would the book

I we that. think just accelerated

Okay.

range. I think and Day that Investor still we're in

pressure the have And in half. expense conservative guide up XX% year. if -- is for the going below your back front, expense expense tracking am X% that's or excellent. lastly be a the just pressure little wondering on your Okay, there just more I to year-over-year bit

I think realistic. that's

big need were shortly. we things backfill. we coming which operating back some a back we there need charged have to to to that hiring out of add it. that going million merger previously we on we I of bit of think that And significant back, of retention low, just part into big to with need being is is center, hiring And that portions coming that to is we do $XX some a a to one thinking also some the need we do just the pockets little merger was close have

Great, thank you.

the going is we one are two third takes we to say, that in in our the Day, to was starting as I And invest one a mentioned - then third technology and to up. is quarter we Investor to are come

in million next technology $XXX the a full our see in impact quarter So run-rate three of over we a fourth expect I $XX start to some to invest really that run-rate XXXX with as our in hit platforms million years. we

comes Rose from from question go you're when Raymond Please Michael next Our ahead James. ready.

this I just growth. loan wanted quarter's on to touch

so were math, the think square was if touch And larger guidance But think of half reiterated. us then space. warehouse, just of could guidance. kind trying than I'm I Does if imply stronger this that a Is we're year? the the like anticipating. obviously in back -- of the I guide your doing competitors was to the maybe it on quarter right? the of shrinkage of The of out one and much looks kind you the got many

all to Just would see what the benefits be. Thanks. you wanted potential

Michael, probably I'll growth Yes. is think this half the We in start. Bryan. back the loan that will flatten out year. some of

continued some residential You had of pipelines in the mortgage. pull-through

been mortgage mentioned, utilization landscape there the on up side we've competitive lending. and the You nice pricing some opportunities the There very seen there. line some relationships both pick and warehouse in have some changes to

done commercial saw in And existing we broadly estate ago. speaking, we quarters some as utilization saw that fund-up projects were real of many many,

But us customer well needs and to start positioned those deposit-gathering some grow in year. think it over growth back saw expectation and advantage level for year trends support that is in out. the of to we'll flattens the full attractively clearly half to of and out we we'll our think, the we So, the deposits this opportunities. franchise take positive We our loan

And Great. maybe to fixed-income just switching business. the then

months. we're there. is couple wanted this to of I about point get update I business on my competitive think get next rates Can kind terminal an some you going to and us have in I the sort updates lowest of the in its positioning many, kind revenue Thanks. going model back is here quarter just just of this give the at of some inflection that inflection many of that years. point is quarter to of least

it's terminal we rates we're broad and that -- as to nicely. quarters has been a recover very with yield in do in steepening It's likely transition positioned customers start business and distribution unique some of average series reach the model that We're Look, as suffered base when confident serve and very a ability that see a result. of a to customer very We're uniquely business to our way. revenue in tough still very we're and daily see curve, confident our Yes. we very huge

is We've meantime, we it very the deliver it value that. we're research will always it countercyclical do we'll our channels, hard when other to asset and cost comes. somewhat to and of In management, expect positioned control very, teams the are things described, to portfolio, working turn continue through that and nature, advisory, going for be

KBW. Please ahead, ready. from next Brady when you're We from Gailey question have go our

So, the initial over. promotion deposit is

and new was deposit But of I at there rates. the going for what but up, think mentioned wrapped new of deposits you it you lower a XX, pricing June quarter? promo this said then kind is

kind with for were money money markets the the been of all at starting success July we've now do Since and X, $X.XX. had market we most one we're one, $X.XX that that at

decreased XXX we So, basis points there.

as pretty say that's Now similar would that other I for well. directionally products

Okay. The down to loan-to-deposit ratio you Is mid-XX% now like range. of at there a ticked a little you'd a that actively that bit It's see Are get the kind quarter. second in at? ratio goal trying lower? ratio that to

funded Yes. at deposits and portfolio. we both our Brady, useful look around a that in our fashion. to We're have have we loans because fund securities they don't We mindful have think loans that. both securities a portfolios with it's and goal to similar to be

are to We ratio get we that that through. mindful don't want

with going how where going by out be to ground, not and give right very us and ratio. we're to but comfortable of We're to we're constrained it We're -- ability our it's outlook get doesn't wildly deposits not our concern any with uncomfortable overly now it that is let gather positioned. loan-to-deposit our

buyback. me, then on update just the finally for share an And

that's finish higher equity buyback than supposed XX.X%. the of X.XX X, XX% of you're Tier especially a to to Is the a share stock there XX.X%, tangible? your year on to around If lot look goal update any your the you willingness consider common at at with

have important We I to capital base. buy of see opportunity back strong to stock. new really a of We that deploy it's believe We how information. authorization think have optionality. nice like degree positioned environment capital any We'll it. don't to with provides right this out. being Yes. now still have economic plays We plenty

balance opportunities it's And look we're dividend the our buyback. whether to going grow to capital the But it use at appropriate. to customers where meantime, repatriation, support in and and/or sheet

go Our next Brody from from Preston comes ahead. UBS. question Please

seems the and deposit a interest-bearing ask, was wanted bit the I just like period-end, when weighted to average. growth it little comparing back-half the

And maybe so, happen to the of at the to have quarter-end? ask I on rate deposit just is spot what costs. Do that wanted interest-bearing you

Yes. weighted half termination We of in No was with back the program doubt, early the the May. it back-half in started May.

rate all-in about cost at would of the in quarter of the spot deposits. end run X.XX% Our

Okay.

of great. I just the outlook just using guide. how guess, Okay I within -- of you know And then, guide. you and But you net -- the as that income much bit a changed are it the forward below the low evolves. think XQ interest little Hope, I end curve maintained you're the

to add back year income wanted of to how you of I the couple kind net had the did of interest handful did think into those just half ask -- cuts baked of of I of the much the in So, previous the cuts, how guidance. removal cuts How a the removal kind the guidance? much -- much a

We came give lower beta our momentum. up expect excited month set a seeing really miss thought Investor strong guidance did were and We we deposit than We which June on in deposit X deposit at an did going point. said slightly We Day have runoff. and better that higher May and to see And all us just everyone on growth. really, to we're net we didn't no, Yes. how to margin. June little interest a were June be that's

But deposits mention paying funding. I will for -- wholesale rate the paying-off we're is

down the use client fund overall horizon balance it funding to to our net sheet. primary margin as So can as interest continue our we way wholesale deposits pay positive over it is and matures as our to

offset the curve in year positive we're rate the help way the rate rates year the has a to at and look we our bringing increased later versus increase have. we does decreases earlier deposit to moved, two since it the very is margins in When asset-sensitive,

still offsetting. So in I three believe those with all of range we're

yield happen fixed-rate Okay. wanted the then on And XX the that is, I next loans amount what what do just months? one fixed-rate that's repricing of our know the to And you repricing those current ask on portfolio. to loan dollar is? loans know you over Do the

I repricing the $X it to them you. yield those. of get At months. I don't back have get billion is Relations to on have the but Investor have Brody, day, we next try the and the end about that can don't that, I know XX in

I'm Okay, missed great. sorry current you that And if mentioned what it. and are yields, I origination

we Yes. XXX widen We've the new spreads seen to XXX XXX about significantly spreads seeing XX to to out -- are what our is are. originations

Got then And last it, for okay. me. one

do that happen within conditional to the come with know you the within portfolio guess portfolio, to prepayment that up are I and what then know guys rate? do that what using You is effective calculation, Just duration. you duration AFS of duration

rate. then effective prepayment is X.X a X duration we Our assume and

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

Jared. Braziler This filling Timur in is actually for

second It right liquidity was couple that in The the questions excess sitting spoke quarter. cash of looks generated in Just now. here. a it's like

liquidity into color use borrowings some Just to curious, we what going to that book, down on is of any can be, the going of pay you bond the that, to go that? get are is going

FHLB matures It to we that pay with laddered off it plan But pay came excess quicker. We at intentional will and a bit deposits have much that that. our -- the funds. to in the We as borrowings borrowings cash debt, wasn't on had down we Fed. our our little out

some building going the liquidity there that's -- be going strategy then the you're the And throughout of to we Okay. layering rest the see the additional could book. well It like to bond as year, sounds into continue or

on the books. additional intention no have we time, of securities putting this any At

liquidity earlier as use. as Our said, you our position, is improve Bryan intention said, to

our loan capital position felt. clients we for be liquidity, we and there generate and to that this time and our strong during growth customers support Our

loan We have year, of growth. moderating loan still the growth in but the back half

Expect expectation Our continue that -- reinvestment, limited trend very we're the to portfolios making securities because is they'll down.

maybe to markets, of of Can talk And bigger offering. further near-term Thank is quarter. you're the kind kind helpful. above? the Maybe the of again share just second the plays you. thinking that's the company, give diversity that kind penetrate in standpoint, the strategy on you a there a strategy product Okay, in how of in from IBERIA Tennessee, kind and how it strategy with namely about the as gain here. geographic growth more you to about then, deposit of a the market on that Is all geographic picture for broader once broad just standalone generated working sense Nashville, that

if breakdown, of recall was and about was numbers, XX% The out. State in it I the Tennessee of Yes. XX% was the growth the deposit

benefits the We diverse. think the as we fairly of several quarters, equals. realizing merger First the of and Horizon at look of the next it's broad-based promise that we're so, And IBERIABANK

markets. that to We continue for quarters retail out build what the have us focus, the opportunity of coming would markets. that think IBERIABANK grow will be areas to in and be in out very this retail continue presence in all a legacy We're presence one attractive and we will and how of we higher-growth our across be emphasis to the great

deposit broadly a our same serve value capitalize model the for for the to growth being unique huge in customers on at customers, there proposition and see these and time a drive more markets. our us to ability higher-growth business opportunity positive we So, attractive

ahead Alexopoulos JPMorgan. go you're Our next from Steven Please question comes ready. from when

last for banker you in Day? changes Investor at deal were Steve. through the able year are there provided and the the quarter did Elian and you retention quarter notable associates indicated any since that of first move Anthony Day look the XX% to retention from retain question while waiting Investor second My Investor of Day forward. is What statistics to nearly for TD like you This at on month, this first

No. No notable changes.

encouraged Our as client good to groups, well and see our be retention and very as our our with associates, banker we're excitement very, clients. have continued we enthusiasm the both in bankers, and

retention numbers. saw would So, probably I final seen our has first estimate be from my that -- in I quarter. is But the good been the improved what would haven't and you

promotion. with from did feel like Okay. aggressive I And deposit-gathering engaging then level, you on promotions, guess to existing you in just be new-to-bank also deposit-gathering but a high clients, clients? from needed not the why from

Well. A with you had with the May we Clearly, one do in situations couple as thoughts. merger of wanted the of termination couple things. maybe we may the and termination of more miss the mid-April unique to a of

that a U.S. in lot was an the deposit play the awful know volatile all period in there was One, that and has where been base we and contracting.

terms committed to field serve. on continue opportunity great how to how needs. our a but positioned, their that to serving the First So in There well-positioned when was we're we Horizon, them commitment our conversation customers wanted the front do having phone, to we about a to be home and and to be to in demonstrating the foreseeable footed over aggressive of to be talking very to not protect get the looking future, bankers only we positive we're what markets

benefit And thirdly, federal borrowing. a funds. then you home Hope when get at as mentioned, Even you the of wholesale with and funds cost, deal sort versus a the bank client relationship same the loan alternative wholesale certainly of

our we're we're to draw front on our to we and we're the under commitment of going merger. looked it demonstrate Horizon a line commitment get of reset, period footed, going to is marketplace say the going to First a to termination it the and very our appropriate said at We're -- period the customers, model. to So, value delivering going to

Okay. much last you. billion How add And from Thank existing and how the into from $X.X in second breakdown would that deposit sticky deposits campaign. question does and quarter billion of the you $X.X the from you is clients? the $X.X say clients my billion the new

commercial. in introduce -- of on First consumer franchise. clients, new relationships, the see First we And saw We one an commercial. deepening to these The XX% brand is consumer, bank opportunity every Horizon it and to to that Horizon clients XX% was of the that in of to XX% XX% the new

so, And single build to out relationships them now the hoping these of them majority spaces deepen that will sticky, and we're we're transitional calling that a trying of more be on in clients relationship that to every we with deposits, and with that seeing deposit as we're reaching have a other these to relationships them. not trying one

had an and this we create more quarter and opportunity relationships continue we to X% than profitability. to We clients grow them see have before, more with that's

which real is, if you to billion but view is you our is demonstrate in had like at look principally growth The primary was we an the that our XX% $X.X in opportunity something like of And $X.X to billion, recognize any base, new that that. campaign, my customer with it we XX% right, and commitment recollection in with great, customers service were customers roughly opportunity any something deposit existing our base, and deepening. to -- deposit attract our customer

were relationship opportunity were right, new The period have X,XXX numbers So customers, want with take about here XX,XXX is XX,XXX, were do about to a remember the X,XXX what relationship, we customers. if take the and the commercial. was plus the I and deepen we broaden the to the locked-in we'll opportunity, XX,XXX, it retail these

doing we and that said good opportunity relationship I it. expect have great very results that broaden with we'll about to have a that's for us So and

ahead. from Janney Christopher question Montgomery Our Scott. Instructions] Marinac [Operator next from go Please is

or on had you the how at that question credit just point ahead? with look mention substandard, out in Susan, for may think I how quarters and a the about just you it you migration or downgrades of for special

downgrades is -- asset had it it's for We Chris. had portfolio. financials Thanks, non-path. as year-end very, we're was of But something moderate limited you We're additional and pleased quarter getting -- quality we into -- we on since with second overall the still that very it still we're do in clients. the very typically know, see the

in decrease pointed for our terms of quarter, balances. out. this non-accrual planning X.X% X.X% send at had We actually and the total in So, a loan at to classified, non-accruals have end-of-the

watching rates. rising with in we're obviously, the going it economy, interest So, carefully on what's

in but clients, they're as used talk to adjusting prices, appropriate are to business pass being watching bankers so we increases initial and environment, the to need to cases, to we given servicing are able doing carefully getting that do and we're along in and many continuing we like well-positioned, But there's well. borrowers still are our as and this and where that monitoring underwriting it diligent later be

roll to still the recession It's feels place. six kind and that's interesting in Chris. expected continue and to you always like borrowers just our good are customers when pretty of talk off a months it This customers, bankers

paying attention the As awful doing, higher Susan adjusted they've but said, our at inflation. very lot an said, you end day, point. at feel as well and grading dynamics the how understanding around good of changing borrowers are rates things we're relatively to And the this and of to still

that unfunded a come for commitments thank you that. down, any of possible is the release there possibility. reserve Great, would And Susan, be

And like looking the point, take gauge there quarter, what But, re-evaluated we and to of economy. we've where things look on every unfunded, they to today we we'll obviously, on or when Chris, is this a and obviously I like we in if the had have terms changing conditions look like based what's be is economic are going that. to At the reserve feel growth, at that, release, in in deterioration either there's balances know opportunities economy. needs growth it at we there what just at

registered. further for have team the hand final to We questions remarks. I'll no management back

us busy for morning. company. our taking We is Carla. in time. your Thank appreciate everybody a know appreciate you We joining you, what on we interest Thank

additional questions reach all please need today of Flanders if have any you have Natalie to hope any follow-up and information, you us additional or If I get day. information. out great will you Thanks. a or we you

concludes you for call. Thank joining. This today's

the part If the you of day. would to again, like have replay call Have or shortly. be missed available a any telephone hear lovely will