First Horizon (FHN) 16 Oct 242024 Q3 Earnings call transcript

Good morning, all, and thank you for joining us for the First Horizon Third Quarter 2024 Earnings Conference Call. My name is [indiscernible], I'll be the call coordinator for today. [Operator Instructions]. I'd now like to hand over to your host, Natalie Flanders, Head of IR, to begin. Floor is yours.

Karli]. [ you, Thank morning. Good to our conference XXXX third quarter results call. Welcome for joining you us. Thank President Jordan; which, Today, Officer, CEO, our and Chairman, Bryan to your will prepared happy Hope provide and remarks, be after we'll take questions. Dmuchowski Financial Chief Chief have to questions pleased well. Tom with Officer, our also Hung, Credit We're as to here assist

today remarks website earnings ir.firsthorizon.com. our at is which Our presentation, reference will our available on

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

the presentation. [ comments of that items. feel measures, views, but it's are that, in X ] aware last so end non-GAAP our not These over of Page release I earnings we are turn not information our we for the refer you our GAAP and them. that review obligated to exclude things least, you to And on Bryan. update current our to important will with And should notable our Additionally, which to comments [indiscernible] adjusted understand results,

call. morning, you everyone. you, Thank Good Natalie. for joining Thank our

our in Tennessee, food, one were supplies. and details fuel I'm to highlights our the provide and units centers early on support heavily Helene remain well, of essential for with all the some the and fared banking clients. open, the and our also want have stages responded impacted all to we'll communities, is providing and centers process. On Slide continuous Florida mobile incredibly X, our for Before of rebuilding North and to quarter. financial needs we and the we at get proud these commitments water but and engaged Carolina are back into banking In the are on We've clients of recovery, of ground announced prepared immediately associates, our our Milton. to how express services communities. We the other in to were the time. team, Hurricanes shared of our team but banking financial there by restoration site concern quarter, the I for banking who of this of open those

another maintained First credit expense revenue, for coverage capital. Horizon as continue generate grew delivered to strong shareholders discipline, we improved quarter and our

EPS from diversified continued Our tangible revenue XX.X%. results and quarter. this improving deepening return our quarter which on $X.XX a million $X.XX common equity was of increase our adjusted our adjusted share, focus the reflect business and $XX client Pre-provision on growing of strength per an increased net achieved model prior to relationships. We the

continue in over third X XX.X%. ratio deploy million the We to and repurchases, with ended quarter capital buying year-to-date. stock quarter of of We the million back through common $XX share a $XXX equity Tier

to clients Our well markets. I'm million with to our our charge-offs culture our the Southeast. throughout serving of and results proud are our our XX I in that $XX net saw of -- communities believe along these capitalize and dedication or we disciplined basis this of continue demonstrate as benefit points quarter. just of the credit display footprint we positioned grow to bankers the opportunities attractive on

more results economic As value. enhance fully environment is remain Hope over that, head to I'll run to to financial the call shareholder encounter our I Hope? equipped we our in next franchise continuing into to that through optimistic With while incredibly detail. year, hand we any navigate

our share the performance you, of adjusted morning, improved performance increase Thank net X, Pre-provision earnings will from $X.XX key interest you Slide financials net due a and for strong generated quarter, quarter. income last per Good flat. find $X.XX, everyone. On remained from Bryan. adjusted business, to and million our We while metrics essentially from revenue largely expenses adjusted income $XX by quarter. our prior fixed

see expense. X.XX% of ACL including our on XX.X%. $XX revenue potential return increased drove Hurricane net from and and solid increase qualitative to coverage modestly We basis provision continue million common credit and portfolio Helene. The our to performance reserves $X related improved lower reserve with charge-offs tangible to of XX for an losses million equity to of adjusted points build in

late target, in Our by CETX modestly XX.X% due to share. reduced per near-term ratio results couple assets portfolio by outlined quarter, our in XX% Slide notable of risk-weighted X, a sale. On driven which we $X.XX the increased above to quarter items the lower-than-expected a

$X that efficiencies expenses the to valuation we related of Third quarter funding continued restructuring the escrow a include items occurred notable the have to expenses associated identify. up with accrual, special and million $X assessment a derivative to Visa FDI that operational million credit September, lastly, in of expenses million pretax was trued to $XX

quarter, you X, X.XX%, as deposit of costs fixed by compressed asset floating of $X this billion rate that second basis X from client higher net new points and deposit benefiting from stable growth. Loan the an The and of costs. partially NII driven cost with quarter, basis as expanded increase million from renewing average The All relatively to quarter flows. X was higher on million use higher brokered in will well of of net offsetting prior acquisition benefiting new yields reduction slightly last totals from rate cash margin $XXX spreads interest deposits a income. On points to was yields count. see better the repricing Slide day $XX to

with the billion contraction deposit Slide closer look we take and growth. a we quarter, into X% X, As repricing. On $X at deposit expect we growth. strong our client balances Period-end loan increased margin move to the the modest driving almost lag between due position fourth of

have The higher saw increased X.XX% end interest-bearing in part loan-to-mortgage pleased broker at use the over the rate quarters. on rate X.XX%. the to declining We are noninterest-bearing higher which deposits, spot few by of from seasonality billion are X.XX% June. spot need we driven are to deposits the Deposit rate a also and end a with see was to of already $X to of with paid relatively drove market another improve as continued interest-bearing the declined in September, remain X to balances last basis beginning that funding. Deposit average stable deposits rates X.XX% rate by points due of approximately the indexed. of companies the partially costs October have for to today spot This

future. After in sale other commercial [ have higher of This not to XX, up] progress loan to the intent real fund of repricing a XX [ sell make the this to year, in quarter. graded fund billion over opportunistic of we Period-end CDs after the to as consisted the Slide estate have continue portfolio -- of low leverage, health our promotional overview portfolios the of set a from an balances included as loans $X will are in the $XXX approximately loans. billion of on approximately exited the million deposit are prior care care portfolio, declined we ] has The deposits relationships health approximately that ups period reprice last or we $XXX portfolio remaining X% have that by mortgage maturing. On sponsored loans. companies. million the up do addition driven an pass loans Average of any vertical. to lending the stabilized. X% loans in portfolio in foreseeable brokered quarter, seasonality We $XX We were of from

repricing. mentioned, spreads previously points X and from cash fixed As up due to loan flow were wider yields basis second quarter

from prior is July the our ], quarter, fixed into revenue a we move loan increase fee Slide quarter. portfolio likely we Average As XX, [ XX% fourth $XX business as yields increased rates. On quarter. a was loan to to million saw deferred the the we muted in highlight excluding income indexed XX% in decline short-term of daily in increase to relatively our are Fee the in $X income. $XXX,XXX million income, compensation improved month. driving revenue fee

increasing cuts confidence the and business in in September. rate in both the increased, market's we saw momentum as However, August

other we [ items, ] adjusted due Personnel was Home deferred from down higher and BOLI $X that comp million quarter. including $X noninterest securities Slide the some and expenses show dividends income Lastly, million FER million. Bank prior increased [ other compensation, benefits. On exclude ] Federal by $X decreased XX, nonrecurring excluding gains, to Loan

As on the the higher the income included that count a day associated $X The and reduction expense in salary quarter incremental second incentives higher production. in a incentive fixed incentives offset the of elevated retention place the took and impact of outweighed and at expense. reduction end to medical with commissions continued the million awards step-down

constantly evaluating efficiency. operational are options to improve We

X that impacted This items quarter, implemented we headcount.

efficiently model we across First, clients. the serve our our more optimized staffing to retail footprint

salary and incremental our expense costs. by will outsourced occupancy management property recently lowered also which be functions, count head offset some but We

more for to better this We while providing our expect support building a efficient make associates. clients our and experience

Net of through high still and declines a their our are strength if year. of and out components. improvement for and talk The we quarter, our the consistent average of optimistic environment are revenue million to $XX We to was the we remainder we $X continued remain reduction to landing year-over-year, very initiatives cover the to increasing of There $XX loss reserves lower property outside the as by of to down Hurricane equipment. Offsetting build this by rate strategic occupancy exceeding be quarter, through do Helene new more have X% increased XX, on of the qualitative total navigate to couple a in up driven continued maintenance clients production Loan slightly decline. On on Slide included basis with months. by XX% we guidance soft Fed do points economic services million versus real of million coverage believe the the continual well. from initiatives. commercial million loans. enter XX is continues by or which commercial provision $X decreased on services expect driven to X.XX%. perform loans as chooses to the a though very what over individual C&I reserve an the see with and which NPLs $XX charge-offs scenarios. Nonperforming Slide to last can current well that here related software strategic impact increase continue next million as we'll rates our improved $XX outlook now credit management increase laid driven was of revenue as to are million consumer estate. grade well with million Moving depreciation flat the gave [indiscernible]. Overall, offset by portfolio will to partially with incremental a is advisory pleased $X as the migration, in $X total engagement our phase. I'll million was composition as certain our What increase XX, focusing We ACL

Our pressure. that see countercyclical against a asset interest are hedge If our incremental rates, those sensitivity. businesses will natural NII businesses we in declines incremental offset revenues

Turning expenses. to

to Our unchanged to our remains to investments. as we remain committed continuing help identify offset guidance efficiencies

but see until unchanged For range the recent net that can events are charge-offs, losses we have potential arise on to that weather trending in we the you our from for have left favorably could information the our we guidance more footprint.

XX% progress target ratio Lastly, of year. we to up as far XX. the proud have an all this term. I'll so CETX as we made Slide wrap turn a you company I continue am near to

while making focused we enhancements us franchise. success to improving to needed the grow strategic profitability as set are on continue for up We the

First extremely optimistic to Horizon delivering for remain As the and banking about we of a and experience are premier shareholders a continue value excited clients. future our team, our to leadership

it give I'll back Now to Bryan.

top you the Thank say you, Many to heard of our stack is goal Hope. have good me one next. on quarter that of

to momentum goals. that our to added us step [indiscernible] track and one quarter This longer closer record puts achieving

retention are discipline improve expense an aim revenue through operational execution. and client while As excellence. growth organization, focused we We on intently through maintaining to

shareholder well-established next diversified We capital deliver to model, the into confident us capabilities our greatest remainder will business over and technology that value resources enhancing align will exceptional year. to businesses, continue countercyclical XXXX and including strong continue business opportunities of deliver the to our our to allow client while with remain experience. I

combined other. to open to it footprint build an questions. and Carl], unparalleled dedication and for for with all Thank associates for associates' positions Our you our extraordinary for clients, client that communities banking now each attractive you up franchise base in [ we can our us Southeast. our do. the

Instructions]. [Operator

first America. comes Poonawala, Bank Our from of question Ebrahim

in million of But sense over the income a NII When at think book I I Certainly bound seen revenues quarter, bond in mentioned we guess this term, margin about some the maybe, [ NII, rates given the or quarter as talking, business, NII. what's question would is, will fair next to at leg Bryan, makes very guess it $XX least total amount as impact fees address or Hope, Hope the terms just banks, near on fixed cut the to is look compression to you the of X countercyclicality us, good your of the like go terms gets talk we've restructuring I increase is versus higher upper another this? Or rate got that. ] you -- in of outlook? love it that for it there additional on businesses.

Ebrahim. muted question. a July. my comments that I that Hope answer saw very This to in is mentioned we

with go already about that we've thing rates down ending had XX decline points seen one If year they've and a still we upside think again. talked day. as absolutely clients were September this you that people restructuring other basis conversation where earlier quarter. The stronger And we rates momentum that mentioned buying strong year -- than much the we So see some July. year, -- to we locked August some to was things our are the late thinking continue if another last this see business

I do be there'll think continued in environment. a rate momentum so And decreasing

the just ratio. And the was Understood. other around question loan-to-deposit

you the actions [ the driven -- know partly from quarter. in the XX% during XX%], decline I think to some by about the talked past. this the we've you of called I took out

to there managing lower? XX at And more to? you quickly which you cautious certain making loan-to-deposit is that remind a as when Just look result, you're pricing of us, a [ is level a of kind terms you little ratio, the bit ] [indiscernible] how deposit in

that most but a our monitor our our We ratio, as also loans than to to we And peers. run use belief of securities we we where securities monitor clients, portfolio smaller ratio. first. much our put it continue deposits that's as much is We a to plus help want can loan-to-deposit to deposit

we to in forward, move up of it's we ] does you'll the have we to As tend we comfortable did where to ratio [ additional at What as on. the that want with change to But is are work want competitive that put front. near generally we course, we're loan-to-deposit trying continue broker see not over staying to with do piece down time. I would clients our say us are our defend We're continue fund to sure warehouse. And to see pricing. us. biggest it We home it's mortgage term. with of make

a have order deposit are quarter-over-quarter the at say premium. we're are would to clients retain banks bank that out current other I there offers by really [indiscernible] comes to being and come rate looking made so growth looking that for in them same absolutely the back for. the to book to continue deposit the growth bit and in higher does And little higher new a in it's that but

through a activity deposit way our in at look significant We lens. and it We loan-to-deposit the add. don't acquisition think ratio. deposit I'll about customer Ebrahim, around pricing largely

to while we during by customer note the relationships. customer So time, want continue wholesale And look or funds, on side. we're gain $X the pricing quarter, about is high-quality We're of in pricing customer attractively attractively And customer that you'll share. this very important we over at growing billion grow attractive and we deposits footprint course are grew what relationships. versus so with to X% that to market

particularly private somewhat high time ] So customer in grow net [ the client worth our on businesses. do focusing while our we spend are X related, retail how we more relationships, and

from James. Rose Michael Our of next comes Raymond question

additional bit. side, the quarter margin pressure the some the a you referenced. little you repricing little more into I wanted about the deposit dig in the a opportunities. into mismatch on your Hope, mentioned I timing next given we But understand some as of bit fourth comments just on to Certainly tailwinds, the with year just of margin that think as

slide I in mentioned client was that for that $XX repricing eligible million are deck promotional fourth of pricing chunk eligible quarter. think deposits the the of for a deposits

the do expectation really margin can move rate pull each it's and the at and going Or where despite think to point quarters? the push that and to be a shouldn't higher quarter a fourth point sensitivity? at your we for of the we we expect you quarter, the Are move NIM is least over inflection couple is the next

a on November, It Michael, rate quickly quarter-to-quarter. We thank see we you really I back-to-back push the it's question. and for see in be more do going of depends December, stabilization. cuts some rate the to say how we and pull would then probably cuts.

continue we but after stabilize, repricing see quarter or month can down. after to margin Our quarter month

in to they mentioned promotions through reprice are their loans new to -- I come to XX% going to as going my are work that comments, off our As to We're have going our loans deposits. of down and bank.

way necessarily XXXX, environment. in think will we rate take don't that doing things cut a everything can I sensitivity current in can it we somewhat but curve are place asset trajectory off So to steady or a sure we other based the be the forward very see on of make the one uncertain we as table to put

are repricing deposit sensitive currently how because quarter get promo new-to-bank that loan For side. days little before bit XX-day lag just allows on guarantee, us guarantee quicker can the see you shortened and we that quarter-to-quarter, a to less example, a flexibility especially more depending just deposit the we repricing. late we in asset XX and that we get It's a our of maybe the

the why might more and the on the the see on Hope income. variables, total pacing as will net interest significantly more in cuts you see said, other. item we're rate are business, is, as to you focus focused of impact line and cycles, you of if income rate significant balanced And revenue one One But think where that's we rate the offset you'll sensitive noted, Michael, more fixed more it on key the interest et our cuts we appear properly cetera, then the or less in.

to that in believe will can of we've interest got and year the we this sheet FOMC XXXX. do moving we in way rate balance for pace But that rates positioned manage adapt rest through we volatility the the a sets such into and whatever

the had to plan and expectation the is difficult some pulled savings some and but at ask banks Certainly as understand of you you year-over-year? levers a I is point of early higher for and be rate the just your understand can sheet Maybe balance year, any think are comments this I the front, know certainly assume would for on hearing some it's I on of cost planning just next but if growth. you wondering looking you grow backdrop that. just kind we I should PPNR follow-up, that to adjusted leverage? And about that bankers, more know -- that? kind we're expectations how I But initially, drive operating more because that project, positive And

little positive guidance we're XXXX. items, growing working in I sit our in you I next us think the Yes, through expect year. remainder we'll more year. various line see next the PPNR but PPNR provide drive a outlook today, here quarter will I of we for will But do And that this or still

of next Our RBC Arfstrom Capital. Jon from comes question

referenced your kind growth? on stability, and looks But outlook you. thoughts for for but about of have how C&I expectations. what a one Bryan, what this some you of guys growth seeing, was much like bit an you CRE weaker. loan us self-imposed talk is you're Give It

happens not that coming month. of parts, some is I a back seeing suspect in up say that limiting self-imposed. it not has come somewhat There's are the we're balance you couldn't that, the Yes. muted next will one the the very in at this to is in picked is I tell I to I in The point. caveat elections marketplace growth weight part the It what up. of how to size but second. would sheet. the loan We're what of little

and I have interest are we had in weighted to a deals is better competitive have else. start partly customer on the we've this we we I with greater of those. pent-up used we at There the to looking or get financially. to going few what we soft We're think exception. grow with XX just some as the our and where landing some We still period participations hear investments. to optimistic that rates. places And ] to mentioned the we we're somewhat demand, very, broadened customers in of when And we'll been our a least we some point. X looking are to But [ thought time. might, a or next make taken Fed it's overall, there's And and when very clarity participations particular, that. to have than of And client through I'm for of loan opportunity in exit we grow something muted, ready that all still somewhat that, in It's other conversations. The then where do at look had one out maybe marketplace the are days on deepened is relationship if base. do, not lean going

that. enough on Fair Okay.

optimism more on little you're still lot that's there, I growth. hedging know of a somewhat like a maybe it So potentially. feels optimistic but

to as much to happen. mean what's didn't uncertainty I as I meant about to hedge going convey

like share I help Hope, in a rate. that a How August fixed with on willing maybe of was? run follow-up think Okay. would and you look the us to big what income. a ADRs September? Are step-up that

following September, in say were rate And were finished I quiet. the much I see have actually kind a And August as same of significant that different, of weeks in cut, rate months hold uncertainty that takes uptick. that September rate the was the strong. cuts type [ me. equal, the right the as we I materially and before story. Nobody before really there's but right momentum generally a buy think the rate were end front recall. really few not cut don't pretty I quarter would about But of cuts rate different Jon, of anything the months. the wanted coming we'll to after ]

Jon, give the economy for you last expectations the changed. has good the curve rate moved a bit X have as the XX-year around people's I'll weeks.

first over a If Last of $X.X week, $XXX,XXX. October, little week over were million. we we a you the at were little look

So based X weeks does and rates doing. sentiment moves interest not in it around trend, market make on what a the and are

And we -- mind of On a the at into keep to remainder I you we're think well the the to down [ slightly in and the the whole, passed, year. little you just ] X.XX better have tend for over were you our that for the as to this of get back point, and shut be markets year. quarter. is as some outlook part than know,

on optimistic for year. remainder we're of activity the So this

[Operator Barclays Instructions] from comes question Next Jared Capital. Shaw of

those us fourth in referenced Maybe a coming term and you on now update there due just where in moving billion expect change is see quarter. $XX pricing side, you to of give going that to? the also, And promotion? Could deposit that back on that that's deposits an the the you

Jared, as recently yes, have as question, starting end term the the your last changed week. we at of

the see look our is to of down a continue are sensitive clients falling. at rates we really how rates, sensitivity bring how quickly to As analysis it how

guaranteed days the our prior XX we week earlier, last versus just And mentioned so XX. end roll that, new of as only did out rates I

compares earnings quarter XX money ]. me when Our last [ at call. [ ] X.XX you That X. is to on currently the market asked

offer retention X.X%. is now Our

walking might December really depending on and hard And headway rate is we've back back much so scenarios us cuts have for make after, how for with it the ahead when cut of that see the and quite cut we rate been to look a rate we few deposits.

And walk meaningful the the much November on how most rate back. can it impact we cut so have will

Okay.

Okay. appetite we additional we we look from up as be expect deposit Or business. the And the that what's to mix? Should top? for brokered the deposit the mortgage in bigger of anticipation at composition, heard broker you here? built I a commentary are that then part of see overall your near the

used and seconds. Jared, is brokerage always our money goal first client

bring typically, with it funding rate million start goal, retain So can need QX client brokerage last we less saw saw mortgage we let's increased quarter, comes come that kind mortgage actually us is down, for we quarter-over-quarter. more and of $XXX note being some is warehouse years, a cuts. warehouse. money, We up on about the the match saw refi broker with the for we always X% our I'll and which activity And past of of actually against our average

we're be get is about goal So [indiscernible] we that the think mortgage to to really in how balances about we and as to always have but our try going more there out to the of well warehouse But is can much continue yes, it compared I where theirs. versus brokerage mortgage that of peer group we last below to when quarter-over-quarter money. am client our our comfortable [ whether we see ] decreasing warehouse balances quarters increasing couple or

continued fees, NII the the trying think revenue towards but are a 'XX? then gauge and Okay. or margin guiding sheet How potentially finally balance here exit total me, what or for the the And we know expectation. some is year, how -- growth, should trough of for try NII between pressure, at we what dynamic we're but you're to ending versus more versus just I about for NII with the

revenue is going for other. on NII XXXX, much gave, [indiscernible] both it from guidance of high we line Jared, the new the and our guidance at the low prior come you see change I and end we and end a in the look to revenue in of don't one of

the is our think moved big we movement. not NII, NII historical It we large did into For see. QX XX% for a and us, to about XX% a been to or how year, going see just we are yielding would highest or for much refi asset we've going that as mortgage help XX% next so significantly. us unknown from It's seeing, XX%

in talk mortgage majority the NII line mortgage the in So we with about is Financial FHN the of warehouse is income as countercyclical, line. and

we those So talk with that about both into embedded XXXX hopefully, have in an going hedges, as hedge of is embedded growth loan we also do businesses.

Our from next Samuel of UBS. question comes Varga

just some I retail see I switch you you to to little a might to on going any deposits on over have it's noninterest-bearing commercial. or wanted whether could through initiatives bit. wanted if some to color deposits, attract give

Yes. is across We're the looking deposit really to entire This grow base. Bryan.

a very get in what with in deposits. it had along a earlier which stable, been our to we you the was noninterest-bearing growing of -- They've We year, articulated have bit, very been core it sort core it checking grow and is active customer which follows to but we that. is noninterest a of deposits low-cost growing that's drops important an bearing. But relationships accounts, part noninterest-bearing percentage, because level looking as little we're grew

have to of entire deposits. efforts number we the continue lean those And consumer our side. So we in grow commercial and will on and to the to customer grow look across a franchise had client relationships

should Can give understand Understood. part for of I the average are a And And of us there the that about of a then, of model you as 'XX that as what of currently a on those. of 'XX, NII? be late not chunks sort there's any and of you yield over has? [indiscernible]. that Hope, bigger weighted book think next that the reset we XX% much main loans sense guess But sort aware year, I

if of in X, X%, I that X, have we I any one the kind lot X.X of at don't they we is whomever, get space today. for have currently to get [ a our we at we mentioned amount them next to years. at they're added think the that large They've refi don't the see cut [ to rate]. have though But balance XXX% the I over our X%, XXX%. wall the balance really of ] is -- That items steadily where a years, or see average less earlier large have from been rates on say expect X, of ARM we time What I'll fixed sheet what X prepaid. Being in the sheet a years. them last that a X could of of weighted

numbers these Natalie look you better do. than and can use I to correctly, remember remember I as proxy. a If she I'll But because

range, in largely yielded by consumer ARM]. maybe quarter, in that's X.X% and a so I [ little loan our the third portfolio think the higher or driven

a that's number. proxy So that for

[Operator Instructions].

McGratty Chris KBW. from comes question Next of

question XX%]. maybe [ Bryan, ] PPNR XX being above [ on Hope a or the

a Just control the couple of curve Maybe And a comment forward of or currently expense revenue questions. I is more in an now? steps? comment factor that a between your does that guess right secondarily, given

Yes, yes.

I down, efficient if ] it's the about can break yes we but ] that use we curve. probably So always prognosticate to cord [ -- rates, [ most

of been point flux we're it's controlling our revenue. focused So that's sort always in focused on and on reference. And growing always We're of expenses.

merger work percent. of over those important have value, I we're working creating terms little ability XX% only get that long-term think in tangible we the of that our we that done returns XX-plus essentially shareholder number to of on of are our north equals common driving PPNR associated integration really the are in but logical of XXXX, on really really, a back a with the during leverage equity the catalysts period. of didn't initiatives taking not that follow-on And focused are

to And -- things see to relationships grow that a we opportunities so loan number growth centralizing investments nature. additional our and tactical centralize revenue, the we of very to of deepen to drive systems get control a further level costs, at once processes made

back think be going we So all yes, I'll to, around that to it's circle levers the you mentioned. of across

it. saying the then expect changes are XX% for the that been about any Okay. continue where regulation, maybe maybe with above you're just But your That's have that to buyback. $XXX on on I the target slightly you're now really billion? helpful. And of bit a you're on would also CETX, down? And comment, you a contemplating Basel medium Bryan, watered you little investment might over be going term

said through about approach and interest things to the Yes. the as economy performance more we credit authorization. us we authorization like Yes. And We comfortable things earlier CETX would ratio I We at is of rates the where Board in back circle and improvement ratio more get Board and and clarifying involved the they what bring What is And that part discussions and like said the I that have any soft and we cycle. ratio above we're have how clarity at don't think and play uncertainty looking get that, landing fourth in is customers to landing to sufficient our XXXX further below process. That the see a clearly, the short-term XX%. ways to need in in soft bring also out. catalyst certain we've talk authorization. We the We early will down. we some it about any do CETX we about us. be we buyback will about to through. The quarter, that continued look election feel get get the capital to strength

it in of early we start we assess to look sometime in -- Probably really the will So reassess that. will way. it before meaningful XXXX be at part a

] of billion. around is [ particularly part regulatory that at second an hurdles, LFI $XXX becoming The

is believe a that. I place that to of and won't on of ability billion a to and we to are build the are look that it. threshold we going we're the gives that that of be relationships landing, opportunistic up event do trouble not that have, those markets the to of build that you difficult balance we that do work the you in, more of if have of the capabilities and in of that a near that circumstance opportunity in difficult for base institutions. client to us a we a the making We got in the infrastructure be the important it. also financial time growing obstacle an number And when fair opportunity leaning building really threshold costs more infrastructure. But our the given we've it so strong infrastructure to prepare as term sheet hit continue that it think an those more get part deposit think is the it's strong forward given that to we set $XXX and years a matter in and feather other will preparatory have to work, We in pick amount doing grow in side we we have they're matter at that if a over to investments crossing

comes Braziler question of Wells Timur next Fargo. from Our

outlook Maybe of one the the like rate some up guess some comments to look for upside? environment to type the you mortgage to for that following implying for of of maybe next Hope, need back were on on just what's performance year. mortgage your I relating to get

to is bit little inverted be is that play and little a has for XX thing Board continue actually This basis to while have rate. telling Our is the it rates curve uncertain. homes steepened had that overall a fairly less that I purchases, be will thing historically last refi How -- mortgage belief a sub-X% so home is as not became cut will mortgage and out purchases, the low at home touched new we years. point been think as for X there. What we the second the a this last see the first-time curve

seen. back think have highest we've And industry says buyers So they data the in. if we're supply of a start we the getting from mortgage the [ ] lot will seeing

as part rate in their people when we as it's think purchases to of mixed X% arm]. a that I the be going for under new get are well of a the refi So [ combination

on kind some more being a it variability side? I'm onetime the where And the some wide fee on just rate it of in revenue outcomes guide, of Okay. maybe greater onetime ex out nature. this fees? the quarter XQ other it on Can And in the is? on then wondering Is then specifically a those side? range implies you called the Is pretty run starting fees for maybe just fourth the NII of of give you fees, maybe quarter. us

change start would did really -- like X.XX%. to be Sure. we is [ most would this the board on points, look and then been of comes not say would to It our The is of have but for we successive in whether the rounding intend as had really there's going upside If curves say side see money doesn't a bit intent cuts, quarter. It's What our flat range. income instead -- NII will see to basis current we have and I don't similar If we year. It curve at not is [ NII. revenue X the months. the is all hard lower pick on for downside better, would QX I believe more the ] any income ]. XX think really plays on the fee -- income when little XX forward than cuts or and points come -- range handicap more out, to is to to change probably in will of fee more basis XX NII to with up.

quarter then other fees? Okay. one-timers for the in And the just Is increase the this that line? full

is at comes, Up items, and BOLI it know. other ] [ when that always the comes it bounces just around. don't something you

down up a those quarter range go get quarter-to-quarter. about us. be tends that arrears have of to can't those $X predict quarter. Obviously, figure quarter-to-quarter. and to out a it often materially I more we're to dividends. I happen run is we expect on that what's can the don't So portfolio [indiscernible] really or we more borrowing, moving going you do the on we that comment in to BOLI dividends It next paying million

I if And in. one question more Great. could sneak

wondering, real rate any can that broader on loan kind to growth? maybe is So schedule type that the looked you estate, What paydowns the get more way has we comment stabilized there what headwind recently? as funding out. And be what do historical might of as cuts have accelerate, they've to paydowns just looked of quantify commercial like? like I'm start

on downs pay about talking NPLs? You're

Just commercial real estate.

just commercial Yes, on paydown estate. real

Okay.

were still in ones the about talking mentioned you're we that that thought paying. nonperforming we're I that Sorry,

Yes.

I think here. -- is Hung this Thomas

be that's a probably heavier of of is went on think to estate our predict right lot our commercial because now than real lot peers. to I side us, construction hard going little a for the a

what And down [indiscernible] financing to so drive the takeout of it in market, we appetite terms how for really will that financing. really much the see. paydown that level will come there firm of That's is paydowns,

comes question Montgomery next from Scott Our J ]. of Christopher Marinac [

charge-offs could in that and there National out it of anything question inflows credit exam into importantly, on as of follow-up to Shared this Credit a QX? QX [ net the move Is NPAs either fall we terms had more year. or I relates ] as that

run in little book $X performance Yes. us you charge-offs and at SNC relative C&I through overall. of about a Overall, same so. This the generally expect all billion of if under line. There's metrics that [indiscernible]. year-to-date our our net the again. terms material classified book, the national kind really or has difference credits I is of Thomas don't Hung for assets, shared And a in are NPLs not look

expectation my overall as about same perform is book. the So continue to the that should SNC

We seen variance. haven't a really

anything you just out then I this losses numbers information expense morning. stand you. Is the other lot would know broke or for in of nature a there And on quick that out? there that one operational fraud, a Great. customer things of for

nothing that now. There's stands out

gains things on bunch said, it any million. change property of or would to up quarter-over-quarter items did large We or added that. I sales fraud as a $X seem significant small that not onetime As any have like of

no I'd any back have We hand closing Jordan, to like questions. currently further Bryan for CEO, remarks. to

and call interest. follow with you has that all We joining may morning. your up day. Please Thank questions additional you, everyone Thank your a our Hope any appreciate this you have. Karl]. great time for [

we today's As everyone thank call, for conclude we joining.

now may You disconnect your lines.